Sandhu v HM Revenue and Customs

For limitation purposes, a concealed fact is relevant to a right of action only if it is a fact which the claimant must prove to establish a prima facie case. Evidence which merely strengthens the claim does not qualify. The claimant bears the burden of showing that the concealment could not have been discovered with reasonable diligence.

An institutional claim for misfeasance in public office must identify the individual officers said to possess the necessary dishonest or subjectively reckless state of mind. Allegations of objective recklessness, incompetence or inadequate disclosure are insufficient without particulars supporting bad faith or subjective recklessness.

The claimant had been convicted of cheating the public revenue following a VAT fraud prosecution. His conviction was quashed for non-disclosure, and he was later acquitted after the defendant offered no evidence at the proposed retrial: [2006] EWCA Crim 606.

He subsequently brought a claim for damages for misfeasance in public office, alleging deliberate non-disclosure by customs officers. The defendant applied to strike out the claim or obtain summary judgment, relying on limitation and inadequate pleading. The central issues were whether the claim was postponed under section 32 of the Limitation Act 1980 and whether the pleaded facts disclosed the requisite state of mind for misfeasance.

1. The action was statute-barred. Section 32(1)(b) of the Limitation Act 1980 postpones limitation only where the concealed fact is relevant to the claimant’s right of action in the narrow sense. Applying Paragon Finance v DB Thakerar & Co [1999] 1 All ER 400 and AIC Limited v ITS Testing Services (UK) Limited (The Kriti Palm) [2006] EWCA Civ 1601, the claimant had to show that he could not have discovered the relevant facts with reasonable diligence. The only newly identified material had been disclosed by 17 April 2007. The defendant’s later decision to offer no evidence was not a fact relevant to the right of action. The claim, issued on 25 April 2013, was therefore out of time.
2. Even if limitation did not bar the claim, it was inadequately pleaded. A claim for misfeasance in public office requires identification of the officer or officers who possessed the necessary dishonest or subjectively reckless state of mind. The claimant had not identified any such person or explained whether the alleged intention was shared, individual, or held by another officer.
3. The pleaded failures of disclosure did not themselves establish malice. Objective recklessness, incompetence or overwork could not replace subjective bad faith or subjective recklessness. The reasoning in London Borough of Southwark v Dennett [2007] EWCA Civ 1091 and Carter v Chief Constable of the Cumbria Police [2008] EWHC 1072 (QB) supported striking out the claim.
4. The Particulars of Claim were struck out and the action dismissed.

The judgment describes the claimant’s conviction being quashed by the Court of Appeal, which ordered a retrial: [2006] EWCA Crim 606. The retrial did not proceed because the defendant offered no evidence and the claimant was acquitted. This action was determined at first instance by the High Court.