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Court of Appeal gives guidance on CPR Part 19 and pleading claims in unjust enrichment

27/11/24

The Court of Appeal has today issued judgment in Axa Sun Life Plc v HMRC [2024] EWCA Civ 1430. The appeal provides important guidance on the proper interpretation of CPR Part 19, especially the meaning of “GLO Issues” and the Court’s power to “order otherwise”: see CPR 19.23(1). It also provides a discussion of the requirements for pleading claims in unjust enrichment.

The litigation is complicated and arises out of the CFC and Dividend Group Litigation Order, established in 2003. One set of issues on appeal was the effect of a decision of Henderson J in the trial of the GLO in Prudential Assurance Co Ltd v HMRC [2013] EWHC 3249 (Ch), [2014] STC 1236. The taxpayers were not party to that trial but argued that Henderson J had given a “judgment or order” in relation to “one or more GLO issues”, and that they were entitled to the benefit of that judgment or order. HMRC argued that there was no relevant judgment or order; and that, if there was, the Court should order otherwise.

The Court of Appeal dismissed the taxpayers’ appeal. It held that there was, on one issue, no relevant judgment or order on a GLO Issue; and on the other issue it held that, although there was a determination, the Court should “order otherwise”. The Court of Appeal held that the jurisdiction under CPR r.19.13(1) should be interpreted by reference to wider principles of abuse of process and res judicata.

The second main issue considered whether the taxpayers had pleaded claims for restitution of the sums sought by 1 April 2010 (when an ouster clause was introduced). There were two parts to this issue, though only one raised an issue of principle. Richards J, the judge, held that the taxpayers had in 8 April 2003 pleaded a claim for restitution of sums paid in 2017 and 2018. In response, HMRC submitted “that one cannot plead a cause of action that has not yet arisen.” The Court of Appeal accepted the submission that “one cannot plead a future fact” and allowed HMRC’s appeal accordingly.

The judgment can be found here.

Frederick Wilmot-Smith, who argued the pleading issue before the Court of Appeal, acted as junior counsel for HMRC, alongside special tax counsel, instructed by HMRC’s in-house legal team.