Judgment Call: 11 March 2013


British Film Institute v Revenue and Customs Commissioners. [2013] UKFTT 72 (TC). Judge Peter Kempster; Lynneth Salisbury. 5 December 2012

Under European case law, all cultural services qualified for exemption from VAT under Directive 77/388 art.13(A)(1)(n) notwithstanding the reference

in that provision to “certain” cultural services, which suggested some kind of qualification.

Three domestic authorities reaching the opposite conclusion had been decided per incuriam. The exemption was sufficiently precise so as to have direct


Preliminary issues determined in favour of appellant

For the appellant BFI

Pump Court Tax Chambers’ David Milne QC; Pump Court Tax Chambers’ Zizhen Yang; Deloitte partner Giles Salmond

For the respondents HMRC

One Crown Office Row’s Sarabjit Singh, instructed directly by HMRC


BAA Ltd v Revenue and Customs Commissioners. [2013] EWCA Civ 112. Patten LJ; Kenneth Parker J; Mummery LJ. 21 February 2013

Where a company took over another and then joined the latter’s VAT group, the VAT incurred on professional costs incurred by the company mounting the takeover was not recoverable as input tax attributable to the group’s general overheads.

Appeal dismissed

For the appellant BAA Ltd

Essex Court Chambers’ Roderick Cordara QC; Temple Tax Chambers’ David Southern; Temple Tax Chambers’ Rebecca Murray; Herbert Smith partner Isaac Zailer

For the respondents Revenue and Customs Commissioners

1COR’s Owain Thomas; Essex Court Chambers’ Edward Brown; instructed directly

Financial regulation

Digital Satellite Warranty Cover Ltd v FSA. [2013] UKSC 7. Lord Neuberger (president); Lady Hale JSC; Lord Mance JSC; Lord Clarke JSC; Lord Sumption JSC. 13 February 2013

As Directive 73/239 did not prevent EU member states from regulating any insurance business falling outside the 18 classes listed in the Annex to the Directive, the common law position that insurance contracts were contracts for the payment of a sum of money or for some corresponding benefit was not displaced by the requirement to construe domestic legislation in conformity with mandatory requirements of EU law.

Appeal dismissed

For the appellant Digital Satellite Warranty Cover Ltd

Kings Chambers’ Lesley Anderson QC; South Square’s Lloyd Tamlyn; Brabners Chaffe Street partner Simon Morris

For the respondent FSA

4SB’s Jonathan Crow QC; South Square’s Charlotte Cooke instructed directly

Real estate

Moore v British Waterways Board. [2013] EWCA Civ 73. Mummery LJ; Jackson LJ; Lewison LJ. 14 February 2013

The British Waterways Board had had no power to issue notices under the British Waterways Act 1983 s.8 against a boat owner

who had moored boats alongside his riparian land on a tidal stretch of a canal.

Although he had no riparian right to permanently moor the boats, he had committed no actionable wrong in doing so, and they were therefore not moored “without lawful authority” within the meaning of s.8.

Appeal allowed

The appellant Moore appeared in person

For the respondent

Serle Court’s Christopher Stoner QC; Shoosmiths partner Zoe Wright


Tamiz v Google Inc. [2013] EWCA Civ 68. Lord Dyson (MR); Richards LJ; Sullivan LJ. 14 February 2013

There was an arguable case that an internet service provider that allowed defamatory material to remain on a blog hosted on its platform after it had been notified of a complaint might have become a publisher of the material, but the probable damage to the complainant’s reputation over a short period was so trivial that the maintenance of libel proceedings could not be justified.

Appeal dismissed

For the appellant Tamiz

5RB’s Godwin Busuttil; Brett Wilson partner Iain Wilson

For the respondent Google Inc

Matrix Chambers’ Antony White QC; One Brick Court’s Catrin Evans; RPC partner Keith Mathieson


Aioi Nissay Dowa Insurance Co Ltd (formerly Chiyoda Fire and Marine Insurance Co Ltd) v Heraldglen Ltd; (2) Advent Capital (No.3) Ltd. [2013] EWHC 154 (Comm). Field J.

8 February 2013

Losses sustained by reinsurers arising out of the 9/11 attacks on the Twin Towers of the World Trade Center were caused by two separate occurrences arising out of separate events.

Appeal dismissed

The claimants were not represented

For the defendants Heraldglen Ltd and Advent Capital Ltd

7KBW’s Alistair Schaff QC; 3 Verulam Buildings’ Nicholas Craig; Holman Fenwick Willann partner Andrew Bandurka

Civil procedure

U&M Mining Zambia Ltd v Konkola Copper Mines plc. [2013] EWHC 260 (Comm). Blair J. 15 February 2013

Where the parties had agreed to arbitration in London under the rules of the London Court of International Arbitration (LCIA) so that the seat of the arbitration was in England, the LCIA rules, in particular art.25.3, permitted the parties to have recourse to the local Zambian court for interim or conservatory measures.

Judgment accordingly

For the claimant U&M Mining Zambia Ltd

Fountain Court Chambers’ Andrew Mitchell QC; Fountain Court Chambers’ Marianne Butler; Clyde & Co partner Peter Hirst

For the defendant Konkola Copper Mines Plc

Keating Chambers’ Justin Mort; Latham & Watkins partner Philip Clifford; Latham & Watkins partner Nigel Campion-Smith

Civil procedure

Nicholas Stewart QC
Nicholas Stewart QC

OJSC TNK-BP Holding v Lazurenko. Unreported. Lewison LJ. 21 February 2013

Where an unsuccessful claimant sought permission to appeal and a stay of execution so as to continue an injunction, and a single Lord Justice adjourned the application to a two-judge court, the defendant was entitled to its costs when the permission application was withdrawn.

Owain Draper
Owain Draper

Application granted

For the claimant OJSC TNK-BP Holding

Ely Place Chambers’ Nicholas Stewart QC; Ely Place Chambers’ Jonathan Price; 4-5 Gray’s Inn Square’s James Ramsden; Bryan Cave associate Robert Dougans

For the defendant Lazurenko

One Essex Court’s Neil Kitchener QC; Monckton Chambers’ Owain Draper; Mishcon de Reya partner Masoud Zabeti

Featured case

Financial regulation

Financial Services Authority v (1) Sinaloa Gold plc; (2) Barclays Bank. [2013] UKSC 11. Lord Neuberger (president); Lady Hale JSC; Lord Mance JSC; Lord Clarke JSC; Lord Sumption JSC. 27 February 2013

Where an authority like the FSA, acting in pursuance of a public duty, sought an interim injunction, there was no general rule that it should be required to give a cross-undertaking in damages in respect of losses incurred by third parties.

Appeal dismissed

Barclays Bank appealed against a decision that the FSA was not required to give a cross-undertaking in respect of third-party losses on its application for an interim freezing injunction against certain companies including Sinaloa Gold.

The FSA believed Sinaloa Gold was engaged in unlawful activity and obtained without notice an injunction freezing its assets under the Financial Services and Markets Act 2000 and/or the Senior Courts Act 1981.

The FSA gave an undertaking in respect of costs incurred by third parties, but not in relation to losses incurred. Barclays submitted that F Hoffmann La Roche & Co AG v Secretary of State for Trade and Industry [1975], in which it was held there was a normal rule that a cross-undertaking would not be required from the Crown, concerned enforcement of an apparently valid executive order in relation to which the only defence was that it was invalid.

Subsequent authorities had read Hoffmann La Roche too broadly, the appellant claimed. Hoffmann La Roche only related to the protection of defendants, whereas the instant case involved the protection of third persons who, unless the contrary was shown, had to be taken as having no involvement in the breach of the law alleged against the defendants; no sensible distinction could exist between a cross-undertaking in respect of costs and one in damages.

Appeal dismissed

There was a general distinction in Hoffmann La Roche and the subsequent line of authority between private litigation and public law enforcement action. In private litigation a claimant acted in its own interests and had a choice whether to commit to doing so. If the claimant sought interim relief that might cause loss or expense to the defendant it was usually fair to require it to accept responsibility for that loss.

Different considerations arose in relation to law enforcement action, where a public authority was enforcing the law in the public interest and enjoyed only the resources assigned to it for its functions.

The risk that public authorities might be deterred from pursuing claims in the public interest had to be accepted as a material consideration. Authorities acting in the public interest could not be expected generally to back their legal actions with public funds.

It was generally appropriate to adopt a starting point that public authority claims brought in the public interest required separate consideration, and that no cross-undertaking should be exacted as a matter of course, or without considering what was fair in the circumstances of the case, Hoffmann La Roche followed.

The distinction Barclays suggested between cross-undertakings for the protection of defendants and for third parties did not hold good.

There was a pragmatic basis for a distinction between specific costs and general loss. The rationale of Hoffmann La Roche applied to any open-ended cross-undertaking in respect of third-party loss. It did not apply in the same way to a cross-undertaking in respect of costs.

Where an authority like the FSA sought an interim injunction there was no general rule that it should be required to give a cross-undertaking in damages in respect of losses incurred by third parties. There were no particular circumstances why the FSA should be required to do so in the instant case.

For the appellant Barclays Bank (instructed directly)

Richard Handyside QC, Fountain Court

Tamara Oppenheimer, Fountain Court

For the respondent FSA (instructed directly)

Nicholas Vineall QC, 4 Pump Court

James Purchas, 4 Pump Court

Adam Temple, 4 Pump Court

Adam Temple


, Adam Temple

This was a case fought squarely in the realm of principle: the underlying action had long been concluded, and Barclays Bank was not suggesting it had incurred any losses nor, even, that it had had any particular concerns that such losses might have arisen on the facts of this case.

A distinction between protecting public and private rights has been the accepted approach for some time. The Supreme Court agreed with that, rejecting Barclays’ interpretation of Hoffman-La Roche v Secretary of State for Trade and Industry [1975].

It follows that cross-undertakings in favour of defendants and third parties should be limited to cases with special circumstances.

This case does not provide any clear examples of such special circumstances. But banks should not expect to receive protection simply because freezing orders apply to accounts that they hold.

What the courts will not do is give blanket protections for unnamed third parties.

Instead, real protection for third parties is in their own hands: they will be expected to contact the injuncting authority or the court before the with notice hearing.

They will then be able to lay out the reasons why they should be given special protection, and their specific circumstances can be taken into account.

This approach should stop authorities being afraid of seeking freezing injunctions and strengthen the hand of those who protect the public.

4 Pump Court Chambers barrister Adam Temple