This judgment was the culmination of the latest (but not the last) episode of the epic £1.44bn claim by the Danish Customs and Tax Administration (referred to in the litigation’s own shorthand as “SKAT”) against 89 defendants (down from more than 100 initially sued) in 5 linked claims begun in 2018 and 2019 which are set for a trial beginning in April 2024 which is listed for 4 entire legal terms.
SKAT claims that, in about 4,590 applications, the defendants (all of whom were resident/domiciled outside Denmark) falsely represented themselves (or others) as being entitled to a refund of tax paid on dividends (by way of being withheld when the dividends themselves were paid). The precise means by which of the representations were made and the bases upon which the refunds were alleged to be due varied across the applications and were not material to the issues on this appeal. SKAT sought monetary awards to reflect the sums paid out in response to the refund applications on the basis that they were false (and generally known to have been false).
When the proceedings were launched most of the defendants challenged the claim on the basis that it contravened what was then Rule 3 (now Rule 20) in Dicey, Morris & Collins, (“the revenue rule”) which states:
“English courts have no jurisdiction to entertain an action:
- for the enforcement, either directly or indirectly, of a penal, revenue or other public law of a foreign state:..”
Those defendants asserted that the claim sought to enforce a “revenue or other public law” of Denmark because it relied upon the relevant Danish tax law as the basis of all the claims. The point was dealt with as a preliminary issue and the assigned Judge agreed with the defendants and dismissed the entire claim. The Court of Appeal overturned that decision and the defendants appealed to the Supreme Court.
Please click on this link to read the full article by William McCormick KC.