Case No: A3/2007/2663
Neutral Citation Number: [2008] EWCA Civ 1502
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
(MR JUSTICE LEWISON)
Royal Courts of Justice
Strand, London, WC2A 2LL

Date: Thursday, 23rd October 2008

Before:

LORD JUSTICE WILSON
and
LORD JUSTICE RIMER

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Between:

	GAINES-COOPER	Appellant
	
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THE COMMISSIONERS 
FOR HM REVENUE AND CUSTOMS	

Respondent	

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(DAR Transcript of 
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Mr M Flesch QC and Miss Nicola Shaw (instructed by Squire, Sanders and Dempsey) appeared on behalf of the Appellant.

THE RESPONDENT DID NOT APPEAR AND WAS NOT REPRESENTED.

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Judgment

Lord Justice Rimer:

1.	This is a renewed application by Robert Gaines-Cooper for permission to pursue a second appeal in order to challenge an order of Lewison J, dated 13 November 2007, upholding a decision of the Special Commissioners, dated 31 October 2006, that the appellant was domiciled in England and Wales in the tax years 1992/93 to 2003/04 inclusive.  That decision followed the finding by the Special Commissioners that the appellant had not, contrary to his claim, established a domicile of choice in the Seychelles in 1976 in place of his domicile of origin in England and Wales.  

2.	The proposed appeal is mounted on the basis that, in arriving at their decision, the Special Commissioners misdirected themselves in law by producing a set of reasons tainted with error on their face.  In part it is also said that their reasons reflect that they ignored material evidence which they should have taken into account.  My own assessment is that the Special Commissioners’ decision was a particularly careful one, and Lewison J, in a judgment redolent of his usual clarity and insight, was unmoved by the arguments that the Special Commissioners had fallen into legal error and he dismissed the appeal.  Arden LJ was similarly unmoved and refused permission on the papers on 22 August.  

3.	I do not propose to devote any time to rehearsing the long and quite complicated history of this case, which is very fully set out by the Special Commissioners.  The essence of the case that the appellant wishes to make in the Court of Appeal is, however, that the only reasonable conclusion that the Special Commissioners could have come to, but did not, was that the appellant did acquire a domicile of choice in the Seychelles in 1976.  It does seem to me, from the way in which the case has been formulated in the skeleton arguments which have been put before us and indeed from the way in which Mr Flesch QC has elaborated the arguments before us this morning, that the appeal is in fact intended to be a fact-based challenge to the Special Commissioners’ decision, when it is squarely and properly recognised by Mr Flesch that the appeal to Lewison J, as indeed any appeal to us, could only be founded on the basis that the Special Commissioners made an error of law.  As I would explain, the appellant does say that the true analysis of his case is that it seeks to identify a series of fatal errors of law by the Special Commissioners; and indeed, if this application has any prospect of success, he has to be able to show that.

4.	The appellant opened his main 143-paragraph skeleton argument by submitting that the Special Commissioners failed to appreciate the appellant’s essential case on the facts and he cited in support paragraphs 148 to 152 of the Special Commissioners’ reasons.  If that was intended to be the appellant’s best point, and it did appear first in the skeleton argument, I have to say I regard it as a very poor point and there is, in my assessment, nothing in it.  That part of the Special Commissioners’ reasoning was expressly stated to be a line of alternative reasoning that was not argued before them and not relied upon by them.  Taken in isolation there are features in it which can fairly be criticised, but it does not make the case that the reasoning which did found their decision reflected a misunderstanding of the case before them, and their reasons show in my judgment that they fully understood that case.

5.	The appellant makes, however, a very long list of further criticisms, including that the Special Commissioners made findings of fact that are said to have been directly contrary to the undisputed evidence and that they were in error in finding that in and after 1976 the appellant retained a chief residence in England even though his former residence there, Grove House, was leased out for four years from 1976.  

6.	Central to the acquisition of a domicile of choice is the dual requirement that the propositors must (a) have the intention of permanent or indefinite residence in the new jurisdiction and (b) in fact take up residence there.  The critical question for the Special Commissioners was whether the appellant had proved on the balance of probabilities that as at 1976 he had met both conditions.  There is, I understand, no dispute, and the Special Commissioners plainly proceeded on this basis, that in relation to the question of intention it was permissible to take account of the conduct of the appellant after the relevant date -- that is, 1976 -- in assessing what his intention was at the material time.  As regards the evidence admissible in relation to the residence element, I understand the appellant now to accept -- although it is not entirely clear that he so accepted before Lewison J -- what seems to me to be perfectly obvious, that regard can -- indeed probably must -- also be had to evidence post-dating the claimed “snapshot moment” when the domicile of choice is said to have been assumed.  But he submits that there is a temporal limit to the length of a subsequent period in respect of which such evidence can be relevant to the answering of that question.  That may be so, but what the time limit is in any case must necessarily depend on its particular circumstances.  

7.	More particularly, the appellant says that the Special Commissioners were in error in considering the residence element of the questions before them by looking at and considering evidence after 1980, that date being so far as I can see an essentially arbitrary date fastened upon by the appellant.  The question was as to his chief residence in or about 1976, and the appellant says that evidence relating to issues of residence in and after 1981 could not be relevant to that question.  In the skeleton argument the submission was advanced that the Special Commissioners were wrong in their approach to that question.  Whilst the judge relied on Bremer v Freeman [1857] 3 Moo PCC 306, Re Grove [1888] 40 Ch D 216, IRC  v Bullock  [1976] STC 409 and Agulian v Cyganik [2006] EWCA Civ 129 in support of the Special Commissioners’ reliance on later evidence, it is said that those cases were only concerned with the intention to take up the new permanent residence.

8.	I understand from the skeleton argument that the appellant is prepared to assume that IRC v Duchess of Portland [1982] STC 149 may support the view that it is legitimate to consider subsequent evidence in relation to the identification of the appellant’s chief residence in 1976, but it is nevertheless said that it cannot be legitimate to take into account evidence over the next 28 years, and I have indicated that the submission is that in the present case it was not legitimate to look at evidence beyond 1980.  That was a period during which the appellant was averaging about five months a year in the Seychelles, a fact of which it is complained the Special Commissioners made no mention of, and during which Grove House was let.  Reference is made to the appellant’s unequivocal evidence in which he asserted his intention to make the Seychelles his home in 1976 when he obtained a residency permit there, and it is said that this evidence, which went to his subjective intention, should have been accepted.  

9.	The appellant’s problem, however, is that the Special Commissioners did not accept that evidence.  At the beginning of their reasons, in paragraphs 7 to 9, they explained why they approached the appellant’s evidence with caution, and in paragraph 122 they again directed themselves as to the caution with which they considered that they had to approach his declarations as to his intention.  They found that he intended to retain a presence in England for an indefinite period, and that was their answer to the intention question, and they also found that England was where his chief residence was albeit that he may also have intended to maintain a physical presence in the Seychelles.  They did not accept his evidence that he never had a desire to return to England.  Those matters were, it seems to me, matters of fact for the Special Commissioners.  In the skeleton argument it is said that their conclusion is inconsistent with various documents dating from 1976 and 1977 which it is said - and I accept - lend support to the appellant’s case that he was by then resident in the Seychelles and intended to reside there permanently.  It is further said that his subsequent conduct is consistent with that.  Reliance is placed on the assertions that he had a resident’s permit to live there; that he has owned a home there and has lived for more than 30 years; that the factory he built there in 1975 or 1976 in order to obtain that permit is still owned by him and has been enlarged and modernised; that he remained in the Seychelles after the military coup in 1977.  Another matter complaint is made that the Special Commissioners did not refer to, and an omission which is said to be an error of law, is that he spent considerable sums in 1996 to 1998 in further improving Bois Noir, and reliance is placed on the unchallenged evidence that he wants his ashes scattered at Bois Noir.  All these matters are rightly said to be consistent with the appellant’s declared intention to reside permanently in the Seychelles and no doubt they are.  

10.	The appellant focuses his criticism in particular on the Special Commissioners’ reasoning in paragraphs 133 to 146 of their reasons where they applied the legal principles which they had earlier identified, and as to which no complaint is made, to the question of whether or not the appellant had acquired the domicile of choice that he was asserting.  It is said that they failed to appreciate that the appellant’s case was that he acquired that domicile in 1976, with the critical evidential period being 1976 to 1980.  Their reasoning is also criticised as failing to distinguish between the considerations of the appellant’s intention to reside in the Seychelles and his actual residence.  I do not for one moment accept that the Special Commissioners did not understand that 1976 was advanced by the appellant as the resident date he was asserting.  Paragraphs 51, 111, 134 and 145 show that the Special Commissioners understood that perfectly well and the assertion made in the skeleton argument to the contrary is absurd.  Paragraph 142 shows that they understood that he was asserting that in 1976 his chief residence was in the Seychelles, an essential element to his case that he had then assumed domicile of choice there.  The Special Commissioners did not, however, accept that his chief residence was there.  The argument that it was rested at least in part on the fact that his English residence, Grove House, was by then rented out.  The Special Commissioners were well aware of that but they also took into account, amongst other things, that so was Bois Noir rented out, the reason being that at that period the appellant was pursuing a venture in Canada.  The Special Commissioners said that the “evidence did not, even in this period when the appellant spent materially more time in the Seychelles than in England, persuade us that the Seychelles rather than Canada, California or England was his chief residence”.  

11.	The appellant focuses particular and detailed criticism on the approach of the Special Commissioners to the chief residence point in paragraphs 139 to 142 of their decision.  I disagree that these criticisms are well-founded.  It may be that in paragraph 140 at least certain of the matters they refer to were considered, in isolation, of marginal or no relevance.  It may be that they reflect certain factual inaccuracies.  It may be that they do not refer to matters which the appellant asserts that they should have referred to. The appellant refers in particular to the points in paragraph 142 about the precise dating of the renting-out of Grove House and Bois Noir, the point made being that, on the facts, Grove House had been rented out before Bois Noir; so that there was a period of time in 1976 when the latter could be, and they say was, the only house that would qualify as the appellant’s residence.  But paragraphs 24 and 25 show, as I read them, that the Special Commissioners understood the timing of the respective rentals.

12.	In this part of their reasoning the Special Commissioners were, as they were bound to do, evaluating the evidence that overall bore on the soundness of the appellant’s factual case that in 1976 he both intended to and did establish a permanent residence and a chief residence in the Seychelles.  They knew what his case was and they assessed it by consideration of all the evidence.  As it seems to me that was an entirely correct approach.  That evidence included material in and following 1981 which pointed against the conclusion that the appellant had the permanent intention that he had claimed, and it included evidence that the Special Commissioners were entitled and indeed bound to have regard to.  They did of course arrive at a conclusion on the facts with which the appellant profoundly disagrees and which he says involved the making of wrong findings.  Accepting for present purposes that the Commissioners did take into account factual matters that they should not have done or made factual errors in the recitation of the evidence, that may at most mean that they arrived at a conclusion of fact that another tribunal might not have done, although I do not say that they did.  But it also means that the proposed challenge to their conclusion is based on a challenge to their findings of fact, not on a mistake of law, and as Lewison J rightly pointed out in paragraph 66 of his judgment, that provided no basis for the appeal to him.  

13.	It is also, as follows, no basis for permitting a second appeal against the upholding of their decision by the judge.  Second appeals have to cross one or other of the threshold criteria in CPR Part 52.13.  A challenge to the Special Commissioners’ fact-finding exercise cannot claim to do that.  It is worth noting that in the appellant’s main skeleton argument there was no apparent recognition of the Part 52.13 criteria and no attempt was made to identify how either of them was said to be satisfied.  In a supplementary skeleton argument running to a mere 29 paragraphs, the appellant sought further to make good his grounds for permission in the light of a decision of this court in Barlow Clowes International Ltd v Henwood [2008] EWCA Civ 557, a judgment handed down on 23 May 2008.  That was done following the adjournment of the original permission application by Arden LJ until that judgment had been handed down, and Arden LJ invited comments on that decision.  She also pointed out the appellant’s omission to address CPR Part 52.13 and directed him to do so.  The supplemental argument sought to do that.  

14.	The general assertion in that further skeleton argument is advanced that the Special Commissioners’ decision was littered on its face with errors of law and fact and that, on a proper application of the law to the facts, the only possible conclusion was that the appellant assumed a domicile of choice in the Seychelles in 1976.  The basis on which the appellant seeks to say that the Special Commissioners’ errors amounted to errors of law, as they have to do, is by relying on Lord Radcliffe’s well-known observations in Edwards v Bairstow [1956] AC 14 at page 36.  The appellant invokes that passage as enabling him to reargue the facts in support of the ultimate proposition that the Special Commissioners’ conclusion was wrong and that their conclusion was therefore wrong in law.  In my judgment the appellant seeks to read the language that Lord Radcliffe used rather too widely.  In an appeal limited to a question of law such as that before Lewison J it was not open to the appellant to re-open the facts in the way that was and is now sought.  Provided that there was evidence that entitled the Special Commissioners to come to the conclusion that they did, their decision is not open to challenge on an appeal.  It is not enough to argue, as in effect Mr Flesch has sought to argue, that their conclusion on the facts was against the weight of the evidence.  The present case appears to me to be one in which the appellant is simply seeking to do that.  A challenge of that sort is not a challenge founded on an error of law: it is nothing other than a challenge to findings of fact.  It is just the sort of challenge, equally misconceived, that is regularly sought to be made by way of appeals to the Employment Appeal Tribunal against decisions of employment tribunals, whereas appeals to the EAT likewise lie only on questions of law.

15.	Having been invited by Arden LJ to do so, the appellant referred to the Henwood decision in support of the proposition that the Special Commissioners’ alleged ignoring of relevant and undisputed evidence amounts to an error of law, and reference is made to various paragraphs in that decision.  None, however, supports the proposition which is sought to be advanced.  The appeal in that case was not confined to an appeal on a question of law: it was one that could legitimately also be made against the judge’s findings of fact, and all that the court was saying was that it was entitled to interfere with those findings if it was satisfied that relevant evidence had been ignored.  That option is not open to the appellant in this case.  

16.	In a yet further statement provided to the court in support of the case that the proposed appeal crosses the Part 52.13 threshold, the appellant says that the proposed appeal raises an important point of principle and, if not, that there is anyway some other compelling reason to grant permission for a second appeal.  As regards the latter point, the argument is that, for the extensive reasons advanced in the earlier skeleton arguments, there are very good prospects of success on an appeal.  I am not convinced that there are any such prospects, since as I have indicated, I regret more than once, the proposed appeal is nothing more than an illegitimate attempt to reargue the facts.  But even assuming that there is a real prospect of success, that does not show a compelling reason to grant permission.  A demonstration of a real prospect of success is a precondition of a grant of permission in every case.  Plainly something more and something special needs to be shown in order to identify some other compelling reason to permit a second appeal.  The circumstances in which there will be that something more and something special will necessarily be almost infinitely various, but I am for my own part entirely unconvinced that there is anything special about this case which enables it to be said that the second limb of the threshold criteria has been made out.

17.	The appellant says, however, that the appeal anyway raises important questions of principle for the purposes of the first limb.  The first question is said to be whether, in the context of what constitutes a chief residence in a two-home situation, a person who leases out his house in his domicile of origin for four years can be said to retain a residence there in the relevant sense and secondly, whether events happening in and after 1980 can ever be of relevance in determining a person’s chief residence for domicile purposes in 1976.  In my view neither question raises an important question of principle.  The answer to the first is not one that can be answered in the abstract so as to establish some universal principle of general benefit.  The answer to that question, insofar as it arose in the present case, depended on a fact-sensitive assessment of the particular circumstances with which the Special Commissioners were concerned.  The answer to the second question also depended on a like consideration of the circumstances of the case.  As Lewison J said, the more remote the evidence from the moment when the domicile of choice is said to have been assumed the less cogent the inferences that can be drawn from it, but that goes to the evaluation of the evidence as a whole; it does not provide a basis for rejecting part of it as irrelevant.  That question cannot in my judgment be said to raise a question of principle likely to be of value more generally.

18.	In any event, since in my judgment the Special Commissions appear to have reached an unimpeachable finding that the appellant did not have the necessary intention to reside permanently in the Seychelles (see Lewison J’s judgment at paragraphs 23 and 24), the attempt in a proposed appeal to focus on and explore the chief residence issue would appear to me to be an essentially academic endeavour.  Like Arden LJ, with whose cogent and succinctly expressed reasons I entirely agree, delivered by her after considering the appellant’s first skeleton arguments, I would refuse this application.

Lord Justice Wilson:  

19.	So would I. 

Order: Application refused