HC Deb 12 July 1994 vol 246 cc963-8

Motion made, and Question proposed, That this House do now adjourn—[Mr. Arbuthnot.]

12.13 am
Mr. Tim Devlin (Stockton, South)

I wish to bring to the attention of the House the case of Mr. Charles Edward Winter. He is a constituent of mine who, on the face of it, has suffered over the past 12 years from a disturbing combination of incompetence, dishonesty, collusion and suppression of evidence, from 1985 to the present day. He has been as much the victim of circumstances as of malpractice on the part of a host of professionals to whom he went for help.

In 1981, Mr. Winter was a wealthy hotelier. He is now bankrupt. The circumstances of his bankruptcy have driven him to make rash threats against those whom he considers responsible for his present situation.

Mr. Winter owned the Queen's hotel in Bishopton lane, Stockton-on-Tees, with his second wife, Anne Barlow. It burned down in 1981, leaving Mr. Winter to pursue a long and involved insurance dispute. The final settlement fell far short of the value which he attached to the hotel. Furthermore, he feels that the accountant, John Chilton of Chipchase Manners, whom he instructed to deal with his claim, acted negligently. Indeed, Mr. Winter was awarded £100,000 damages against that man.

Similarly, Mr. Winter strongly believes that his legal representation in the matter—Robin Bloom of Jackson and Company—gave him wrong and harmful advice in respect of it and was therefore negligent. He also has a grievance against firms of solicitors—Paul Bennett of Punch Robson for allegedly suppressing legal evidence in the form of documents since 1982, and later Booth and Company in Leeds from 1985. He also alleges perjury on the part of Robin Bloom of Jackson and Company, who did not bring this written evidence to light until 1993.

Mr. Winter attributes his subsequent bankruptcy largely to a threefold negligence. First, he claims that the damages that he was awarded were insufficient and that the accountant, Mr. Chilton, gave him an untrue picture of his own means. He also transferred assets to his wife so as to reduce his legal liability. His house, which was apparently worth only £60,000 last year, when the matter was in the courts, is now advertised in the local newspaper at £300,000.

Secondly, the barrister who took Mr. Winter's case acted negligently in failing to apply for costs to be paid by Mr. Chilton and said that if Mr. Winter did not accept the situation he would make a recommendation to the legal aid board that Mr. Winter was being unreasonable, and his legal aid would be withdrawn.

Thirdly, there was the suppression of written evidence, which could have helped him between 1982 and 1993.

Mr. Winter believes that these three facts have contributed to his being made bankrupt, which he would otherwise have avoided.

From 1982 there followed a protracted period during which Mr. Winter sought justice on the points that I have described, as well as with regard to a large capital gains bill, which was disputed between himself and his second wife, from whom he had become estranged and whom he subsequently divorced in 1982.

To advise him on this latter point Mr. Winter instructed a separate firm of solicitors, Bolsover, Manning and Scott, whose handling of his case he found to be far from satisfactory. Lacking all confidence in his legal representation in his divorce proceedings, he instructed a further set of solicitors—Punch Robson—to deal with matters relating to ancillary relief, and to ensure that the ex-Mrs. Winter met her side of their joint tax obligations in respect of the cash received on the insurance policy on the Queen's hotel. Incredibly, Mr. Winter has reason to believe that these solicitors—Punch Robson and Harvard and Company—acting for Ms Barlow, his ex-wife, acted in collusion rather than properly on his behalf, and that as a result they strung out the proceedings over 12 years, to the point where Mr. Winter was finally broken, financially and otherwise.

Over the course of these unfortunate events Mr. Winter has tried time and again to pull his life back together again. He has remarried and with his third wife, Linda, he has attempted a number of business ventures. But the cost and stress of his various actions has weighed heavily against him. Consequently he has remained largely unemployed and was declared bankrupt in February 1993, after spending £160,000 on solicitors' fees, being allowed to go into debt for £300,000 and having bankruptcy finally enforced upon him by the Inland Revenue. His losses now total over £1 million according to expert witnesses. He is also faced with the loss of the home he now lives in and the site of the Queen's hotel.

You will not be surprised, therefore, Mr. Deputy Speaker, to hear that these events have left Mr. Winter a very bitter man. He feels that, having paid so many professional people for advice, he should have received the correct advice and should have gone back into business fairly quickly. Instead, he is bankrupt. He has sought to resolve the matter for 11 years, writing to the ombudsman, to the solicitors' and barristers' complaints organisations and even to the European Court.

As a final cry for help, he resorted to threatening to kill Paul Bennett, John Chilton and Mr. Harvard, for which he was duly put on remand in custody for eight and a half months. When the matter came to court the judge, Mr. Justice Hannah, recognised the effect that the collusion of the solicitors had had on my constituent.

The purpose of this Adjournment debate is to bring the case of Mr. Winter to the attention of the House. Clearly there is little scope for intervention in the internal affairs of a self-regulating body such as the legal profession. However, I sincerely hope that all the relevant papers from all the firms to have had a hand in Mr. Winter's affairs can be placed before an independent representative of that profession for independent scrutiny. Those documents are all held by Mr. Winter's trustee in bankruptcy, and an eminent Queen's counsel is now being consulted.

I should like to press my hon. Friend the Financial Secretary and the Inland Revenue to review their decision to declare Mr. Winter bankrupt. I should also like them to reconsider the size of his capital gains tax bill. Perhaps in that light they will be able to give Mr. Winter an opportunity to restart in business, and thus to try to get back on his feet and start earning his own living. He has not been able to do that for the past 12 years.

The case is extremely complex. In summary, Mr. Winter seeks justice for himself in five ways. First, he would like the £55,000 that was paid to the Inland Revenue to be returned, plus interest backdated to 1989. Secondly, he would like the Queen's hotel site to be restored to his sole name. Thirdly, he feels that there should be a guarantee that no enforcement proceedings will be lodged against his home, thus protecting himself and his new family from homelessness. Fourthly, he would like £160,000 worth of solicitors' fees back on the ground that all the solicitors whom he instructed failed in their duties on his behalf. Lastly, he would of course like the restoration of the £1 million loss that Ernst and Young and his property advisers, Storey Sons and Parker, estimated that he had suffered.

I am sorry to have to tell the House that my constituent has suffered severely from stress as a result of those protracted proceedings, and he is now in North Tees hospital suffering from pneumonia and a blood clot above his heart. That has been brought about by the stress of all the proceedings. I very much hope that Mr. Winter will soon be able to make a full recovery, and I am sure that that process will be greatly helped by anything that the Minister can say to comfort him this evening.

12.21 am
The Financial Secretary to the Treasury (Mr. Stephen Dorrell)

I shall begin by picking up the last point made by my hon. Friend the Member for Stockton, South (Mr. Devlin). I am sure that the whole House would want to echo what he said about our good wishes for Mr. Winter's restoration to good physical health. The story that my hon. Friend has told is one with which we would all feel deep sympathy. Clearly it is an unhappy story in which a whole series of things have gone wrong with Mr. Winter's life. None of us could listen to it without feeling deep sympathy with him over the turn that his life has taken.

I have discussed Mr. Winter's case with my hon. Friend, and I know that he has taken a long-standing and deep interest in it. He has sought, not only in this debate but in correspondence with a wide range of interested bodies, such as the Inland Revenue and others, to argue that case to the best of his ability, and to offer Mr. Winter advice on how he might be able to improve the position in which he finds himself.

However, having said all that, I must confess that I find myself at some disadvantage in trying to suggest how I, as the Minister with direct responsibility for the Inland Revenue, can help in Mr. Winter's case. The reasons for that are various. Not the least of them is the fact that, as my hon. Friend will be well aware, the relationship between Ministers and the Inland Revenue does not allow a Minister to intervene directly in a particular taxpayer's affairs. The Inland Revenue is established by law as an independent body, and it is a responsibility of the commissioners of the Inland Revenue, not of the Minister responsible for the Department, to make individual decisions about specific taxpayer cases.

That being said, I have asked the Inland Revenue to review Mr. Winter's case once again in order to see whether anything can be done to alleviate the situation in which he finds himself. There is not much doubt in my mind—the judgment reached by the Inland Revenue confirms this—that the handling of the case from the narrow point of view of the Inland Revenue does not lend itself to any revision which could help Mr. Winter.

The circumstances are, as my hon. Friend has recounted, that, as a result of the fire in the hotel in 1981–82, an insurance claim was made by Mr. Winter which represented a substantially larger sum of money than the sum that he had originally paid for the hotel, with the result that, since it was not reinvested in the hotel or in a similar activity, no roll-over relief was available and a capital gains tax liability crystallised.

Mr. Winter appealed unsuccessfully against that assessment and the capital gains tax due was confirmed. I know that Mr. Winter feels—I have some sympathy with him—that if he had been properly advised at the time, he might have acted differently, with the result that the capital gains tax liability might not have crystallised. I accept that it is possible to think in retrospect of how different behaviour by Mr. Winter might have avoided the crystallisation of that tax liability, but the Inland Revenue cannot deal with what might have been; it has to deal within the law with what happened.

The fact of the matter is that Mr. Winter did not act in a way that allowed him to claim roll-over relief, so the tax liability crystallised, leaving the Inland Revenue with a statutory responsiblity to collect the tax due within the terms of the law. I emphasise that I understand how, in retrospect, it is possible to see how affairs might have been differently handled, but, from the point of view of the Inland Revenue, they were not differently handled and it had to deal with the facts as they were.

Then we come to what the Inland Revenue does when a tax liability has crystallised and it has the responsibility to collect it. The liability crystallised during the tax year 1981–82 and it was only earlier this year that the Inland Revenue took action which led ultimately to the bankruptcy of Mr. Winter. No one could conclude that the delay between 1981–82 and the ultimate action to provoke the bankruptcy of Mr. Winter earlier this year constituted anything other than very patient action by the Inland Revenue, reflecting the recognition on the part of its officials of the difficult circumstances in which Mr. Winter finds himself.

However, the task of the Inland Revenue is not merely to be sympathetic to an individual taxpayer, which it has been in this case, but to deliver its broader responsibilities to taxpayers in general to collect tax that is due from people whose actions have led to the crystallisation of a tax liability.

That is the circumstance in which the Inland Revenue finds itself in Mr. Winter's case and, therefore, it is difficult to argue that the Inland Revenue should have acted differently, either in dealing with the assessment of liability on the facts available, or in dealing with the collection of that liability in the difficult circumstances in which Mr. Winter finds himself.

We have considered Mr. Winter's circumstances in detail. We, and I am sure all hon. Members, feel considerable sympathy with him in the sad tale that my hon. Friend the Member for Stockton, South related, but I do not believe that any of the judgments that were reached by Revenue officials in the course of that story were wrong. Even if I did, it is not within the competence of a Minister to instruct or to lean on the Inland Revenue in its dealings with an individual taxpayer.

Having considered the matter, I conclude that the Inland Revenue acted reasonably and within the powers that are theirs and theirs alone to exercise. While I can offer my hon. Friend and, more pertinently, Mr. Winter sympathy on the position in which he finds himself, I cannot offer my hon. Friend any prospect that the Inland Revenue will act differently or in a way that will alleviate the unfortunate position in which Mr. Winter finds himself.

Question put and agreed to

Adjourned accordingly at half-past Twelve midnight.