HM Revenue & Customs v Xicom Systems Ltd [2008] EWHC 1945 (Ch) (04 August 2008)

HM Revenue & Customs v Xicom Systems Ltd [2008] EWHC 1945 (Ch) (04 August 2008)

The High Court has jurisdiction to order set-off under section 72 of the County Court Act 1984 where there are cross-judgments between the parties, including where one is the Crown, and section 25 of the Crown Proceedings Act 1947 does not preclude such set-off. The court should exercise its discretion to permit set-off in this case, as Xicom has no means to pay the county court judgment and the factors advanced against set-off are insufficient to outweigh the general principle of set-off.

Citation
[2008] EWHC 1945 (Ch)
Parties
Claimant: The Commissioners for Her Majesty's Revenue and Customs; Defendant: Xicom Systems Limited
Jurisdiction
England and Wales
Judgment Date
04 August 2008
Procedural Posture
Application for Set Off Under Section 72 of the County Court Act 1984 / High Court, Post Costs Order and County Court Judgment
Outcome
Application granted
Legal Topics
Set Off of Judgments, Costs Orders, Crown Proceedings, PAYE and National Insurance Liabilities, VAT Input Tax Fraud
Civil Procedure Tax Law Set Off of Judgments Costs Orders Crown Proceedings PAYE and National Insurance Liabilities VAT Input Tax Fraud

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Parties

The Commissioners for Her Majesty's Revenue and Customs

Claimant

Xicom Systems Limited

Defendant

Procedural Posture

Application for Set Off Under Section 72 of the County Court Act 1984 / High Court, Post Costs Order and County Court Judgment

Legal Issues

  1. 1 Whether the High Court has jurisdiction to order set-off of a High Court costs order against a county court judgment involving the Crown
  2. 2 Whether section 25 of the Crown Proceedings Act 1947 precludes set-off against the Crown
  3. 3 Whether the court should exercise its discretion to permit set-off in the circumstances

Ratio Decidendi

The High Court has jurisdiction to order set-off under section 72 of the County Court Act 1984 where there are cross-judgments between the parties, including where one is the Crown, and section 25 of the Crown Proceedings Act 1947 does not preclude such set-off. The court should exercise its discretion to permit set-off in this case, as Xicom has no means to pay the county court judgment and the factors advanced against set-off are insufficient to outweigh the general principle of set-off.

Court Disposition

Application granted

Orders

  • Leave granted to HMRC to set off its liability to pay costs (£30,500) against Xicom's liability under the county court judgment (£104,654.58)