Case No: A3/2001/0506
Neutral Citation Number [2001] EWCA Civ 1882
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CHANCERY DIVISION
(Mr Justice Lloyd)
Royal Courts of Justice
Strand, 
London, WC2A 2LL

Wednesday 12 December 2001

B e f o r e :

LORD JUSTICE CHADWICK
LORD JUSTICE LONGMORE
and 
MR JUSTICE HARRISON
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THE EXPERT WITNESS INSTITUTE
Respondents
and
COMMISSIONERS OF CUSTOMS AND EXCISE
Appellants

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(Transcript of the Handed Down Judgment of
Smith Bernal Reporting Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040,  Fax No:  020 7831 8838
Official Shorthand Writers to the Court)
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Mr Richard Drabble QC (instructed by KLegal, London for the Respondent)
Mr Michael Patchett-Joyce & Miss R. Haynes(instructed by Commissioners of Customs & Excise for the Appellants)

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Judgment
Lord Justice Chadwick : 

1.	This is an appeal against an order made on 15 February 2001 by Mr Justice Lloyd on an appeal by The Expert Witness Institute against a decision of the London VAT and Duties Tribunal (Dr A N Brice, chairman, Mr Bernard Coode FFA and Mr A Khan) released on 22 September 2000. The Tribunal had confirmed the decision of the Commissioners of Customs and Excise, contained in a letter dated 12 July 1999, that supplies of goods and services made by the Institute were not exempt supplies for the purposes of value added tax. The judge allowed the appeal, on the grounds that the Institute was a non-profit making organisation with aims of a civic nature; and so within paragraph (l) of Article 13A(1) of EC Council Directive 77/388/EEC. The Commissioners appeal with the permission of this Court (Lord Justice Aldous) granted on 29 March 2001.

The applicable provisions in Community and domestic law
2.	EC Council Directive 77/388/EEC – the Sixth Council Directive on the harmonisation of the laws of Member States relating to turnover tax - was issued on 17 May 1977. Article 1 of the Sixth Directive required Member States to give effect to the provisions of the directive in their own domestic legislation. The United Kingdom legislation is now contained in the Value Added Tax Act 1994. 
3.	Section 4(1) of the 1994 Act provides that value added tax shall be charged on any supply of goods and services made in the United Kingdom, where it is a taxable supply made by a taxable person in the course or furtherance of any business carried on by him. Section 4(2) defines “taxable supply” as a supply of goods or services made in the United Kingdom other than an exempt supply. A supply of goods or services is an “exempt supply” if it is of a description for the time being specified in Schedule 9 of the Act – see section 31(1). 
4.	It is not in dispute that Schedule 9 to the 1994 Act was enacted in order to give effect to the requirement in article 13A(1) of the Sixth Directive that, without prejudice to other Community provisions, “Member States shall exempt the following under conditions which they shall lay down for the purpose of ensuring the correct and straightforward application of such exemptions and of preventing any possible evasion, avoidance or abuse: . . .” There follow seventeen paragraphs which, as the cross-heading to Article 13A suggests, describe “certain activities in the public interest”. Paragraph (l) is in these terms:
“supply of services and goods closely linked thereto for the benefit of their members in return for a subscription fixed in accordance with their rules by non-profit making organisations with aims of a political, trade union, religious, patriotic, philosophical, philanthropic or civic nature, provided that this exemption is not likely to cause distortion of competition;”    
5.	There are set out in Schedule 9 to the 1994 Act, grouped under fifteen heads, a large number of activities in relation to which the supply of goods or services are to be treated as exempt supplies for the purposes of the Act. Group 9 in Schedule 9 is in these terms (so far as material):    
“GROUP 9 – SUBSCRIPTIONS TO TRADE UNIONS, PROFESSIONAL AND OTHER PUBLIC INTEREST BODIES

Item No.
1.  The supply to its members of such services and, in connection with such services, of such goods as are both referable only to its aims and available without payment other than a membership subscription by any of the following non-profit-making organisations –
(a)	a trade union or other organisation of persons having as its main object the negotiation on behalf of its members of the terms and conditions of their employment;
(b)	a professional association, membership of which is wholly or mainly restricted to individuals who have or are seeking a qualification appropriate to the practice of the profession concerned;
(c)	an association, the primary purpose of which is the advancement of a particular branch of knowledge, or the fostering of professional expertise, connected with the past or present professions or employments of its members;
(d)	an association, the primary purpose of which is to make representations to the Government on legislation or other public matters which affect the business or professional interests of its members. 
(e)	a body which has objects which are in the public domain and are of a political, religious, patriotic, philosophical, philanthropic or civic nature.
Notes 
. . . 
(3)	Item 1 shall include organisations and associations the membership of which consists wholly or mainly of constituent or affiliated associations which as individual associations would be comprised in the item; and “member” shall be construed as including such an association and “membership subscription” shall include an affiliation fee or similar levy.
(4)	Paragraph (c) does not apply unless the association restricts its membership wholly or mainly to individuals whose present or previous professions or employments are directly connected with the purposes of the association.
(5)	Paragraph (d) does not apply unless the association restricts its membership wholly or mainly to individuals or corporate bodies whose business or professional interests are directly connected with the purposes of the association.”   

The group description (formerly “Trade Unions and Professional Bodies”) was amended, and paragraph (e) was added, by The Value Added Tax (Subscriptions to Trade Unions, Professional and Other Public Interest Bodies) Order 1999 (SI 1999/2834). 
6.	The 1999 Order took effect from 1 December 1999. It was not in force at the date (12 July 1999) of the Commissioners’ decision letter which has given rise to these appeals. In those circumstances both the Tribunal and, on appeal, the judge took the view that the provisions of article 13A(1)(l) of the Sixth Directive – so far as unimplemented by domestic legislation at the date of the Commissioner’s decision letter – should be given direct effect. On this appeal, however, both parties have invited the Court to proceed on the basis that the determinative provision is that now contained in United Kingdom domestic law – that is to say, in paragraph (e) of item 1 of Group 9 in Schedule 9 to the 1994 Act. Whether or not, on a strict analysis, that is, the correct approach in the circumstances, it is obviously sensible that our decision on an appeal for which permission was granted on the basis that it raised an important point of principle should be treated as a decision on the provisions in the 1994 Act. It has not been suggested that the implementation in domestic law of the formerly unimplemented provisions in paragraph (l) of Article 13A(1) of the Sixth Directive has altered the scope and effect of those provisions. But it is now no longer necessary to give them the effect which they should have by a direct application of Community law. They can be given effect, as the Sixth Directive requires, under domestic law. 
The Institute
7.	The Expert Witness Institute was incorporated under the Companies Acts 1985 to 1989 as a company limited by guarantee and not having a share capital. Its objects are set out in clause 3 of the memorandum of association:
“The objective for which the Institute is established is the support of the proper administration of justice and the early resolution of disputes through fair and unbiased expert evidence, and in particular:
a)	To provide support to and an organisation for experts of all professional disciplines and other occupations requiring skills and judgement.
b)	To provide training for experts whether by way of courses, seminars, conferences or otherwise to maintain and enhance high professional standards in expert witnesses and their status.
c)	To act as a voice for expert witnesses, especially in communicating with the media.
d)	To encourage lawyers to make use of experts wherever specialised knowledge is required.
e)	To make representations to Government, Governmental Departments, Authorities or to other Professional Bodies and Associations wherever appropriate.
f)	To work actively with other Professional Bodies and Associations to ensure that any of their members who wishes to be an expert witness has the necessary education, training, support and ability.
g)	To carry on any other trade or business which can, in the opinion of the Board of Directors, be advantageously carried on by the Institute, and to do all such other things as are incidental to, or which the Institute may think conducive to, the achievement of the objects of the Institute.
PROVIDED ALWAYS that the objects set forth in any sub-clause of this Clause shall not, except where the context expressly so requires, be in anywise limited or restricted by reference to or inference from the terms of any other sub-clause or by the name of the Institute. None of such sub-clauses or the objects therein specified or the powers thereby conferred shall be deemed subsidiary or auxiliary to the objects mentioned in the first sub-clause but the Institute shall have full power to exercise all or any of the powers conferred by any parts of this Clause notwithstanding that the business, undertaking, property or acts proposed to be transacted, acquired, dealt with or performed do not fall within the objects of the first sub-clause of this Clause.”
8.	The effect of the proviso is – at the least – to require each of the sub-clauses (a) to (g) to be construed independently of each other, and to rebut any inference that sub-clauses (b) to (g) are to be treated as subsidiary to sub-clause (a). But it has not been suggested that the seven sub-clauses are to be treated as other than ancillary to the primary object set out in the opening words of clause 3: “The objective for which the Institute is established is the support of the proper administration of justice and the early resolution of disputes through fair and unbiased expert evidence.” To my mind it is reasonably clear – and, in the absence of any submission to the contrary, I am content to assume – that, as a matter of construction, sub-clauses (a) to (g) are properly to be regarded as ancillary to the primary object. They set out particular – but non-exclusive – ways in which the primary object is to be pursued. 
9.	The management of the affairs of the Institute is entrusted to the Governors - who fulfil the role of the Board of Directors. Membership of the Institute is governed by provisions in the articles of association. Article 11 provides that an individual member is a person who is elected by the Governors. The Governors have power (but are not bound) to elect to membership any person who applies for election and who has such qualifications and experience as is required by the membership regulations from time to time approved by the Governors. No document containing regulations was put in evidence before the Tribunal; but, as the Tribunal records at paragraph 14 of its decision, the Governors had approved an application form for completion by persons seeking individual membership which required applicants to set out their qualifications and experience and to provide the names of referees from the legal profession. Article 15 provides for a separate register of  “provisional members” who must declare a desire to proceed in due course to election as a member. Article 21 provides that a corporation, professional body or association may be elected as a member upon its declaring support for the work of the Institute. Article 24 provides for associate membership. An associate member may be a practising solicitor, barrister or a member of a profession which employs or consults experts and who desires to support the Institute. The articles provide for complaints of misconduct by members or provisional members to be investigated and to be referred to the Governors.   
10.	It has not been suggested that the activities which the Institute carries out in practice involve any departure from the primary object for which it is incorporated. The evidence, and the Tribunal’s findings of fact upon that evidence, are set out at paragraphs 8 to 25 of the Tribunal’s decision. Paragraphs 22 and 23 describe the membership list published by the Institute:
“22.	In August 1999 the Appellant published an “Expert Witness Institute Membership List” which contained a Code of Practice approved by the Board of Governors for the guidance of members “in the belief that members will observe not merely the terms but also the spirit of the Code”. The Code was two pages in length and contained 13 paragraphs. Paragraph 3 provided that, when providing evidence, whether written or oral, the primary duty of a member was to the court.
23.    Also included in the Membership List was “The Expert’s Declaration” which was a requirement under the Civil Procedure Rules. In addition there were some recommended model terms of engagement. Then followed a list of members’ areas of expertise in alphabetical order after which area of expertise was listed with the names of members expert in that area. The list contains the names of 4,000 individuals accepted by the Appellant as competent. These members are also included in the Law Society’s list of expert witnesses without any further vetting.”
11.	At paragraph 21 of its decision the Tribunal referred to the “Benefits of Membership” summarised under ten headings on the membership application form. At paragraph 25 the Tribunal found the following facts by reference to nine of those headings:
“(1)	Representation of the views of experts
(a)	Submissions were made by the Appellant to the Committee considering the Civil Procedure Rules.
(b)	Part 35 of the Civil Procedure Rules deals with experts and assessors. The Vice-Chancellor set up a working party of lawyers and experts to establish a code of guidance for expert evidence. The Working Party was chaired by Sir Louis Blom-Cooper [then chairman of the Appellant’s Board of Governors] and the secretariat work was undertaken by the Appellant. The code of practice was submitted to the Vice-Chancellor in January 2000 and, at the date of the hearing, approval was awaited. If approved the code of practice will become a Practice Direction.
(c)	Regular liaison meetings are held with the Lord Chancellor’s Department, the Law Society and other professional bodies.
 (2)	Training and Education
 (a)	The Appellant has discussed training with the Lord Chancellor’s Department and with their support has started a programme of seminars to instruct members about their obligations as expert witnesses under the Civil Procedure Rules. These seminars are given in London and other cities. The Appellant received grant aid from the Lord Chancellor’s Department in 1999 and 200 for training purposes. 	
(b)	The Appellant organises a course with the Law Faculty of the University of Liverpool on basic civil and criminal law.	   
(c)	Courses on report writing and on court room skills are now available to introduce new members to the legal environment. New courses on solicitors and expert witnesses working together and on legal procedure are being developed.
 (3)	Expert referral service
The Appellant gives the names of its members to solicitors who enquire about expert witnesses.
 (4)	Access to professional indemnity cover
The Appellant has a scheme of professional indemnity insurance with Lloyd’s and members have access to it.
 (5)	Library and information service
The library is still in its formative stage.
 (6)	Certification as a member.
Members are given a certificate.
 (7)	Informative newsletters
Three newsletters are despatched each year. The newsletters contained digests of recent cases relevant to expert witnesses.
 (8)	Seminars and conferences
 (a)	The first of what is intended to be an annual conference was held on 29 September 1999 and entitled “Experts in the New Legal World”. The Lord Chief Justice gave the keynote speech.
(b)	The Rt Hon Sir Richard Scott gave a Lecture following the Annual General Meeting on 22 March 2000. The text was circulated to members as an occasional paper.
 (9)	Events exclusive to members and solicitors
A seminar was held in December 1998 at the premises of the Institute of Chartered Accountants to discuss the new Civil Procedure Rules. Solicitors, barristers and judges were invited to attend.”
The Tribunal made no finding under the tenth head of “Benefits of Membership” – “helpline for support and advice”.
12.	It has been common ground that the Institute is a non-profit making organisation and that the services which it supplies to its members are both referable only to its aims and available without payment other than a membership subscription. There is no evidence that the Institute supplies goods to its members; or that, if it does, those goods are supplied other than in connection with the services which it supplies. The underlying dispute between the Commissioners of Customs and Excise and the Institute is whether the Institute is accountable for value added tax on the subscriptions received from members. We were shown figures which suggest that the amount of tax for which the Institute would be accountable if the supply of services to members in consideration for the subscriptions which they pay is not large. Subscription income is £200,000 per annum or thereabouts. We were told that the appeal had been brought to resolve a question of principle which has not previously been before this Court.
The Tribunal’s decision
13.	The issues before the Tribunal were (i) whether the Institute was a professional association within paragraph (b) of item 1 of Group 9 in Schedule 9 to the 1994 Act, (ii) whether the Institute was an association, the primary purpose of which is the advancement of a particular branch of knowledge or the fostering of professional expertise, within paragraph (c) of that item, and (iii) whether the Institute was an organisation with aims of a civic nature within paragraph (l) of article 13A(1) of the Sixth Directive. The Tribunal determined the first two of those issues against the Institute. There was no appeal against its decision on the issues under paragraphs (b) and (c) of item 1 of Group 9. We are not concerned with those issues.
14.		The Tribunal decided, also, that the aims of the Institute were not of a civic nature within paragraph (l) of Article 13A(1) of the Sixth Directive; and so determined the third issue against the Institute. After referring to the decisions of Mr Justice Pill in Institute of Leisure and Amenity Management v Customs and Excise Commissioners [1988] STC 602 and of Mr Justice Brooke in Committee of Directors of Polytechnics v Customs and Excise Commissioners [1992] STC 873, the Tribunal expressed its conclusion in two short sentences, at paragraph 68 of its decision:
“In our view the word “civic” however defined has connotations with a locality or public affairs. None of the stated aims of the Appellant could be so described.”
Given that the “stated aims” of the Institute – set out in its memorandum of association – included “support of the proper administration of justice”, the Tribunal must be taken to have accepted that the proper administration of justice had no “connotations with . . . public affairs”. If  “connotations with public affairs” be the correct test, that conclusion is, to my mind, surprising. It requires that “public affairs” be given a very restricted meaning.  
The decision in the High Court

15.	Mr Justice Lloyd, whose decision is now reported at [2001] 1 WLR 1658,  reached a different conclusion. He accepted, at page 1667D-E, that:
“. . . if the support for the administration of justice is an aim of a civic nature, then the aims of this institute are properly so described and that is not subverted or undermined by the presence of other objects incidental thereto for the benefit of the members.”

He had referred, earlier in his judgment at page 1663D, to definitions in the Oxford English Dictionary  which had been put before Mr Justice Brooke in the Directors of Polytechnics case:
“. . . the initial meaning of the word ‘civic’ is ‘of, pertaining, or proper to citizens’; another definition is ‘of or pertaining to a city, borough or municipality’; another definition is ‘of or pertaining to citizenship’. Then there is a definition, ‘as civic minded, inclined to concern oneself with civic affairs; public spirited’”.

 	Mr Justice Lloyd went on, at pages 1667E-1668A, to say this:
“Coming then to the crucial question of the application and scope of the phrase ‘aims of a civic nature’, it seems to me that Mr Drabble is right that, on the basis that aims of a civic nature can, as a matter of ordinary language, include the citizenship meaning as well as the municipal meaning, the reading of sub-paragraph (l), which would include a body whose objective is to support the administration of justice, is a fair and proper reading of it, albeit that it results in it having a somewhat wider scope than it would if it were limited to the municipal meaning.

It seems to me that the words of caution of the European Court of Justice [in Commission of the European Communities v Federal Republic of Germany (Case 107/84) [1985] ECR 2655 and in Stichting Uitvoering Financiële Acties v Staatssecretaris van Financiën (Case 348/87) [1989] ECR 1737] to the effect that exemption is to be strictly construed do not mean that if you have an activity or aim which, in terms of the ordinary use of language and without any strain, falls within the phrase ‘aims of a civic nature’ that activity must be held not to fall within the sub-paragraph because it would result in the exception being wider than if that meaning were disallowed. The sub-paragraph, I accept, must be read in a way which is not overwide, but as Nolan J said [in Yoga for Health Foundation v Customs and Excise Commissioners [1984] STC 630, 634e], it must be given a fair meaning, and a fair meaning in accordance with the use of the language in question.

I should mention that I was not shown any of the other language texts of the Directive which could in theory be relevant. Of course, if I had been shown the equivalent of ‘civic’ in any of the other Community languages, I might well have been given some education in the meaning of the word in the particular language, because it would not necessarily follow that one would understand even with some familiarity with the language the precise connotations of ‘civique’ in French or ‘civica’ in Italian or whatever it might be in one of the other member state languages. As I say, I am relieved from that task and all I have to go on is the English text. In my judgment, ‘aims of a civic nature’ include aims to do with the support of the administration of justice on the basis that ‘civic’ includes the citizenship connotation as well as the municipal connotation.”

The submissions on appeal to this Court

16.	We were reminded by Mr Patchett-Joyce, who appeared for the Commissioners on this appeal, that the context in which the phrase “aims of a civic nature” falls to be construed is the determination of the scope of an exception to, or exemption from, the general principle that turnover tax (or value added tax) is to be levied by a Member State on all services supplied for consideration by a taxable person within the relevant territory. Accordingly, the phrase is to be construed strictly – see the observations of the Court of Justice in Stichting Uitvoering Financiële Acties v Staatssecretaris van Financiën (Case 348/87) [1989] ECR 1737, 1753, at paragraph 13 of the judgment: 
“. . . the terms used to specify the exemptions envisaged by Article 13 of the Sixth Directive are to be interpreted strictly since they constitute exceptions to the general principle that turnover tax is levied on all services supplied for a consideration by a taxable persons.”

That that is the approach to the construction of the phrase which we should adopt on this appeal is not, I think, in doubt. Unless the aims of the Institute fall fairly within the phrase “aims of a civic nature”, supplies of services by the Institute are not to be treated as exempt supplies for the purposes of value added tax. It is not for this Court to adopt a strained construction in order to fill what it may perceive to be a lacuna in exempting provisions in fiscal measures. It is for the legislature to decide whether there is an unintended lacuna; and (if so) whether, and how, that lacuna should be filled – see the observations of Mr Justice Nolan in Yoga for Health Foundation v Customs and Excise Commissioners [1984] STC 630, 634d.

17.	It does not follow, however, that the Court is required to give to the phrase “aims of a civic nature” the most restricted, or most narrow, meaning that can be given to those words. A “strict” construction is not to be equated, in this context, with a restricted construction. The Court must recognise that it is for a supplier, whose supplies would otherwise be taxable, to establish that it comes within the exemption; so that if the Court is left in doubt whether a fair interpretation of the words of the exemption cover the supplies in question, the claim to the exemption must be rejected. But the Court is not required to reject a claim which does come within a fair interpretation of the words of the exemption because there is another, more restricted, meaning of the words which would exclude the supplies in question.   

18.	The point can be illustrated by reference to the “dictionary” meanings of the word “civic” to which we have been taken. The Oxford English Dictionary (Second Edition, 1989) gives the following meanings for the word “civic”: 
“1.a. Of, pertaining or proper to citizens. b. (a) civic crown: a garland of oak leaves and acorns bestowed as a much prized distinction upon one who saved the life of a fellow citizen in war. (b) Arch. ‘A garland of oak leaves and acorns often used as an ornament’, 2.a. Of or pertaining to a city, borough or municipality. b. Of a city as a particular kind of locality. c. civic centre: the headquarters of a municipality; an area in which the principal public buildings of a municipality are grouped together, often in a unified architectural scheme. 3. Of or pertaining to citizenship; occasionally in contrast to military, ecclesiastical etc; civil. civic oath: an oath of allegiance to the new order of things, demanded from citizens in the French Revolution. 4. Comb., as in civic-minded, inclined to concern oneself with civic affairs, public spirited; so civic-mindedness”

No-one could suggest that a non-profit making organisation with “aims of a civic nature”, in the context of the value added tax exemption, meant – and meant only - a body (if one could be found) whose object was the distribution of garlands of oak leaves and acorns amongst those of its members who had saved the life of a fellow citizen in war. But that is, perhaps, the most narrow meaning which could be given to the words. Why, then, should it be said that “aims of a civic nature” must mean aims of a municipal nature rather than aims pertaining to citizenship?  

19.	Mr Patchett-Joyce offers two answers to that rhetorical question. First, that aims of a municipal nature are more restricted than aims pertaining to citizenship; and that the proper approach to construction requires the court to confine the scope of an exemption if it can. For my part, I am not persuaded that, if a choice had to be made, it would be found that a meaning which excluded from the exemption bodies having aims pertaining to citizenship would, necessarily, have a more restrictive effect than a meaning which excluded bodies having aims of a municipal nature. But, for the reasons which I have already sought to explain, I reject the premise that the proper approach to construction does require the court to confine the scope of an exemption if it can. The task of the court is to give the exempting words a meaning which they can fairly and properly bear in the context in which they are used.

20.	Secondly, it is said that the primary meaning of the word “civic” is “of or pertaining to a city, borough or municipality”. I find no support for that submission in the dictionary definitions which I have set out; nor in the definitions in the New Shorter Oxford English Dictionary to which we were also referred. In my view it is impossible to hold that the meaning “of or pertaining to a city, borough or municipality” has any primacy over the meaning “of, pertaining or proper to citizens” or  the meaning “of or pertaining to citizenship”. “Civic” is one of those words which takes its meaning from context. “Civic centre”, like “civic dignitary”, does have municipal connotations. “Civic responsibility” and “civic duty” have connotations of citizenship. When it is said that it is a civic responsibility to vote in elections, no-one would understand that the obligation was confined to municipal elections. Nor would it be a matter of surprise to be told that there was a civic duty to serve on a jury if required to do so; although the obligation to serve is not confined to service within the municipality in which the juror may live – see section 2 of the Juries Act 1974.        

21.	The first of the two decisions upon which the Commissioners rely in support of their contention that in its primary meaning of the phrase “aims of a civic nature” has municipal connotations - Institute of Leisure and Amenity Management v Customs and Excise Commissioners [1988] STC 602 – is not, I think, of any assistance in the present case. The Institute of Leisure and Amenity Management had some 3,500 members, most of whom were employed by local authorities as managers or potential managers of establishments providing leisure or recreational facilities for the public. In return for a voluntary subscription, the institute offered its members representation at national level with a variety of other bodies, regional meetings, a monthly journal, a range of conferences, seminars and exhibitions, and educational and training courses leading to examinations conducted by the institute. The Commissioners assessed the institute to value added tax on the income derived from subscriptions. The Tribunal upheld the assessment; holding that the institute was not a professional association within paragraph (b) of item 1 of Group 9 (then in Schedule 6 to the Value Added Tax Act 1983); that it was not an association having as its primary purpose the advancement of a particular branch of knowledge within paragraph (c) of item 1; and that it was not an organisation with aims of a civic nature within paragraph (l) of article 13A(1) of the Sixth Directive. The institute appealed; contending, in addition, that the services which it provided were not provided for consideration. 

22.	Mr Justice Pill rejected the contention that the services provided by the Institute of Leisure and Amenity Management were not provided for consideration. He upheld the tribunal’s conclusions that the institute was neither a professional association nor an association having as its primary purpose the advancement of a particular branch of knowledge. He addressed the argument that the institute was organisation having aims of a civic nature – and so within paragraph (l) of article 13A(1) of the Sixth Directive – in three paragraphs at the end of his judgment, at [1988] STC 602, 608f-h:
“Counsel for the institute referred to the civic pride felt, for example, in theatres and parks which members manage. The aims of the institute were of a civic nature within the meaning of art 13A(1)(l) of the Sixth Directive. I am invited to adopt a purposive approach to the interpretation of the article as indicated by Lord Denning in Bulmer v Bollinger [1974] Ch 401 and to bear in mind the presence of the expression ‘trade union’ in the paragraph.

Counsel for the Crown submitted that aims of a civic nature meant aims which were ‘dignified’ as distinct from ‘efficient’. It did not include everything which benefited local people. He used the example of the provision of a war memorial. A civic society might be an example though I make no specific finding on the point.

In my judgment the expression does not include organisations which aim to provide everyday and generally expected municipal services which in modern conditions include the provisions of parks, leisure centres and similar facilities. The tribunal did not, in my judgment, err in law in holding that the association was not an organisation with aims of a civic nature within the meaning of para 1(l).”

23.	It is clear that Mr Justice Pill was not asked to consider whether the phrase “aims of a civic nature” could have any meaning other than aims of a municipal nature. In particular, he was not asked to consider whether the phrase could mean or include aims pertaining to citizenship. That he was not asked to address, and did not address, the point which arises in the present case is not at all surprising; given the particular nature of the aims which the Institute of Leisure and Amenity Management was incorporated to promote. It is for that reason that the decision in the Leisure and Amenity Management case is of no assistance in the present case. I should add, however, that I find it difficult to accept that if “aims of a civic nature” can include aims of a municipal nature, the provision of “everyday and generally expected municipal services” should be excluded. The real question in the Leisure and Amenities Management case, as it seems to me, was whether the aims of the institute – which did not include the provision of municipal services, but did include the fostering of the skills of those who were, themselves, providing such services – rather than the aims of its members were aims of a civic nature in the municipal sense. 

24.	I turn, therefore, to the second of the two decisions upon which the Commissioners rely - Committee of Directors of Polytechnics v Customs and Excise Commissioners [1992] STC 873. As the name suggests, membership of the committee was drawn from directors of polytechnics in England and Wales – at a time before polytechnics had been granted university status. The primary object of the committee – which was incorporated as a company limited by guarantee – was “to advance and to assist in the advancement of education . . .  and in particular . . . to promote, encourage and develop the polytechnic sector of higher education and other institutions of higher education" . The committee engaged in three areas of activity: (i) the publishing of books and leaflets on matters relating to polytechnics – sales of which were accepted by the Commissioners as zero rated for the purposes of value added tax; (ii) the organisation of conferences and seminars, and the provision of training services, for those who taught, or might teach, in polytechnics – which was accepted to be an activity conducted otherwise than for profit and so exempt under item 2(b) of Group 6 in what was then Schedule 6 to the 1983 Act; and (iii) the provision of “a forum in which its members could consider the role and educational standards of polytechnics, discuss ideas and share experiences, develop collective policies, prepare responses to government proposals on higher education and forge links with professional bodies within the United Kingdom” – see [1992] STC 873, 876b-c.

25.	Mr Justice Brooke rejected the now familiar contentions that the committee fell within items 1(b) or 1(c) of Group 9 in what is now Schedule 9 to the 1994 Act (then Schedule 6 to the 1983 Act).  He then turned to the submissions under article 13A(1) of the Sixth Directive. He referred to the passages in the judgment of Mr Justice Pill in the Leisure and Amenity Management case which I have set out; and to the approach to interpretation of article 13A(1) which is to be derived from the judgment of the Court of Justice in Stichting Uitvoering Financiële Acties v Staatssecretaris van Financiën (Case 348/87) [1989] ECR 1737, at page 1753. He referred, also, to the judgment of Mr Justice Nolan in Yoga for Health Foundation v Customs and Excise Commissioners [1984] STC 630, 634. He accepted that the only possible scope for argument that the Sixth Directive might have direct effect was that founded on the proposition that the committee was an organisation with aims of a civic nature, within paragraph (l) of article 13A(1). At [1992] STC 873, 884j-885b, he said this:
“Although the judgment of Pill J [in the Leisure and Amenity Management case] has only persuasive effect, I find it of assistance. In the context of an exemption for a non-profit-making organisation with aims of a civic nature, I find it impossible to include within that concept the Committee of Polytechnic Directors. It may be that within any particular city the director of a polytechnic might be regarded as a civic dignitary. But unless one gives those words an extremely wide meaning, which would include almost any activity in which the citizens of a city involved themselves, I do not see how a committee consisting of every polytechnic director in the country can properly be described as an organisation of (sic) aims of a civic nature.

I was helpfully supplied by counsel with dictionary definitions. In the Oxford English Dictionary. the initial meaning of the word ‘civic’ is ‘of, pertaining, or proper to citizens’; another definition is ‘of or pertaining to a city, borough or municipality’; another definition is ‘of or pertaining to citizenship’. Then there is a definition, ‘as civic minded, inclined to concern oneself with civic affairs; public spirited’.

In my judgment, the aims of this committee, which was concerned with all sorts of matters relating to polytechnics up and down the country are not, either on first impression or on further examination, aims of a civic nature within the meaning of the Sixth Directive.”

26.	It is, I think, clear, that in the Directors of Polytechnics case – as in the Leisure and Amenity Management case – the court did not decide that, in its primary meaning, the phrase “aims of a civic nature” has municipal connotations. In particular, Mr Justice Brooke, in the Directors of Polytechnics case, did not reject what he had identified as the initial dictionary meaning of the word “civic” as “of, pertaining, or proper to citizens”; or the alternative meaning as “of or pertaining to citizenship”. The only conclusion that can be drawn from his judgment in that case – in relation to the point which we have to consider in the present case - is that Mr Justice Brooke did not think that it was relevant, having regard to the stated aims of the Committee of Directors of Polytechnics, to address the question whether the phrase “aims of a civic nature” could or should be given a meaning with citizenship connotations. There is nothing in the report which suggests that it was argued, in that case, that the promotion, encouragement and development of the polytechnic sector of higher education was an aim which pertained to citizenship.  

27.	For my part, I would reject the submission that the phrase “aims of a civic nature” – or the equivalent phrase “objects which are of . . . a civic nature”, which is found in the domestic legislation – must be given a meaning which excludes aims or objects pertaining to citizenship nationwide. There is nothing in paragraph (l) of article 13A(1) of the Sixth Directive which suggests that “civic” is to have – or to have only - a municipal connotation. None of the other descriptive epithets in that paragraph – political, trade-union, religious, patriotic, philosophical and philanthropic – have that connotation. The same may be said both of paragraph (e) of item 1 of Group 9 in Schedule 9 to the 1994 Act and of the other paragraphs of that item. It is plain that an interpretation of the phrase “aims of a civic nature” which includes aims pertaining to citizenship nationwide accords with a normal and obvious use of language in an appropriate context. There is no reason that I can ascertain why the phrase should not be given that meaning in the context of paragraph (l) of Article 13A(1). If so, the comparable phrase “objects which are of a civic nature” in paragraph (e) of item 1 of Group 9 in Schedule 9 to the 1994 Act must bear the same meaning.    

28.	We have had the benefit – which Mr Justice Lloyd did not have – of some evidence as to the meaning of the equivalent phrase in other language texts of the Sixth Directive. It appears from an expert report prepared by Professor Piet Eeckhout, Professor of European Law and Director, Centre of European Law, King’s College London – which was adduced as further evidence in this Court without objection – that the equivalent phrase in the German language text is “staatsbürgerliche Ziele”. Professor Eeckhout has explained that the word “staatsbürgerlich” embodies the notion of belonging to or concerning a citizen of the state. It has no connotation with municipalities. His report shows that the position is the same in the Dutch language text. The equivalent phrase in the French language text is “objectifs de nature . . . civique”. Again, the ordinary meaning of the word “civique” connotes citizenship; it does not connote connection with a municipality. 

29.	It is necessary to approach that evidence with some caution. Not because Professor Eeckhout’s report is questioned; but because it is, necessarily, incomplete. There has not been time, since he was asked to consider the matter, to examine the texts in the other Community languages. Nor have the Commissioners had an opportunity to respond to Professor Eeckhout’s research into the use of the words “staatsbürgerlich” and “civique” in German and French domestic legislation – which, as he says, confirms his opinion that the concept “aims of a civic nature” would be understood in those Member States as having connotations of citizenship. But, so far as it goes, the further evidence confirms the view that I have already expressed as to the proper interpretation of that concept in the light of the English language text. 

30.	The remaining question, therefore, is whether “the proper administration of justice and the early resolution of disputes through fair and unbiased expert evidence” – which is the primary object for which the Institute is incorporated – is an aim of a civic nature, giving the word “civic” the meanings “of, pertaining, or proper to citizens” or “of or pertaining to citizenship” which, as it seems to me, it can properly bear. I do not think that the answer to that question can be in doubt. A proper administration of justice is, as it seems to me, a central element in the social contract between the state and its citizens. The proper administration of justice is promoted by fair and unbiased expert evidence in those cases in which opinion evidence is relevant. The ability to reach an early resolution of disputes – without the need to invoke the procedures which the state provides through its courts – is of importance and value to citizens in a civilised society. That, too, may be promoted by fair and unbiased expert evidence which both parties can accept. 

31.	It was submitted that, if the promotion of the proper administration of justice – or the early resolution of disputes – were otherwise to be regarded as aims of a civic nature in the citizenship sense, they lost that character because the members of the Institute made a charge for their services. It was necessary, so it was said, that aims of a civic nature be pursued out of a sense of altruism rather than for reward. I reject that submission for two reasons. First, I can see no reason why an objective which would be of a civic nature if pursued at the expense of the pursuer should lose that character because the pursuer is reimbursed, or rewarded, for his time and skill. The relevant question is “what is the nature of the objective”; not “why is it being pursued”. Second, the relevant objective is that of the organisation; not that of any individual member or members. The exemption is available only to a non-profit making organisation – see article 13A(1)(l) of the Sixth Directive and item 1(e) of Group 9 in Schedule 9 to the 1994 Act. There is no reason to impose a further requirement of altruism on the members.     

32.	I would hold that the objects for which the Expert Witness Institute is incorporated, and the aims which the Institute pursues, are of a civic nature within paragraph (l) of article 13A(1) of the Sixth Directive and item 1(e) of Group 9 in Schedule 9 to the Value added Tax Act 1994.

33.	For those reasons I would dismiss this appeal.
Lord Justice Longmore: 
34.	When the Emperor Tiberius was called upon to decide whether a civic wreath should be awarded to a Roman soldier, who had saved a fellow citizen and killed two enemy soldiers, the question before him was whether the place where the incident occurred had to be unoccupied by the enemy at nightfall.  He held (Noctes Atticæ 5.6.11) that that was not necessary and so he made the award.  He would have had no doubt that the highest interest of the state was engaged and the use of the Latin term, “Corona Civica”, indicates as much.
35.	We have the more mundane task of deciding whether the Expert Witness Institute which has as its stated objective:
“the support of the proper administration of justice and the early resolution of disputes through fair and unbiased expert evidence”
is “a body which has objects which are in the public domain and are of a . . . . . civic nature” within the meaning of the Value Added Tax (Subscriptions to Trade Unions, Professional and Other Public Interest Bodies) Order SI 1999/2834.  I cannot believe Tiberius would have had any doubt on the matter. The word “civic” does not, to my mind, necessarily have a local or municipal meaning despite Mr Patchett-Joyce’s argument to the contrary.  It has also the primary meaning
“of, pertaining or proper to citizens” (see O.E.D (1989), s.v.)
and in this context of this taxing regulation it has, in my judgment, that primary meaning.
36.	Mr Patchett-Joyce submits that such a construction is impossibly wide because any organisation which does not have positively anti-social aims could claim to have objects of a civic nature.  I do not consider that that is correct because the requirement that a body has objects which are of a civic nature if it is to be able to claim exemption, means that the body must have objects which promote the relationship of citizens, not among themselves, but with the state of which they are citizens.
37.	There can hardly be a more obvious civic object in peacetime than the support of the proper administration of justice.  Of course, the tribunal of fact will wish to be careful that bodies putting themselves forward for exemption under this head of the regulations do, in fact, have the objective which they say they have. But no suggestion is made in this case that the Institute does not.  It would be different if the Institute’s objectives were solely or even, perhaps, mainly for the benefit of its members.  In that case the objects would not be of a civic nature and the body would have to seek exemption, if at all, as a trade union or professional association.
38.	The Tribunal in paragraph 68 of its decision said, merely, that the word “civic” had connotations with a locality or public affairs and then that none of the Institute’s aims could be so described.  The decision that the proper administration of justice has no “connotations with public affairs” is a surprising one and I can only conclude that the Tribunal gave an incorrect interpretation to the phrase “objects of a civic nature”.  The Tribunal has thus erred in law and the judge was entitled to substitute his own conclusion based on the findings of fact of the Tribunal.  That he did and, in agreement with Chadwick LJ, I would dismiss the appeal.
Mr Justice Harrison:
39.	I agree.
Order: Appeal dismissed; costs awarded to the respondents.