Regina v. Her Majesty's Commissioners of Inland Revenue (Respondents) ex parte Wilkinson (FC) (Appellant)

The duty under section 3 of the Human Rights Act 1998 remains a process of statutory interpretation. It permits a strong presumption of compatibility with Convention rights, but it does not permit an acontextual rewriting of legislation.

The Inland Revenue's care and management power authorises pragmatic concessions connected with efficient tax collection. It does not permit the creation of a substantial allowance which Parliament deliberately withheld. Where primary legislation leaves a public authority no lawful alternative, section 6(2)(a) protects it from liability under section 6(1).

Damages for discrimination seek just satisfaction rather than compensation as for a domestic tort. Where lawful compliance would have removed an anomalous benefit instead of extending it, a claimant who would still have received nothing has suffered no recoverable pecuniary loss.

A widower claimed the income tax bereavement allowance which section 262 of the Income and Corporation Taxes Act 1988 granted only to widows. The Revenue accepted that the distinction infringed article 14 of the Convention read with article 1 of the First Protocol, but maintained that primary legislation prevented it from acting differently.

Moses J held that section 1 of the Taxes Management Act 1970 was broad enough to permit an extra-statutory allowance, but dismissed the claim under section 6(2)(b) of the Human Rights Act 1998. The Court of Appeal dismissed the appeal, reported at [2003] 1 WLR 2683, holding that the care and management power did not authorise the allowance and that section 6(2)(a) therefore applied.

The issues before the House were whether section 262 could be interpreted as including widowers; whether the Revenue could create an equivalent extra-statutory allowance; whether section 6(2) protected the Revenue; whether pecuniary just satisfaction was available; and whether different treatment from earlier Strasbourg petitioners was irrational or abusive.

1. Appeal dismissed unanimously. Lord Hoffmann delivered the leading speech. Lord Nicholls, Lord Hope, Lord Scott and Lord Brown agreed that the Revenue had no power to grant the claimed allowance and was protected by section 6(2)(a) of the Human Rights Act 1998.

2. Per Lord Hoffmann, section 3 of the 1998 Act requires legislation to be interpreted against the background of Convention rights and creates a strong presumption of compatibility. It nevertheless remains an interpretative obligation. It does not authorise courts to assign statutory language an acontextual meaning. The wording and structure of Part VII of the Income and Corporation Taxes Act 1988 demonstrated that “widow” in section 262 could not reasonably mean a surviving spouse of either sex.

3. Per Lord Hoffmann, section 1 of the Taxes Management Act 1970 gives the commissioners a wide managerial discretion directed towards obtaining the highest practicable net return from the taxes entrusted to them. It permits pragmatic policies addressing minor or temporary anomalies, marginal hardship and difficulties of tax administration. It does not permit the commissioners to create an allowance which Parliament could have enacted but did not, based upon general equality between men and women. Any concessions exceeding that administrative purpose might themselves be ultra vires.

4. The commissioners consequently could not lawfully have allowed the widower's claim. Section 6(2)(a) therefore excluded liability under section 6(1). Lord Scott additionally reasoned that a litigation settlement with one taxpayer does not oblige the Revenue to confer equivalent treatment upon taxpayers who have not commenced proceedings.

5. Per Lord Hoffmann, it was unnecessary to determine section 6(2)(b). He nevertheless considered that it would also have protected the Revenue because payment to widows gave effect to section 262. Lord Brown agreed that protection would remain but preferred the reasoning that exercising any wider discretion contrary to Parliament's manifest will would itself have been unlawful.

6. On just satisfaction, Lord Hoffmann held that damages under section 8 are intended to reproduce the Strasbourg outcome, not damages for a domestic tort. The proper counterfactual was abolition of the unjustified allowance, not its extension to widowers. The appellant would therefore still have received nothing. Lord Brown agreed, emphasising that discrimination awards must also account for whether the favoured class received an unjustified anomaly and for the burden which retrospective compensation would place upon the public.

7. The Revenue acted rationally and within its powers. Its earlier economical settlements of Strasbourg proceedings did not prevent it from contesting this claim. The appeal was dismissed.

1. House of Lords: Dismissed the appeal unanimously: [2005] UKHL 30.
2. Court of Appeal: Dismissed the taxpayer's appeal because section 1 of the Taxes Management Act 1970 did not authorise the extra-statutory allowance and section 6(2)(a) of the Human Rights Act 1998 applied: [2003] EWCA Civ 814; [2003] 1 WLR 2683.
3. High Court: Moses J held that the Revenue possessed the asserted care and management power, but dismissed the claim because section 6(2)(b) applied. He also rejected the unequal-treatment argument. No citation is stated.