Europcar UK Ltd & Ors v HM Revenue & Customs

In a group litigation order, a concise claim form may be read with the GLO order and group register when determining whether a cause of action was pleaded for limitation purposes. Those documents may resolve ambiguity, but cannot create a cause of action wholly absent from the claim form or replace the need to plead the principal material facts.

A claim for restitution based on mistake of law is conceptually distinct from a Woolwich claim. Adding mistake as a necessary factual ingredient generally introduces a new claim. Such an amendment does not relate back where it does not arise from the same or substantially the same facts. Section 320 of the Finance Act 2004 limits amendments extending the factual scope of an existing mistake claim. Surplus ACT surrendered into an undifferentiated pool is set off on a first-in, first-out basis.

The judgment concerned 19 test claims in the ACT Group Litigation. The claimants sought compensation or restitution for ACT paid on dividends to overseas parent companies, following the ECJ decision in Metallgesellschaft Ltd v IRC and the House of Lords decision in Deutsche Morgan Grenfell Group Plc v IRC.

The principal questions were whether the claimants had made valid mistake-based claims before 8 September 2003; whether later amendments were new claims subject to section 320 of the Finance Act 2004; and whether a re-issued claim was similarly restricted. A further issue concerned the order in which surrendered surplus ACT was to be set off against mainstream corporation tax.

1. Claims in the Europcar format. The claim forms, read with the ACT GLO order and group register, sufficiently indicated claims based on mistake of law. Paragraph 2 of the claim form alleged that a group income election would have been made and ACT would not have been paid if the parent had been UK-resident. In the GLO context, this resolved the ambiguity and stopped time running for limitation purposes. The Revenue had understood that mistake-based restitution was included.
2. Heidelberg. Heidelberg’s claim form pleaded neither restitution nor the group income election nor any mistake. The GLO materials could not create that absent cause of action. No valid mistake claim was therefore made before 8 September 2003.
3. Pleading principles. NEC Semi-Conductors Ltd v IRC remained authority that individual claim forms must plead the material facts and causes of action, although a GLO claim form may be concise. The approach in Boake Allen Ltd v Revenue and Customs Commissioners permitted the GLO register to resolve uncertainty but did not dispense with minimum pleading requirements.
4. Amendments and section 320. Adding mistake of law introduced a new cause of action because mistake was an essential ingredient of the restitutionary claim. It did not arise from the same or substantially the same facts as a claim based on unlawful demand. The amendments therefore took effect from their amendment dates and could not benefit from section 32(1)(c) of the Limitation Act 1980 by reason of section 320(1) of the Finance Act 2004. Section 320(2) was directed to preventing expansion of the factual scope of an existing mistake claim to different payments, periods or matters.
5. Re-issued claims. A new claim issued after 8 September 2003 was plainly subject to section 320(1).
6. AMC and set-off. AMC’s Part 7 claim form sufficiently indicated a mistake-based restitution claim because it expressly subscribed to the relevant GLO limitation issues. Once surrendered ACT had been carried forward into a single undifferentiated pool, the proper method of set-off was FIFO. The distinction between relevant and non-relevant ACT concerned liability, not the objective calculation of loss.

First-instance determination of test claims within the ACT Group Litigation. The judgment records earlier decisions in related ACT litigation, including [2007] UKHL 25, but does not state an appeal from the present decision.