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Overriding objective

 

“(1) The overriding objective of these Rules is to enable the Tribunal to deal with cases fairly and justly. 
(2) Dealing with a case fairly and justly includes-- 
(a) dealing with the case in ways which are proportionate to the importance of the case, the complexity of the issues, the anticipated costs and the resources of the parties; 
(b) avoiding unnecessary formality and seeking flexibility in the proceedings;

(c) ensuring, so far as practicable, that the parties are able to participate fully in the proceedings;
(d) using any special expertise of the Tribunal effectively; and
(e) avoiding delay, so far as compatible with proper consideration of the issues.
(3) The Tribunal must seek to give effect to the overriding objective when it--
(a) exercises any power under these Rules; or
(b) interprets any rule or practice direction.
(4) Parties must--
(a) help the Tribunal to further the overriding objective; and
(b) co-operate with the Tribunal generally.” (FTT Rules r.2)

 

Positively seeking flexibility/avoiding formality 

 

"[23] Secondly, there was some suggestion that, given that they relate to the procedure of a tribunal rather than a court, the Rules should be interpreted on a somewhat looser basis than Rules of court. I accept that the procedure of the tribunals is intended to be less formal and more flexible than that of the traditional courts. While that consideration can, indeed should, properly be taken into account when interpreting the Rules, I do not believe that it justifies a different result. Indeed, if anything, it is a point which supports the conclusion I have reached, based as it is on the fact that the Rules point strongly against costs-shifting in the tribunal, whereas costs-shifting in litigation in traditional courts is still the norm."

(Eclipse Film Partners No.35 LLP v. HMRC [2016] UKSC 24).

“Not just allowing flexibility but seeking it; not tolerating unnecessary formality, but avoiding it…There was to my mind an unwelcome degree of formality in the terms of the Appellant’s requests for further particulars.” (Vale Europe Ltd v. HMRC [2014] UKFTT 1042 (TC), §5…§10, Judge Hellier)

“In this connection it has to be borne in mind that this Tribunal hears numerous appeals from litigants in person and in cases (of which this is not one) where litigants are represented by individuals with little knowledge of law and procedure. To ensure that justice is done a high degree of flexibility is required irrespective of whether the taxpayer is professionally represented. The present application falls well within the tolerance that this Tribunal considers it necessary to afford.” (Marchday Holdings Ltd v. CEC [1992] VATTR 484).

 

Flexibility does not mean a shoddy attitude to compliance

 

“A more relaxed approach to compliance in tribunals would run the risk that non-compliance with all orders including final orders would have to be tolerated on some rational basis. That is the wrong starting point. The correct starting point is compliance unless there is good reason to the contrary which should, where possible, be put in advance to the tribunal. The interests of justice are not just in terms of the effect on the parties in a particular case but also the impact of the non-compliance on the wider system including the time expended by the tribunal in getting HMRC to comply with a procedural obligation. Flexibility of process does not mean a shoddy attitude to delay or compliance by any party.” (BPP Holdings v. HMRC [2016] EWCA Civ 121, §38).

 

Duty to co-operate on procedural matters / avoid unnecessary applications and unnecessary delay

 

“ [The rules] impose an express obligation upon the parties to assist in the furtherance of the objective of dealing with cases fairly and justly, which includes the avoidance of unnecessary applications and unnecessary delay. That requires parties to cooperate and liaise with each other concerning procedural matters, with a view to agreeing a procedural course promptly where they are able to do so, before making any application to the tribunal. This is particularly to be expected where parties have legal representation. Parties should endeavour to agree disclosure issues without the need for the tribunal to make a ruling. However, even where a direction from the tribunal may be required …..it will assist the tribunal to further the overriding objective if the parties can identify any directions they are able to agree, subject to the approval of the tribunal. Where they are unable to agree every aspect, this liaison will at least have the advantage of crystallising their positions, and more clearly identifying the issue(s) upon which the tribunal will have to rule.” (Dorset Healthcare NHS Foundation Trust v. M H [2009] UKUT 4 (AAC), §13).

 

“On any view these reasons provide no justification for failing to engage with the appellant and seeking to agree directions. Both parties have a duty to help the tribunal to further the overriding objective of dealing with cases fairly and justly (Rule 2(4)). It is clear that that duty extends to seeking to agree directions to avoid unnecessary hearings.” (Elder v. HMRC [2014] UKFTT 728 (TC), §31).

 

Duty to help further the overriding objective applies to the party, irrespective of advice or representation

 

“…the Civil Procedure Rule in fact impose duties on the parties to the litigation, and it seems to me that must mean the parties themselves irrespective of the help and advice they are or are not receiving. Their duty under CPR 1.3 is this “The parties are required to help the court to further the overriding objective.” One of those objectives is of course to ensure that the case is dealt with expeditiously, and I am therefore quite satisfied that it was the duty of Mr Price, a personal duty, to ensure that the case was dealt with expeditiously and in the particular circumstances of this case to act promptly to set aside any judgment entered in default of his having put in his appearance.” (Mullock v. Price [2009] EWCA Civ 1222, §23).

 

“From Mullock we understand that the obligation to co-operate with the Tribunal (Rule 2(4) refers) is on the Appellants “irrespective of the help and advice they are or are not receiving”; and that “a party should not shield behind his representatives”.” (Vaultdawn Ltd v. HMRC [2015] UKFTT 383 (TC), §90).

 

No right for taxpayer to bring appeal in most advantageous way

 

“First, as to the submission that the appellants were entitled to bring the appeal in a way which was most advantageous to them. That is not a principle which is to be found in the rules. It is not a principle to be found either in reason, common sense, or justice. It is frequently said, and not always appreciated, that justice is a concept which has two faces. There is justice to an appellant; there is justice to a respondent; and there is a third feature, which is not to be diminished, which is that the court or tribunal which is called on to rule in relation to a dispute between two parties should be able to do so speedily, economically and in a way which can be seen to be consistent and fair to both parties.” (Maharani Restaurant v. CEC [1999] STC 295 at 299, Turner J).

 

HMRC under duty to assist unrepresented taxpayer by identifying weaknesses in HMRC’s case

 

“The Appellant is unrepresented and, in those circumstances, convention requires that HMRC provide him with all reasonable assistance at the hearing, they are obliged to identify weaknesses in their own case.” (Dangov v. HMRC [2017] UKFTT 734 (TC), §34 Judge Amanda Brown).

Overriding objective

Examples

 

Parties required to copy correspondence to each other

 

“The overriding objective is to deal with cases fairly and justly and that includes ensuring, so far as practicable, that the parties are able to participate fully in the proceedings and avoiding delay. It seems to me that, by not copying the letter of 29 July and formal response to Montpelier, HMRC failed to have proper regard to their obligation to help the UT further the overriding objective in this case. Further, if HMRC expect the UT to serve their documents on appellants as a matter of course rather than serving the documents themselves, I consider that HMRC are failing to cooperate with UT generally. I doubt, however, that HMRC really have any such expectations as, in my experience, HMRC are generally conscientious in copying submissions, applications and correspondence with the UT to appellants and their advisers." (Huitson v. HMRC [2017] UKUT 75 (TCC), §23, Judge Sinfield).

 

Parties not criticised for not bringing non-compliance by the other party to the other party’s attention

 

“Plainly the appellants were aware of the respondents’ non-compliance and could have raised it with the respondents or drawn it to the attention of the tribunal after 15 September 2017. In the context of direction 6.1 I consider that would have been an appropriate course. However, I do not accept that the appellants are to be seriously criticised for failing to do so.” (Burnikell v. HMRC [2018] UKFTT 140 (TC), §63, Judge Cannan).

 

HMRC should identify appellants who are vulnerable persons and need extra support

 

“We rather incline to the view that if any party has failed to co-operate with the Tribunal in the manner described in Rule 8(3)(c) it is HMRC.  They were the ones who should have (even if “must have” is going too far) realised the vulnerability of the appellant and should not only have made all appropriate adjustments themselves but should have informed the Tribunal, so that the rather unsuitable directions and letters from the Tribunal would not have been issued in the form they were and which could easily have led the panel hearing the application to take a very different course from the one it did.  That would not have been just and fair.” (E v. HMRC [2017] UKFTT 348 (TC), §74, Judge Richard Thomas).

 

Presumption in favour of a hearing where draconian step considered

 

“This case is not on all fours with Frey v Labrouche but there are similarities; and the principle to be derived from what the Master of the Rolls said is that there is a presumption in favour of a hearing when a draconian step—there striking out, here refusal to reinstate—is in contemplation.” (SRN Horizon Ltd v. HMRC [2017] UKUT 246 (TCC), §32, Asplin J and Judge Bishopp).
 

Examples

Constitutional right of access to the Courts/Tribunals

 

"[76] In more modern times, many examples can be found of judicial recognition of the constitutional right of unimpeded access to the courts (as Lord Diplock described it in Attorney General v Times Newspapers Ltd [1974] AC 273, 310, and again in Bremer Vulkan Schiffbau und Maschinenfabrik v South India Shipping Corpn Ltd [1981] AC 909, 977), which can only be curtailed by clear statutory enactment..." (R (oao Unison) v. Lord Chancellor [2017] UKSC 51)

Impediments to access must be clearly authorised by Parliament

"[78] Most of the cases so far mentioned were concerned with barriers to the bringing of proceedings. But impediments to the right of access to the courts can constitute a serious hindrance even if they do not make access completely impossible. More recent authorities make it clear that any hindrance or impediment by the executive requires clear authorisation by Parliament. Examples include Raymond v Honey [1983] 1 AC 1, where prison rules requiring a prison governor to delay forwarding a prisoner’s application to the courts, until the matter complained of had been the subject of an internal investigation, were held to be ultra vires; and R v Secretary of State for the Home Department, Ex p Anderson [1984] QB 778, where rules which prevented a prisoner from obtaining legal advice in connection with proceedings that he wished to undertake, until he had raised his complaint internally, were also held to be ultra vires.

[79] The court’s approach in these cases was to ask itself whether the impediment or hindrance in question had been clearly authorised by primary legislation. In Raymond v Honey, for example, Lord Wilberforce stated at p 13 that the statutory power relied on (a power to make rules for the management of prisons) was “quite insufficient to authorise hindrance or interference with so basic a right” as the right to have unimpeded access to a court. Lord Bridge of Harwich added at p 14 that “a citizen’s right to unimpeded access to the courts can only be taken away by express enactment”." (R (oao Unison) v. Lord Chancellor [2017] UKSC 51)

Impediment only authorised to the degree reasonably necessary to fulfil the objective

"[80]   Even where a statutory power authorises an intrusion upon the right of access to the courts, it is interpreted as authorising only such a degree of intrusion as is reasonably necessary to fulfil the objective of the provision in question.

...

[87] The Lord Chancellor cannot, however, lawfully impose whatever fees he chooses in order to achieve those purposes. It follows from the authorities cited that the Fees Order will be ultra vires if there is a real risk that persons will effectively be prevented from having access to justice. That will be so because section 42 of the 2007 Act contains no words authorising the prevention of access to the relevant tribunals. That is indeed accepted by the Lord Chancellor." (R (oao Unison) v. Lord Chancellor [2017] UKSC 51)

Constitutional right of access to the Courts/Tribunals

General power to regulate own procedure

 

“I am not persuaded that I should hold that the FTT could not produce the desired just result by using its power under Rule 5 ‘to regulate its procedure’, particularly to deal with the case fairly and justly (as required by Rule 2(1) and (3)). Accordingly, I am not prepared to accept the submission of Ms Dewar for HMRC that the FTT could not make a debarring order against HMRC if, on the facts, the FTT considered that the only way to deal with the case fairly and justly was to make such an order.” (Foulser v. HMRC [2013] UKUT 38 (TCC), §64 – strike out not covered by express provision).

 

“Rule 5(2) provides the flexibility to enable the FTT to deal with a situation, such as in this case, where it cannot be said that there is any error of law in the decision to strike out but that decision is challenged on the ground that it arose from a misunderstanding of the nature of the proceedings by the appellant.” (Jumbogate Ltd v. HMRC [2015] UKFTT 64 (TC), §38)
 

General power to regulate own procedure

Natural justice must be observed

 

“Where so much is left to the discretion of the commissioner, the only real limitation, as I see it, is that the procedure must be in accordance with natural justice. This involves that any information on which the commissioner acts, whatever its source, must be at least of some probative value. It also involves that the commissioner must be prepared to hear both sides, assuming that he has been requested to grant a hearing, and that on such hearing he must allow both sides to comment on or contradict any information that he has obtained. This would doubtless apply equally where a hearing had been requested but refused, for in such a case it would not be in accordance with natural justice to act on information obtained behind the backs of the parties without affording them an opportunity of commenting on it.” (R v Deputy Industrial Injuries Commissioner. Ex parte Moore [1965] 1 QB 456 at 476).

 

No private communications with Judge

 

“The first stage of Mr Green QC's argument was the submission that a party to litigation should not communicate privately with a judge hearing a case. In general this is plainly correct.” (Jackson v. Thompsons Solicitors (a Firm) [2015] EWHC 218 (QB), §29 – in the context of the tort of abuse of process).

 

Hearing not unfair simply because taxpayer not represented

 

“The absence of legal representation during the course of Mr Lewis’ evidence might have placed the appellant at a disadvantage but not so substantial that it could not have had a fair hearing.” (Outkey Trading Ltd v. HMRC [2014] UKFTT 156 (TC), §104, Judge Cannan).
 

Natural justice must be observed

Right to a fair hearing

Tax matters generally not covered

“I agree with Mr Jones that Ferrazzini is decisive, as the Court of Appeal recently reiterated, see the leading judgment of Vos LJ at [68] in R (oao APVCO 19) v HMT [2015] EWCA Civ 648.  Both Black LJ and Floyd LJ concurred on this point.” (Gold Nuts Ltd v. HMRC [2016] UKFTT 82 (TC), §97).
 

But: 

“There was no dispute before me that a determination which bore directly on a person’s entitlement to tax credit amounted to a ‘determination of his civil rights’. As the amount of tax credit is a cash payment capable of arithmetical calculation in accordance with statutory rules, that must be correct on the authorities reviewed in Tomlinson v. Birmingham City Council [2010] UKSC 8.” (ZM v. HMRC [2013] UKUT 547 (AAC), §34).
 

Criminal matters are covered

Extended time limit assessments are not criminal charges

 

See Discovery assessments, above XX.

 

COP9 investigation becomes criminal if contractual disclosure facility refused

 

“The COP9 Booklet has a minatory tone.  It includes explicit warnings to a recipient who is considering whether to refuse co-operation, and the substance of those warnings is the threat of prosecution or the imposition of civil evasion penalties.  I find that the person who refuses the CDF is meant to understand that there is now a likelihood of prosecution or civil penalties.  It follows that I agree with Mr Onalaja that Mr Budhdeo has been “charged” with a  criminal offence within the meaning of Article 6.” (Gold Nuts Ltd v. HMRC [2016] UKFTT 82 (TC), §116).
 

Small fixed penalties aimed at administrative compliance are not criminal but deterrent penalties are

 

“It is clear that Sharkey is authority for the proposition that small fixed penalties, the primary purpose of which is to procure the production of documents rather than to punish and deter, do not engage Article 6 where there is no evidence that any prosecution is being contemplated…However, as the Appellants point out, those are not our facts: HMRC have accepted that they are contemplating Mr Budhdeo’s prosecution…More generally, both UK and  ECtHR case law clearly establishes that even small penalties are criminal if their purpose is to punish and deter, see my discussion in Bluu Solutions Ltd v HMRC [2015] UKFTT 95 (TC) at [52]ff.   In Pipe, albeit obiter, Henderson J distinguished daily penalties of up to £60 a day from the fixed penalty in Sharkey, because the daily penalties were not simply “an administrative means of securing the production of returns” but had a substantial deterrent element…I find that the penalty charged on Mr Budhdeo does engage Article 6, because prosecution is being contemplated.” (Gold Nuts Ltd v. HMRC [2016] UKFTT 82 (TC), §§266…267…268…269).

 

“What of the small fixed penalty imposed on Noviscom? Does it engage Article 6, because Mr Budhdeo, its director, may be prosecuted?  This might be arguable if the prosecution in question was that of the companies together with that of Mr Budhdeo, qua director, but those are not our facts: HMRC are only considering a prosecution of Mr Budhdeo.  I therefore follow Sharkey and find that the £300 penalty levied on Noviscom does not engage Article 6.” (Gold Nuts Ltd v. HMRC [2016] UKFTT 82 (TC), §270).

 

Depends upon process adopted

 

“[W]e can see no principled distinction between mere encouragement towards compliance and deterrence from non-compliance. They are essentially two sides of the same coin. Any difference depends on the process adopted to encourage or deter; a warning or guidance might be regarded as falling on the side of encouragement, whereas in our judgment a penalty is clearly on the side of deterrence.” (Euro Wines (C&C) Ltd v. HMRC [2016] UKUT 359 (TCC), §23, Birss J and Judge Berner).

 

“In the present case, the penalty was imposed essentially for the breach of duty not to facilitate a criminal activity i.e. smuggling. The imposition of the penaltywas not, in my view, merely a preventative or regulatory measure and it seems to me that the very structure of the legislation (i.e. an Initial Notice followed by a Penalty Notice) is fatal to Mrs Hall’s argument.” (British-American Tobacco v. HMRC [2017] UKFTT 190 (TC), §479, Judge Brannan).

 

Engel criteria

 

“The Engel criteria, in summary, require that the following must be taken into account: (a) the classification of the penalty in domestic law; (b) the nature of the offence; and (c) the nature and degree of severity of the penalty that the person concerned had risked incurring. The domestic classification of the penalty is only one of the factors, and is not decisive. Not only was the domestic law classification not decisive, it carried relatively less weight than the other factors of the nature of the offence and the nature and degree of severity of the penalty (see for example, Yau and Ors v Customs & Excise [2001] EWCA Civ 1048 per Mummery LJ at [26]). These latter two criteria were alternative, and not cumulative; it was sufficient if the offence in question was by its nature criminal from the point of view of the Convention  or that the nature and degree of severity of the penalty placed the sanction in general in the criminal sphere. However, a cumulative approach is equally permitted if it was not possible to reach a conclusion by reference to the individual criteria (see the helpful summary of the relevant ECtHR case-law in the recent decision of the Upper Tribunal (Birss J and Judge Berner) in Euro Wines (C&C) Ltd v Revenue and Customs Commissioners [2016] UKUT 359 (TCC) at [15] – [21](“Euro Wines”)).” (British-American Tobacco v. HMRC [2017] UKFTT 190 (TC), §472, Judge Brannan).
 

Right to a fair hearing

Collective proportionality (setting an example for others)

 

“It is important that the parties to litigation recognise that Tribunal orders should be complied with:  this factor tends to imposing sanctions for non-compliance, particularly where there is no good excuse for non-compliance because otherwise the Tribunal would only reinforce a casual attitude to compliance.  Overlooking such non-compliance would encourage future non-compliance by the parties to this appeal, and more generally.” (Greenish Ltd v. HMRC [2017] UKFTT 727 (TC), §35, Judge Mosedale).

 

“HMRC did not refer to collective proportionality, a phrase used by the Court of Appeal in their recent decision in BPP [2016] EWCA Civ 121.  While this phrase may be new in this context, the principle I understand it enshrines is not.  It means that in taking case management decisions, the Tribunal must have an eye to the impact of its decision on the case management of other cases.  In other words, a lax attitude to compliance in one case only encourages lack of compliance in other cases.  Some case management decisions may justifiably be made ‘pour encourager les autres’.” (Chung v. HMRC [2016] UKFTT 215 (TC), §25).

But not commoditisation

 

“Nor can it have been the intention of the Upper Tribunal to commoditise MTIC appeals.  Each such appeal must be considered on its own merits, and the case management process must have regard to the particular circumstances of each appeal.  Whilst proportionality is an important factor in the achievement of the tribunal’s overriding objective, and it would be wrong to permit a waste of resources, fairness and justice dictate an approach that focuses on the individual case before the tribunal.” (CF Booth Ltd v. HMRC [2016] UKFTT 261 (TC), §12).
 

Collective proportionality (setting an example for others)

Interests of justice includes effect on other cases 

 

“The Court of Appeal has also recently reminded courts and tribunals (albeit in a different context) that the interests of justice extend beyond the parties themselves.  In Chartwell Estate Agents v Fergies Properties [2014] EWCA Civ 506, Davis LJ (with whom Sullivan LJ and Laws LJ agreed) said at [28] that the interests of justice include: “the interests of other court users: who themselves stand to be affected in the progress of their own cases by satellite litigation, delays and adjournments occurring in other cases...”.” (RJS Electronics Ltd v. HMRC [2016] UKFTT 77 (TC), §23).
 

Interests of justice includes effect on other cases 

Relevance of Civil Procedure Rules and practice

 

A guide (but no more than a guide)

 

“In many cases, I would expect in the vast majority of cases, the outcome will in practice be the same, even though the relevant statutory provisions and procedural rules are different and the emphasis in the formulation of approach differs: see the comments of Langstaff J in Pye v Queen Mary University of London (23 February 2012 – UKEAT/0374/11/ZT) at 20-21. Rule 4 of the 2004 Regulations provides that “the overriding objective of these Regulations and the rules . . . is to enable tribunals and Employment Judges to deal with cases justly”. That is the CPR objective transposed to the ET. “Justly” means that overall fairness is paramount in the exercise of the discretion.” (O’Cathail v. Transport for London [2013] EWCA Civ 21, §43).

 

“…the CPR do not apply to the  tribunals, and they cannot be used as they stand in order to fill gaps. They offer no more than a guide; and in using the CPR for that purpose the tribunal must not lose sight of the surrounding circumstances.” (Leeds City Council v. HMRC [2014] UKUT 350, §16).

 

“Although not directly applicable, the benefit of the guidance provided by the CPR in Tribunal proceedings has long been recognised (eg by the Senior President of Tribunals in BPP Holdings v HMRC [2016] STC at 841 [36]).” (Elbrook (Cash and Carry) Ltd v. HMRC [2017] UKFTT 650 (TC), §14, Judge Brooks).

 

“The appellant’s position is that the CPR provided a guide to the Tribunal in exercising its discretion…and I did not understand that [Counsel for HMRC] disagreed with that.” (DPAS Ltd (No.2) v. HMRC [2015] UKFTT 0071 (TC), §17 – in relation to staying a VAT repayment claim pending determination of liability in the Upper Tribunal).

 

Tribunal less formal

 

“Although the courts and the tribunals share many aspects of their functions and operations, they are different bodies with their own distinct philosophies and procedures. The tribunals are, or are intended to be, less formal and less legalistic than the courts; and that is reflected in the different structure and language of the CPR and the TPR. Great care must therefore be taken when seeking guidance from the CPR about the operation of the TPR. And so, in the present case, great care must be taken in interpreting the TPR requirements about sending and delivery of documents by reference to the CPR provisions, in particular Part 6, relating to service.” (Clavis Liberty Fund LP1 v. HMRC [2015] UKUT 72 (TCC) §18, Warren J).

 

No reference to proportionate cost in FTT rules

 

“The overriding objective of the CPR is to ‘deal with cases justly and at proportionate cost,’ whereas that of the Tribunal Rules is to ‘deal with cases fairly and justly.’ There is no reference to ‘proportionate cost’… It is unsurprising, therefore, that there is also no equivalent in the Tribunal Rules to CPR 1(2)(b): the requirement, so far as practicable, of “saving expense.”  Neither is there a formal obligation to allot to each case “an appropriate share of the court's resources, while taking into account the need to allot resources to other cases.” ” (Citipost Mail Ltd v. HMRC [2015] UKFTT 252 (TC), §§61…62)
 

Relevance of Civil Procedure Rules and practice

English or Scottish tribunal

 

Unclear how to determine

 

“We accept that we sat as an English tribunal.  We accept any consequences relating to precedent and subsequent appeals, flowing from that.  At the end of the day, however, there was no issue of precedent by which we may have been bound as an English tribunal, but not as a Scottish tribunal, that has affected our decision or the reasons for it.” (Morrison 2002 Maintenance Trust v. HMRC [2016] UKFTT 250 (TC), §10 – FTT sat first in London and then Edinburgh).

But see N6A: Foreign Law

English or Scottish tribunal

Calculating time

 

Acts must be done by 5pm

 

“(1) An act required by these Rules, a practice direction or a direction to be done on or by a particular day must be done before 5pm on that day.” (FTT Rules, r.12(1)).

 

Acts required to be done on a non-working day may be done on the next working day

 

“(2) If the time specified by these Rules, a practice direction or a direction for doing any act ends on a day other than a working day, the act is done in time if it is done on the next working day.
(3) In this rule "working day" means any day except a Saturday or Sunday, Christmas Day, Good Friday or a bank holiday under section 1 of the Banking and Financial Dealings Act 1971.” (FTT Rules, r.12(2) – (3)).

 

Calculating time

Taxpayers expected to be aware of 5pm deadline

"We also reject [the taxpayer's] submission that it was not serious or significant that the witness statement was filed the day of the deadline but after 5pm because in contrast to the preceding unless orders a specific time on the particular date was not stated. He argued it was not unreasonable for representatives (such as CTM) who were not lawyers to assume they would have the whole of the day to file. Given that a person’s status as a litigant in person does not generally provide a good reason for failing to comply with rules[2], it cannot be that representatives (who are instructed for their expertise (as observed in Katib at [59])), whether legally qualified or not, would be held to a lower standard. Taking account of the potentially severe consequences of not meeting the deadline, it would reasonably be expected that a representative on the receiving end of the Unless Order would not make any assumptions about the deadline but would check the position in good time." (Lingajothy v. HMRC [2023] UKUT 63 (TCC), Judge Raghavan and Judge Greenbank)

Taxpayers expected to be aware of 5pm deadline

Sending and delivering documents

(1) Any document to be provided to the Tribunal under these Rules, a practice direction or a      direction must be--
(a) sent by pre-paid post or document exchange, or delivered by hand, to the address specified for the proceedings; or
(b) sent or delivered by such other method as the Tribunal may permit or direct.” (FTT Rules, r.13(1)).

 

Presumption that address provided is correct

 

“(5) The Tribunal and each party may assume that the address provided by a party or its representative is and remains the address to which documents should be sent or delivered until receiving written notification to the contrary.” (FTT Rules, r.13(5)).

 

Implicit authorisation of a delivery method

 

“(2) Subject to paragraph (3), if a party or representative provides a fax number, email address or other details for the electronic transmission of documents to them, that party or representative must accept delivery of documents by that method.” (FTT Rules, r.13(2)).

 

Explicit rejection of delivery method 

 

“(3) If a party informs the Tribunal and all other parties that a particular form of communication (other than pre-paid post or delivery by hand) should not be used to provide documents to that party, that form of communication must not be so used.” (FTT Rules, r.13(3)).

 

Power to request a hardcopy 

 

“(4) If the Tribunal or a party sends a document to a party or the Tribunal by email or any other electronic means of communication, the recipient may request that the sender provide a hard copy of the document to the recipient. The recipient must make such a request as soon as reasonably practicable after receiving the document electronically.” (FTT Rules, r.13(4)).
 

Sending and delivering documents

Irregularities do not of themselves render any step void

“(1) An irregularity resulting from a failure to comply with any requirement in these Rules, a practice direction or a direction does not of itself render void the proceedings or any step taken in the proceedings.” (FTT Rules, r.7(1)).

Irregularities do not of themselves render any step void

Alternative dispute resolution

 

“(1) The Tribunal should seek, where appropriate--
(a) to bring to the attention of the parties the availability of any appropriate alternative procedure for the resolution of the dispute; and
(b) if the parties wish and provided that it is compatible with the overriding objective, to facilitate the use of the procedure.
(2) Part 1 of the Arbitration Act 1996 does not apply to proceedings before the Tribunal.” (FTT Rules, r.3).

 

Only a relevant consideration if proceedings are on going

 

“While proceedings are underway then the terms of Rule 3 are relevant but here there are, currently, no proceedings – the appeals have been withdrawn or struck out.  If the proceedings were to be reinstated then Rule 3 would again be relevant to the resumed proceedings.  But we do not accept that the encouragement of ADR by Rule 3 should be interpreted by us as a factor in favour of reinstating what are currently spent proceedings. If the only objective of the reinstatement applications was to provide an opportunity to participate in the EBT settlement opportunity then we would concur with HMRC that that would count against the Appellants.” (Vaultdawn Ltd v. HMRC [2015] UKFTT 383 (TC), §96).
 

Alternative dispute resolution

- Query whether FTT has power to require parties to engage in ADR

 

"[74] For the reasons I have given, I have decided that:
i) [9]-[10] of Halsey was not part of the essential reasoning in that case and did not bind the judge to dismiss the Council's application for the stay of these proceedings.

ii) The court can lawfully stay proceedings for, or order, the parties to engage in a non-court-based dispute resolution process provided that the order made does not impair the very essence of the claimant's right to proceed to a judicial hearing, and is proportionate to achieving the legitimate aim of settling the dispute fairly, quickly and at reasonable cost.

iii) I decline to lay down fixed principles as to what will be relevant to determining the questions of a stay of proceedings or an order that the parties engage in a non-court-based dispute resolution process. Many of the factors mentioned at [61]-[63] above and the nature of the process contemplated will be relevant, as will other circumstances.

iv) I would decline to make any order for a stay of these proceedings at this stage for the reasons given at [67]-[73] above." (Churchill v. Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416)

Relevant factors

"[61] The Bar Council submitted that the following factors were relevant to the exercise of the court's discretion: (i) the form of ADR being considered, (ii) whether the parties were legally advised or represented, (iii) whether ADR was likely to be effective or appropriate without such advice or representation, (iv) whether it was made clear to the parties that, if they did not settle, they were free to pursue their claim or defence, (v) the urgency of the case and the reasonableness of the delay caused by ADR, (vi) whether that delay would vitiate the claim or give rise to or exacerbate any limitation issue, (vii) the costs of ADR, both in absolute terms, and relative to the parties' resources and the value of the claim, (viii) whether there was any realistic prospect of the claim being resolved through ADR, (ix) whether there was a significant imbalance in the parties' levels of resource, bargaining power, or sophistication, (x) the reasons given by a party for not wishing to mediate: for example, if there had already been a recent unsuccessful attempt at ADR, and (xi) the reasonableness and proportionality of the sanction, in the event that a party declined ADR in the face of an order of the Court.
[62] I note that these factors mirror, to some extent at least, the factors discussed by the Court of Appeal in Halsey at [16]-[35] as being relevant to the costs question of whether a party had behaved unreasonably in refusing ADR.
[63] Mr Churchill submitted that the internal complaints procedure in this case was, in any event, a disproportionate fetter on the right of access to court because (a) there was no neutral third party involved and the claim was dealt with by the manager of the Council's own knotweed department, (b) no legal advice was available to the claimant, (c) there was no settled written procedure by which it operated, (d) it had no statutory backing, (e) it was a process that had no fixed timescale and might take an open ended amount of time, (f) the limitation period was not suspended during the process, (g) there was no provision for the payment of a claimant's costs, and (h) there was no express provision allowing for the payment of compensation in addition to eradicating the knotweed." 
(Churchill v. Merthyr Tydfil County Borough Council [2023] EWCA Civ 1416)

- Query whether FTT has power to require parties to engage in ADR

Expedition and urgency

 

See M3: Categorisation and Listing

Expedition and urgency
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