Legitimate Expectation

November 29th, 2018 by James Goudie KC

The Upper Tribunal (Fancourt J presiding) has in judicial review proceedings restated the principles for a claimant establishing or a defendant resiling from a legitimate expectation potentially established by published guidance from a public authority, as follows, in R (Vacation Rentals (UK) Ltd v HMRC), (2018) UKUT 383 (TCC):-

(1) The principle that substantive as well as procedural legitimate expectation should be protected is now well established as a ground for judicial review:
(2) For this principle to apply, the general requirements are that:-

(i) The Claimant has an expectation of being treated in a particular way (a) favourable to the Claimant (b) by the Defendant local or other public authority,
(ii) That authority has caused the Claimant to have that expectation by (a) words and/or (b) conduct,
(iii) The Claimant’s expectation is “legitimate”, and
(iv) It would be an “unjust exercise of power” for the authority to frustrate the Claimant’s expectation;

(3) Detrimental reliance is not essential;

(4) It is however relevant to the fourth question above;

(5) A legitimate expectation may be frustrated when there is an “overriding public interest that requires it”;

(6) In order for statements by the authority to give rise to a legitimate expectation those statements must be “clear, unambiguous and devoid of relevant qualification”;

(7) In dealing with that question, one considers how, on a fair reading, the promise would have been reasonably understood by those to whom it was made;

(8) Guidance is not to be dissected with the vigour appropriate to an exercise in statutory construction or interpretation of a deed or contract;

(9) The clarity of a representation depends in part upon the identity of the person to whom it is made;

(10) There can come a time when a legitimate expectation ceases because reliance on the representation ceases to be reasonable;

(11) Whilst the doctrines of substantive legitimate expectation and abuse of power merge into each other, the principle of “conspicuous unfairness amounting to an abuse of power” is pertinent where there is no express promise, assurance or representation on which reliance can be placed;

(12) That principle is not directly applicable where a legitimate expectation has been established based on clear guidance by a public authority: it cannot be used to throw a greater burden onto a claimant than would otherwise exist;

(13) A legitimate expectation that the authority has encouraged can be overridden only in circumstances where there is a sufficient public interest to override it;

(14) Once a legitimate expectation has been established, the onus shifts to the authority to justify the frustration of the legitimate expectation;

(15) This is a “heavy burden”;

(16) It is for the authority to identify any overriding public interest on which it relies to justify the frustration of the expectation;

(17) If the authority does not place material before the Court to justify the frustration of the expectation, the authority runs the risk that the Court will conclude that (i) there is no sufficient public interest and (ii) in consequence of the legitimate expectation created by the authority the authority’s conduct is so unfair as to amount to an abuse of power.

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