Inland Revenue & Anor v Deutsche Morgan Grenfell Group Plc

Inland Revenue & Anor v Deutsche Morgan Grenfell Group Plc

A taxpayer who makes a payment to the revenue under a mistake of law is not entitled to a restitutionary remedy at common law outside the Woolwich principle (for unlawful demands) or the relevant statutory regime (for lawful demands). The Kleinwort Benson principle does not extend to overpayments of tax where a statutory regime exists. The claim in relation to the 1993 payment is statute-barred, but the claims in relation to the 1995 and 1996 payments are not, as they were brought within the limitation period.

Parties
Appellants: Commissioners of Inland Revenue and Her Majesty’s Attorney-General; Respondent: Deutsche Morgan Grenfell Group plc
Jurisdiction
England and Wales
Judgment Date
04 February 2005
Procedural Posture
Civil Appeal / Court of Appeal Judgment on Appeal From High Court
Outcome
Appeal allowed in part; claim in relation to the 1993 payment is statute-barred; appeal dismissed in relation to the 1995 and 1996 payments.
Legal Topics
Mistake of Law, Recovery of Overpaid Tax, Statutory Remedies, Limitation Periods, Unjust Enrichment
Tax Law Restitution Limitation of Actions Mistake of Law Recovery of Overpaid Tax Statutory Remedies Limitation Periods Unjust Enrichment

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Parties

Commissioners of Inland Revenue and Her Majesty’s Attorney-General

Appellants

Deutsche Morgan Grenfell Group plc

Respondent

Procedural Posture

Civil Appeal / Court of Appeal Judgment on Appeal From High Court

Legal Issues

  1. 1 Whether a taxpayer who has made an overpayment of tax under a mistake of law can recover that payment at common law outside statutory regimes or the Woolwich principle
  2. 2 Whether the mistake made by DMG was of a nature capable of founding a restitutionary claim
  3. 3 When the mistake was discovered for limitation purposes under section 32(1)(c) of the Limitation Act 1980

Ratio Decidendi

A taxpayer who makes a payment to the revenue under a mistake of law is not entitled to a restitutionary remedy at common law outside the Woolwich principle (for unlawful demands) or the relevant statutory regime (for lawful demands). The Kleinwort Benson principle does not extend to overpayments of tax where a statutory regime exists. The claim in relation to the 1993 payment is statute-barred, but the claims in relation to the 1995 and 1996 payments are not, as they were brought within the limitation period.

Court Disposition

Appeal allowed in part; claim in relation to the 1993 payment is statute-barred; appeal dismissed in relation to the 1995 and 1996 payments.

Orders

  • The appeal is allowed in relation to the 1993 payment; judgment for the appellants on that payment.
  • The appeal is dismissed in relation to the 1995 and 1996 payments; judgment for the respondent on those payments.