The appellant, a company incorporated in Spain, was said by the Commissioners to have been involved in a series of carousel frauds in relation to the sale of mobile telephones from Spain to the United Kingdom, which frauds were said to have resulted in an overall loss to the British taxpayer of value added tax (VAT). The particulars of claim referred to a number of occasions on which the Appellant with intent to cheat the claimants of revenue and/or to defraud the revenue, conspired and combined together to cheat and/or defraud the claimants by unlawful means.’ The ‘unlawful means’ said to have been adopted within the conspiracy were the common law offence of cheating the public revenue. The Appellant denied being party to any conspiracy, or combination of conspiracies, to cheat or defraud the claimant by unlawful means. The Appellant also denied that the claimant’s allegations were capable of constituting a cause of action for the purposes of the tort of conspiracy on the bases of there being no independently actionable cause, of the claim being a breach of art.4 of the Bill of Rights 1688, and of the Act providing a comprehensive scheme such as to displace any common law rights.
There latter denials were tried as a preliminary issue, with Hodge J finding in the Commissioners’ favour.
Allowing the Appellant’s appeal:
1. The Court of Appeal was bound by its own decision in Powell v Boldaz and accordingly the unlawful means must be independently actionable at the suit of the claimant.
2. In any event, the VAT Act 1994 provided a comprehensive scheme that displaced common law rights.
3. Mounting a claim did not amount to an infringement of art. 4 of the Bill of Rights 1688.