Source: All England Reporter
Publisher Citation: [2007] All ER (D) 294 (Jul)
Neutral Citation: [2007] UKHL 34
Court: House of Lords
Judge:

Lord Hope of Craighead, Lord Nicholls of Birkenhead, Lord Scott of Foscote, Lord Walker of Gestingthorpe and Lord Mance
Representation Laurence Rabinowitz QC, Francis Fitzpatrick and Steven Elliott (instructed by Slaughter & May) for the taxpayer.
  Ian Glick QC, Rupert Baldry and Gerry Facenna (instructed by Solicitor for Revenue and Customs) for the commissioners.
Judgment Dates: 18 July 2007

Catchwords

Income taxation - Corporation tax - Advance corporation tax - United Kingdom resident subsidiary companies and non-resident parent companies - Breach of European Community law - Remedy - Whether cause of action available at common law for money paid under a mistake of law - Interest - Calculation of interest - Whether court had jurisdiction at common law to award compound interest where claimant sought restitutionary remedy for the time value of money paid under mistake - Appropriate rate of interest.

The Case

Income taxation Corporation tax. The court had a common law jurisdiction to award interest, simple and compound, as damages on claims for non-payment of debts as well as on other claims for breach of contract and in tort. A cause of action was available at common law for money paid under a mistake of law. The court had jurisdiction at common law to award compound interest where the claimant sought a restitutionary remedy for the time value of money paid under a mistake. The remedy of restitution differed from that of damages. It was the gain that needed to be measured, not the loss to the claimant. If a conventional rate of interest was to be adopted, it should be one which was appropriate to the circumstances of the enriched party.

Practice Areas

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