Lawful proceedings

Total Network SL was incorporated in Spain. It had a UK bank account. HMRC claimed that Total was liable to pay them damages at common law for unlawful means conspiracy in respect of carousel fraud. Thirteen conspiracies were alleged to have occurred between May and October 2002.

On the trial of a preliminary issue the judge held that HMRC had a cause of action in conspiracy where the unlawful means alleged was the common law offence of cheating the public revenue. Total's appeal against that decision was allowed by the Court of Appeal so HMRC appealed and Total cross appealed.

The House of Lords ruled that HMRC were entitled to resort to the private law remedy of an action for damages for the tort of conspiracy in order to recoup lost VAT. HMRC's statutory powers were derived from the Commissioners for Revenue and Customs Act 2005 as...