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Procedure.Tax
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N13: Raising new points
New contractual argument raised at hearing for the first time not permitted
"[19] Having considered the parties’ skeleton arguments lodged for the proceedings, together with the documents lodged by the parties, we accept that the parties had proceeded on the basis that the relevant facts to be adduced for determining the appeal concern the nature of two sets of contractual relationships, namely:
(a) Between K5K and the Agency Workers/Personal Companies, and
(b) Between K5K and the End Clients (or ‘Hirers’) as recipients of the services.
[20] To raise an argument based on the construction of a tripartite relationship with an implied contract between the Agency Workers/Personal Companies and the Hirers in the Opening Note was to bring in a new ground. In the absence of any application having been made for admitting the new ground, the respondents had no prior notice and were ambushed. This preliminary issue was disposed of by the Tribunal’s direction given at the February hearing that Mr Jones would not run the argument mooted in paragraph 6(a) of his Opening Note in relation to an implied contract that could have existed between the Agency Workers’ Personal companies and the Hirers." (K5K Limited v. HMRC [2022] UKFTT 217 (TC), Judge Poon)
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New argument that might have been met with evidence not permitted
"[63] However, it would be quite wrong for us to reach that conclusion without first having heard any evidence which the Appellants may have to rebut it and, because the point was raised at such a late stage in the proceedings, the Appellants have not been given a fair opportunity to produce that evidence. The Respondents filed their statement of case on 31 July 2020 and then applied to amend it shortly before the hearing, on 13 April 2023, and there is no indication in either the original version of the statement of case or the proposed amendments that the Respondents proposed to plead this point. Although it was mentioned in the Respondents’ skeleton argument for the hearing, that was not filed until 2 May 2023, three weeks before the hearing. Consequently, the Appellants have not been given a meaningful opportunity to adduce evidence which might have showed that, on the balance of probabilities, the stamp duty assurance was not a term of the agreement for sale and was merely part of the larger arrangement. For example, if the Appellants had been given sufficient notice of the point, they might have been able to call Mr Woolfe to give evidence to that effect.
[64] We think that the Appellants were entitled to know the precise nature of the Respondents’ case at the time when the Respondents filed their statement of case, as required by Rule 25 of the Tribunal Rules. Whilst the statement of case referred to the fact that the Respondents intended to rely on Section 2 to advance their case in the proceedings, the paragraphs dealing with the point made reference solely to the matters described in paragraphs 46(1) to 46(4) above. Moreover, those paragraphs did not even intimate that those four matters were just examples of the matters in which the Sale Agreement was deficient and that the Respondents might wish to allege that there were others. For example, the preamble said that the Sale Agreement was void under the section “because” of the four matters when it might have said that the Sale Agreement was void “because, inter alia” of the four matters. In the circumstances, we think that it would be contrary to the overriding objective in Rule 2 of the Tribunal Rules if we were to determine this question in favour of the Respondents without having heard any such evidence and we decline to do so." (Executors of Elborne v. HMRC [2023 UKFTT 626 (TC), Judge Beare)
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