Buckley v Minister for Treasury and Resources and others: [2024] JCA 288

In 2017, Mr Buckley entered two contracts with the States of Jersey Development Company Limited to acquire shares into two companies known as Horizon (East) Limited and Horizon (West) Limited. Ownership of the shares would give Mr Buckley a right to occupy two flats in a development known as the Horizon Development at the Waterfront in St Helier. Neither flat was due to be Mr Buckley’s main residence. Completion of these transactions was originally envisaged to be in 2021 but for reasons beyond Mr Buckley’s control, completion did not take place until 16 January 2023. The transactions were subject to land transaction tax (LTT).

On 16 December 2022, the States Assembly approved the Finance (Budget 2023) (Jersey) Law 2023 (the Budget Law). This introduced a higher rate of LTT and Stamp Duty specific to the purchase of a dwelling acquired for a purpose other than as the purchaser’s main residence. On the same date the States Assembly made an Act (the Acte Opératoire) under Article 12 the Public Finances (Jersey) Law 2019 (the 2019 Law), giving the Budget Law immediate effect. Accordingly, the increased rates of LTT and Stamp Duty contained in the Budget Law came into force on 1 January 2023, before the Budget Law had been sanctioned by order of His Majesty in Council or registered in the Royal Court. If the two contracts which Mr Buckley had entered in 2017 had completed before 1 January 2023, he would have been liable for LTT of £4,200. By reason of the new higher tax rate applicable to transactions such as these from 1 January 2023, when those transactions did complete on 16 January 2023, Mr Buckley’s liability was £13,500.

Mr Buckley sought to judicially review the decision of the States of Jersey to adopt the Budget Law and to enact its provisions using the Acte Opératoire. This raised significant issues of constitutional law.

The Court of Appeal held that as a general rule, it is wholly inappropriate for the Royal Court to engage in an exercise to scrutinise the legislature (whose primary function is to adopt laws for Jersey) other than the extent contemplated in and authorised by legislation that is already in place (such as the Human Rights (Jersey) Law 2000).  The court noted that the courts cannot intervene or declare laws invalid on the grounds of the legislature exceeding its legislative powers, as there are presently, no limits that exist on a statutory footing that curtail the legislative powers of the legislature. It further held, that decision of the States of Jersey to adopt a law cannot be susceptible to review on the ground that those decisions pursue improper purposes or upon an allegation that members of the States of Jersey considered irrelevant considerations or have failed to take into account relevant considerations.

Mr Buckley also sought to judicially review the decision of the Comptroller of Revenue and the Judicial Greffier not to exercise their discretion to reduce the amount of LTT that he had to pay. The Court of Appeal noted that each of these officers have a prima facie duty to collect the taxes which the States of Jersey has determined should be collected. However, it noted that within that context, these officers have a general power to remit or reduce the tax charged, where, in their respective opinions, it would be just to do so.  In exercising that power, each of these officers are obliged to consider the terms of any directions issued by the Minister, but it is for the officer to decide whether to remit or reduce the tax based upon the facts and circumstances of the individual case. The court agreed with Commissioner Thompson who at first instance held that these officers cannot thwart the legislation by declining to collect the higher rates of LTT. However, the court did consider that Commissioner Thompson had gone to far to conclude that it was unarguable that the increased LTT had retrospective application. Whilst the court recognised that LTT is charged on the completion of a transaction and accordingly anyone who enters a contract for the purchase of land therefore runs the risk that the tax rate will change before completion. However, it held that the application of the higher rate to a pre-existing contract is a consideration which could potentially, at least in some circumstances, justify remitting or reducing the tax. The court further held that it is arguable that the application of the increased LTT to existing transactions is incompatible with Mr Buckley’s rights under the Human Rights (Jersey) Law 2000. As such it granted leave for Mr Buckley to pursue his application to judicially review the decision that LTT be charged was the amount as stated in the Budget Law.