In R (Good Law Project) v Electoral Commission (2019) EWCA Civ 1567 the Court of Appeal was concerned with the interpretation of the phrase “expenses incurred”, which is to be found throughout election legislation, and dates from the middle of the nineteenth century. The Court observed, at paragraph 82, that it did not appear to have caused any great difficulty in practice. The Court referred, at paragraph 83, to the Cockermouth Division case (1901) 5 O’M v H 155, and said:-
“… What that case illustrates is that it is not only expenses incurred directly by, for example, a parliamentary candidate which will be caught by the limits on expenditure. That limit will also include expenses incurred by a third party on behalf of the candidate …”
The Court of Appeal continued:-
“84. The public can therefore have assurance that all relevant expenses incurred in favour of a particular point of view, for example in a referendum campaign, will be subject to a limit and will be transparent. The public can also be reassured that all relevant donations will be transparent. On the Divisional Court’s interpretation, some donations will also count as expenses incurred by the donor and not only by the donee. We do not consider that that interpretation is required by the underlying purposes of the legislative scheme.”
“86. … the Divisional Court concluded that anyone who makes a donation to a charity can be said to have incurred an expense in the ordinary meaning of those words: [42]. It was of the view that whenever a person’s assets are “diminished”, it can be said that that person has incurred an expense. We respectfully disagree. We do not think that the financial reporting standards in accountancy assist in interpreting this statute and would observe that few would consider themselves as having incurred an expense when, as countless thousands do every day, they donate money to charity.
87. In our view, the Divisional Court fell into the error of assuming that the phrase “expenses incurred” means simply the same thing as “spent”. “Expenses” are not necessarily the same as “expenditure” or spending. Furthermore, we consider that the Divisional Court gave insufficient weight to the inclusion in the phrase “expenses incurred” of the word “incurred”. … that introduces a flavour of some responsibility, even if not strictly speaking legal liability, to pay the expense in question.
88. In this context, we note that at [44] the Divisional Court acknowledged that the interpretation to be given to the phrase “expenses incurred” contended for by Vote Leave was one which was a possible interpretation as a matter of language. Our view is that, when the legislation is read harmoniously and as a whole, the interpretation contended for by the Electoral Commission (and supported by Vote Leave) is the correct one.
89. There is no difficulty in the statutory scheme with the same money being treated both as a donation by one person and as a referendum expense by the recipient. The difficulty caused by the Divisional Court’s analysis is that a donation may be treated also as a referendum expense by the donor as well as being a referendum expense by the donee. The consequence will be that a single amount of money will count twice towards different people’s limits on expenses….”
“97. In our view, the correct interpretation of the legislation read as a whole is that a donation to a permitted participant cannot also be an expense incurred by the donor.”