Tax analysis: In JTI Acquisition Company (2011) Ltd, the Court of Appeal dismissed the taxpayer’s appeal against the disallowance for corporation tax purposes of debits in respect of interest payable on loan notes. The Court of Appeal agreed with the FTT and the UT that the taxpayer was party to the loan notes for an unallowable tax avoidance purpose under the loan relationships rules and not for any commercial purpose.

Restructuring & Insolvency analysis: In the recent judgment of Patley Wood Farm LLP v Kicks, the Court of Appeal has provided a salutary reminder of the broad discretion allowed by the courts to insolvency practitioners in carrying out their statutory functions, together with an implied acknowledgement that they are entitled to take their own interests into account as well as those of creditors. Reversing the decision of the court below, the Court of Appeal found that a decision by trustees in bankruptcy (trustees) not to apply to be joined in protracted and hostile proceedings between the bankrupts and a third-party, taken with the benefit of legal advice, was not perverse pursuant to section 303 of the Insolvency Act 1986 (IA 1986). Written by Georgia Terry, pupil barrister at Maitland Chambers.

Family analysis: The Court of Appeal held that in a number of previous decisions, and in guidance issued by the President of the Family Division, an improper gloss had been placed on the wording of the test for the appointment of an intermediary under Part 3A of the Family Procedure Rules 2010 (FPR 2010) and FPR 2010, PD 3AA. The court found that necessity means necessity and needs no gloss and that the court at first instance had been wrong to refuse a mother in care proceedings an intermediary for a fact-finding hearing and her appeal was therefore allowed. The court allowed the appeal on its merits and looked at the development of the law on the test in some previous recent decisions. Rhiannon Lloyd, barrister and arbitrator at 4PB, examines the issues.

Insurance & Reinsurance analysis: A dishonest solicitor, Mr Jones, misappropriated substantial sums from his client (DLC). He also used DLC’s property, without its authority, as security for a loan to a company under his control. The solicitor’s firm (Jirehouse) was insolvent, and so DLC sued its insurers (Axis) under the Third Parties (Rights against Insurers) Act 2010 (the 2010 Act). Axis defended the claim on two grounds. First, it relied upon a policy exclusion for fraudulent acts that were ‘condoned’ by the firm’s other partners, members or directors (in fact there was only one, Mr Prentice). Second, it argued that the two claims in question were ‘similar acts or omissions in a series of related matters or transactions’. At trial before Robin Knowles J (the Judge) Axis lost on both issues. The Court of Appeal dismissed Axis’ appeal. On the condonation issue, it held that the Judge’s conclusion, though generous to DLC, was not perverse and so could not be overturned. On the aggregation issue, it agreed with the Judge that the two acts in question were neither ‘similar’ nor ‘in a series of related matters or transactions’. Written by Tom Bell, barrister at Gatehouse Chambers.

Tax analysis: The Court of Appeal has held that an intra-group loan in an acquisition financing structure was 100% attributable to an unallowable purpose. As such, none of the interest costs arising from that loan were deductible for UK tax purposes. This was on the basis that the loan (and indeed the borrower entity itself) existed for no other purpose other than to secure a UK tax advantage. This was held to be the case despite the loan making good commercial sense for the borrower itself (considered in isolation) and that the wider commercial context (the acquisition of the Barclays Global Investors business) was undoubtedly a genuinely commercial one. This decision highlights the difficulties in structuring to create or maximise tax deductions even in genuine commercial transactions. The Court of Appeal also found that the interest deductions were not restricted under transfer pricing rules. This aspect is beyond the scope of this article. Written by Tom Rank, partner at DWF Law LLP.

Planning analysis: The Court of Appeal confirmed the principle that a breach of a procedural rule, whether required by statute or voluntarily adopted by a public body (even if expressed in mandatory terms) is a form of procedural impropriety which will not necessarily render the resulting decision unlawful. In order to establish that there has been procedural unfairness, and thus unlawfulness, the claimant must establish that they have suffered material prejudice. At common law procedural fairness does not require a planning authority to afford members of the public the right in every case to make oral representations on a planning application. The question whether there has been procedural unfairness if someone is precluded from making oral representations is therefore fact sensitive and decided on a case-by-case basis. In particular, if the planning authority voluntarily provides for a process for speaking at a meeting, as most do, it is obliged to ensure that the adopted process is fair. Only in rare cases could a claimant who has been afforded the opportunity to speak (and declined it) complain of a failure to afford the same opportunity to others. Written by Brendon Lee, partner at HCR Hewitsons.

Arbitration analysis: The Paris Court of Appeal reiterates the level of control that French courts will exercise in the context of annulment proceedings of an arbitral award where a party raises allegations of corruption or allegations of a violation of the right to a fair trial. Written by Nadia Darwazeh, partner and Quentin Brimberg, associate at Clyde & Co.

PI & Clinical Negligence analysis: The Court of Appeal has reversed the decision of a lower court which had found that an employee’s tortious exposure to a noxious agent had made a material contribution to his Parkinson’s disease. In so doing, the court has clarified the circumstances in which the principles of material contribution can be applied to cases of indivisible injuries and examined the thresholds of evidence necessary to make such findings. Written by David Juckes, barrister at Hailsham Chambers.

Corporate Crime analysis: The judgment in Barnet London Borough Council v Kamyab confirms that, in confiscation proceedings for continuing offences (such as a failure to comply with an enforcement notice), where a summons refers to an offence occurring on a single day, the benefit from particular criminal conduct relates to the whole of the period of failure to comply with the notice and is not limited to the single day in the charge. Also, where the Crown Court makes a confiscation order and the prosecution appeals pursuant to section 31(1) of the Proceeds of Crime Act 2002 (POCA 2002), the Court of Appeal may confirm, quash or vary the order, including to increase it. However, it has no power to remit the case to the Crown Court for a rehearing, in contrast to the position under POCA 2002, s 32(1) by which the prosecution can appeal against no confiscation order being made. The Court of Appeal considered the legislation ‘less than perfect’ and ripe for parliamentary improvement. Written by Amanda Pinto QC and Catherine Collins, barristers at 33 Chancery Lane.

EU analysis: upon a preliminary reference from the highest administrative court in Lithuania, the Court of Justice interpreted Article 1 of Directive 87/357/EEC concerning products which, appearing to be other than they are, endanger the health or safety of consumers (EU Food Imitation Safety Directive). In the context of ‘bath bombs’, the court stated that the directive does not require the demonstration by objective and substantiated data that consumers will confuse the products with foodstuffs, as a strict data requirement would conflict with the aim of the directive to protect the health and safety of consumers. It is sufficient to demonstrate that the placing of the product in the mouth, sucking it or ingesting it is ‘likely to entail such risks’. Written by William Moody, barrister at Henderson Chambers.

Arbitration analysis: In Instrubel NV and Montana Management Inc v Montana Management Inc and others, the Court of Justice confirmed that a freezing measure adopted pursuant to an EU sanctions regulation does not in itself affect the ownership of assets subject to that measure, which remain the property of the sanctioned person. The question of the ownership of the assets of a sanctioned Iraqi entity which were frozen by France pursuant to Regulation (EC) No 1210/2003 was raised before the French Supreme Court in enforcement proceedings pending against the State of Iraq and various public entities of the Saddam Hussein regime. Against the background of the expansive sanctions imposed by the EU on Russian entities and individuals since 2014 and the ongoing discussion of Russian reparations for the war in Ukraine, this ruling serves as a timely reminder that the law as it currently stands does not allow for the confiscation of frozen Russian assets to compensate EU companies facing expropriation in Russia or to pay for the reconstruction of Ukraine. Written by Veronika Korom, solicitor and professor at ESSEC Business School (Paris).

IP analysis: Indo European Foods had opposed an EU Trade Mark on the basis of an earlier unregistered UK Trade Mark (BASMATI). The European Union Intellectual Property Office (EUIPO) Board of Appeal had rejected the opposition and Indo European Foods filed an appeal to the General Court. During the General Court proceedings, the Brexit transition period expired. The EUIPO argued that the action was no longer admissible because the basis of the original opposition proceedings was no longer a valid ground of opposition in the EU. The General Court disagreed with the EUIPO's position on the basis that the decision being appealed took place before the end of the transition period. The General Court also found the decision of the EUIPO Board of Appeal to be flawed and remitted the case back to the EUIPO. The EUIPO appealed to the Court of Justice on the sole ground that Indo European Foods no longer had the required interest in bringing proceedings. The Court of Justice upheld the decision of the General Court, finding that the purpose of the appeal to the General Court still existed. The case will now be remitted back to the EUIPO Board of Appeal. Written by Milena Velikova, trade mark attorney and Helene Whelbourn, legal director, at Lee & Thomspon.