Home > Cases > HMRC v Total Network SL [2008] UKHL 19; [2008] 2 All ER 413; [2008] 2 WLR 711; [2008] STC 644

The appellant commissioners appealed against a decision of the Court of Appeal ([2007] EWCA Civ 39, [2007] 2 WLR 1156) to strike out their claim of unlawful means conspiracy against the respondent (T). T cross-appealed against a finding in the commissioners’ favour. T was a company incorporated in Spain which had a bank account in the United Kingdom. It was not a “taxable person”. The commissioners claimed that T was liable to them in damages at common law for conspiracy in sums equivalent to amounts of VAT which they said they had lost as a result of 13 missing trader intra-community, or carousel, frauds which were participated in by T. The issues were (i) whether it was open to the commissioners to maintain a cause of action in damages at common law as a means of recovering VAT from a person who had not been made accountable or otherwise liable for that tax by Parliament; (ii) whether, if so, it was an essential requirement of the tort of unlawful means conspiracy that the conduct which was said to amount to the unlawful means should give rise to a separate action in tort against at least one of the conspirators. The Court of Appeal decided the first issue in the commissioners’ favour and the second in T’s favour.

HELD: (Lords Hope and Neuberger dissenting on the first issue) (1) (Per Lord Mance) There was nothing in the statutory scheme to preclude the commissioners’ pursuit of a common law claim for conspiracy against T. (2) The Court of Appeal had been wrong to answer the second question in the affirmative. The authorities gave rise to a general assumption, too obvious to need discussion, that criminal conduct engaged in by conspirators as a means of inflicting harm on the claimant was actionable as the tort of conspiracy, whether or not that conduct, on the part of a single individual, would be actionable as some other tort. It would be appropriate to clarify the law by holding that criminal conduct (at common law or by statute) could constitute unlawful means, provided that it was indeed the means of intentionally inflicting harm. The intentional harm tort and the “unlawful means” variety of conspiracy shared the ingredients of the intentional infliction of harm on the claimant. But that variety of conspiracy was not simply the intentional harm tort committed by joint tortfeasors. The gist of the intentional harm tort (apart from exceptional “two party” cases) was striking at the claimant through a third party, and doing so by interfering with his freedom of economic activity.

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