Littlewoods Retail Ltd & Ors v Revenue and Customs

The court may refer an EU-law question where its answer may determine the remaining issues, even if one proposed question is presently unnecessary. A question should not be referred where the referring court does not need the answer to decide the issues before it, particularly where the issue depends on unresolved factual findings or may never arise. Where national law excludes domestic claims, the appropriate EU-law question may concern whether national restrictions must be disapplied and whether one available cause of action provides an effective remedy.

Following an earlier judgment on liability issues, the High Court considered which questions concerning repayment of overpaid VAT and compound interest should be referred to the Court of Justice of the European Union. The claimants also sought an immediate declaration on the domestic-law effect of sections 78 and 80 of the Value Added Tax Act 1994 and permission to appeal.

The court had provisionally concluded that the domestic claims were excluded by those provisions, but that further EU-law issues concerning effectiveness, interest and possible defences remained unresolved.

1. The court declared that, as a matter of English law and without reference to EU law, the claimants’ claims were excluded by sections 78 and 80 of the Value Added Tax Act 1994.
2. Question 4 was referred under article 267 TFEU. The question concerned whether the EU-law principle of effectiveness required national restrictions to be disapplied so as to permit one or both domestic causes of action to vindicate any EU-law right established by the Court of Justice. The reasons previously given for referring that question remained valid.
3. Question 5, concerning a change-of-position defence, was not referred. The factual findings established that the defence was unavailable to the Commissioners. The question was therefore unnecessary at that stage, and there might also be a jurisdictional impediment to referring a question which the national court did not need answered.
4. The court settled the reference on questions concerning whether EU law required compound interest representing the use value of overpaid VAT, or left interest as an ancillary matter for national law subject to equivalence and effectiveness. The authorities, including Metallgesellschaft v Commissioners of Inland Revenue, left a genuine issue as to the scope of the EU-law remedy.
5. Permission to appeal the declaration was adjourned until final judgment, with liberty to restore. Further proceedings were stayed pending the Court of Justice’s ruling, subject to the order’s specified exceptions. Costs were reserved.

This was a first-instance procedural and interlocutory judgment following the High Court’s earlier judgment of 19 May 2010, identified in the judgment as [2010] EWHC 1071 (Ch). The court made a declaration, referred four questions to the Court of Justice of the European Union, adjourned permission to appeal, and stayed further proceedings.