E6. Previous legislation | Principles.tax

Previous legislation

"[148] It remains to consider whether it is legitimate, in the present case, to have recourse to the statutory antecedents of section 23 and List C as an aid to their construction. Given the clear and cogent assistance which such recourse provides, and the detailed references to the previous legislation contained in the explanatory notes, I would be dismayed if this were forbidden by binding authority. Fortunately, however, that is not the case. In Derry, loc. cit., the Supreme Court gave valuable guidance on the correct approach to interpretation of a Tax Law Rewrite statute: see the judgment of Lord Carnwath JSC at [7] to [10], and the further observations of Lady Arden JSC at [84] to [90]. The guidance emphasises that, in construing either a consolidating statute (such as CAA 1990) or a Rewrite statute (such as CAA 2001), it would in general be wrong for the court to refer back to antecedent legislation: see [9] and [87]. However, the fact that this is the general rule clearly allows for possible exceptions in an appropriate case. Moreover, in Farrell v Alexander [1977] AC 59, which is the leading case on the construction of consolidating statutes, Lord Wilberforce, while also affirming the general rule, recognised at [73] that recourse to antecedents "should only be had when there is a real and substantial difficult or ambiguity which classical methods of construction cannot resolve."
[149] In my judgment, the construction of section 23 and List C as they stand in CAA 2001 does give rise to a real and substantial difficulty, because of the striking differences in the drafting of the Items in List C, and the sheer implausibility of Parliament having wished to draw a distinction between expenditure "on" the items in the first part of the List and expenditure on the "provision" of those items. The absence of any explanation in the explanatory notes, which themselves refer back to the predecessor legislation and appear to indicate an intention to replicate it, subject only to specified minor changes, can only reinforce the nagging sense that something must have gone wrong in the drafting. Accordingly, this appears to me to be a classic instance of a case where recourse to the antecedent legislation is not only permitted, but is essential if justice is to be done.
[150] I should add that, in reaching this conclusion, I have had in mind the cautionary note recently sounded by the Supreme Court in NCL Investments Ltd v HMRC [2022] UKSC 9, [2022] 1 WLR 1829, at [44] to [47]. As I read those paragraphs, however, they cast no doubt on the guidance given by Lord Wilberforce in Farrell v Alexander, which must in my view apply with at least equal force to a Tax Law Rewrite statute such as CAA 2001." (Urenco Chemplants Limited v. HMRC [2022] EWCA Civ 1587, Henderson, Thirlwall, Arnold LJJJ)