Deutsche Morgan Grenfell Group Plc v Inland Revenue Commissioners

Deutsche Morgan Grenfell Group Plc (DMG) sought compensation for having paid advanced corporation tax (ACT) on dividends paid to its German parent company between 1993 and 1996, which DMG was unlawfully required to pay. The House of Lords held that DMG had a cause of action for restitution of tax paid under a mistake of law, as extended in Kleinwort Benson Ltd v Lincoln City Council [1999] 2 AC 349, and that the period of limitation was postponed until the date of the European Court of Justice's decision in Hoechst. The House of Lords dismissed the appeal by HM Commissioners of Inland Revenue and allowed DMG's appeal, restoring the judgment of Park J. The legal issues before the House of Lords were whether DMG had a cause of action for restitution of tax paid under a mistake of law, whether DMG made a mistake, and whether DMG could discover the mistake with reasonable diligence. The House of Lords held that DMG had a cause of action for restitution of tax paid under a mistake of law, as extended in Kleinwort Benson, and that the period of limitation was postponed until the date of the European Court of Justice's decision in Hoechst. The House of Lords held that DMG made a mistake and that the mistake was not reasonably discoverable until after the judgment had been delivered. The House of Lords held that the mistake was not reasonably discoverable until after the judgment had been delivered. The House of Lords held that DMG had a cause of action for restitution of tax paid under a mistake of law, as extended in Kleinwort Benson, and that the period of limitation was postponed until the date of the European Court of Justice's decision in Hoechst.