Case: Claimants other than test claimant in a GLO not entitled to interim remedy

Released 7 August 2018

[2018] EWHC 1830 (Ch)

High Court of Justice (Chancery Division, Revenue List)

Mr Justice Roth

Decision released 17 July 2018

Group litigation order (‘GLO’) – Judgment given for test claimant to receive repayments – Judgment under appeal – Order sought for other claimants under the GLO to receive repayment in the interim – Whether claim interim remedy under FA 2013, s. 234 – Yes – Whether conditions for grant of remedy satisfied – No –Appeal dismissed.

Jazztel plc (as Test Claimant for GLO Issues 9A, 9B and 10) v R & C Commrs [2018] BTC 34


The application arose from two decisions of the Court of Justice of the European Union (‘ECJ’) that the imposition of stamp duty reserve tax (‘SDRT’) and stamp duty (‘SD’) at the rate of 1.5% on the issue of shares into a clearance service or to a depositary-receipts issuer was incompatible with EU law. The claims for repayment of tax and interest were brought into a GLO on 21 October 2010. The test case on certain issues (Issues 9A, 9B and 10) under the GLO and concerning only SDRT, with Jazztel as the test claimant, was heard by the High Court on 3 April 2017 (Jazztel plc v R & C Commrs [2017] BTC 7). Following the judgment, it was agreed between the parties that Jazztel was entitled to repayment of the principal amounts of SDRT paid plus simple interest, but that should the Supreme Court give HMRC permission to appeal against a claim for restitution on the grounds of ‘change of position’ in Test Claimants in the FII Group Litigation v R & C Commrs [2016] BTC 44, and should the appeal then succeed, Jazztel would be required to repay the relevant amounts.

Simply put, the application in the present case, although made by Jazztel, was to put the other claimants in the GLO in the same position as Jazztel, namely that they should be entitled to claim repayment of the SDRT paid by them plus simple interest, without being required to wait for the final resolution of the issues. HMRC’s defence against the application was based on FA 2013, s. 234, which provides that, where an application for an ‘interim remedy’ has been made in court proceedings related to a taxation matter and founded on a point of law yet to be finally determined in the proceedings, the interim remedy is to be granted only where under FA 2013, s. 234(3)(a), payment of the sum is necessary to enable the proceedings to continue or under FA 2013, s. 234(3)(b), the claimant’s circumstances are exceptional and granting the remedy is necessary in the interests of justice. On behalf of the Applicant, it was argued that FA 2013, s. 234 did not apply, since it was seeking not any form of interim remedy but a final order. Should that point fail the Applicant’s further argument was that the other claimants’ circumstances were indeed exceptional (condition (b) above).

Mr Justice Roth held that the order that the Applicant was seeking was clearly an interim remedy within the wide meaning given to that term in FA 2013, s. 234(1). Were the stay on the GLO proceedings to be lifted, the other claimants would not be able to obtain summary judgment given the sequence of pending cases before the courts, as required under the judgment in Six Continents Ltd v R & C Commrs [2015] BTC 29.

Applying the conditions of FA 2013, s. 234(3)(b), on which the Applicant relied, whereas there was force in the argument that the interests of justice would be served by granting the remedy, the circumstances of the other claimants were in no sense exceptional. The mere fact of being in a GLO could not be regarded as exceptional, and the delay experienced by the other claimants in recovering their money arose purely as an inescapable consequence of treating proceedings as final only once an appeal had been resolved.

The application was therefore dismissed.


Even though the test claimant in the GLO had been successful and had received a conditional repayment, the other claimants were not thereby similarly entitled as long as the point of law on which their right to repayment was based had yet to be finally resolved. A delay of over a year from the outcome of the test case was not exceptional in the circumstances.

‘Change of position’ is a defence to a claim in unjust enrichment that operates to reduce a defendant’s liability to the extent to which his or her circumstances have changed as a consequence of an enrichment. Whether HMRC will be permitted to mount a ‘change of position’ defence against the Court of Appeal’s judgment in Test Claimants in the FII Group Litigation v R & C Commrs in turn depends on the Supreme Court’s decision in Prudential Assurance Company Ltd v R & C Commrs [2016] BTC 15.

The key point of law at the bottom of all these cases is whether claimants for restitution in respect of tax levied in breach of EU law are entitled to compound interest (as the claimants argued) or only to simple interest (as HMRC argued).

At the time the High Court gave its judgment in the case being reported here (i.e. Jazztel), the decision in Prudential Assurance was not yet known. However, on 25 July, the Supreme Court delivered its judgment and, on the compound-interest issue, overruling the majority of the House of Lords in Sempra Metals Ltd v R & C Commrs [2007] BTC 509, found for HMRC. In 2017, the Supreme Court had already held, in Littlewoods Ltd v R & C Commrs [2017] BVC 54, that there was no right to compound interest under EU law.

For commentary on claims for relief for overpaid tax generally, see the Direct Tax Reporter from ¶191-210.

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