Company Conflict of laws Criminal Housing Immigration Local government Prisons


Company



Company reconstruction - creditors to have 94% shareholding in new company and existing shareholders to have 4% - not substantial identity between two bodies of shareholders



In re Travel Group plc: ChD (Mr Justice Mann): 25 November 2004



The company was a holding company of a group of companies in the travel industry, and had got into financial difficulties. A scheme of reconstruction under section 425 of the Companies Act 1985 was drawn up by the company's creditors whereby four of them would become 94% share-holders in the new company, leaving 4% of the shareholding in the new company to the shareholders in the old company.



The remaining 2% of shares would be offered to bondholders in the old company. An ad hoc bondholders' committee opposed an application by the company under section 427 of the 1985 Act to call a meeting of the shareholders and creditors to consider the scheme.



Richard Sheldon QC, Sir Thomas Stockdale and Hilary Stonefrost (instructed by Slaughter and May, London) for the claimant; Michael Crystal QC, Robin Dicker QC and Stephen Atherton (instructed by Cadwalader Wickersham & Taft, London) for the ad hoc bondholders' committee.



Held, refusing the application, that the notion of 'reconstruction' in relation to companies required that there should be a substantial identity between the body of shareholders in the old and new companies, and although the shareholders should not have to be precisely identical for the purpose of the scheme under section 425, they should be substantially identical; and that a state of affairs in which 4% by value of the shareholding in the new company was to be held by 100% of the shareholders in the old was not one in which there was a substantial identity between the two bodies of shareholders.



Back to top



Conflicts of law



Jersey shareholder of English company purporting to appoint directors resident in Switzerland - dispute in respect of appointment - English court having exclusive jurisdiction to adjudicate on dispute



Speed Investments Ltd and another v Formula One Holdings Ltd and others: CA (Lords Justice Carnwath and Neuberger and Sir William Aldous): 12 November 2004


The claimants, two companies registered and resident in Jersey, were the majority shareholders in the first defendant company which was registered, resident and managed in England. The second defendant, a Jersey company and a minority shareholder in the first defendant, purported to exercise its power to appoint the third and fourth defendants, Swiss nationals domiciled in Switzerland, as directors of the first defendant.



The claimants had agreed with the second defendant that 'although the governing law was English law, the parties submitted to "the exclusive jurisdiction of the courts of Geneva, Switzerland"'. Disputes arose in respect of the second defendant's appointment of the directors. The claimants commenced proceedings in England but, before the claim forms had been served, the second defendant commenced and served proceedings against the claimants in Switzerland and applied to stay the claimant's English proceedings. Mr Justice Lewison [2004] Gazette, 2 September, 37, holding that under article 16(2) of Council Regulation (EC) No 44/2001, the English court had exclusive jurisdiction to resolve the dispute, dismissed the application. The second to fourth defendants appealed.



Murray Rosen QC and Nick Parfitt (instructed by Lovells, London) for the second to fourth defendants; Elizabeth Jones and Nicholas Harrison (instructed by White & Case, London) for the claimants; the first defendant was not represented.



Held, dismissing the appeal, that since the composition of the management organ of the first defendant company was in England, the English court had exclusive jurisdiction under article 16 to adjudicate on disputes relating to the appointment of the directors, which related to the internal management of the English company.



Back to top



Criminal



Confiscation order - neither consultancy contract nor future payments under it 'realisable property' to be taken into account by court in determining ability to pay amount due under confiscation order - certificate of inadequacy granted



In re Adams: QBD (Mr Justice Lightman): 26 November 2004


The defendant was ordered to pay £53,478 under a confiscation order made against him by the Crown Court. He applied under section 83(1) of the Criminal Justice Act 1988 for a certificate of inadequacy to pay that amount on the ground that two items of property taken into account by the court in fixing the amount of the order had reduced in value to nil.



The Crown Prosecution Service contended that a consultancy contract, which the defendant had entered into after the making of the order and under which he would be entitled to an income of £52,000 for provision of his consultancy services, should be taken into account by the court as 'realisable property'.



The defendant in person; Stephen Hellman (instructed by Crown Prosecution Service) for the Crown Prosecution Service.



Held, granting the application, that, since the consultancy contract was for the provision of services where the identity of the provider was of the essence, it was a chose in action personal to the parties and was not assignable; that, accordingly, it was not 'realisable property' for the purposes of an application under section 83(1) of the 1988 Act; that any entitlement to payment for services to be provided in the future under the contract was not a present chose in action but would only arise if the services required of the defendant were provided; and that such conditional and future entitlement was not 'property', let alone 'realisable property', to be taken into account by the court.



Back to top



Housing



Housing benefit - claimant receiving regular voluntary financial gifts from son - gifts to be disregarded in ascertaining eligibility for benefit



Secretary of State for Work and Pensions v Perkins and another: CA (Lords Justice Ward and Sedley and Sir William Aldous): 17 November 2004


The claimant, aged 87, received housing benefit on the basis that his income was below the necessary threshold. In addition to his pension, he received monthly voluntary gifts of £280 from his son. An appeal tribunal upheld the council's decision that the gifts formed part of the claimant's income and could not be disregarded under the excepting provisions in paragraph 13(2) of schedule 4 to the Housing Benefit (General) Regulations 1987 ('Sums to be disregarded in the calculation of income other than earnings'). A social security commissioner allowed the claimant's appeal. The secretary of state appealed.



Martin Chamberlain (instructed by the Solicitor, Department of Work and Pensions) for the secretary of state; Sally Robertson (instructed by French & Co, Nottingham) for the claimant; the council did not appear and was not represented.



Held, dismissing the appeal, that the paragraph 13(2) exception was intended to enable voluntary payments to be made to a claimant for items other than specified basic essentials without affecting entitlement to housing benefit; that it was for the appeal tribunal to determine, on the balance of probabilities, what the donor intended the claimant to do with his gift; and that in circumstances where the claimant had sufficient pension income to pay for essentials, the commissioner's decision that the gift was intended to be used by the claimant to pay for otherwise unaffordable items and was thus within the exception was a conclusion which he had been entitled to reach.



Back to top



Immigration



Asylum - determination of claim - screening process to be conducted only once



R (G) v Secretary of State for the Home Department: QBD (Admin) (Mr Justice Wilson):18 November 2004


The claimant was a female of Somali ethnicity. Prior to coming to the UK, she had applied for asylum in Italy which had conducted the screening process at that time required under the standing arrangements set out in the Dublin Convention (1997) (Cmnd 3806) and, by reference to a default provision, had identified itself as responsible for the substantive examination.



She applied for judicial review of the certification by the Secretary of State for the Home Department, as clearly unfounded, of her claim that her removal to Italy under section 11(2) of the Immigration and Asylum Act 1999 (as substituted by section 80 of the Nationality, Immigration and Asylum Act 2002) would be unlawful under section 6 of the Human Rights Act 1998, in that it would be incompatible with her rights under article 8 of the European Convention on Human Rights and, since she had subsequently claimed to be a minor with family in the UK, would be in breach of articles 6, 7 and 15 of Council Regulation No 343/2003, (the Regulation) which had replaced the Dublin Convention.



Edward Nicholson (instructed by Luqmani Thompson & Partners, London) for the claimant; Alan Payne (instructed by the Treasury Solicitor) for the defendant.



Held, dismissing the application, that an EU state which conducted the screening process in an asylum application pursuant to the regulation was required to work its way, in strict order, through the criteria contained in articles 5 to 14 in order to identify the state responsible for the substantive examination of the application; that that process, which had to be undertaken by reference to the upshot of an inquiry conducted by the state with which the application was first lodged and at the time it was lodged, fell to be conducted only once; and that following its completion, an applicant could not demand further consideration of the criteria.



Back to top



Local government



Vulnerable competent adult wishing to commit assisted suicide - duties of local authority



In re Z (Local Authority: Duty): FD (Mr Justice Hedley): 3 December 2004


The local authority was granted an interlocutory injunction restraining a husband from removing his wife, who suffered from an incurable degenerative brain disease and who wished to go from England to Switzerland to commit assisted suicide.



A consultant psychiatrist assessed her as having full legal capacity and as having made the decision entirely uninfluenced by outside considerations. At the party and party hearing, the local authority was anxious to know the extent of its duties to a vulnerable person living in its area. The hearing was held and judgment given in open court, subject to the non-identification of any of the parties.



Mark Everall QC and Jonathan Butler for the local authority; Malcolm Sharpe for Mr Z; Jennifer Richards for the Official Solicitor as advocate to the court.



Held, discharging the injunction, that where a local authority learned that the welfare of a vulnerable person in its area was seriously threatened by a decision taken by that person, its duties included investigation of the person's true position, intention and legal competence, any influences that might be affecting the decision, consideration of whether it was necessary to invoke the inherent jurisdiction of the High Court to establish competence, and, where there were reasonable grounds for suspecting that criminal conduct might be involved, drawing the matter to the attention of the police; but that thereafter there was no obligation to seek injunctive relief where the effect was to deny a right to a seriously disabled but competent person where only the physical disability prevented that right being exercised.



Back to top



Prisons



Restriction on prisoner's right to publication - prisoner intending to publish details of his offences - publication contrary to standing orders made under prison rules - restriction lawful



R (Nilsen) v Governor of HM Prison Full Sutton and Another: CA (Lord Phillips of Worth Matravers Master of the Rolls, Lords Justice Kennedy and Gage): 17 November 2004


The claimant was sentenced in 1983 to six life sentences for six murders, the details of which he wished to publish. In 1992, he began writing his autobiography, which his then solicitor took out of prison in 1996. His present solicitor sought to return it to the claimant, who wished to do further work on it for publication. The secretary of state decided to withhold it from him and the prison governor refused permission for him to receive it, applying paragraph 34(9)(c) of standing order 5 (made under section 47(1) of the Prison Act 1952 and rule 8 of the Prison Rules 1999 (as amended by Prison (Amendment) (No 2) Rules 2000)) which did not permit correspondence containing material about an inmate's crimes intended for publication. The claimant's application for judicial review of those decisions was dismissed by Mr Justice Maurice Kay. The claimant appealed.



Alison Foster QC and Flo Krause (instructed by Tuckers, Manchester) for the claimant; Steven Kovats (instructed by the Treasury Solicitor) for the defendants.



Held, dismissing the appeal, that it was not disproportionate for imprisonment to carry with it some restriction on freedom of expression; that the tightly-drawn restriction which prevented a prisoner from publishing material containing details of his offences did not infringe the right to freedom of expression under article 10 of the European Convention on Human Rights and was lawful; and that, on the facts, the application of the rule was justified and proportionate.



Back to top



Revenue



Income tax - emoluments - single payment to employee to settle dispute not chargeable



Wilson (Inspector of Taxes) v Clayton: CA (Lords Justice Peter Gibson, Clarke and Lady Justice Arden): 7 December 2004


The employer, a local authority, sought to terminate the benefit of an 'essential car user allowance' that the taxpayer received.



Together with many other employees he refused to accept the new employment terms and was dismissed. An employment tribunal held the dismissal unfair and at a subsequent remedies hearing by consent the employer agreed to reinstate the taxpayer, to restore the allowance and to make him a single payment of £5,060.



The Inland Revenue claimed the payment was chargeable to income tax under schedule E. The judge upheld a determination of general commissions allowing the taxpayer's appeal. The Revenue appealed.



Adam Tolley (instructed by the Solicitor, Inland Revenue) for the Revenue; Richard Jones QC and Glenn Willetts (instructed by Thompsons, Nottingham) for the taxpayer.



Held, dismissing the appeal, that section 19 of the Income and Corporation Taxes Act 1988 set out the charge to schedule E tax on emoluments, as defined in section 131; that section 154 of the Act imposed the charge on benefits received by reason of the employment; that section 148 of the Act provided for payments exceeding £30,000, not otherwise chargeable to tax received 'in connection with' the termination of employment; and that the judge's decision that the payment, the result of a negotiated compromise of a dispute about dismissal, was not an emolument and, being under £30,000 was outside the section 148 charge, was correct.



Back to top



Taxation



Value added tax - transfer of interest in partnership land - effected by partnership not by non-taxable partner



Fengate Developments (a partnership) v Customs and Excise Commissioners: CA (Lords Justice Mummery, Maurice Kay and Gage): 1 December 2004


Development land valued at £250,000 was owned by F, a partnership whose partners were Mr D and Mrs D. Transactions for transferring the land to D, another partnership, were negotiated.



Thereunder, Mr D and Mrs D each paid £125,000 into F's bank account and on the same day executed a Land Registry transfer form which named them personally as the transferors. The transferee was stated to be Mr D and a Mrs B, who together were partners in D. Mr D and Mrs B each drew and paid over to F £125,000 out of D's bank account. F, having elected to waive exemption from VAT, was assessed as having made a taxable supply of the land for £250,000. The VAT tribunal rejected F's case that the transaction was a transfer by Mrs D, a non-taxable person, of her beneficial interest in the land. Mr Justice Evans-Lombe [2004] STC 772 dismissed F's appeal. F appealed.



Eamon McNicholas (instructed by David Barney & Co, Stevenage) for F; Paul Key (instructed by the solicitor, Customs and Excise) for the commissioners.



Held, dismissing the appeal, that, in ascertaining whether a transaction transferring an interest in land was effected by a VAT registered partnership or by an individual non-taxable partner, all the surrounding circumstances had to be considered and not just the wording used on the Land Registry transfer; and that the tribunal, having heard the evidence, had been entitled to conclude that F had transferred the whole legal title and beneficial interest in the land and was thus liable for the tax.