© 2024 by Michael Firth KC, Gray's Inn Tax Chambers
Contact: michael.firth@taxbar.com
Procedure.Tax
For additional search results use Google and enter:
site:procedure.tax [search term]
N13: Raising new points
Whether it is a new point
​
- Argument referred to in correspondence but not formally pleaded not a new point
"[146] We have come to the view that, on balance, the point is not a new issue and should properly be regarded as being before the Tribunal. We acknowledge that the point is not properly formally pleaded. However, the point was clearly at issue between the parties before the submission of the notice of appeal. The notice of appeal and the amended grounds of appeal did not correctly refer to the penalties and HMRC, to their credit, took some steps to clarify the scope of the appeal. Although the wording of Elliotts Shah's email of 17 August 2021 is not particularly precise - the reference to not having "seen or received HMRC communications" could be taken to refer to the receipt of penalty assessments or other correspondence in addition to the receipt of the section 8 TMA notice itself - and we would have expected great clarity in professional correspondence, read in the context of the earlier exchanges, in our view, it should be regarded as including a reference to section 8 TMA notices. Accordingly, in exercise of our powers under FTR 5(3), we would permit Mr Niasse to make submissions on this point. In arriving at this conclusion, we are mindful of the overriding objective "to deal with cases fairly and justly" in FTR 2(1) and in particular the injunction in FTR 2(2)(b) to avoid "unnecessary formality".
[147] That having been said, the correspondence with Elliotts Shah was not as clear as might have been reasonably expected. We can understand why HMRC may not have regarded the point as continuing to be in issue. As a result of the conclusions that we have reached below, we do not need to address this point. However, if we had not reached those conclusions, we would have considered that procedural fairness required us to permit HMRC to introduce further evidence to address the point and to allow them time to do so." (Niasse v. HMRC [2024] UKFTT 179 (TC), Judge Greenbank)
​
- HMRC pleading one subsection did not allow them to rely on another subsection
"[43] Rule 25 of the FTT Procedure Rules requires HMRC to set out their position in relation to the Appellants' case. We respectfully agree with the decision of Judge Mosedale in Allpay where she stated:
"The Tribunal's rules require HMRC to set out its position in respect of a case; what that means is that [the Revenue] should explain its position in sufficient detail to enable the appellant to properly prepare its case for hearing. Anything less may lead to injustice."
[44] We are clear that HMRC have not come near to setting out their position in relation to subsections (a) and (d) of Section 850C(20) for the Appellants to have properly prepared their case for this hearing. These were not matters which were in any sense "obvious" such that a litigant in the position of the Appellants could reasonably have been expected to anticipate reliance upon them.
[45] No application was made by HMRC to amend their Statement of Case. No application was made by HMRC for an adjournment and, given the circumstances involving delay of a long hearing which had been arranged for some time, where there was little reason for HMRC not to have made an application to amend their Statement of Case in advance of the hearing, we were not inclined to adjourn the hearing of our own volition.
[46] Our conclusion was that the overriding objective required that the hearing proceeded on the basis of the unamended pleadings." (Boston Consulting Group UK LLP v. HMRC [2024] UKFTT 84 (TC), Judge Bowler)
​
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)
​
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)
​
New grounds after the hearing (possible but very unlikely)
"[53] The Tribunal has the power, in its discretion, to allow such an application at the post-hearing stage, but the discretion must be exercised in a principled way.
(1) Up until the time that the Tribunal's final decision is communicated to the parties, the Tribunal remains seised of an appeal, and until that time it may in its discretion grant an application for permission to admit new evidence and/or new grounds of contention (E v Secretary of State for the Home Department [2004] EWCA Civ 49, [2004] QB 1044 ("E") at [27] and [92]; Karunia Holdings Ltd v Creativityetc Ltd [2021] EWHC 1864 (Ch) ("Karunia") at [48]).
(2) Any such application made after the time limit for presenting evidence, grounds and arguments has already expired should be determined through the application of the three-stage test in Denton v TH White Ltd [2014] EWCA Civ 906, [2014] 1 WLR 3926 at [24]. This requires the Tribunal:
(a) to identify and assess the seriousness and significance of the failure to comply with the time limit for presenting the evidence, grounds and/or arguments;
(b) to consider why the failure occurred; and
(c) to evaluate all the circumstances of the case, so as to enable the Tribunal to deal justly with the application, which will involve a balancing of the merits of the reasons given for the delay and all other relevant factors, including the prejudice which would be caused to both parties by granting or refusing permission, and the importance of the need for litigation to be conducted efficiently and at proportionate cost, and for time limits to be respected.
(See Karunia at [52], [56], [59], [61] and [63]; Civil Procedure Rules, rule 3.9(1) (by analogy); The Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (the "Rules"), rule 2(1), (2)(a) and (3)(a), and rule 5(2) and (3)(a), (c) and (d).)
(3) Where such an application is made after the hearing of an appeal has already concluded, regard must also be had to the principle of finality, under which each party is generally entitled to expect that the other's full case and evidence will be presented at the hearing (Karunia at [47]). It is a duty of every litigant to bring forward their whole case at once, and a tribunal should be astute to discourage applications to put in new evidence and new grounds after the hearing of a case has concluded (compare Charlesworth v Relay Roads Ltd [1999] EWHC 829 (Pat), [2000] 1 WLR 230 at 237H and 238H).
(4) Such an application made at the post-hearing stage, but before the Tribunal's final decision is communicated to the parties, is not subject strictly to the test in Ladd v Marshall [1954] 1 WLR 1489, according to which leave to adduce further evidence on appeal will only be granted if:
(a) it is shown that the evidence could not have been obtained with reasonable diligence for use at the trial,
(b) the further evidence is such that, if given, it would probably have an important influence on the result of the case, though it need not be decisive, and
(c) the evidence is such as is presumably to be believed.
However, the Ladd v Marshall test can nevertheless be taken into account as a cross-reference (Karunia at [53]-[56] and [63]). In practice, such an application at the post-hearing stage may well be unlikely to succeed if it does not satisfy the Ladd v Marshall test, although all will depend on the circumstances of the individual case as a whole which need not be exceptional (Karunia at [54]).
...
[55] The Tribunal finds that there has been a serious and significant delay in the presentation by the Respondent of the proposed new evidence.
...
[56] The Tribunal finds that no satisfactory explanation has been given by the Respondent for the delay in presenting the proposed new evidence.
...
[57] An evaluation of all of the circumstances of the case leads the Tribunal to conclude that it would be just to refuse the Respondent's 30 November 2023 application." (HMRC v. IPS Progression Limited [2024] UKFTT 136 (TC), Judge Staker)
​