Claimants Listed in Class 8 of the Group Register of the CFC & Dividend GLO v HM Revenue and Customs

Where legislation provides an exclusive statutory remedy for recovery of overpaid tax, expressly ousting common-law claims, those claims cannot proceed merely because the statutory route is procedurally difficult. The EU law principle of effectiveness requires a remedy that is not impossible in practice or excessively difficult, but it does not require taxpayers to know that a remedy exists or to know the legally correct quantum before making a quantified claim. Limitation periods may be shortened retrospectively where reasonable notice or transitional protection is provided. A statutory defence inconsistent with EU law may be disapplied by conforming construction. Alleged obstructive conduct by a tax authority does not alter the legal position in the absence of a properly pleaded factual claim.

The claimants were members of the class 8 claims in the CFC and Dividend Group Litigation concerning corporation tax paid on foreign dividend income. They brought common-law restitutionary and damages claims, including claims concerning compound interest. The court was asked to determine four agreed preliminary issues, principally whether those claims were ousted by paragraph 51(6) of Schedule 18 to the Finance Act 1998, whether section 320 of the Finance Act 2004 applied to earlier tax payments, and when mistakes could reasonably have been discovered. The court also decided whether five disputed issues remained open for trial under the group litigation order.

1. Paragraph 51(6). Paragraph 51(6) expressly ousted the claimants’ common-law claims issued after March 2010. Autologic did not support continuation of common-law claims where statute expressly excluded them.
2. Effectiveness. The statutory remedy under section 790 of ICTA, construed in accordance with EU law, was effective. The reasoning in Haribo applied even where the taxpayer could not obtain the foreign company’s tax information. Lack of knowledge of the remedy, uncertainty about the correct quantum, and the application of portfolio dividends through the Marleasing principle did not make the remedy impossible or excessively difficult. A quantified claim need not be legally exact, and paragraph 56 permitted supplementary claims.
3. The practice generally prevailing defence in paragraph 51A(8) was incompatible with EU law to the extent necessary and was to be read as excluded. The statutory limitation reductions did not deprive the claimants of an effective remedy because they had been introduced with more than six months’ notice.
4. HMRC’s earlier concession in Portfolio Dividends HC 1 did not create an estoppel. Alleged obstructive conduct was not relevant to the agreed legal issue, absent a properly pleaded claim in fraud, misfeasance or judicial review.
5. Section 320. Section 320 took effect from 22 July 2004, whether the tax had been paid before or after 8 September 2003. The court declined to follow the contrary reasoning in Jazztel concerning taxpayers’ knowledge of accrued rights.
6. Constructive discovery. The relevant date was 12 December 2006, when the CJEU decided FII CJEU 1.
7. The first disputed issue had been finally decided in the earlier test case and could not be raised again. The second and third issues remained open because they were fact-specific or concerned different claimants. The fourth issue no longer arose. The fifth was a legal issue already refused permission to appeal and could not be run again.

First-instance determination of agreed preliminary issues and the availability of five disputed issues in group litigation. No appeal decision is stated in the judgment.