Mercy Global Consult Ltd v Adegbuyi-Jackson & Ors [2023] EWHC 749 (Ch) (31 March 2023)

Mercy Global Consult Ltd v Adegbuyi-Jackson & Ors [2023] EWHC 749 (Ch) (31 March 2023)

The VAT Defence constitutes a new defence, not mere amplification, and has no realistic prospect of success due to the binding authority of Mainpay Ltd v HMRC, which establishes a distinction between supply of staff and supply of services for VAT exemption purposes. Permission to amend the defence to plead VAT exemption is refused. Even if VAT exemption were established, Schedule 11 VATA creates Crown debts via self-billed invoices, so the alleged fraud persists. A preliminary issue trial would not resolve the substantive dispute and would cause unacceptable delay.

Citation
[2023] EWHC 749 (Ch)
Parties
Claimant: Mercy Global Consult Ltd (in liquidation); First Defendant: Mr Abayomi Adegbuyi-Jackson; Second Defendant: Mr Alain Ludovic Boisdur; Third Defendant: Mr Michael Osemwegie; Fourth Defendant: Mr Abayomi Ayankunle Olunlade; Fifth Defendant: Mrs Gift Enoch; Sixth Defendant: Mrs Funmilayo Ojuolape Adegbuyi-Jackson; Seventh Defendant: Cornerstone Global System UK Ltd; Eighth Defendant: Mercy Global Properties Solutions Ltd; Ninth Defendant: Dominion Payroll Solutions Ltd; Tenth Defendant: Olugbenga Titus Jones Somade; Eleventh Defendant: Ojuolape Arcade Ltd; Twelfth Defendant: Adekanmi (also known as Kanmi) Olaolu Adedire; Thirteenth Defendant: DMO Consultancy & Accounting Services Ltd; Fourteenth Defendant: Purpose IP Consult Ltd; Fifteenth Defendant: Hanstal Consulting Limited
Jurisdiction
England and Wales
Judgment Date
31 March 2023
Procedural Posture
Chancery Division Business List / Interlocutory Judgment on Amendment and Preliminary Issue Applications
Outcome
Amendment Application refused for VAT Defence; permission for other minor amendments to be agreed. Preliminary Issue Application not determined, but would have been refused if necessary.
Legal Topics
VAT Exemption, Amendment of Pleadings, Admissions, Preliminary Issue, Labour Supply Fraud, Nursing Agency Concession
Insolvency Tax Fraud Equity VAT Exemption Amendment of Pleadings Admissions Preliminary Issue +2 more

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Parties

Mercy Global Consult Ltd (in liquidation)

Claimant

Mr Abayomi Adegbuyi-Jackson

First Defendant

Mr Alain Ludovic Boisdur

Second Defendant

Mr Michael Osemwegie

Third Defendant

Mr Abayomi Ayankunle Olunlade

Fourth Defendant

Mrs Gift Enoch

Fifth Defendant

Mrs Funmilayo Ojuolape Adegbuyi-Jackson

Sixth Defendant

Cornerstone Global System UK Ltd

Seventh Defendant

Mercy Global Properties Solutions Ltd

Eighth Defendant

Dominion Payroll Solutions Ltd

Ninth Defendant

Olugbenga Titus Jones Somade

Tenth Defendant

Ojuolape Arcade Ltd

Eleventh Defendant

Adekanmi (also known as Kanmi) Olaolu Adedire

Twelfth Defendant

DMO Consultancy & Accounting Services Ltd

Thirteenth Defendant

Purpose IP Consult Ltd

Fourteenth Defendant

Hanstal Consulting Limited

Fifteenth Defendant

Procedural Posture

Chancery Division Business List / Interlocutory Judgment on Amendment and Preliminary Issue Applications

Legal Issues

  1. 1 Whether defendants may amend their defence to plead VAT exemption under Items 1 and/or 4 of Group 7 of Schedule 9 VATA 1994
  2. 2 Whether the VAT Defence should be tried as a preliminary issue
  3. 3 Whether previous admissions in the defence preclude amendment

Ratio Decidendi

The VAT Defence constitutes a new defence, not mere amplification, and has no realistic prospect of success due to the binding authority of Mainpay Ltd v HMRC, which establishes a distinction between supply of staff and supply of services for VAT exemption purposes. Permission to amend the defence to plead VAT exemption is refused. Even if VAT exemption were established, Schedule 11 VATA creates Crown debts via self-billed invoices, so the alleged fraud persists. A preliminary issue trial would not resolve the substantive dispute and would cause unacceptable delay.

Court Disposition

Amendment Application refused for VAT Defence; permission for other minor amendments to be agreed. Preliminary Issue Application not determined, but would have been refused if necessary.

Orders

  • Applicants refused permission to amend defence to plead VAT exemption under Items 1 and/or 4 of Group 7 Schedule 9 VATA 1994.
  • Parties invited to agree terms of order for permitted amendments.