QB-2020-004171 - [2025] EWHC 2773 (KB)

Further or in the alternative to the causes of action requiring proof of malice, there is a claim in negligence. A claim in negligence cannot be used as a way to evade the onerous requirement of malice. It is right to subject to it to some amount of scrutiny to ensure that it is not a plea to avoid the difficulty of proving malice and that it works as an independent cause of action.

The Claimants submit on their first route that their case gives rise to a duty of care on established principles and not amounting to anything novel. Their second route is that, if it is novel, they seek to adopt the incremental approach, being analogous to existing case law for the court to find that the duties pleaded are arguable.

The first route, not said to be based on a novel approach, is what is said to be a standard Hedley Byrne approach based on an alleged negligent misstatement. Its origin is based on alleged oral statements to the effect that the brewery could trade without a licence. It is said that each statement was made to an identifiable person, for a specific purpose, that the Claimants relied on the statements, that the representor must have appreciated foreseeable consequences of the same and that the Claimants have suffered economic loss: see RRAmPoC paras. 103 – 105. It is said that this was not based on any statutory duty, but applies because of conduct outwith the statutory duties. The statutory framework should not be treated as a barrier to the private law duty which would apply to a person existing outside such as framework because of advice given in circumstances giving rise to a Hedley Byrne type duty.

The Claimants say that oral permission was granted to brew beer whilst applications for registration were outstanding. This is said to have occurred as follows:

It is said that the Claimants relied on such permission and that the HMRC assumed responsibility for the accuracy of such advice and that the absence of a written licence could not be relied upon:

The second route is that if it is a novel cause of action, it is said that HMRC created a “sufficiently special relationship between the Claimants and the Defendant to impose a common law duty of care": see RRAmPoC para. 105 pursuant to which HMRC was required (RRAmPoC para. 106). By reference to RRAmPoC paras. 105 – 106, it is said that this gave rise to an assumption of responsibility and a duty of care as follows:

The Claimants say that the original oral permission to brew and its subsequent re-confirmation and the subsequent excessive requests for information and delays in the four applications to brew were positive actions which created a danger that would not otherwise have existed and made matters worse. It is said that applying existing case law incrementally, there is sufficient evidence to give rise to an arguable duty of care for the purpose of resisting a strike out application. It is said that it would be fair, just and reasonable to impose such a duty because the advice given should not be without consequences, and in any event, it would be at a trial that the Court would be best able to appraise questions of fairness, justice and reasonableness.

The Claimants submit that in breach of this duty, HMRC has:

The Claimants say that it cannot be said that non-compliance of the applications or failure to pay Beer Duty caused the subsequent enforcement steps because HMRC ought to have accepted the applications and/or allowed any very minor corrections. For example, Mr Parkinson ought not to have refused an application because an error in the VAT number: see RRAmPoC para.38. Likewise, the claim is that HMRC ought to have accepted the offered Beer Duty having orally permitted trading: see RRAmPoC para. 108.

They also claim that HMRC worsened the Claimants and LFCP's position as regards their compliance with the licensing and taxation regimes by giving an allegedly false assurance about their ability to commence brewing without having a registration: see RRAmPoC para. 108A. This was especially because they would not then be able to pay Beer Duty without a beer licence, and non-payment of Beer Duty would be used as a reason for refusal of a brewing licence and for seizure of beer.

Further, the Claimants submit that the duties of care extended to VAT. This is important because the search warrant, the arrest and the prosecution were in connection with the non-payment of VAT.

The Claimants submit that by reason of emails from Ms Laker dated 8-20 October 2014 that the VAT Unit would “…do everything…to help you and Paul” and that “I’m sure with Us all working together we will get there...”, HMRC assumed a duty of care to provide the Claimants with assistance and/or forbearance which it breached by offering insufficient assistance and/or “aggressively commencing enforcement action in criminal law”: see RRAmPoC para. 110.