Woolwich Building Society v IRC

Woolwich Equitable Building Society v Inland Revenue Commissioners [1993] AC 70 is an English unjust enrichment law case, concerning to what extent enrichment of the defendant must be at the expense of the claimant.

Woolwich Equitable Building Society v Inland Revenue Commissioners
London, Woolwich-Centre, General Gordon Square-Woolwich New Road, Equity Building03.jpg
Woolwich's headquarters at the time of the dispute.
CourtHouse of Lords
Decided20 July 1992
Citation(s)[1993] AC 70
[1992] 3 WLR 366
Court membership
Judge(s) sittingLord Goff
Lord Browne-Wilkinson
Lord Slynn
Lord Keith of Kinkel
Lord Jauncey
Keywords
  • restitution
  • interest
  • ultra vires

It related to the payment of tax which was subsequent held not to have been due as a result of the invalidity of the law under which the tax had been assessed. The Inland Revenue repaid the tax, but disputed their liability to pay interest on the money during the time which they had held it.

FactsEdit

The Woolwich Building Society was charged £57 million in tax that it objected to as being assessed under a tax law which is alleged was ultra vires. It paid the sums on a "without prejudice" basis, and then sought judicial review with a view to reclaiming the tax. The House of Lords agreed with Woolwich. The revenue repaid the tax, but refused to pay any interest, which was agreed to be in the amount of £6.73 million. Under section 35A of the Supreme Court Act 1981 interest would only be given at the court’s discretion if an entitlement to restitution of the principal could be made out. So because there was a dispute of the interest, the question was whether Woolwich was entitled as of right to restitution of the principal. The problem was a claim based on mistake could not succeed, because Woolwich argued it was ultra vires from the start. It was not duress, because the only threat by the Revenue would be to sue for non payment, and threatening to sue is legitimate pressure. Nor was it duress colore officii because the Revenue was not impliedly threatening to withhold performance of a duty owed to Woolwich.

JudgmentEdit

Lord Goff, Browne-Wilkinson and Slynn said that a demand for payment by a public authority ultra vires was a good ground for restitution itself, in essence a public law ground for restitution based on a constitutional principle of no taxation without Parliament. The Bill of Rights article 4 says there should be no taxation without legislation.

Lord Slynn said the mistake of law bar was ‘open to review by your Lordships’ House’.

Lord Keith dissented.

Lord Jauncey also dissented.

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