Commercial analysis: This decision is a reminder of the ‘strict constraints’ on the court’s power to imply a particular term or terms into a contract, and the court’s aversion to applying any element of hindsight in interpreting the parties’ original bargain. The court confirmed the trial judge’s finding that a contract ‘worked’ notwithstanding that one party did not receive a benefit that both parties anticipated that it would receive at the time of contracting. Written by Jonathan Kelly and Victoria Rowley, at Freshfields Bruckhaus Deringer LLP.

Immigration analysis: The Court of Appeal dismissed appeals concerning the revocation of sponsor licences held by J’s Supermarket Ltd and Prestige Social Care Services Ltd. It held that J’s Supermarket had been given a fair opportunity to address allegations that sponsored roles were not genuine and that the Secretary of State’s conclusion was rational. Although procedural unfairness and irrationality affected aspects of Prestige’s revocation, relief was properly refused under section 31(2A) of the Senior Courts Act 1981 (SCA 1981) because revocation was highly likely on independent grounds. The decision underlines the need for sponsors to maintain robust recruitment processes and evidence of workers’ suitability, while confirming that procedural fairness requires the case against a sponsor to be put before a final decision is made. Produced in partnership with Ben Maitland of Vanessa Ganguin Immigration Law.

Tax analysis: In Elborne and others v HMRC, the Court of Appeal held that a 2003 inheritance tax (IHT) home loan scheme succeeded because the trustees’ liability under a promissory note reduced the value of the deceased’s deemed estate.

Tax analysis: In Murphy v HMRC, the Court of Appeal overturned the decision of the High Court, finding in favour of the taxpayer. The Court of Appeal held that the ‘ordinary sophisticated taxpayer’ had a legitimate expectation that HMRC’s extra-statutory concession ESC B18 (1999) applied with a six-year time limit in respect of credit for UK income tax paid on trust income.

The Financial Conduct Authority (FCA) has welcomed a decision by the Court of Appeal to deny permission for a judicial review in the case R (Sutton) v FCA. A group of crude-oil traders had applied for a judicial review of the FCA’s decision to request information from UK residents in order to assist the US Commodity Futures Trading Commission (CFTC) in an ongoing investigation of certain crude oil trading on a US exchange.

Dispute Resolution analysis: The Court of Appeal has held that the open justice principle applies to variation of trusts hearings, rejecting the argument that there should be a presumption in favour of granting anonymity to the beneficiaries of family trusts. Such applications are normally heard in open court, with the parties identified. However, the beneficiaries, members of one of Britain’s wealthiest aristocratic families, sought to argue that these cases are analogous to approval hearings for patients who lack capacity and therefore that the court should follow the Court of Appeal’s approach in X v Dartford and Gravesham NHS Trust [2015] EWCA Civ 96 and hold that ordinarily the starting point should be a presumption in favour of anonymity. The Court of Appeal rejected the argument that there was any true analogy between the two types of case and emphasised that the courts should not create new exceptions to open justice. Written by Guy Vassall-Adams QC, barrister, Matrix Chambers, London.

Tax analysis: In HMRC v Bluecrest Capital Management (UK) LLP, the Court of Appeal considered an appeal by HMRC, and the LLP’s cross-appeal, against the Upper Tribunal’s decision on the application of the salaried members legislation under sections 863A–863G of the Income Tax (Trading and Other Income) Act 2005. The court decided that the question of whether certain members of the LLP satisfied Condition B in s 836C should be remitted to the FTT for rehearing. It upheld the decision of the UT that Condition A in s 863B was satisfied in relation to all of the relevant LLP members.

Tax analysis: In HMRC v Innovative Bites Ltd, the Court of Appeal (CA) decided that, absent absurdity or the like, confectionery in the context of Value Added Tax Act 1994 (VATA 1994), Sch 8 Group 1 includes any product falling within Note 5 of the legislation because that is the effect of Note 5 when interpreted using the ordinary principles of statutory interpretation.

Planning analysis: In Tate v Northumberland CC, the Court of Appeal held that there had been an error of law due to Northumberland County Council’s (the Council) failure to give reasons when departing from an inspector’s reasoning in a previous decision for similar development at the same site.

Public Law analysis: In the case of R (Ayoola) v SSHD, the Court of Appeal ruled that Articles 24(2), and 25(2) of the Withdrawal Agreement (WA) do not create new rights of residence, but operate solely to preserve education-based derivative rights of residence that already existed prior to withdrawal from EU. Namely, children of EU citizens enjoyed rights of residence under Article 12 of Regulation 1612/68 (later under Article 10 of Regulation 492/2011). Their parents who were third party nationals, enjoyed residence rights, insofar as their presence may be necessary for the child. CJEU authorities recognized and strengthened those derivative rights. However, those rights are fundamentally parasitic upon the prior exercise of Treaty rights by an EU-citizen worker. They did not extend to children of EU-citizens who were not workers, but self-employed. Additionally, as the child in question was now a British citizen, they fell outside of the scope of Article 10 of the WA. Finally, the grant of leave to remain to the applicant parent under domestic law (appendix FM) also meant that, EU residency rights do not arise. The court confirmed that residence rights only arise, to the extent necessary to prevent an EU citizen being deprived of enjoyment of some right. As domestic law had secured a right of residence for the applicant parent, that was not the case here. Written by Parvez Anwar Pantho, caseworker at Duncan Lewis.

IP analysis: In an unusual turn of events, the Court of Appeal reversed a finding of patent invalidity even though the parties had already settled their dispute. J C Bamford Excavators (‘JCB’) brought the original action against members of the Manitou group (‘Manitou’), alleging infringement of four patents concerning telehandlers, a type of modified forklift vehicle. Manitou counterclaimed for invalidity. The trial judge found only one patent-in-suit to be valid and infringed and invalidated the three others in issue. The parties then settled their dispute, and as a term of settlement, JCB was able to continue its appeal to restore one of the patents (the ‘Patent’), which the defendants had admitted would be infringed if valid. In a judgment by Lord Justice Birss, the Court of Appeal concluded claim 1 of the Patent was not invalid over the prior art and overturned the order for revocation. Written by Sinclaire Marber Schäfer, associate at Wiggin LLP.

Family analysis: A 75% costs order made against the father by Nicholas Allen KC (sitting as a deputy High Court judge) in long-running private law Children Act 1989 (ChA 1989) proceedings was overturned on appeal. Lady Justice King, giving the Court of Appeal’s judgment, determined that the judge had failed to weigh both parties’ conduct in the proceedings and wrongly found certain aspects of the father’s conduct to have been ‘unreasonable’ so as to be capable of justifying a costs order against him. The court reiterated that costs orders in ChA 1989 proceedings are rare, and that for such an order to be made there must be either behaviour that is reprehensible or exceptional, or a stance taken in relation to the proceedings that is unreasonable (within the meaning given in Re S [2015] UKSC 20, [2015] 2 FLR 208 and Re T (Care Proceedings: Costs) [2012] UKSC 36, [2013] 1 FLR 133). Despite the father’s behaviour towards the mother having been acknowledged by King LJ as being ‘shameful and deceitful’, the father’s conduct in relation to the proceedings amounted to ‘low level procedural conduct’ only and was therefore incapable of justifying the costs order made at first instance. David Wilkinson, solicitor at Slater Heelis, considers the decision in Pringle v Nervo.