Skatteforvaltningen (The Danish Customs And Tax Administration) v Solo Capital Partners LLP & Ors

An agent submitting a tax refund claim expressly for a taxpayer will generally not owe the tax authority a personal duty of care merely because it acts as agent. However, a duty may be arguable where the agent’s words and conduct objectively communicate its own belief in the claim’s genuineness and the surrounding circumstances support an assumption of responsibility.

At summary judgment stage, the court must not resolve genuinely arguable factual disputes or conduct a mini-trial. A success fee earned only upon payment of a claim may not be protected by a good-consideration defence where the payment itself was made by mistake. Knowing receipt turns on whether retention of the receipt would be unconscionable in light of the recipient’s knowledge.

The claimant, the Danish tax authority, alleged a large-scale fraud involving Danish withholding-tax refund claims. Goal Taxback Ltd had acted as tax reclaim agent for named taxpayers and submitted claims to the claimant. Goal was not accused of dishonesty.

The claimant pursued negligence, unjust enrichment and knowing receipt claims against Goal. Goal sought summary judgment. The claimant sought permission to amend its pleading. The central issues were whether Goal might have made implied representations about its belief in the genuineness of claims, owed a duty of care in respect of those representations, lacked reasonable grounds for its belief, and was liable to restore transaction or exclusivity fees.

1. Applications dismissed. Goal’s application for summary judgment failed. The claimant’s amendment application also failed. The claimant was required to re-plead its English-law claims against Goal concisely, precisely and coherently. The alternative Danish-law claims were to be struck out.
2. Negligence. The pleaded claim was properly analysed as one for negligent misstatement by Goal, not liability for the taxpayer’s representations made through Goal as agent. An implied representation may arise from words and conduct where a reasonable person in the representee’s position would infer that the representor was communicating the relevant belief: IFE Fund SA v Goldman Sachs International [2006] 2 CLC 1043 at [50]. The surrounding circumstances, including Goal’s expertise, its presentation of supporting documents, its relationship with the tax authority and the alleged information imbalance, made the proposed representation realistically arguable.
3. Although an agent acting expressly for a principal will generally not owe the counterparty a personal duty of care, that is not an absolute rule. The question is whether the circumstances objectively demonstrate an assumption of responsibility. This case was not an ordinary arm’s-length commercial transaction. The asserted duty concerned Goal’s own implied belief, not the truth of representations made by the taxpayer. The issue required a trial.
4. The claimant’s alleged knowledge of irregularities went to breach, and potentially to the timing of careless conduct, rather than causing a duty of care to arise. Causation and contributory negligence were also unsuitable for summary determination. The claimant had a realistic prospect of proving that Goal’s involvement affected the transaction and that the appropriate counterfactual required a trial.
5. Unjust enrichment. Goal’s transaction fees were arguably success fees earned only when the claimant paid the refund claims. The alleged good-consideration defence therefore did not establish that the unjust enrichment claim had no realistic prospect of success. The claimant also had a realistic prospect of challenging any good-faith defence.
6. Knowing receipt. The applicable question was whether Goal’s knowledge made it unconscionable to retain the £1.5 million exclusivity fee, applying Bank of Credit and Commerce International (Overseas) Ltd v Akindele [2001] Ch 437 at 455E. The alleged scale and nature of the claims, the characteristics of the taxpayers, the transaction structure, the restructuring of Solo’s business and the timing of the fee constituted a serious triable case. The evidence did not justify summary dismissal.
7. The pleading was materially defective. The claimant was directed to separate the alleged representations, duty, breach, unjust enrichment and knowing receipt claims, and to remove speculative or unsupported allegations.

First-instance judgment. No appellate history was stated in the judgment.