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M15: Adjournments and stays
FTT power
“(3)…the Tribunal may by direction –
(h) adjourn or postpone a hearing;
[…]
(j) stay (or, in Scotland, sist) proceedings;” (FTT Rules, r.5(3)(h), (j)).
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Delay to be avoided insofar as is compatible with a proper consideration of the issues
“It is made quite clear in Transport for London v Greg O’Cathail that the overarching fairness factor must be taken into account in assessing the effect of the decision as to whether or not to adjourn on both sides. Terluk v Berezovsky identifies the fact that a late adjournment involves a significant loss of time and money. If this hearing were to be adjourned there would undoubtedly be a waste of scarce Tribunal time, no possibility of recovery of costs from this hearing from the appellants and a further delay in access to justice for the parties since, at a minimum, there would be no case management directions and there would be an outstanding application for strike out. HMRC contend that an adjournment would result in prejudice to HMRC, the administration of justice and the public purse.” (Decker v. HMRC [2016] UKFTT 805 (TC), §41, Judge Anne Scott).
“It is made quite clear in Transport for London v Greg O’Cathail that the overarching fairness factor must be taken into account in assessing the effect of the decision as to whether or not to adjourn on both sides. Terluk v Berezovsky identifies the fact that a late adjournment involves a significant loss of time and money. If this hearing were to be adjourned there would undoubtedly be a waste of scarce Tribunal time, no possibility of recovery of costs from this hearing from the appellant and a further delay in access to justice for the parties.” (Walmley Ash Ltd v. HMRC [2016] UKFTT 160 (TC), §13)
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- Adjournments of interim hearings to be avoided
“In particular, this was a long outstanding matter and if at all possible postponements of interim hearings should be avoided; the appellant ought to have been prepared for this hearing…” (First Class Communications Ltd v. HMRC [2015] UKFTT 511 (TC)).
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- Adjournments are a discretionary matter, but sometimes required
“Although an adjournment is a discretionary matter, some adjournments must be granted if not to do so amounts to a denial of justice. Where the consequences of the refusal of an adjournment are severe, such as where it will lead to the dismissal of the proceedings, the tribunal or court must be particularly careful not to cause an injustice to the litigant seeking an adjournment.” (Teinaz v. Wandsworth LBC [2002] EWCA Civ 1040, §20)
"I quite agree the Court of Appeal ought to be very slow indeed to interfere with the discretion of the learned judge on such a question as an adjournment of a trial, and it very seldom does so; but, on the other hand, if it appears that the result of the order made below is to defeat the rights of the parties altogether, and to do that which the Court of Appeal is satisfied would be an injustice to one or other of the parties, then the Court has power to review such an order, and it is, to my mind, its duty to do so." (Maxwell v. Keun [1928] 1 KB 645 at 653m Atkin LJ)
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- No special rule for cases involving fraud where taxpayer not present
“In this case, the relevant case management power was the power to adjourn the hearing but the fact that one of the factors to be considered and weighed in the balance was that, if the hearing was to continue, there might be no opportunity for the fraud allegations to be tested in cross examination does not in our view mean that the decision is no longer a case management decision. However, as Ms Malcolm put it in argument, that factor should inform and influence how the case management power was exercised.” (Westminster Trading Ltd v. HMRC [2017] UKUT 23 (TCC), §59).
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- Must be some possibility of reason for adjournment being resolved
“The prospect of funding for these proceedings being made available in any reasonable time frame, if at all, seems remote.” (Decker v. HMRC [2016] UKFTT 805 (TC), §56, Judge Anne Scott).
“We have refused the application for adjournment on the basis that nothing would be achieved in granting it as there is little or no prospect of any funding being obtained. Further, Mr Kelly has been aware of the funding problem for years and had done little or nothing until very recently…The cost to the public purse would be considerable and there is no prospect of recovery of the wasted costs of this hearing.” (Walmley Ash Ltd v. HMRC [2016] UKFTT 160 (TC), §44).
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“It is inimical to justice to continually adjourn a case without any real prospect that the circumstances underlying the request for the adjournment will ever change.” (Banerjee v. HMRC [2015] UKFTT 85 (TC), §43).
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- Consider the effect on other Tribunal users
"[43]...(4) Other taxpayers would be prejudiced by an adjournment. Both HMRC and the Tribunal would divert resources away from other appeals, and as Davis LJ said in Chartwell Estate Agents v Fergies Properties [2014] EWCA Civ 506 at [28], 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...” (Henry v. HMRC [2024] UKFTT 237 (TC), Judge Redston)
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- Absence of representative not necessarily sufficient
"[43]...(1) Mr Henry had been informed of the strike out well over a year ago, and he was also told what action had to be taken should he wish to reinstate the appeal. Although his reading and writing skills are limited, he was able to ask Ms Anderson to assist him for this hearing, and it is reasonable to infer that he could have asked her, or another friend 5 or acquaintance, to read the strike out decision when it arrived; this would have ensured that he knew for himself what action was required, rather than relying only on Mr WrightAnderson.
(2) Mr Henry had instructed new accountants some months ago. There was no good reason why Mr Adeboyejo could not have “got to grips with” the Application before this hearing. If Mr Wright-Anderson was not co-operating in relation to the provision of earlier documents, Mr Adeboyejo could have contacted HMRC and asked for copies.
(3) The Tribunal is well-used to hearing from litigants in person who attend the hearing without an accountant or lawyer. ” (Henry v. HMRC [2024] UKFTT 237 (TC), Judge Redston)
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Exceptional circumstances required where hearing imminent
"[43] The starting-point must be that Ms Morton's application to EJ Kolanko on 30 October 2017 faced two serious hurdles. First, she was applying for the adjournment of a hearing which was about to begin that morning. That is obviously very undesirable, for all the reasons given by Lewison LJ, and in any event by virtue of rule 30A (2) it could only be granted if there were exceptional circumstances." (Morton v. Eastleigh Citizens Advice Bureau [2020] EWCA Civ 638, Underhill LJ)
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Test is whether refusal of adjournment would be unfair
"[164] I am no doubt bound by the decision in SH (there being no relevant difference between the correct approach to an adjournment in the Immigration and Asylum Chamber and that in the Tax Chamber), and I do not in any event have any difficulty with the proposition that the refusal of an adjournment will be flawed if it was unfair.
...
[167] In any event the real question it seems to me is whether the prejudice to the Appellants in not being able to cross-examine was such as to make it unfair to refuse the adjournment." (Mungavin v. HMRC [2020] UKUT 11 (TCC), Nugee J)
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Accommodating a witness
Person whose presence is needed for a fair trial - adjournment usually granted
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“A litigant whose presence is needed for the fair trial of a case, but who is unable to be present through no fault of his own, will usually have to be granted an adjournment, however inconvenient that may be…But the tribunal or court is entitled to be satisfied that the inability of the litigant to be present is genuine, and the onus is on the applicant…to prove the need for such an adjournment.” (Teinaz v. Wandsworth LBC [2002] EWCA Civ 1040, §21)
Unless no prospect of obstacle being overcome
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“…even if we had accepted she was too ill to attend, we would have refused postponement on the grounds that real injustice was being done in the delay in hearing this case already delayed by over two years (in reality 8 years) and a further delay was unlikely to serve any purpose in that there appears to be little prospect that the appellant will ever consider herself well enough to attend the hearing.” (Banerjee v. HMRC [2015] UKFTT 85 (TC), §43 – earlier delays due to taxpayer).
But in exceptional circumstances it will not, even where the medical evidence is unchallenged because neither party has a monopoly on fairness:
“The ET set out in its judgment of 21 February 2011 the various factors considered by it when considering whether or not to grant an adjournment. It said that that the proceedings were stale, having been issued in August 2009 in relation to events dating back to 2008; that there had been a previous adjournment of the substantive hearing at the Claimant's request; that two of TfL's witnesses had already become unavailable and a third was likely to become unavailable, if the hearing was postponed; that the delays in determining the claim affected the determination of other pending claims and an internal appeal; that costs would be wasted, if the matter were postponed; that, as a matter of proportionality, the claim did not involve dismissal and would be limited to a modest award for injury to feelings; that considerable ET resources had been dedicated to the claim; that the postponement would have an effect on other claims awaiting adjudication by the ET; and that many of the Claimant's claims relied on documentary material rather than on oral evidence and could be fairly determined by the ET without the need for the Claimant's evidence and submissions…I have never seen such a scrupulously detailed and careful decision by an ET or, indeed, by any court or tribunal, on the question whether or not to grant an adjournment. It is clear that the most anxious consideration was given to taking the exceptional step of refusing an adjournment applied for on unchallenged medical grounds…The Claimant did not have a monopoly of the fairness factors in this case. It would not be fair for TfL to be repeatedly denied a hearing on the ground of the Claimant's recurrent health problems.” (O’Cathail v. Transport for London [2013] EWCA Civ 21, §§20…40…43).
Irrelevant that person who is unable to attend pleased to obtain adjournment
“If one were to read [95] as saying that, even if Mr Wright was ill, the fact that he was happy to use his illness as a delaying tactic was a reason for refusing the adjournment, that would, in our view, have been having regard to an irrelevant factor. Whether or not Mr Wright would be pleased by an adjournment, albeit caused by his ill health, is not relevant in assessing the balance of prejudice it might cause.” (Wright v. HMRC [2013] UKUT 0481 (TCC), §45, Judges Hellier and Gort).
Witness being unable to appear who has already had opportunity to advance positive case
“In this case, the Appellants had ample opportunity to prepare detailed witness statements covering all the issues raised by HMRC, including the question as to whether HMRC were correct in their allegations that there was an orchestrated fraud and to provide positive reasons why Mr Kohli believed that the transactions that the Appellants entered into had a commercial rationale.” (Westminster Trading Ltd v. HMRC [2017] UKUT 23 (TCC), §69).
Stress, depression and anxiety are generic terms requiring elaboration
“Stress and anxiety are generic terms. Mr John Cavanagh QC, who has appeared for the appellant, has not suggested that stress and anxiety cannot constitute an illness. However, as I see it those terms are likely to cover a range of symptoms differing widely in their severity. Where a party seeks an adjournment on the basis of stress or anxiety, he should expect to produce details of the symptoms, the causes, severity, and so on, or to explain why those details cannot be supplied to the Tribunal.” (Andreou v. Lord Chancellor’s Department [2002] EWCA Civ 1192, §65).
“…depression (like stress and anxiety in Andreou) may take many forms and the FTT was entitled to consider that it was not clear whether the depression from which Mr Wright was suffering would prevent him from attending a hearing in the reasonably near future. As a consequence, without the more detailed evidence it had sought as to when Mr Wright would be fit to attend it was entitled to be seriously concerned about when a hearing would eventually take place…” (Wright v. HMRC [2013] UKUT 0481 (TCC), §34(2)).
Stress – adjournment unlikely to serve any useful purpose
“In cases where the applicant complains of stress-related illness, an adjournment is unlikely to serve any useful purpose because the stress will simply recur on an adjourned hearing.” (Forresters Ketley v Brent & Another [2012] EWCA Civ 324).
“In those circumstances [absence of further medical evidence on expected fitness to attend], in our view the FTT was entitled to give significant weight to the evidence that was before it at the time of the third adjournment application which, as the FTT found, provided considerable uncertainty as to whether Mr Kohli would be fit to attend the proceedings at any time bearing in mind the nature of his illness.” (Westminster Trading Ltd v. HMRC [2017] UKUT 23 (TCC))
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Power to insist on further evidence
“If there is some evidence that a litigant is unfit to attend, in particular if there is evidence that on medical grounds the litigant has been advised by a qualified person not to attend, but the tribunal or court has doubts as to whether the evidence is genuine or sufficient, the tribunal or court has a discretion whether or not to give a direction such as would enable the doubts to be resolved. Thus, one possibility is to direct that further evidence be provided promptly. Another is that the party seeking the adjournment should be invited to authorise the legal representatives for the other side to have access to the doctor giving the advice in question. The advocates on both sides can do their part in assisting the tribunal faced with such a problem to achieve a just result. I do not say that a tribunal or court necessarily makes any error of law in not taking such steps. All must depend on the particular circumstances of the case. I make these comments in recognition of the fact that applications for an adjournment on the basis of a medical certificate may present difficult problems requiring practical solutions if justice is to be achieved.” (Teinaz v. Wandsworth LBC [2002] EWCA Civ 1040, §22)
“Fairness to other litigants may require that indulgences given to those who have had the opportunity to justify an adjournment but have not taken that opportunity adequately are not extended.” (Andreou v. Lord Chancellor’s Department [2002] EWCA Civ 1192, §46 – the Tribunal directed medical evidence to be produced covering specific points by a certain deadline, the evidence produced did not deal with those points).
“A comparison with Andreou is instructive. In both cases the initial medical certificate was insufficient; in both cases the Appellant was given a chance to produce something fitting although a little more warning was given in Andreou; in Andreou the consequence was striking out the action, in Mr Wright’s appeal the FTT adopted the less drastic procedure of hearing the case and taking into account only the written evidence supplied by Mr Wright.” (Wright v. HMRC [2013] UKUT 481 (TCC), §35, Judges Hellier and Gort).
No stay to allow witness to give evidence that is unlikely to affect the outcome
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“However, the following factors were in favour of continuing with the case and making our decision on the basis of the evidence and submissions before us:
(1) If we adjourned the hearing, HMRC would incur extra costs, both in time and resources, in preparing for and attending a further hearing.
(2) Mr Drammeh had been repeatedly asked by the Tribunal about witness attendance at the hearing, and had also been warned that if the hearing had to be adjourned, it was likely that the costs incurred by HMRC would be recoverable.
(3) If we now adjourned so Mr Bediako could attend as a witness, it was both reasonable and proportionate for HMRC’s extra costs to be paid by Mr Bediako or Mr Drammeh, particularly in the light of that specific warning.
(4) Using the Guideline hourly rates, we estimated that HMRC’s costs, calculated on a standard basis, would be of the order of £605, being five hours at the lowest rate applicable to the London postcode where Mrs Levy is based. That would exceed the penalty in issue.
(5) There was in any event no certainty that Mr Bediako would attend as the result of a direction; he had ignored all HMRC’s correspondence and requests for confirmation, contact, and documents.
(6) Although it was less likely that Mr Bediako would refuse to comply with a formal witness summons, the purpose of adjourning would be to see if there were further factors relevant to the penalty which would assist Mr Bediako. It was almost certainly disproportionate to issue a witness summons in those circumstances.
(7) Mr Bediako had appointed Mr Drammeh to represent him and had not given any indication, to HMRC or the Tribunal, that he was unhappy with that representation or wished to be personally involved in the case. This is consistent with his continued reliance on Mr Drammeh during the enquiry process, despite HMRC issuing him with two penalties for failure to comply with the Sch 36 Notice.
(8) We are required by Rule 2(2)(e) to avoid delay, so far as compatible with proper consideration of the issues.
(9) We had some information in the Bundle as to Mr Bediako’s personal position.
Taking all these factors into consideration, we decided that it was in the interests of justice for us to continue with the hearing and not to adjourn for Mr Bediako to provide more information about his personal situation.” (Bediako v. HMRC [2016] UKFTT 280 (TC), §§107…108).
Unable to log in to video hearing
Adjournment refused for low value case where HMRC witness unable to log in
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"[31] Rule 2 also requires us to deal 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”. The subject matter of this appeal was a decision to restore the trailer for a fee of £6,550.58. Although that is not an insignificant sum to the Appellant, it is relatively small in the context of the cases dealt with in this Tribunal. As to complexity, the issues raised by the appeal are not novel, but straightforward. A further hearing would incur costs for the Appellant, who would have to instruct Mr Keddle to attend on another occasion, and to prepare afresh for that second hearing. Even if the Border Force were to cover Mr Keddle’s extra fees, the Ministry of Justice would incur irrecoverable costs. These would include the fees of the Tribunal panel; the costs of the administration team who would need to set up the new hearing, and the costs of the video hearing team who would have to arrange a new test hearing, and to attend a new substantive hearing.
[32] Taking into account all relevant factors, we decided it was in the interests of justice to refuse the application to adjourn and continue with the hearing."(Paniec v. HMRC [2020] UKFTT 360 (TC), Judge Redston)
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Accommodating representation
Consider prejudice due to not being able to cross-examine
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"[83] That means that in assessing whether a party is significantly prejudiced by not being able to cross-examine a witness, it is important to look with care at whether there is reason to suppose (i) that that witness gives evidence which is adverse to the crossexamining party, which might have been undermined or qualified if crossexamination had taken place, and which might have a significant effect on the outcome of the case; or (ii) that further evidence favourable to the cross-examining party could have been elicited from that witness.
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[118]...I am entirely satisfied for the reasons I have sought to give that the FTT were not only entitled to conclude, but were right to conclude, that the actual prejudice to the Appellants in not being able to cross-examine HMRC’s witnesses through their own counsel as they would have wished was nothing like as great as at first blush it might appear." (Mungavin v. HMRC [2020] UKUT 11 (TCC), Nugee J)
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Difference between representative being ill for a while and becoming unexpectedly unwell
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"[122] ... The point that the FTT was making was not that she had had a number of indulgences and so could not expect any more; it was that there was a history of accommodations made because of her medical condition, and that that formed part of the background such that her case could not be equated with that of an advocate who was suddenly and unexpectedly taken ill. That point seems to me a valid one regardless of how much of the delay in filing the skeleton was due to her medical condition, as certainly some of it was.
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[134] What they were saying was that it was foreseeable that she might be unable to conduct the hearing due to problems arising either from her cancer or from her treatment. In the light of the history which they had recounted (the delay in filing the skeleton, the necessity for Ms Graham-Wells to go to hospital during the March hearing, her inability to complete the March hearing, and her inability to attend the June hearing), they were entirely justified in my judgment in concluding that whether or not any specific problem could have been anticipated, it was foreseeable that she might suffer further problems that would mean she could not attend the December hearing either." (Mungavin v. HMRC [2020] UKUT 11 (TCC), Nugee J)
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Make contingency plans
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"[141] In my judgment the FTT was justified in concluding that the Appellants should have had contingency plans that were able to cope with that situation. That need not have meant instructing Mr Clarke to get fully up to speed before that date; it could have meant asking him to have a preliminary briefing from Ms Graham-Wells and familiarising himself with at least the outline of the case (as the FTT said at [17(2)]). That would not mean the Appellants incurring the full cost of instructing him “just in case”, but would have made it easier for him to be in a position to step in if necessary." (Mungavin v. HMRC [2020] UKUT 11 (TCC), Nugee J)
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Not usually granted
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“I am conscious that this is a substantial case, and that there will at all events be considerable documentary and other evidence. It is a case where it will be preferable from the point of view of Mr Hackett if he is able to have the assistance of experienced legal representation. But if that turns out not to be possible to achieve, the absence of it will not be such that Mr Hackett will not receive a fair hearing. The interests of justice will be met by there being a hearing, at which Mr Hackett will have the opportunity to challenge the case made by HMRC and to provide his own evidence and submissions in that regard. The tribunal will ensure that he is able to do so. A stay would not be in the interests of justice.” (Hackett v. HMRC [2016] UKFTT 781 (TC), §16, Judge Berner).
“We did not consider that the case should be adjourned to allow her time to find pro bono help. She has had years to find such help but has clearly taken no steps to do so until that last few weeks before the hearing. She was clearly aware fo the possibility of pro bono barristers as she had referred to an intention to seek such help in letters written much earlier in proceedings.” (Banerjee v. HMRC [2015] UKFTT 85 (TC), §47).
“Rule 2 also requires us to ensure, so far as practicable, that the parties are able to participate fully in the proceedings. [the taxpayer] has had six months in which to instruct Counsel; it would not be in accordance with the overriding objective for the Tribunal to delay the hearing so that he could have further time to consider whether or not he wished to issue instructions. [The taxpayer] did not submit that either party’s submissions were of such complexity that the attendance of Counsel was required. He had attended the hearing to represent the company; he was familiar with the company’s history; he had put forward the company’s grounds of appeal and was able to explain them to the Tribunal. We found that continuing with the hearing was entirely consistent with ‘ensuring, so far as practicable, that the parties are able to participate fully in the proceedings.’ “ (Westminster College of Computing Ltd v. HMRC [2014] UKFTT 669 (TC), §24(3)).
No stay where representative on holiday and sufficient time to appoint new representative
“In particular, while I had no explanation at all for the appellant’s non-appearance, the application for adjournment had been made on the basis his representative would be on holiday and I presumed that Mr Bland was not present because he was on holiday. However, the postponement had been refused in sufficient time for the appellant to attend himself and/or appoint a new representative. And the application for postponement due to Mr Bland’s holiday I had judged unmeritorious as Mr Bland had neither claimed, nor produced evidence to support such a claim, that the holiday had been booked before he was notified of the hearing date, and the fact that the application for postponement was made nearly 3 weeks after the notification of the hearing was consistent with it being booked after notification of the hearing date. Moreover, even if the holiday had been booked before notification, the Tribunal’s policy on postponement clearly stated that applications should be made as soon as possible yet I had been given no explanation for the nearly three weeks between notification of the hearing and Mr Bland’s application for postponement.” (Clements v. HMRC [2016] UKFTT 522 (TC), §11).
No stay where party unreasonably delayed taking decision to proceed and appointing representatives
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"[7] On 11 April 2013 HMRC served their skeleton argument but on the same day Bowker Orford applied for the hearing to be adjourned on the basis that they had only recently been instructed to progress with the appeal and there was insufficient time to instruct counsel to represent Mr Healy.
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[11] In our view the application disclosed no good reasons outside the control of Mr Healy or his advisers which would justify an adjournment; in particular no good reason was given why there was such a long delay in reaching a decision to proceed and why there had been no earlier communication with HMRC and the Tribunal on the issue. To adjourn the matter at such a late stage would cause a significant delay in finalising the matters and would be likely to result in an increase in HMRC’s costs. We therefore concluded that it was in the interests of justice to proceed with the hearing.” (HMRC v. Healy [2013] UKUT 337 (TCC), §11, Judges Herrington and John Clark).
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Relevant higher authority expected
Tribunal practice to identify and stay appeals raising issues to be decided by higher courts
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"[16] As might be expected, the Tribunal receives a large number of appeals each day. Often appeals are received where the issue in dispute is one which is due to be decided by the higher courts in an earlier appeal. The Tribunal practice is to stay the later appeals until the particular issue has been decided by the higher courts, and then those later appeals can be settled by agreement or, if there are any remaining issues, those later appeals can proceed to hearing." (Beales v. HMRC [2023] UKFTT 386 (TC), Judge Bailey)
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Authority needs to be of material assistance
“As we would see it, a Tribunal or court might [stay] proceedings against the wish of a party if it considered that a decision in another court would be of material assistance in resolving the issues before the Tribunal or court in question and that it was expedient to do so.” (HMRC v. RBS Deutschland Holdings GmbH [2006] CSIH 10, §22).
“The parties were agreed that the proper approach to be adopted as regards an application for a stay in the absence of agreement between the parties in a case in this Tribunal was that set out in Coast Telecom Limited v HMRC [2012] UKFTT 307 (TC)…” (Peel Investments (UK) Ltd v. HMRC [2013] UKFTT 404 (TC), §9).
“Judge Bishopp based his order for a stand over in Mynt partly on his finding that the CJEU had accepted and was determining references which, he was satisfied, may provide answers of relevance to the appeals in question. This seems to me, with respect, to put the test, as encapsulated in RBS Deutschland, a little too low. The question is not whether the determination of another court might provide assistance, but whether it will provide material assistance.” (Coast Telecom Ltd v. HMRC [2012] UKFTT 307 (TC), §21, Judge Berner).
“It cannot be characterised, as [HMRC] seeks to, as just another fact specific EBT decision because it clearly exposes two fundamentally opposed approaches to the issues concerned. Any decision of the FTT before the Upper Tribunal determines Murray Group Holdings would in these circumstances most likely be subject to an appeal, whichever way it was determined…I therefore conclude that the decision of the Upper Tribunal or a higher court in Murray Group Holdings will be of material assistance in determining the present appeals.” (Peel Investments (UK) Ltd v. HMRC [2013] UKFTT 404 (TC), §§34…35).
But need not be determinative
“…the Tribunal made a pronouncement to the effect that it would [stay] proceedings against the wish of one of the parties pending a decision in another court only where that decision would be determinative of the issues before the Tribunal. We do not recognise that proposition as one reflecting normal practice in relation to the exercise of a discretion to [stay].” (HMRC v. RBS Deutschland Holdings GmbH [2006] CSIH 10, §22).
“It is important to recognise however, that the fact that the factual context and the issues raised by the current appeals are clearly not on all fours with Project Blue which means the decision will not necessarily be determinative, does not preclude any Supreme Court decision on Project Blue being of material assistance to this tribunal.” (Milltown Ltd v. HMRC [2016] UKFTT 640 (TC), §18).
Take account of cost and time savings
Take account of likelihood of higher court decision before immediate case decided
“In addition, although the 2006-07 appeal is listed to be heard by the Court of Appeal in June 2017 it is feasible that by the time the 2007-08 appeal is listed by the Tribunal, taking into account the availability of counsel and witness, the Court of Appeal would have heard the 2006-07 and handed down its decision. Even if that were not the case there would be nothing to prevent the Tribunal having heard the evidence (which relates to matters arising some ten or so years ago) on which to make its findings of fact receiving further submissions from the parties, after the judgment of the Court of Appeal in the 2006-07 appeal is known, before reaching its own decision on the 2007-08 appeal. It is not uncommon for the Tribunal having concluded a hearing, but before releasing its decision, to invite further written representations from the parties in respect of a relevant decision that was not available at the time of the hearing.” (Degorce v. HMRC [2016] UKFTT 429 (TC), §19).
Tribunal should avoid prejudging the substantive issues
“In our opinion, what the tribunal did, following the hearing on an application for a partial [stay] of the proceedings, was, in effect, to reach a firm conclusion about the abuse of rights element in the appellants' case, without holding a full hearing on that matter. The tribunal, in our opinion, has simply prejudged that issue on an unsound basis…In short, we consider that the tribunal misdirected itself in law in relation to its decision not to allow a partial [stay] by proceeding upon a view of the law which cannot be regarded as affirmed. Until the European Court of Justice pronounces on this matter, we have difficulty in understanding how the tribunal could have proceeded in that way.” (HMRC v. RBS Deutschland Holdings GmbH [2006] CSIH 10, §21 – remitted to a differently constituted Tribunal).
Weigh materiality against prejudice of delay
“All these factors lead to a great deal of uncertainty which may cause delay and given the lack of overall similarity in the appeals of UBPT and FSIM, there is likely to be no detriment to the proper consideration of the issue in FSIM if it proceeds to the First-tier Tribunal.” (First State Investment Management (UK) Ltd v. HMRC [2016] UKFTT 349 (TC), §50).
“Given the highly fact sensitive nature of both the Business Activities Issue and the Loan Issue in the present case together with the guidance already available to the Tribunal…in relation to the first issue, I do not consider that the decision of the CJEU would be of material assistance in resolving these issues in this appeal. Also, as judgment in Sveda is not expected until June 2016, in view of the accepted adverse effect on OHML that would inevitable arise I do not consider it expedient for this appeal to be stayed.” (Open Heavens Media Ltd v. HMRC [2015] UKFTT 0042 (TC), §19).
“As [HMRC] submitted, I need to balance against that the fact that if the proceedings are stayed it is likely that it will be a lengthy period before the stay can be lifted.” (Peel Investments (UK) Ltd v. HMRC [2013] UKFTT 404 (TC), §35).
Weigh materiality against prejudice of witness memories fading in fact heavy case
“The concern is twofold, first that it is desirable that delay in the resolution of disputes should be minimised and second the particular one that Mr Hickey points out there is the concern of evidence becoming stale and witness recollections diminishing. On this second point, while the proceedings in this case have not yet reached the evidential stage, what pleadings there currently are suggest to me that the substantive case will turn on the interpretation of the various transaction documents and resolution of the legal dispute; there is little to indicate at this point that the fundamental contentions in dispute will be resolved by matters of oral evidence.” (Milltown Ltd v. HMRC [2016] UKFTT 640 (TC), §22 – stay granted).
“[HMRC] submitted that it would not be just and equitable to order a stay where a case involved consideration of a complex matrix of fact that concerned events as long ago as 2006. There was a risk of prejudice to witness evidence as memories faded. I agree…The ascertainment of the facts before recall becomes more difficult will assist both the parties and the Tribunal.” (Coast Telecom Ltd v. HMRC [2012] UKFTT 307 (TC), §23).
“The Upper Tribunal hearing in Murray Group Holdings will be at least a year away and further appeals cannot be ruled out, leaving a stay in place possibly for two years or more. Consequently, the witness evidence will become stale.” (Peel Investments (UK) Ltd v. HMRC [2013] UKFTT 404 (TC), §35).
Stay more likely in cases where only issues of law in dispute
“Where issues of law alone remain in dispute it can be seen that the imminent consideration of the position under EU law could justify a stay of the appeal proceedings. But the same does not hold good where the facts remain to be determined.” (Coast Telecom Ltd v. HMRC [2012] UKFTT 307 (TC), §22).
“I also take into account the limited nature of the factual evidence to be adduced, as discussed above. On balance it is therefore expedient in my view to permit a stay.” (Peel Investments (UK) Ltd v. HMRC [2013] UKFTT 404 (TC), §37).
Higher authority in challenge to conclusion of fact less likely to be of material assistance
“Unlike the position with regard to Eclipse 35 which concerned a point of law and involved a relatively short delay this application concerns what is essentially a question of fact. As the UT in the 2006-07 appeal stated, at [93]:
“… The question whether a person is carrying on a trade is, as we have indicated, essentially a question of fact and, as Sales J pointed out in Eclipse Film Partners, at [47], there is already copious guidance at the highest level, to which it would be presumptuous of us to seek to add, on the approach which must be adopted.”
Judge Herrington recognised in Peel Investments, that the question is not whether the determination of another court might provide answers of relevance but whether it will provide material assistance. Although there is no doubt that what the Court of Appeal may have to say about the 2006-07 appeal might be of assistance to Mr Dergorce’s 2007-08 appeal, I am not convinced that it will provide sufficient material assistance so as to justify a stay in the 2007-08 appeal.” (Degorce v. HMRC [2016] UKFTT 429 (TC), §§17…18).
Higher authority on issues FTT cannot consider of no assistance
“It may be that the Supreme Court’s judgment in De Silva will be of material assistance in enabling a court or Tribunal to decide whether Mr O’Donnell is liable for the amount of tax that HMRC have assessed. Moreover, the issues raised in De Silva are of potential relevance to HMRC’s decision as to the amount of accelerated partner payment required as Green J noted at paragraph 45 of his judgment in Walapu v HMRC [2016] EWHC 658 (as, if there were binding authority that the assessments HMRC had made were not correct, Mr O’Donnell might well be able to challenge the rationality of the calculation of the accelerated partner payment given that paragraph 4(2) of Schedule 32 requires this to be calculated “to the best of the officer’s information and belief”). Therefore, if HMRC could not reasonably hold the view that Mr O’Donnell could owe the amount of tax assessed it could certainly be argued that no accelerated partner payment should be required…However, the Tribunal simply has no jurisdiction in relation to the matters set out at [40].” (O’Donnell v. HMRC [2016] UKFTT 743 (TC), §§40…41).
Directions for disclosure stayed
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“Despite these points, it would in my view be disproportionate to require the parties to undertake an expensive and time consuming disclosure exercise where there is an imminent Court of Appeal hearing which could dispose of these appeals in their entirety. Whilst the outcome of the Court of Appeal hearing is of course unknown and there are a number of possible decisions which the Court of Appeal could reach, it is worth risking a delay of a few months in order to know the outcome of that appeal.” (Universal Cycles v. HMRC [2018] UKFTT 564 (TC), §103, Judge Vos).
Awaiting further appealable decisions​
No stay simply because HMRC might make another appealable decision and it would be convenient to hear the appeals at the same time
“A taxpayer must have a right to appeal those assessments and amendments as made, and it would not in my judgment be in the interests of justice for proceedings in the Tribunal to be delayed because there might be further appeals in the future once enquiries into another year, or other years, have been completed.” (Baruela v. HMRC [2015] UKFTT 422 (TC), §21).
Overlapping proceedings
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Stay to avoid the same issue being decided in two separate courts
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“It seems to me that to allow two sets of proceedings to go on about practically the same subject matter, in two different courts at one and the same time must prima facie be a course which the court should avoid. If he resumes the hearing while the High Court action is undecided the county court judge may well be deciding a matter which is purely of academic interest – in fact sitting to hear a moot and not a judicial case at all.” (Airport Restaurants Ltd v. Southend Corporation [1960] 1 WLR 880)
“As I understand it, the principle is that if two courts are faced substantially with the same question, it is desirable to ensure that that question is debated in only one of those two courts if by that means justice can be done.” (Thames Launches Ltd v. Trinity House Corporation (Deptford Strond) [1961] Ch 197 at 207, Plowman J).
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“While there are indeed certain issues in Mr Badzyan’s appeal which are distinct from those arising in respect of the Partnership assessment, there are also critical issues in common. So, while the validity of the discovery assessment in Mr Badzyan’s case could be determined solely by hearing Mr Badzyan’s appeal, the central issues regarding the tax effectiveness of the arrangements and the timing of any income tax charge could not…I accept, on the other hand, that a decision in relation to the Partnership assessment might well not resolve all the issues in Mr Badzyan’s appeal. But the test in Court Telecom is not whether another decision would be determinative, or whether it would resolve all the issues… If it were determined on the Partnership appeal that HMRC was wrong to tax the profit allocation as effectively made to the individual members via the conduit of the corporate member, then that would clearly be of material assistance in determining whether a partner who forfeits his allocation, such as Mr Badzyan, could nevertheless be taxed in the year the profits arise to the corporate member.” (Badzyan v. HMRC [2017] UKFTT 439 (TC), §29, Judge Thomas Scott).
“The cases indicate that as a matter of principle, first, proceedings in which the same issues or questions fall in substance to be determined should not be permitted to proceed in parallel. Secondly, in principle proceedings in one court should not be determined if there is a realistic prospect that the matter decided would be moot, because the issue would become immaterial as a consequence of a decision of another court. Finally, those principles are founded upon the interests of justice, which will therefore fall to be applied in any case where the question whether to adjourn or stay is not determined as a matter of principle.” (HT & Co (Drinks) Ltd v. HMRC [2015] UKFTT 663 (TC), §31).
Issues may overlap even if they are relevant in different ways
“The improper purpose ground is a case in point. That is a ground which may represent a ground in its own right in the JR proceedings. But although not a discrete issue in the tribunal proceedings, it is also one element of the Appellants’ case on unreasonableness in the tribunal. I accept, as Mr McDonnell argued, that in the JR proceedings it will be a question of principle, and in the tribunal proceedings it will be a ground in support of a case of unreasonableness, but that distinction does not, in my view, prevent those issues from overlapping.” (HT & Co (Drinks) Ltd v. HMRC [2015] UKFTT 663 (TC), §35).
Mere possibility of proceedings becoming moot not necessarily enough
“In these circumstances, I have reached the conclusion in the circumstances of this case that the mere possibility of the tribunal proceedings becoming, at a later stage, moot does not require a stay of those proceedings as a matter of principle…Two particular factors weigh heavily in my view in favour of permitting these tribunal proceedings to proceed. The first is the uncertainty which surrounds the JR proceedings. Were those proceedings to have been at a more advanced stage, so that it could be said with some certainty that the questions on the judicial review were to be answered one way or another, that factor would have weighed in favour of a limited stay. But the absence of any certainty in that respect, and the prospect of further proceedings extending at least to May of next year, and beyond that, point in the opposite direction, especially when combined with the second factor. That factor is that the proceedings in this tribunal are at an early stage. To proceed with the process of the provision by HMRC of a statement of case, documents and witness evidence will not prejudice either party, except in terms of the work and expense involved. The tribunal proceedings are not at the stage of the determination of any issue.” (HT & Co (Drinks) Ltd v. HMRC [2015] UKFTT 663 (TC), §§42…46).
Judicial review and FTT to be allowed to proceed in tandem unless serious risk of inconsistent findings of fact
“In my judgment, there have to be strong reasons for restricting their right to pursue both claims. In this particular case, it would be a strong reason to restrict their right if there were likely to be a significant duplication of fact in the proceedings which might lead to inconsistent findings. On that basis the crucial question on this appeal is whether the judge's order will lead to the Administrative Court having to make findings of fact on matters which will have to be determined in the tax appeals if the judge's order stands. In general, the same issues of fact ought not to be decided by different tribunals in disputes between the same parties not only because it wastes time and costs but because it is contrary to the interests of justice: it undermines the parties' confidence in the justice system's ability to produce a fair result and may lead to a continuation rather than a resolution of their disputes.” (R (oao Veolia ES Landfill Limited v. HMRC [2015] EWCA Civ 747, §3, Arden LJ).
No stay pending criminal proceedings where factual overlap is limited
“It is not enough to show that there may be some factual areas of overlap, or that the appellant could be cross examined twice (once in the civil and once in the criminal courts) on the same matter. It must be shown it would prejudice the criminal trial and it could only do that if evidence arising in or findings from the civil case were used against the defendant by the prosecution or known to the jury. I do not see that it matters if it is merely known to the prosecution if they cannot use it in the trial.” (Dong v. NCA [2016] UKFTT 116 (TC), §10).
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Stay assessment appeal to await outcome of information notice appeal
"[30] In considering whether granting the stay is suitable to the circumstances of Mr McMeekin’s case, I take into account Stephen Price at [10], where Judge Mosedale said, in a passage later approved by Judge Sinfield in Andreas Michael [2015] UKFTT 577 (TC) at [29], as well as by other Tribunal judges:
“HMRC is entitled to know the full facts related to a person's tax position so that they can make an informed decision whether and what to assess. It is clearly inappropriate and a waste of everybody's time if HMRC are forced to make assessments without knowledge of the full facts. The statutory scheme is that HMRC are entitled to full disclosure of the relevant facts: this is why they have a right to issue (and seek the issue of) information notices seeking documents and information reasonably required for the purpose of checking a tax return (see Schedule 36 of Finance Act 2008 ).”
[31] Thus, the normal position is that Sch 36 Notices operate at a preliminary investigative stage, which may be followed by the closure of enquiries, the issuance of assessments and taxpayer appeals. However, in Mr McMeekin’s case, the events relating to years 2011-12 to 2013-14 have not followed that normal course. Although HMRC issued the Notices on 18 February 2020, after repeated attempts to obtain the information and documents on a voluntary basis and well over a year before the relevant assessment time limits, Mr McMeekin then appealed the Notices and his appeal was delayed by the same procedural challenges as were later decided in Perlman, and that in turn has been appealed to the UT..
[32] If the Assessments Appeal is stayed behind the Notices Appeal, the Sch 36 process will precede the FTT’s determination of Mr McMeekin’s appeal against HMRC’s assessments, so putting him as far as possible in the normal position. In my judgment, that outcome is expedient - in other words, “suitable and appropriate” and “suitable to the circumstances of the case”." (McMeekin v. HMRC [2023] UKFTT 223 (TC), Judge Redston)
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Staying consequential repayment claim pending appeal of liability decision
“The Tribunal has two factors to weigh: if the stay is not granted, both the appellant and HMRC’s costs in preparing and taking DPAS no.2 to hearing will be wasted if the decision in DPAS no.1 on appeal goes against them; but if the stay is granted, and the appeal unsuccessful, DPAS is kept out of its money for longer than it would otherwise be. I consider that there is a clear policy that first instance decisions should be given effect and that is the case even if the giving effect to them involves the parties in some expense…If repayment to the appellant was considered to be a risk to the revenue…then that would be a reason to grant the stay on the quantum hearing.” (DPAS Ltd (No.2) v. HMRC [2015] UKFTT 0071 (TC), §§26…30)
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Staying APN penalty proceedings pending JR of APN
“However, I can quite see that, at a hearing, both HMRC and Mr Sherman might wish to refer to the judicial review proceedings in connection with their arguments on “reasonable excuse”. For example, if Mr Sherman is unsuccessful in judicial review proceedings he may wish to argue that his loss was a narrow one; by contrast HMRC might wish to argue that any loss was a resounding one so as to make it unreasonable for him to withhold payment while judicial review is ongoing. In making these points I am not, of course, determining that an unsuccessful judicial review application is necessarily a “reasonable excuse” for not paying a sum that HMRC have demanded in an APN. I am simply stating that, given the way Mr Sherman has put his case, both parties may wish to refer to the judicial review proceedings even if Mr Sherman is ultimately unsuccessful in those proceedings…The points at [4] and [5] have led me to conclude that the outcome of the judicial review proceedings would be of “material assistance” in resolving the issues before the Tribunal.” (Sherman v. HMRC [2017] UKFTT 152 (TC), §§5…6, Judge Jonathan Richards).
Allegation that proceedings breach public law duties
No stay on judicial review grounds
“Nor would it be proper for the tribunal to exercise its case management powers to stay proceedings on the basis that HMRC's decision to proceed with a civil penalty was unreasonable. That would be tantamount to the assumption of a power of judicial review.” (Hackett v. HMRC [2016] UKFTT 781 (TC), §12, Judge Berner).
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Other party submitted skeleton late
Ambush or procedural objection?
“[The taxpayer] applied for the hearing to be adjourned, on the grounds that HMRC had only delivered their skeleton argument at 5pm on 17 June 2014, which was only one working day before the hearing… [The taxpayer’s] complaint was that HMRC had not followed the procedure. There was no substantive issue: the company had not been taken by surprise by any matter in the HMRC skeleton argument, which was, as [the taxpayer] accepted, essentially the same as HMRC’s Application… In considering the overriding objective, we took into account in particular, the need to avoid delay, so far as compatible with proper consideration of the issues. An adjournment would clearly cause delay, and as no new arguments had been put forward by HMRC in their skeleton argument, there was nothing to prevent the parties making submissions on the issues already in the Application and the Notice of Appeal. There was also nothing to prevent us from considering those arguments and submissions.” (Westminster College of Computing Ltd v. HMRC [2014] UKFTT 669 (TC), §§18…24).
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Examples
Adjournment refused where taxpayer key witness/representative not able to attend but taxpayer responsible for delay, appeals were stale, no significant evidence was expected and the medical evidence did not indicate when the person would be fit to attend (Westminster Trading Ltd v. HMRC [2017] UKUT 23 (TCC), §84).
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