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Procedure.Tax
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N15: Skeleton and submissions
Submissions from abroad (permission not required)
Permission not required for tribunal to receive written or oral submissions from abroad
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"[3]...Nor is permission required for a person to make submissions (whether oral or written) from another country, however, the tribunal may consider that the risk that a litigant making oral submissions will stray into giving evidence is too high and so might decide in such a case that permission must be sought as a precaution. There is no need for a person who will merely observe proceedings from abroad, eg by live streaming, to obtain permission to do so." (FTT Guidance on Taking Oral Evidence From Abroad)
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"[22] The third recital to the Upper Tribunal's directions of 11 June 2021 referred to "the issue of evidence/submissions given from abroad". Both Mr Holborn and Mr Bazini addressed us on whether the giving of oral submissions to the Tribunal by a person outside the United Kingdom falls to be regarded in the same way as the giving of oral evidence. Mr Bazini considered that the making of submissions on the law or on the evidence that has been adduced in a case was likely to be regarded by the foreign State as of at least equal significance to the giving of oral evidence. Mr Holborn, however, informed us that the FCDO does not regard the making of oral submissions as akin to the giving of oral evidence. The FCDO's position is that it is taking of oral evidence, without the requisite permission, that is problematic.
[23] On this issue, we find that the view of the FCDO is determinative. At least in the present context, it is not for this (or any other) tribunal to form its own view of what may, or may not, damage the United Kingdom's relations with a foreign State. Accordingly, the steps which we describe later do not need to be taken where the Tribunal is satisfied that the person who will be speaking to it by video from abroad will be making submissions and not giving evidence.
[24] However, as we were at pains to emphasise to Mr Holborn at the hearing, the dividing line between submissions and evidence may in practice not be an easy one to hold. In particular, if the person concerned is not a professional representative but the appellant, the Tribunal may need to treat with circumspection any assertion that the appellant will confine him or herself to submissions and not stray into the giving of evidence. For that reason, we believe that a tribunal is likely, in such cases, to conclude that the steps we describe will need to be taken." (Secretary of State for the Home Department v. Agbabiaka [2021] UKUT 286 (IAC), Lane J)
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Procedure if permission is required (because submissions may involve evidence)
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See N18: Witness evidence
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Skeleton arguments
Should concisely set out the arguments upon which a party intends to rely
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"[63] The practice directions which now supplement CPR Part 52 reflect what was good practice under the former practice direction PD52. Section 5 of Practice Direction 52A provides:
"5.1 (1) The purpose of a skeleton argument is to assist the court by setting out as concisely as practicable the arguments upon which a party intends to rely.
(2) A skeleton argument must –
• be concise;
• both define and confine the areas of controversy;
• be set out in numbered paragraphs;
• be cross-referenced to any relevant document in the bundle;
• be self-contained and not incorporate by reference material from previous skeleton arguments;
• not include extensive quotations from documents or authorities.
(3) Documents to be relied on must be identified.
(4) Where it is necessary to refer to an authority, a skeleton argument must –
(a) state the proposition of law the authority demonstrates; and
(b) identify the parts of the authority that support the proposition.
If more than one authority is cited in support of a given proposition, the skeleton argument must briefly state why.
(5) The cost of preparing a skeleton argument which –
(a) does not comply with the requirements set out in this paragraph; or
(b) was not filed within the time limits provided by this Practice Direction (or any further time granted by the court),
will not be allowed on assessment except as directed by the court.
5.2 The appellant should consider what other information the appeal court will need. This may include a list of persons who feature in the case or glossaries of technical terms. A chronology of relevant events will be necessary in most appeals.
5.3 Any statement of costs must show the amount claimed for the skeleton argument separately."
[64] In relation to appeals to the Court of Appeal, paragraph 31 (1) of Practice Direction 52C provides:
"31 (1) Any skeleton argument must comply with the provisions of Section 5 of Practice Direction 52A and must–
(a) not normally exceed 25 pages (excluding front sheets and back sheets);
(b) be printed on A4 paper in not less than 12 point font and 1.5 line spacing.
(2) Where an appellant has filed a skeleton argument in support of an application for permission to appeal, the same skeleton argument may be relied upon in the appeal or the appellant may file an appeal skeleton argument (Timetable Section 5, Part 1).
(3) At the hearing the court may refuse to hear argument on a point not included in a skeleton argument filed within the prescribed time.
(4) The court may disallow the cost of preparing an appeal skeleton argument which does not comply with these requirements or was not filed within the prescribed time."
[65] These provisions mean what they say and they serve a serious purpose. The civil division of the Court of Appeal works under considerable pressure of time and does its utmost not only to decide cases justly and in accordance with the law, but also to deliver an efficient service to court users. To this end what the court needs from each party is a concise skeleton argument, setting out clearly the points which will be argued and providing relevant references." (Ben Nevis (Holdings) Ltd v. HMRC [2013] EWCA Civ 578, Jackson LJ)
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Criticism
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"[62] The appellants have furnished two replacement skeleton arguments. Together they run to 40 pages and contain 113 footnotes. They are discursive in style and contain much material which was not pursued in oral submissions. When the appellants' leading counsel got to their feet, they proceeded to argue the case as if the skeleton arguments did not exist – at least until the court objected. Thereafter counsel did their best to direct us to disparate sections of the skeletons which were relevant to what they were saying at any particular time. Quite often there were no relevant sections of the skeletons. Counsel simply read out at dictation speed various sets of legal propositions for the court to write down and ponder. At one point counsel dictated a list of relevant dates, since they had not troubled to provide a chronology. All this is a far cry from what the rules require.
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[67] Out of fairness, I should add that the respondents' skeleton argument was longer than necessary and longer than permitted by the current practice direction. On the other hand, it was well structured and the respondents had a great deal of material to respond to. Also, and more importantly, the respondents' skeleton argument identified the arguments which counsel was planning to deploy orally. It thus avoided the need for a dictation exercise. In oral submissions the respondents' counsel used his skeleton argument as the note from which he spoke, amplifying points where necessary and debating with the court the written propositions of law which were in front of us all.
[68] The consequences of the parties' differing approaches to skeleton arguments were graphically illustrated during the course of the hearing. The respondents' oral submissions were completed in half a day. The appellants' oral submissions occupied almost one and a half days." (Ben Nevis (Holdings) Ltd v. HMRC [2013] EWCA Civ 578, Jackson LJ)
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Denial of costs
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"[66] The sum at issue in this appeal is approximately £7.8 million and a galaxy of experienced and expensive lawyers have been instructed. One might therefore have expected the rules to be complied with. If the appellants had succeeded in this appeal, the court would have disallowed at least some and possibly all of the costs of the appellants' skeleton arguments." (Ben Nevis (Holdings) Ltd v. HMRC [2013] EWCA Civ 578, Jackson LJ)
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Tribunal accepting skeleton referring to the wrong taxpayer
"[63] [The taxpayer] pointed out that HMRC’s submissions were not only headed incorrectly, but also referred throughout to “the Appellant”, a term which had been wrongly defined as telent Ltd. In his submission, this error vitiated the whole the submissions.
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[71] In my judgment, it is not in the interests of justice to refuse to admit [HMRC's] skeleton argument, or to refuse to consider his oral submissions. I come to that conclusion for the reasons set out by [HMRC], and for the following further reasons:
(1) HMRC’s pleadings are the strike out application together with the amended Statement of Case. Both of these pleadings had the correct name on the heading and throughout the text, and they set out why in HMRC’s view the application should succeed.
(2) A skeleton argument is supplementary to those pleadings: CPR 52.5(1) says (my emphasis) that “the purpose of a skeleton argument is to assist the court by setting out as concisely as practicable the arguments upon which a party intends to rely”. [The taxpayer] rightly did not seek to argue that the use of “Telent Limited” in the headnote had prevented the Tribunal from understanding HMRC’s submissions for this hearing.
(3) A skeleton is of course also helpful to the other party in the proceedings, but Mr Jones did not seek to argue that there was any failure to understand HMRC’s case. I agree with [HMRC] that [the taxpayer's Counsel] and those instructing him knew all they needed to know about HMRC’s case, other than on the “privies” point, which had arisen only arose because of the Appellant’s stance on the headnote, and it was quickly conceded in HMRC’s favour.
(4) The use of the name “telent” as an abbreviation for both telent Ltd and TTSL, often incorrectly, is part of the relevant background. I add, although this was not drawn to my attention at the hearing by either party and I do not rely on it in coming to this part of my decision, that it was not just the parties who used the names interchangeably. The Tribunal’s own letter advising the parties of this hearing was headed “Telent Limited” when the Appellant is in fact TTSL." (Telent Technology Services Limited v. HMRC [2022] UKFTT 147 (TC), Judge Redston)
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Opening
Order normally depends on who has the burden of proof
Where the legal burden of proof on all issues falls on one party, that party should normally present its case first. This is because: (a) the burden of proof being on that party, unless they call evidence, they must inevitably fail; and (b) the task of the party without the burden of proof is to rebut the evidence called by the other party, which can only be done properly after that evidence has been called.
“If therefore the onus on all issues in an appeal falls on HMRC the taxpayer can insist on HMRC beginning and calling evidence first.” (Hargreaves v. HMRC [2014] UKUT 395 (TCC), §24(2)).
“At Common Law, in the King's Bench Division, the question of the burden and the right or duty to begin frequently arises. It does not mean that the plaintiff has always to begin. One asks the question: If no evidence is given, who wins?” (Dixon & Gaunt Ltd v. CIR 29 TC 289 at 298).
“…it is clear that when the matter comes before the Special Commissioners the burden of justifying the direction is upon the Crown and if no or insufficient evidence is called the Crown does not discharge that burden and the direction must be discharged. The right and the duty to begin, not being altered by statute (as I have held), must on general principles therefore rest upon the Crown.” (CIR v. Transport Economy Ltd 35 TC 600 at 606 – the Revenue elected to call no evidence and thus lost).
“As the burden of proof in respect of a number of matters falls on HMRC, the parties agreed with our suggestion that HMRC should present their arguments first.” (Elsina Ltd v. HMRC [2015] UKFTT 14 (TC), §14).
“The onus of proof in this appeal lies with HMRC. We are required to deal with the appeal fairly and justly and that includes “ensuring, so far as practicable, that the parties are able to participate fully in the proceedings” (Rule 2(2)(c)). In our view the appellant would be deprived of that right if put in a position where evidence had to be given before the full extent of HMRC's case had been tested before the Tribunal. Accordingly, we refused the application for the appellant and directed that HMRC put their case in the first instance.” (Connections GB Ltd v. HMRC [2015] UKFTT 320 (TC), §5).
But still within the discretion of the FTT
“Even if the FTT had concluded that HMRC had the burden of proving that the Halifax principle was engaged, it could have required the Appellants to lead evidence about the transactions and the background to them. Further, in considering a submission of no case to answer, the FTT could take account of the documents before it, whether formally produced by witnesses or not, and require witnesses to give evidence about such documents.” (Massey and Massey t/a Hilden Park Partnership v. HMRC [2015] UKUT 405 (TC), §62, Rose J and Judge Sinfield)
Multiple issues with different burdens of proof: what is fair and just?
“Mr Goldberg then submits that Mr Hargreaves might be directed to open in which case he might have to give evidence on the issues in the substantive appeal first, and the burden on HMRC might have been subverted by the order in which the case had been taken. It is more than a matter of case management. I do not accept this submission. Mr Hargreaves would only be directed to begin where the FTT considered that this was the just way of proceeding, and, while this is a matter for the FTT, my provisional view is that it is difficult to see how it would reach that conclusion in the present case.” (Hargreaves v. HMRC [2016] EWCA Civ 174, §43, Arden LJ).
“If however the burden on some issues lies on A and on others lies on B, then the position is not the same. There are many different types of case where this is so: sometimes A may bear the burden on a claim and B on a counterclaim; sometimes A and B each bear the burden on different issues on the claim. In such cases the question of who starts is not dictated solely by the burden of proof, but by reference to what is fair and just“ (Hargreaves v. HMRC [2014] UKUT 395 (TCC), §27).
“… there is no definitive guidance in the authorities for what the order of proceedings should be when a case involves arguments in which the onus of proof shifts between parties, even taking account of Hargreaves. The statements of Arden LJ in that case suggest that the question comes down to one of case management and the overall obligation of the Tribunal to deal with cases fairly and justly, which would usually mean that the party with the burden of proof should open the case.” (Anderson v. HMRC [2016] UKFTT 565 (TC), Judge Short).
Wrong to elevate procedural advantage to absolute right (no preliminary hearing simply to allow taxpayer advantage)
“…although I accept that in a case where the burden on all issues lies on A it can indeed be a valuable procedural advantage to B to have the opportunity to decide whether to call evidence after hearing A's case, it is wrong in my judgment to elevate this into a principle or right which mandates any particular outcome in a case where the burden on some issues lies on A and some on B. It does not dictate that a separate hearing has to be held on the issues where A bears the burden. Whether there should be such a separate hearing is in my judgment a matter of discretion not of right, and is to be determined, like other procedural questions, by reference to the overriding objective.” (Hargreaves v. HMRC [2014] UKUT 395 (TCC), §30).
“However, I should make clear for the avoidance of doubt, I reject Mr Goldberg’s submission for a direction that there should be a short adjournment following the conclusion of HMRC’s case. Although Mr Goldberg accepts that there is to be a single hearing to determine the both the competence and substantive issues the suggestion of such a pause in proceedings does appear, to me at least, to be an attempt to obtain a preliminary hearing (something rejected by the First-tier Tribunal, Upper Tribunal and Court of Appeal) by the back door. That said, it is a matter that can be left for the hearing judge who can decide whether a short adjournment is appropriate depending on the progress of the hearing eg if HMRC conclude their case in the morning or early afternoon and an application is made at that time.” (Hargreaves v. HMRC [2016] UKFTT 772 (TC), §17, Judge John Brooks).
To give taxpayer opportunity to submit no case to answer
“…I consider that it would appropriate for HMRC to open and have directed accordingly…This would enable Mr Hargreaves, if so advised, to make a submission of no case to answer on the s 29(4) or (5) TMA condition at the conclusion of HMRC’s case and, if he chose to do so, subsequently call his evidence on the substantive issue. It would also allow the parties to prepare for the substantive hearing in full knowledge of the procedure to be adopted and directions regarding the order of the provision of skeleton arguments etc provide for this.” (Hargreaves v. HMRC [2016] UKFTT 772 (TC), §§15…16).
Both parties open before submissions
The Tribunal’s procedure is flexible and where the parties both agree to an unusual approach, there is nothing to prevent the Tribunal allowing them to do take that approach.
“As a matter of agreement between the parties, albeit an unusual approach, we heard opening submissions from both Counsel prior to hearing evidence.” (Connections GB Ltd v. HMRC [2015] UKFTT 320 (TC), §6).
Closing
Evaluative questions require the Tribunal to paint a picture
“In order to decide whether a person carried on business on his own account it is necessary to consider many different aspects of that person’s work activity. This is not a mechanical exercise of running through items on a check list to see whether they are present in, or absent from, a given situation. The object of the exercise is to paint a picture from the accumulation of detail. The overall effect can only be appreciated by standing back from the detailed picture which has been painted, by viewing it from a distance and by making an informed, considered, qualitative appreciation of the whole. It is a matter of evaluation of the overall effect of the detail, which is not necessarily the same as the sum total of the individual details. Not all details are of equal weight or importance in any given situation.” (Hall v. Lorimer [1994] STC 23 at 29).
“even if individual elements of the evidence are insufficient to support the conclusion being sought by a party to an appeal, consideration of all the evidence as a composite whole may lead to a finding that the overall evidence does support that conclusion.” (Chadda v. HMRC [2014] UKFTT 1061 (TC), §106).
Written submissions after oral hearing but before decision
Exceptional, if ever permitted
“It is not open to a party, following a hearing, to seek to supplement their case or raise additional, and to some extent contrary, points to those put forward on their behalf at the hearing itself.” (Sjumarken v. HMRC [2016] UKUT 568 (TCC), §62, Judges Berner and Falk).
“On 30 April 2013 the appellant made an application to refer to passages from Andrews and Millett, Law of Guarantee 6th Edition 2011 on the principle of “co-extensiveness” and to submit a short written submission by way of letter explaining its significance. The Respondents took objection highlighting that it is in the interests of justice that there be finality to the opportunity for parties to make submissions and that save in exceptional circumstances this position is reached at the end of the hearing. They say the appellant has not put forward any exceptional reason…We agree with the Respondents. The appellant has not satisfied us that the submissions could not have been made at the hearing. Further the appellant refers us to documents that were in the bundles but to which we were not referred to. No explanation is given for why we could not have been referred to the documents at the hearing. The point raised is in any event not one which affects the analysis in this decision in any significant way. It is just one element of the Respondents’ case that the guarantee was called in. If the appellant is able to show it was not that does not mean they succeed. We are not satisfied it is in the interests of justice to accept the appellant’s submission.” (Cabvision Ltd v. HMRC [2014] UKFTT 721 (TC), §§360 – 361).
HMRC request to clarify their submissions in writing after hearing refused
"[125] At this point, we told Mrs Donnelly and Ms O’Reilly that we were finding HMRC’s case hard to follow, and agreed to a short adjournment so they could consider their position. When we reconvened, Ms O’Reilly said that HMRC “apologised for confusing everyone” and asked for permission to make written submissions after the hearing to allow them to explain their case.
[126] We indicated that we were very unlikely to agree to this application and outlined our reasons, but said we would consider it more fully after the hearing. Having done so, we confirm that the application is refused. This is because:
(1) The submissions in question would relate to whether the Special Dividend was income or capital under UK law. This had always been the key issue between the parties. It was not a new point, but instead the very heart of the dispute.
(2) As Lewison LJ memorably said in Fage v Chobani [2014] EWCA Civ 5, a hearing of the substantive dispute “is not a dress rehearsal. It is the first and last night of the show”.
(3) Mrs Vickerman made her review decision on 30 March 2022, some ten months before the hearing, and the Statement of Case was filed and served on 15 August 2022, some six months before the hearing. Had HMRC wished to clarify or change their position, they had had plenty of time to do so.
(4) Despite Mr Buckingham having provided both Forms 1042-S to Mr Butler, who had also considered Form 8937, the Statement of Case repeats the following passage from Ms Vickerman’s review decision:
“The Appellant has not provided any information regarding the nature of the payment or any information suggesting, for example, which reserve the payment was made out of and under any mechanism, the only information HMRC have seen is that which Keurig Dr Pepper have made available publicly [followed by the same reference to the Annual Report”.
It is too late for HMRC now to rework their submissions to take that evidence properly into account.
(5) As already noted, Mr Buckingham is 84 years old, and has already complained to HMRC about the delays in their handling of his case. Another ten months have elapsed since he notified his appeal to the Tribunal. Granting HMRC’s application would lead to a further delay, particularly as Mr Buckingham would have to be given the opportunity to respond to such further submissions, and another hearing might be required.
[127] In short, it is plainly not in the interests of justice to adjourn the hearing to allow HMRC to provide a further explanation of their case." (Buckingham v. HMRC [2023] UKFTT 358 (TC), Judge Redston)
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Parties must draw FTT’s attention to all relevant authorities
“HMRC were legally represented, and legal representatives are under a professional duty to draw to the attention of the Tribunal all relevant decisions and legislative provisions. This duty is particularly important in cases where the taxpayer is not represented…Further, and no less important, the authorities cited to me in HMRC’s skeleton argument and included in their bundle were only those that were favourable to HMRC’s case. They did not include a number of cases that were antithical to their case. Even though many of those cases would be of persuasive authority only, it is unacceptable for these to be omitted from the bundle. It is doubly so where the appellant is unrepresented.” (Adewale v. HMRC [2017] UKFTT 103 (TC), §§87…90).
Perils of only hearing one side of the argument
"[5] In the Stated Case the Court records that there was "no respondent to the applications, capable of being heard by the Court, as the [Closure] Notices are addressed to persons unknown"; that "no notice of the applications were served on any person"; that the Court was "unable to consider issuing summonses to any persons under s.82(5); and that the Court was unable to serve the draft Stated Case on any person. On the appeal, The Court was acknowledging that this is a one-party case. I am in the same position. This is an uncomfortable position which raises an anxious concern. How does a court properly decide issues of law from hearing one side of the argument? I invited submissions on this point. Ms Bhogal KC accepted that, if there were arguments which could be made against her client's position in this appeal, these and any materials in support should be identified by her for the Court. I am sure she is right. Having said that, Ms Bhogal KC's submission on behalf of her client remained that this appeal is unanswerable. The only argument which she acknowledged could be made was that the Court was correct in law for the reasons it gave. I considered whether it might be appropriate to invite the appointment of a 'friend of the court' (an 'amicus'), to stand in the place of the voiceless 'Persons Unknown' and identify arguments in opposition to the appeal. In the event, I was satisfied that it was sufficient for the purposes of the present case that I deal with the Council's arguments, relying on the Court's resources to identify any key difficulties with them and any key counter-arguments, on what are essentially questions of statutory interpretation." (Leeds City Council v. Persons Unknown [2023] EWHC 1504 (Admin), Fordham J)
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Withdrawing a concession
Tribunal entitled to rely on concessions by party
“ The Tribunal and all parties are entitled to be able to rely on concessions which are made by legal representatives. Without being able to safely rely on what is said by a legal representative (especially one as experienced in this Tribunal as Mr McNamee) then the interests of justice and the overriding objective are both affected. If concessions are made, or if a case is advanced in a particular way, then resiled from, the consequences are serious in terms of additional time and cost.” (Grange Road Car Sales v. HMRC [2017] UKFTT 205 (TC), §99, Judge McNall)
Qualifications to concession must be clearly set out
“It is not for the Tribunal to seek to tease out what a legal representative is or is not conceding. If there are qualifications to a concession, those have to be set out fairly and squarely. A dispute of a semantic nature where a representative then seeks to gloss or qualify what is on the record is wholly invidious.” (Grange Road Car Sales v. HMRC [2017] UKFTT 205 (TC), §100, Judge McNall)
Tribunal needs to consider adjournment
“If, however, the concession is withdrawn…the tribunal would need to consider whether procedural fairness required an adjournment to enable the other party, or perhaps both parties, properly to prepare the case and obtain the necessary evidence.” (HMRC v. Barclays [2006] EWHC 2118 (Ch), §26).