Admin Law Remedies The Recovery Of Illegal Money And Taxes Notes

THE WOOLWICH PRINCIPLE AND THE RECOVERY OF UNLAWFUL TAXES AND PAYMENTS RATIONALES UNDERLYING THE EARLIER POSITION: 1. ERROR OF LAW IS NOT AN EXCUSE Whitley v R 1919 26 TLR 19 Revenue claimed that the business ws required to pay a tax for its canteen workers whom they had engaged on the basis that those workers were 'servants' The business successfully challenged revenue's interpretation of the law e.g. got a court order positively saying that revenue was wrong in charging the tax.If a party freely hand over money which it is not required to do, it is its own fault - error of law not an excuseif money has been voluntarily paid under a mistake, a mistake not of fact but mistake of law, then it cannot be recovered back Why?Persons are expected to know the law; if a party makes an error of law then that party should bear the liability. 2. FISCAL DISTURBANCE. Glasgow Corporation v Lord Advocate 1959 SC 203 Ps had been wrongfully charged and sought return the tax that was not legally due.Where the error is in regard to an interpretation of a public act of parliament, repayment of a sum paid by one party may very well affect a very large number of others who have made or received payments under a similar misinterpretation.To allow one payment would be to allow all to be repaid.This cumulative impact would further weaken the state's resources.'widening circle of interference with transactions which the parties had treated as settled and completed' EXCEPTIONS UNDER THE OLD RULE: 1. MONEY PAID UNDER MISTAKE OF FACT NOT ERROR OF LAW Aiken v Short 1856 1 H & N 210, 215Where a person pays money when in fact they did not have to - recoverable 2. MONEY PAID UNDER DURESS OF GOODS Maskell v Horner [1915] 3 KB Street trader in a market paid an illegal market toll after a threat that his market stall would be destroyed'if a person pays money, which he is not bound to pay under the compulsion of urgent and pressing necessity or of seizure, actual or threatened, of his goods, he can recover it as money had and received. 'Necessity or threat of seizure that transpires to have been unlawful 3. MONEY PAID UNDER DURESS OF OFIICIAL POWER (COLORE OFFICIO) • • • • Where A paid B tax only because if it did not do so an official function would be withheld. 'extortion by public office.' Where a D demands a payment in return for taking some official action which the citizen needs them to perform. I will only perform my public duty that you need if you pay me tax. Dolan v Nelligan [1967] IR 247 P was a publican in Dublin which had purchased consignments of 'Babycham' - popular drink in the 60s and 70s and was being marketed, particularly to woman and children (despite its alcohol percentage of 14%). The consignment was confiscated by the commissioners of customers and they refused to release the goods unless the applicant paid a customs levy, thus they paid it in order that the goods be released. Transpired that the levy was unlawful as it could only be imposed on spirits, of which Babycham was not.'moneys paid to a public official because of a demand made by him, where he can grant or withhold a privilege in the event of non-payment, may be recovered as money had an received.This payment was not voluntarily made due to an error of law on behalf of the payor applicantThis was made because it was the only way to compel the performance of a public duty (release of the goods) that turned out to be unlawful. ➢ This is a strict exception - it does not apply merely where someone unlawfully pays tax under a feat that if they do not the state will take proceedings, there must be a direct exchange between the payment, the compulsion to perform the duty and the existence of a refusal by the official unless the payment is made. ➢ Payment in order to get the function exercised THE WOOLWICH PRINCIPLE • Finally, in 1993, the non-recoverability rule was dropped. Woolwich Equitable Building Society v IRC (No 2) [1993] AC 70 Ps had paid over £56 million to the Revenue Commissioners under demands made under the Building Societies regulations 1996, the purpose was to avoid the potentiality of legal proceedings - thus - not to compel exercise of a public function and not under a mistake of fact. The regulations under which the payments were made, were declared to be ultra vires. thus, the Building Society sought to recover. HC in England refused - didn't fall within any exceptions. HOL: overturned - established a general right of recovery: Four principle arguments: 1. Lord Goff The constitutional document - the Bill of Rights Act 1689 contained a fundamental principle thattaxes should not be levied without the authority of parliament.Illegally extracted taxes, by definition, are taxes levied without the authority of parliament.Retention of unauthorised taxes is unconstitutional 2. Lord Browne-WilkinsonThey are both just different forms of duress. Colore officii: this principle is part of a wider principle, that money unlawfully handed over to the state under duress was recoverable. The only difference between A) paying under duress that the state will seize your property and B) paying under the duress that Revenue will initiate legal proceedings is the degree of duress.The colore officii cases are merely examples of a wider principle...that where the parties are on an unequal footing, so that the money is paid by way of tax or other impost in pursuance of a demand made by some public officer, these moneys are recoverable since the citizen is unable to resist 3. EUROPEAN LAWThe ECJ in 1983: an individual has a right to recover money illegally demanded by a European institution. (San Giorgio [1982] ECR 3595 - including tax.it would be stranger if the right to recover overpaid tax was more restricted in domestic law than in European law

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