Van Gend en Loos v Nederlandse Administratie de Belastingen [1963]

European Law

Van Gend en Loos v Nederlandse Administratie de Belastingen [1963]
‘Dutch Windmills’ by Eugene Louis Boudin

When a Dutch importer of ureaformaldehyde fell victim to domestically manipulated customs tariffs, the question of both ‘direct effect’ and the individual right to challenge an abuse of EU Treaties became subject to a preliminary ruling under art.177 EC. 

Because of the supranational nature of the case it was first believed inapplicable when challenges to increased (or recategorised) tax rates were put into effect by national statutes, however the argument made was that at the time of the abuse the original Treaty taxation of the affected product was set at just three percent, and so when domestic reclassification set to increase the rate to eight percent the claimant challenged the adjustment by citing art.12 of the Treaty of Rome, which explains that:

“Member States shall refrain from intro­ducing between themselves any new customs duties or imports or exports or any charges having equivalent effect and from increasing those which they already apply in their trade with each other.”

While noting how in addition to the terms of art.12, art.95 EC states that:

“A Member State shall not impose, directly or indirectly, on the products of other Member States any internal charges of any kind in excess of those applied directly or indirectly to like domestic products.”

During the preliminary ruling hearing the European Court of Justice noted that if the protective principles of Community law were to remain excluded from violations of Member States it would defeat their very purpose, thus it was held that the inherent meaning and purpose of art.12 was to afford unequivocal rights to individuals, who when taking issue with such matters, would do so in the knowledge that they were protected by the national courts.

In closing it was held by the Court that all Member States would thereon refrain from increasing levies and customs duties conflicting with those put forward in the original Treaty of Rome, and that because the recategorisation of that specific tariff was now found to be illegal, the matter was referred back to the national courts in order to establish how best to reclassify the products, while the Court reminded the parties that:

“[A]ccording to the spirit, the general scheme and wording of the Treaty, Article 12 must be interpreted as providing direct effects and creating individual rights which national courts must protect.”

CILFIT and Lanificio di Gavardo SpA v Ministry of Health [1982]

European Law

CILFIT
‘Lamb of God’ by Francisco de Zurburán

Member State compliance with Community law is brought into question after an Italian national court sought to address their Ministry for Health’s contention that domestic laws precluded a right to claim, and that no regulatory terms could provide a different outcome.

When a claim was made by a number of textile firms against the excessive taxation of imported wool, they relied upon the powers conferred by Regulation 827/68/EEC and not the discriminatory rules set down under the national powers of Law No.30, which had forced companies to pay levies ten times the amount intended prior to a later amendment under Law No.1239.

In the first instance the claimants were denied a right to recover in the Tribunal di Roma (District Court) on grounds that the adoption of Regulation 827/68/EEC had excluded wool, while the Corte d’Appello (Court of Appeal) also rejected the claim before they appealed to the Court of Cassation, whereupon the Ministry of Health cross-appealed in an attempt to persuade the Court to decide the outcome without seeking a preliminary ruling under art.177 EC.

Here the Court interpreted that by virtue of the fact that the Ministry of Health argued against a consultation with the European Court of Justice, there must be a degree of uncertainty as to the effect of Regulation 827/68/EEC, and that while national legislation failed to provide an immediate remedy such a duty nonetheless existed. 

Thus in accordance with its perceived obligations the Court of Cassation asked:

1. Whether under such circumstances para.3 of art.177 EC required the national courts (or courts of first instance) to seek a preliminary ruling where uncertainty or doubt as to the interpretation of a Regulation existed?

Having evaluated the intentions and possible variances of art.177 EC it was agreed by the European Court of Justice that while certain discretions were provided for when adopting and applying the terms of Community law, the obligation to seek a preliminary ruling was one designed to establish clarity. 

This translated that even if the questions arose from claimants, government or the courts themselves, it was important that the courts looked at the complexity of the doubt and sought (where relevant) the assistance of the European Court of Justice in order that the effect of the Regulation or Directive was properly established, while the Court further reminded the parties that:

A uniform interpretation of Community law by the Court is objectively in the public interest, which may not be subordinated to the existence or otherwise of agreement between the national courts in the previous stages of an action or to the assent or dissent of the parties.”

Commission v United Kingdom [Excise Duties on Wine] [1980]

European Law

 

Commission v United Kingdom [Excise Duties on Wine]
‘Still Life with Bottle, Glass and Loaf’ by Imitator of Jean-Siméon Chardin

Member State obligations to observe the fairness of the European market when allowing for competition were crystallised in this taxation matter surrounding the importation and domestic production of alcoholic drinks.

The terms of Art.95 EC (in particular para.1) were constructed so as to allow and support the freedom of competition between Member States when selling comparable products including alcoholic beverages in their various forms, however during a period between 1973 and 1981 the United Kingdom deliberately increased the taxation rates for bottled wines over that of bottled beers, thus the margin between the two remained disproportionate for a considerable period and significantly hampered the sale of affordable imported wines in lieu of an over-proliferation of domestic low-volume beers.

When addressed by the European Commission under the inference that such disparity amounted to a breach of para.2 of art.95 EC, it was suggested that while running contrary to the harmonisation of Community law, the Member State was, under art.169 EC now required to submit its own observations in defence of its failure to follow the terms prescribed.

In response the United Kingdom contested the findings with little supporting evidence, thereby prompting the Commission to apply to the European Court of Justice on the strength of the breach, while citing that by way of reparation the United Kingdom was to pay the costs of the action. 

Shortly afterwards the Court also allowed Italy to intervene in support of the Commission under art.37 of the Protocol on the Statute of the Court of Justice, whereupon the Court instructed the three parties to reexamine their arguments and submit relevant chronological sales data before reconvening for judgment.

Having established that the manufacturing processes for beer and wine were comparable, it was then revealed that due to the complex structure of the British market it was only possible to compare prices through the taxation rates applicable to the volume (strength) of the alcohol in hand. 

It was this contradistinction that showed clear support for the suggestion that protective measures had been implemented in order to deprive the import of affordable wines from other Member Sates despite the measures laid down under art.95 and the United Kingdom’s obligation to follow them.

Citing numerous and unsustainable arguments for the heavy taxation of wines (including manufacturing costs (as previously ruled out) and alleged ‘social’ reasons) the Court held that a serious breach of art.95 EC had been in existence not only for a considerable period, but that recent attempts to narrow the margin were indicative of reasons beyond that expected from a Member State when observing their duty to encourage and support the free movement of goods and equality of competition between states, before reminding those responsible that:

“[A] Member State may lay down differing tax arrangements even for identical products on the basis of objective criteria provided that such arrangements pursue objectives of economic policy which are themselves compatible with Community law and that they are not discriminatory or protective in nature.”

Inland Revenue Commissioners v Broadway Cottages Trust (1954)

English Equity & Trusts

AN
‘Anonymity’ by Ben Will

Uncertainty as to the exact class of trust beneficiary lies central to the disposition and taxation of funds, when after establishing two virtually identical charitable trusts (the Broadway Cottages Trust and the Sunnylands Trust), the nominated trustees and now appellants were faced with claims by the Inland Revenue that any monies generated by the use of the trust were lawfully subject to taxation under the Income Tax Act 1918.

In the summer of 1950, the now deceased settlor bequeathed a sum of £80,000 for the benefit of a number of beneficiaries, while the design was such that the appellants were granted discretionary powers to invest and apply the money, so as to accrue sufficient income for his wife and numerous other parties for the duration of the trust.

However the appellees claimed that clause 8 of the trust instrument was void for uncertainty, on grounds that while it stated in relevant part that:

“[T]he trustees shall hold the income of the trust fund from the date or respective dates from which the trustees shall become entitled to such income upon trust to apply the same for the benefit of all or any one or more of the donor’s said wife and the beneficiaries….

The beneficiary schedule conversely included:

“1. All persons (other than the settlor and any wife of his and any infant child of his) who have been in the past or (as the case may be) at the date of these presents or subsequently thereto at any time during the period ending on December 31, 1980, or during the appointed period whichever shall be the shorter employed by: (a) the settlor; (b) the wife of the settlor; (c) William Timpson deceased (father of the settlor and who died on January 20, 1929); (d) Katherine Chapman Timpson deceased (mother of the settlor and who died on December 16, 1940); (e) William Timpson Limited or by any other limited company which may succeed to the business of William Timpson Limited; (/) Any other limited company of which the settlor is a director at the date of these presents.
2. The wives and widows of any such persons as is specified in cl. 1 of this schedule.
3. All persons (other than the settlor and any wife of his and any infant child of his) who are the issue however remote of the said William Timpson deceased . . . and Charles Henry Rutherford deceased (father of the wife of the settlor and who died on February 17, 1930).
4 , 5, 6, 7. [Certain named persons.]
8. Alastair John Grenville Stevenson and any spouse of his or issue of him.
9. [The trustees of the settlement and their spouses or issue].
10. Joseph Baker and any spouse of his or issue of him.
11. Godchildren of the settlor or his wife.”

And so the appellees argued that there was no clear and ascertainable list of beneficiaries upon which to refer, while the appellants contended that the trust afforded them discretionary powers to assign the funds to those parties they believed to be ascertainable, and so the trust remained valid under clause 10, which read in relevant part that:

“The trustees shall also have power during the appointed period to apply the whole or any part of the capital of the trust fund in their discretion for the benefit of all or any one or more of the beneficiaries either by way of advancement on account of his or her or their share or shares or not as the trustees may in their discretion think fit….”

In the first instance, the Inland Revenue Special Commissioners reviewed the claim, and awarded for the respondents, while holding that:

“[T]he trusts of the settlement in so far as they related to the income of the trust fund were not void for uncertainty, and that the trustees under the provisions of cl. 8 of the settlement had a power of selection and that it was a valid and effective trust of the income of the trust fund, and that, accordingly, the sums of money received by the respondents from the trustees were the income of the respondents and thus entitled to the exemption claimed.”

Whereupon the appellees challenged the judgment in the Chancery Court, who allowed the appeal, while instead holding that:

“[I[n cases of an imperative trust to distribute there must be certainty as to the objects.”

Upon which the appellants challenged the judgment in the Court of Appeal, who then relied upon In re Gestetner Settlement, in which the Chancery Court had held that:

“[I]n a case where there is a duty on a trustee to select from a number of persons which of them shall be the recipients of the settlor’s bounty, there must be a certainty as to those recipients.”

Thus the court dismissed the appeal whilst reiterating to the parties that:

“[A] trust for such members of a given class of objects as the trustees shall select is void for uncertainty, unless the whole range of objects eligible for selection is ascertained or capable of ascertainment….”

Public Body Duty of Care in Tort

Insight | February 2017

Public Body Duty of Care in Tort
Image: ‘Vicarious Trauma’ by Amy Gaskin

Within the field of tort, there are a number of victims that are recognisable for damages in extenuating scenarios. These include rescuers, involuntary participants, communicators of shocking news, witnesses to self-harm and those held under an assumption of responsibility by the defendant.

There are of course exemptions from such events, in particular public bodies (despite being funded by tax payers money). One argument for such paradoxical exclusion is that making public bodies pay for their mistakes would place a strain upon public services funds, and lead to division of public resources in times of need.

This ironically raises the question of whether liability should exist when the public body has the power to act despite no duty to do so? The House of Lords determined that no duty of care was owed in respect to negligent use of power, unless that action made the claimant’s situation worse than it was before, while jurisprudence around the European Convention of Human Rights (ECHR) and the Human Rights Act 1998 (HRA) altered the previous threshold regards duty of care.

In D v East Berkshire Community NHS Trust and others, ‘defensive practices’ were seen as a consequence of liability on the part of the local authority staff, which would compromise their standard of work, therefore it was subsequently felt that a duty of care was owed to children in extraction cases, but not to all parties.

In the earlier case Osman v Ferguson, and the later Osman v UK, the police were initially offered immunity from a duty of care until the parents of a murdered pupil appealed to the European Court of Human Rights (ECtHR), under the observance that while art.6 of the Human Rights Act 1998 provided public body immunity, it denied the family from receiving a fair trial, while no attempts were made to distinguish Osman from the earlier Hill v Chief Constable of West Yorkshire, despite marked differences.

Of notable interest, is the knowledge that the fire service has no duty of care to respond to an emergency call or to turn up and attempt to fight a fire. It does however, have a positive duty not to make matters worse in the event that they do attend such events, albeit with the caveat that it does not have a duty of care to prevent the fire from spreading. On the upside, at least the ambulance service does owe a duty of care to individual claimants in specific circumstances, while also possessing a duty to respond to emergency calls, although this is only because the domestic courts view the service as an extension of the National Health Service (NHS), which itself owes a duty of care to all of its patients.

Much like the fire service before, the coastguard owes no duty of care to respond to calls from people in trouble at sea, only a duty to not make matters worse when they arrive. While in contrast, the British armed forces are only held to owe a duty of care when the defendant can be said to have assumed responsibility to the client, just as little comfort is taken in the knowledge that there is no duty of care owed to the public under battle conditions, or in times of threat.