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M4: Disclosure and access to documents
GENERAL RULE FOR LIST OF DOCUMENTS
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Parties need only provide a list of documents upon which they intend to rely
“(1) This rule applies to Standard and Complex cases.
(2) Subject to any direction to the contrary, within 42 days after the date the respondent sent the statement of case (or, where there is more than one respondent, the date of the final statement of case) each party must send or deliver to the Tribunal and to each other party a list of documents--
(a) of which the party providing the list has possession, the right to possession, or the right to take copies; and
(b) which the party providing the list intends to rely upon or produce in the proceedings.
(3) A party which has provided a list of documents under paragraph (2) must allow each other party to inspect or take copies of the documents on the list (except any documents which are privileged).” (FTT Rules, r.27).
“Under FTR rule 27, it is open to a party to decide the documents on which it intends to rely or to produce at the hearing whether to support its own case or to disprove the case as put by the other party. If the relevant party chooses not to produce a particular document to which a witness refers that may well reduce the value of the evidence given by the witness and affect the strength of that party’s case overall. That is a matter for the Tribunal to assess and is a risk that the relevant party takes. While I accept Mr Ramsden’s point that, if it is read in this way, the effect of the rule is that the level of disclosure under rule 27 is left largely in the hands of the disclosing party, in my view, on its terms, rule 27 does not require a party to disclose any other documents.” (Addo v. HMRC [2018] UKFTT 492 (TC), §57).
“[The taxpayer] criticised the respondents for not disclosing this material in advance. However, since the directions for disclosure required both parties to disclose only those documents on which they proposed to rely at the hearing, I did not consider there was anything in that criticism. If the appellant had wished to obtain disclosure of internal HMRC documents relating to the appellant’s treatment of flavoured ciders, it could have made an application for fuller disclosure.” (Lithuanian Beer Ltd v. HMRC [2015] UKFTT 441 (TC), §8).
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Mentioning document in witness statement does not require disclosure under r.27
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"[28] In regard to the remaining 14 paragraphs of HMRC 3, my starting point is to agree with Judge Greenbank in Addo at paragraph 57 where he states that in terms of Rule 27 of the FTT Rules:
“Under FTR r 27, it is open to a party to decide the documents on which it intends to rely or to produce at the hearing whether to support its own case or to disprove the case as put by the other party. If the relevant party chooses not to produce a particular document to which a witness refers that may well reduce the value of the evidence given by the witness and affect the strength of that party’s case overall. That is a matter for the Tribunal to assess and is a risk that the relevant party takes. While I accept Mr Ramsden’s point that, if it is read in this way, the effect of the rule is that the level of disclosure under r 27 is left largely in the hands of the disclosing party, in my view, on its terms, r 27 does not require a party to disclose any other documents.”
[29] He then goes on to consider the extent of the Tribunal’s discretion in relation to wider disclosure under Rule 5(3)(d) or Rule 16." (R D Utilities Limited v. HMRC [2022] UKFTT 347 (TC), Judge Anne Scott)
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Not permitted to disclose documents relied on on a sample basis
"[18] With respect, we disagree with this argument. We agree with Judge Dean in Ezy that (without prejudice to the Disclosure Issue, as to which see below) it is fundamental to natural justice that in such cases an appellant should be entitled to see all the evidence which HMRC have relied on in constructing their case. In short, we agree with Judge Dean's conclusion and the reasons which she gave for it.
[19] We therefore REFUSE HMRC's application for a direction that the evidence to be disclosed at this stage may be limited to a sample of the totality of such evidence, however selected. Sampling may well be an appropriate way to proceed for the purposes of the ultimate hearing, but that is a matter to be resolved at a later stage, once the full evidence upon which HMRC rely has been disclosed to the Appellants." (Horizon Contracts Limited v. HMRC [2024] UKFTT 348 (TC), Judge Poole)
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Disputing relevance of documents to avoid inclusion in other party's list of documents
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FTT has power to intervene to require removal of irrelevant documents
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"[52] In most straightforward situations involving a dispute between a single taxpayer and HMRC, there may be no practical incentive to argue that particular documents should not appear on HMRC’s list of documents. Most of those documents will already be known to the taxpayer. Many indeed will have been provided by the taxpayer in the course of HMRC enquiries leading up to the decision in dispute. Nevertheless, we accept that if HMRC purported to include irrelevant documents in a list of documents, the FTT has power to intervene and direct that the documents should be removed from the list. If it does so, the usual obligation in Rule 27, to provide other parties with copies of the documents, or the ability to inspect them, would fall away."(Mitchell and Bell v. HMRC [2021] UKUT 250 (TCC), Judge Richards and Judge Cannan)
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Procedure for determining application
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"[7] Meanwhile, HMRC served their list of documents on 31 October 2018. That contained references to a number of documents connected with HMRC’s COP 9 investigations. However, because Mr Mitchell had objected to disclosure of certain documents referred to in their statement of case, HMRC did not provide copies of all documents on their list to Mr Bell. Instead, they made the application referred to above that they should be permitted to disclose to Mr Bell certain documents on the list. This was followed by Mr Mitchell’s application that the same documents should be excluded from evidence.
...
[9(3)]Conceptually HMRC might wish to defend Mr Mitchell’s application by asserting that the documents in question were relevant. However, if they did so by the obvious means of taking the FTT through the documents, Mr Bell would be notified of the contents of those documents which was precisely what Mr Mitchell did not want to happen. For that reason a procedure was agreed, referred to at [10] of the Decision, under which any submissions on the detailed contents of the documents would be made in private, without the attendance of Mr Bell or his advisers. That procedure was echoed in the way the FTT dealt with the specific contents of the documents in its written decision: Mr Bell received a version of the Decision that was redacted so as to remove references to the detail of the documents, with Mr Mitchell and HMRC receiving an unredacted decision." (Mitchell and Bell v. HMRC [2021] UKUT 250 (TCC), Judge Richards and Judge Cannan)
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Early stage of proceedings will justify a "necessarily irrelevant" test
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"[57] Once HMRC had put forward a cogent explanation as to the relevance of Level 2C and Level 3 documents, the FTT was entitled to conclude that the documents were sufficiently relevant to be included on their list of documents. At the early stage of proceedings at which the FTT was required to consider the question, it would have been premature for the FTT to conclude that Level 2C and Level 3 documents were “necessarily irrelevant”." (Mitchell and Bell v. HMRC [2021] UKUT 250 (TCC), Judge Richards and Judge Cannan)
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Entitled to require some cogent explanation of relevance
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"[85] ... The FTT was entitled to require some cogent explanation of why Level 2B and Level 3 documents were relevant. That cogent explanation did not have to come solely from HMRC’s statement of case. However, the absence of a reference to issues raised by those documents in HMRC’s statement of case remained of potential significance." (Mitchell and Bell v. HMRC [2021] UKUT 250 (TCC), Judge Richards and Judge Cannan)
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Not unfair for HMRC to disclose and rely on COP9 materials
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"[72] In any event, during the hearing before us, Mr Hickey retreated somewhat from the proposition outlined in paragraph 1(b) of his FTT skeleton argument, namely that the confidential nature of the COP 9 process and contractual disclosure facility would make it unfair for the disputed documents to be admitted into evidence. In our judgment, he was right to do so. Section 7.1 of HMRC’s guidance on COP 9 enquiries makes it clear that they will use information a taxpayer provides at meetings taking place under COP 9 for the purposes of assessing tax liabilities and says explicitly: We may also seek to give evidence of this in any appeal proceedings, or disclose the information to other organisations where appropriate and lawful.
[73] Therefore, even if Mr Hickey had, before the FTT, relied on an argument that it would be unfair for material emanating from HMRC’s COP 9 investigations to be admitted into evidence because of Mr Mitchell’s expectations of confidentiality, the FTT would have made no error of law in rejecting that argument." (Mitchell and Bell v. HMRC [2021] UKUT 250 (TCC), Judge Richards and Judge Cannan)
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Heightened disclosure obligation on HMRC where dishonesty alleged​
"[20] HMRC having initially proposed that they ought only to be required to disclose documents upon which they intended to rely, by the time of the hearing they had accepted it was appropriate that as they had pleaded dishonesty against the Appellants, they should also be required to disclose documents that adversely affect their own case or support the Appellants' case, in accordance with HMRC v Citibank NA and another [2017] EWCA Civ 1416 and SOCA v Namli and another [2011] EWCA Civ 1411." (Horizon Contracts Limited v. HMRC [2024] UKFTT 348 (TC), Judge Poole)
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- No corresponding obligation on taxpayer where HMRC allege dishonesty
"[22] Mr Bedenham argued that this approach was fundamentally flawed. The cases showed that "one way" heightened disclosure was appropriate where relevant. He cited in particular Smart Price Midlands and another [2019] EWCA Civ 841, where no question of two-way heightened disclosure arose. He argued that if HMRC's position were correct, all that they had to do in any case to obtain heightened disclosure from an appellant was to allege dishonesty; and if an appellant sought heightened disclosure from HMRC, all it needed to do in turn was to allege dishonesty on HMRC's part. This would make no logical sense and would be contrary to the overriding objective. Furthermore, he submitted, Mr Watkinson's example of what documents might be expected to exist amounted to a classic fishing expedition.
[23] We prefer Mr Bedenham's arguments. We see no reason why it should be appropriate, simply because HMRC have alleged dishonesty on the part of the Appellants, that they should be entitled to heightened disclosure from the Appellants to match the heightened disclosure which they (correctly) accept they must themselves provide." (Horizon Contracts Limited v. HMRC [2024] UKFTT 348 (TC), Judge Poole)
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- HMRC accept general duty to provide documents that undermine their case/support the taxpayer’s case
"[49]...[Counsel for HMRC] argued that if the Tribunal considered that rule 27(2) disclosure was inadequate, HMRC would not object to a disclosure order which requires HMRC to disclose all documents that (a) were taken into account in making the decision, and (b) were not taken into account and which suggest that the appellant is fit and proper. This would, Mr Hall submitted, mirror HMRC's litigation duty, although he accepted that the analogy with the judicial review jurisdiction was not exact. "(Smart Price Midlands Limited v. HMRC [2019] EWCA Civ 841, Rose LJ)
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"[96]...HMRC in accordance with what they considered to be their “duty of candour” pointed to some documents they considered to raise relevant questions of credibility..." (Mitchell and Bell v. HMRC [2021] UKUT 250 (TCC), Judge Richards and Judge Cannan)
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“I should point out that, notwithstanding the nature and subject of the applications, HMRC accepted that, independent of any direction, they are under a duty to ensure that any documents which materially undermine their case or which materially assist the Appellants’ cases are disclosed to the Appellants.” (OWD Ltd v. HMRC [2017] UKFTT 411 (TC), §31, Judge Sinfield).
Dorset Healthcare v NHS Foundation Trust v MH [2009] UKUT 4 (ACC) and R (Roberts) v Parole Board [2005] UKHL 45
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- Requirements of duty of candour
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"[106]...
(1) Disclosure – in the sense of disclosure of documents – is not automatic in judicial review proceedings. When, before the Civil Procedure Rules 1998 were brought into force in 2000, courts used to make reference to "the duty of the respondent to make full and fair disclosure" (see e.g. the seminal case of R v Lancashire County Council, ex p. Huddleston [1986] 2 All ER 941, at 945, in the judgment of Sir John Donaldson MR), that should not be misunderstood as being a reference to "disclosure" in the modern sense of disclosure of documents. This is because, before 2000, disclosure of documents used to be called "discovery".
(2) One of the reasons why the ordinary rules about disclosure of documents do not apply to judicial review proceedings is that there is a different and very important duty which is imposed on public authorities: the duty of candour and co-operation with the court. This is a "self-policing duty". A particular obligation falls upon both solicitors and barristers acting for public authorities to assist the court in ensuring that these high duties on public authorities are fulfilled.
(3) The duty of candour and co-operation is to assist the court with full and accurate explanations of all the facts relevant to the issues which the court must decide. As I said in Hoareau at para. 20:
"… It is the function of the public authority itself to draw the Court's attention to relevant matters; as Mr Beal [leading counsel for the Secretary of State in that case] put it at the hearing before us, to identify 'the good, the bad and the ugly'. This is because the underlying principle is that public authorities are not engaged in ordinary litigation, trying to defend their own private interests. Rather, they are engaged in a common enterprise with the court to fulfil the public interest in upholding the rule of law."
(4) The witness statements filed on behalf of public authorities in a case such as this must not either deliberately or unintentionally obscure areas of central relevance; and those drafting them should look carefully at the wording used to ensure that it does not contain any ambiguity or is economical with the truth. There can be no place in this context for "spin".
(5) The duty of candour is a duty to disclose all material facts known to a party in judicial review proceedings. The duty not to mislead the court can occur by omission, for example by the non-disclosure of a material document or fact or by failing to identify the significance of a document or fact." (R (oao Citizens UK) v. Secretary of State for the Home Department [2018] EWCA Civ 1812, Singh LJ)
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See also TSOL Guidance on Discharging the Duty of Candour and Disclosure in Judicial Review Proceedings
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See also Administrative Court Judicial Review Guide, section 14
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- Supervisory jurisdiction: HMRC should disclose all documents they considered
“In my view, the requirement in rule 27(2) to provide a list that only includes the documents on which HMRC intends to rely and produce in the proceedings is not adequate to ensure that the overriding objective is met in these appeals…In most appeals before the FTT, the appellant taxpayer might be expected to hold or, at least, be aware of the existence of all relevant materials. In these appeals, however, HMRC are likely to have material that they have gathered from various sources which is not available to the applicant for approval under the AWRS and of which the appellant has no knowleddge. An unsuccessful applicant can only form a view as to whether to challenge the decision on grounds of unreasonableness if the applicant knows what matters were considered by the decision maker. If the unsuccessful applicant only knows about materials that were considered and are relied on by HMRC in support of the decision then the applicant cannot plead, with any particularity, that any other documents, information and other matters considered but not relied on should have been taken into account. The role of the FTT is to decide whether the decision under appeal was reasonable. If it is to determine that issue fairly and justly, the FTT must know not only the decision arrived at and the reasons relied on to justify it but what matters were taken into account and what matters were not taken into account by the decision maker. I consider that, without the full picture, there is a real risk that the FTT will not be able to make a fair and just determination of the reasonableness of the decision. In my judgement, it is appropriate to require HMRC to provide a list of all documents that the officer considered in making the decision under appeal and not just a list of documents that HMRC intends to rely on in the proceedings…I find the submission that HMRC should not be required to include in the list of documents any documents that the decision-maker had considered but concluded were irrelevant astonishing. If accepted, it would allow the HMRC officer whose decision is being challenged to determine what materials the FTT should consider when reviewing that decision. That is not the role of the decision-maker and it would risk preventing the FTT from carrying out its role properly. Mr Hays’ submission was necessarily limited to cases in which the decision-maker “ultimately (and correctly) concludes that it is irrelevant” but, if the document is not disclosed, how could the correctness of the officer’s opinion ever be tested?” (OWD Ltd v. HMRC [2017] UKFTT 411 (TC), §§23…24…26, Judge Sinfield)
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- HMRC providing inadequate disclosure/making incorrect statements
“In my view, it is simply not possible to reconcile those assertions with the documents disclosed after the hearing. Those documents show that policy advice had been sought and given, that the Ruling fully reflected that policy advice, and that at the time Mr Hart knew that to be the case…It is deeply unattractive, to put the matter at its lowest, for HMRC to advance a case, based upon incomplete material known to the taxpayer, that a particular representation should be given a very narrow scope, when HMRC has in its possession further significant documents that, on a fair reading, show that no such narrow scope was intended at the time by HMRC.” (R (oao Biffa Waste Services Limited) v. HMRC [2016] EWHC 1444 (Admin), §111…115, Sir Kenneth Parker)
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- HMRC should provide all the evidence they have that may assist the FTT
"[28] The Appellant essentially asked us to draw an adverse inference against HMRC for failure to produce underlying evidence which could have assisted the Tribunal. They referred to the Upper Tribunal judgment in Kyriakos Karoulla v HMRC [2016] UKUT 255 (TCC). It was asserted that the duty of candour on HMRC required them to disclose to the Appellant and include in the Tribunal bundle all relevant evidence.
[29] Whilst we agree that HMRC should, pursuant to the duty of candour, provide all evidence they have to assist the Tribunal, we are satisfied that other than the credit card data from Worldpay (considered above), HMRC had no other evidence in their possession, custody or power which could have been disclosed. HMRC cannot produce evidence they do not have, and we therefore conclude it inappropriate to draw any adverse inference in this case. Regarding the Worldpay data because it is not necessary to support the assessments in the quantum we have determined appropriate given the other evidence and for the other documents because HMRC do not have them and the Meal Ticket Analysis, taken with the over evidence is sufficient to determine an appropriate quantum."(Cheon Fat Limited v. HMRC [2024] UKFTT 180 (TC), Judge Brown KC)
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- Court should not have to engage in detective work or read between the lines
"[65] Mr Stevens’ approach was therefore to put the Secretary of State’s case as best he could, including by referring on a number of occasions to what “the Government” thought or did where there is no evidence that this was what the Secretary of State thought or did. However, in taking this approach to what he must have appreciated was a central issue in the Claims, it is not clear that he and those who assisted him in drafting his witness statement had the following aspects of the duty of candour, as described in the judgment of Singh LJ in R (Citizens UK) v Secretary of State for the Home Department [2018] EWCA Civ 1812; [2018] 4 WLR 123 at [106], at the forefront of their minds:
“(3) The duty of candour and co-operation is to assist the court with full and accurate explanations of all the facts relevant to the issues which the court must decide. As I said in Hoareau at para 20:
“It is the function of the public authority itself to draw the court's attention to relevant matters; …… to identify ‘the good, the bad and the ugly’. This is because the underlying principle is that public authorities are not engaged in ordinary litigation, trying to defend their own private interests. Rather, they are engaged in a common enterprise with the court to fulfil the public interest in upholding the rule of law.”
(4) The witness statements filed on behalf of public authorities in a case such as this must not either deliberately or unintentionally obscure areas of central relevance; and those drafting them should look carefully at the wording used to ensure that it does not contain any ambiguity or is economical with the truth. There can be no place in this context for “spin”.”
[66] The duty of candour is fundamental to the effectiveness of judicial review because the court approaches the case on the basis that, unless the contrary is demonstrated, both sides have complied with it i.e. they have both sought to “assist the court with full and accurate explanations of all the facts relevant to the issues which the court must decide”. It should not have been necessary, in the present case, for the court to engage in detective work or to read between the lines of Mr Stevens’ witness statement and/or draw inferences from his silence on certain points. To borrow the words of Singh LJ, in writing his statement Mr Stevens ought to have been “engaged in a common enterprise with the court to fulfil the public interest in upholding the rule of law” rather than striving for a particular result in the proceedings. Where, as here, what the Minister saw personally is legally significant, and is in issue, the duty of candour requires a departmental witness statement to set out in clear terms what material was seen by the Minister and what was not. In such a case, statements that a matter has been seen or considered by “the Government” risk obfuscating the position rather than achieving the level of clarity required." (R (oao Unison) v. Secretary of State for Business and Trade [2023] EWHC 1781 (Admin), Linden J)
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Failure to comply with duty of candour provides strong basis for adverse inferences
"[80]...The judge stated the correct position clearly. He observed (at [21]) that:
"Where a Secretary of State fails to put before the court witness statements to explain the decision-making process and the reasoning underlying a decision they take a substantial risk". In general litigation where a party elects not to call available witnesses to give evidence on a relevant matter, the court may draw inferences of fact against that party …. The basis for drawing adverse inferences of fact against the Secretary of State in judicial review proceedings will be particularly strong, because in such proceedings the Secretary of State is subject to the stringent and well-known obligation owed to the court by a public authority facing a challenge to its decision, [in the words of Lord Walker of Gestingthorpe in Belize Alliance of Conservation Non-Governmental Organisations v Department of the Environment [2004] UKPC 6 at [86])] 'to co-operate and to make candid disclosure by way of affidavit, of the relevant facts and (so far as they are not apparent from contemporaneous documents which have been disclosed) the reasoning behind the decision challenged in the judicial review proceedings. …" (R (oao Das) v. Secretary of State for the Home Department [2014] EWCA Civ 45, Beatson LJ)
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See also M12: Witness evidence​
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APPLICATIONS FOR DISCLOSURE
“(3) In particular, and without restricting the general powers in paragraphs (1) and (2), the Tribunal may by direction--
(d) permit or require a party or another person to provide documents, information or submissions to the Tribunal or a party;” (FTT Rules, r.5(d)).
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Disclosure not an end in itself
"[40] Disclosure of documents is not an end in itself but a means to an end, namely to ensure that the tribunal has before it all the information which the parties reasonably require the tribunal to consider in determining the appeal. It is only one step in the overall management of the case which should, as the appeal progresses towards a substantive hearing, identify and if possible narrow the issues between the parties. The scope of the issues in contention at the trial depends in part on the legal test to be applied by the tribunal and in part on the parties' respective positions as to which elements of that test are in contention.
[41]...The extent to which it is useful for everything on HMRC's files on the appellant trader to be available to the tribunal at trial will differ greatly in those different appeals. HMRC argue that the trend in civil proceedings in recent years has been to reduce the amount of disclosure ordered. I would prefer to say that the trend has been to ensure that disclosure is more closely related to the issues in dispute in the proceedings." (Smart Price Midlands Limited v. HMRC [2019] EWCA Civ 841, Rose LJ)
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Rule 27 is the starting point
"[44] In summary, the applicability of Rule 27(2) of the FTT Rules turns on the facts of each case.
[45] As Judge Walters made clear in Ebuyer v HMRC [2014] UKFTT 921 (TC):-
“Litigation in this tribunal is intended to conform to a different model from litigation in the High Court and the Rules establish the framework within which litigation in this tribunal is to be carried on. Rule 27 provides for the normal disclosure in a standard or complex case and I consider it would not be appropriate for me, at this stage in this litigation, to require wider disclosure than that required by rule 27.”
I agree.
[46] In HMRC v Citibank and others [2017] EWCA Civ 1416, Sir Geoffrey Vos C, in upholding Judge Walters and overturning the Upper Tribunal’s finding that if a reasoned case for wider proportionate disclosure was made the FTT should not be “troubled by the limited terms of rule 27”, stated:
“It is true that this is an important issue, but the 2009 Rules were made for important cases as well as simple ones. The plain fact is that the procedure is different in the FTT. If fraud or dishonesty had been alleged it would have been different.”
[47] There are no pleadings of fraud or dishonesty.
[48] The burden of proof is undeniably on the appellant. As HMRC state in their Statement of Case, both in the original and as Re-amended, if the Appellant wishes to challenge any of the facts as pleaded by HMRC…it is required to prove it.” (R D Utilities Limited v. HMRC [2022] UKFTT 347 (TC), Judge Anne Scott)
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- In high-value complex cases, all relevant documents should be disclosed unless good reason not to
"[22] First, we agree with the FTT (at [26]) that since this was a “high-value complex dispute” the starting proposition was that HMRC should disclose relevant documents to Mr McCabe unless there was a good reason not to. The parties would also appear to agree, up to this point.
[23] Second, the FTT must exercise its discretion to order additional disclosure under Rule 16 so as to give effect to the overriding objective: Rule 2(3)(a). That objective of dealing with a case fairly and justly includes dealing with it in a way which is proportionate." (McCabe v. HMRC [2020] UKUT 266 (TCC), Fancourt J and Judge Thomas Scott)
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"[37] So taking into account the Rules, case law, and principles which I believe to be relevant when considering relevance in the context of an unallowable purpose appeal, which I have set out at [15] above, I shall approach the application for disclosure as follows:
(1) Since this is a high value complex dispute the starting point is that SHL should disclose relevant documents unless there are good reasons for it not to (McCabe at [22])." (Syngenta Holdings Limited v. HMRC [2021] UKFTT 236 (TC), Judge Popplewell)
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- Higher standard of disclosure if fraud alleged against party, but not if it is alleged elsewhere in deal chain
"[134] We can see no basis in the authorities for requiring a higher level of disclosure in relation to the historic transactions than the one required by Rule 27 of the Tribunal Rules. We think that the answer to this question is provided very clearly by the decision of the Court of Appeal in Citibank. In order to explain why that is the case, it is helpful to compare and contrast three distinct hypothetical scenarios, as follows:
(1) Scenario 1 - a case in which the taxpayer is denied input tax recovery on the grounds that it knew of the connection between its transaction and MTIC fraud and acted dishonestly or fraudulently;
(2) Scenario 2 - a case in which the taxpayer is denied input tax recovery on the grounds that it knew of the connection between its transaction and MTIC fraud but did not act dishonestly or fraudulently;
(3) Scenario 3 - a case in which the taxpayer is denied input tax recovery on the grounds that it knew of the connection between its transaction and MTIC fraud but did not act dishonestly or fraudulently - which is to say, the same as in scenario 2 - and where, as part of the evidence on which the Respondents seek to rely, the Respondents allege that other transactions implemented by the relevant taxpayer were connected with MTIC fraud.
[135] It may be seen that:
(1) all 3 of the scenarios involve an allegation of the existence of fraud by entities which are involved in the deal chain in question but only scenario 1 involves an allegation of the existence of fraud by the taxpayer itself; and
(2) the issue we are presently considering in relation to the historic transactions falls within scenario 3.
[136] Citibank was a case which addressed the differences between the first 2 of the scenarios. In that case, the Tribunal at first instance in relation to E Buyer UK Limited (“E Buyer”) declined to order disclosure beyond the disclosure required by Rule 27 of the Tribunal Rules on the basis that there was no allegation of fraud or dishonesty against E Buyer itself (see Citibank at paragraph [27]). The Court of Appeal agreed, saying that “Judge Walters thought he should apply rule 27 of the 2009 Rules and can hardly be faulted for that”. The Court of Appeal considered that, in the absence of an allegation of fraud or dishonesty against the taxpayer itself, there was no authority for the proposition that a different more onerous disclosure regime should apply and that knowledge of fraud was not the same as direct dishonest participation in a fraud. The Court of Appeal accordingly re-instated the Tribunal’s decision on this point (see Citibank at paragraphs [93] to [95]).
[137] In our view, if the disclosure required by Rule 27 of the Tribunal Rules is appropriate for cases falling within scenario 2, which involve an allegation of knowledge of fraud elsewhere in the deal chain, then it must follow that the same is true of cases falling within scenario 3 where not only is the alleged fraud elsewhere in the deal chain but it is not even being alleged that the taxpayer had knowledge of the alleged fraud.
[138] There is nothing in the other cases to which we were referred by Mr Carey in his closing submission which gainsays this conclusion." (Vortex Enterprises Limited v. HMRC [2023] UKFTT 211 (TC), Judge Beare)
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No presumption that disclosure should be limited to documents a party intends to rely on
"[53] Having considered these different models of disclosure and the FTT's task in these appeals, my conclusion is that disclosure from HMRC limited to that required by rule 27(2), would not be not sufficient in these AWRS appeals, even as a starting point. I do not accept that E Buyer is authority for the proposition that something exceptional is required for that rule to be displaced. The Chancellor's comment was made in the context of an appeal against a case management decision by the FTT to limit disclosure to the documents on which HMRC wished to rely to refuse input VAT deduction in respect of specified transactions alleged to be part of an MTIC fraud. The focus of the inquiry in such a case is much narrower than the wide ranging assessment of fitness and properness involved in the present appeals. The Chancellor said that wider disclosure such as standard disclosure would have been appropriate had fraud or dishonesty been alleged rather than simply knowledge of the fraud. Further, Hallett LJ noted in E Buyer that the order being challenged was expressed by the FTT judge as the one appropriate at that stage of the litigation. I agree with the conclusion of the FTT and Upper Tribunal in these appeals that where HMRC have access to many documents of which the applicant may be unaware, it is vital that the appellant trader have access to any exonerating material in the hands of HMRC. These cases are different from the more common appeals against a tax assessment where most if not all the material considered is provided to HMRC by the tax payer."(Smart Price Midlands Limited v. HMRC [2019] EWCA Civ 841, Rose LJ)
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“While the disclosure provided for by rule 27(2) may be appropriate in many appeals, there is no presumption that it must apply in all Standard and Complex cases. Whether the rule is varied in any particular appeal, as the opening words of rule 27(2) make clear it can be, is a matter for the discretion of the FTT in that case.” (OWD Ltd v. HMRC [2017] UKFTT 411 (TC), §22, Judge Sinfield).
Where no inadequate compliance with initial disclosure regime, further disclosure must be necessary to deal with case justly
"[56] In cases where there has been no inadequate compliance with the regime of initial disclosure, or to the extent that an application for specific disclosure seeks disclosure going beyond the requirements of the initial disclosure regime, an applicant for directions for specific disclosure will need to satisfy the Tribunal:
(1) that the material in respect of which specific disclosure is sought is necessary to deal with the case justly: this will be the case if the party applying for specific disclosure will suffer an unfair disadvantage (or the other party an unfair advantage) in the litigation as a result of lack of access to the material; that is, it is not enough that the material is merely relevant to the case or that the material would fall to be disclosed under a regime of standard disclosure;
(2) that the material is likely to exist, and is likely to be or have been in the other party’s control;
(3) that the material has not previously been (or is unlikely previously to have been) disclosed to the applicant for specific disclosure;
(4) that the material is likely to be found and disclosed if the order for specific disclosure is made and is complied with (that is, if the order for specific disclosure requires a party to make a reasonable search for material, that the search will likely lead to identification and disclosure of the material sought); and
(5) that the proposed order for specific disclosure would be proportionate to the importance of the case, the complexity of the issues, the importance of the material sought to a just determination of the issues in the case, and the anticipated time and costs required to comply with the proposed order." (Royal Bank of Scotland Group Plc v. HMRC [2020] UKFTT 321 (TC), Judge Staker)
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Further evidence on contentious fact subject to conflicting evidence
​
"[57] The Tribunal considers that an example of material that satisfies criterion (1) in the previous paragraph would be material which if put in evidence could potentially affect the outcome of the case in some material respect. That would include, for instance, material that would be evidence of a significant fact of which evidence is otherwise lacking, or of which the already available evidence conflicting. On the other hand, material that would be evidence relevant only to a non-controversial issue, or evidence that would merely confirm the significant amounts of already available evidence that is overwhelmingly one way, would be difficult to characterise as material that is necessary to deal with a case justly.
[58] Of course, the applicant for specific disclosure cannot be expected to know in advance exactly what the material will show if it does exist and is disclosed. Thus, in the example given in the previous paragraph, to satisfy criterion (1) in paragraph 56 above, it would not be necessary to establish that the material would affect the outcome of the case in some material respect, but only that there are sufficient reasons for believing that there is a sufficiently great possibility that material could affect the outcome of the case in some material respect that disclosure of it is necessary to deal with the case justly." (Royal Bank of Scotland Group Plc v. HMRC [2020] UKFTT 321 (TC), Judge Staker)
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No higher standard because party claimed to voluntarily provide standard disclosure
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"[70] The Tribunal has considered whether it makes any difference in this case that the Appellant has purported to give standard disclosure. In argument the Appellant contended that it “has given comprehensive standard disclosure in accordance with CPR 31.6”. In a letter dated 2 June 2020, the Appellant’s solicitors stated to HMRC:
The fact that the reviews undertaken have been, and the reviews to be undertaken will be, to CPR standards should give the Commissioners comfort that documents identified by the search terms which are categorised as relevant are being disclosed irrespective of whether the document assists or is adverse to the Appellant’s case. Our client would not countenance withholding contemporaneous documentation that it was aware would undermine its case.
[71] However, the Tribunal does not consider that the making of such unilateral statements by the Appellant has resulted in the Appellant becoming subject to any additional disclosure obligations beyond those which it would otherwise have had pursuant to the Rules and directions of the Tribunal. HMRC have not in terms sought to contend otherwise.
...
[75] Because HMRC contend that the test for specific disclosure is whether the material sought to be obtained is relevant (see paragraphs 46-52 above), the HMRC arguments do not address directly the question of why the material sought is said to be necessary to deal with the case justly. The Tribunal has given consideration to whether it should invite further submissions from the parties on this particular issue, but has decided against that course. Both parties are legally represented by well-resourced teams, and have had a full opportunity to present their cases in relation to this application.
...
[86] Even if, from the Tribunal’s limited understanding of the general issues in the substantive appeal, it seems likely that the requests would be of relevance to the case, that is not enough to satisfy criterion (1). An applicant for specific disclosure must explain to the Tribunal clearly why the requested material is needed. The Tribunal is not persuaded on the basis of such material and arguments as have been presented to it that the Schedule 1 requests are necessary to ensure that this appeal is dealt with justly." (Royal Bank of Scotland Group Plc v. HMRC [2020] UKFTT 321 (TC), Judge Staker)
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HMRC’s information powers not relevant
“Moreover, the Upper Tribunal have made it clear in HMRC v Ingenious Games LLP and others [2014] UKUT 62 (TCC) that the mere fact that HMRC have formal powers to obtain information during an investigation does not of itself prevent them from making applications for disclosure of documents in the course of an appeal before the Tribunal. Therefore, I did not consider that the fact that HMRC could have exercised their formal powers was a good reason to refuse HMRC’s application for disclosure.” (Tower Bridge GP Ltd v. HMRC [2016] UKFTT 54 (TC), §64).
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Timing of application
Depends on the case
“The appellant asks for standard disclosure before service of witness statements: I accept HMRC’s point that they can’t do both at the same time. The appellant says it needs to prepare its defence, but I think that HMRC’s witness statements are far more likely to produce more relevant material than standard disclosure would reveal: so the appellant is best served if it has the witness statements first and standard disclosure later.” (Ronald Hull Junuior Ltd v. HMRC [2016] UKFTT 525 (TC), §130).
Do not apply prematurely
“It does not advance the efficient progress of litigation for a party to make an application for something which would be shortly directed in any event…I agree the application is premature and, with a view to discouraging premature applications, I will not grant it.” (Citibank NA v. HMRC [2014] UKFTT 1063 (TC), §124, Judge Mosedale).
​
PROPORTIONALITY
​
- Proportionality to be considered
“[16] Both parties referred me to the decision of Sales J (as he then was) in Revenue and Customs Commissioners v Ingenious Games LLP and others [2014] UKUT 62 (TCC). It is clear from that decision that the Tribunal should consider any application for disclosure in the light of the overriding objective, of dealing with cases fairly and justly, set out in Rule 2 of the FTT Rules. That will necessarily involve an assessment of whether considerations of fairness point in favour of disclosure and whether it is proportionate to direct disclosure, taking into account, among other matters the nature of the issues arising and the overall amount at stake. The relevance or otherwise of the material requested will be at the heart of the Tribunal’s assessment but it does not follow that merely because material is relevant, the Tribunal will inevitably direct that it be disclosed. An assessment of proportionality may involve an examination of the costs and effort that would be involved if a party is directed to disclose documents (with a party wishing to argue that a request for disclosure is unduly burdensome being expected to provide some evidence of the burden involved). The terms of the disclosure direction sought will also be relevant in the sense that a broadly drafted direction is likely to be more burdensome to comply with than a more focused direction and may be more likely to require irrelevant material to be disclosed.
[17] Ms Mitrophanous urged me to read the decision in Ingenious Games in the context of its relevant background facts: in particular the fact, as recorded at [12] to [16], that throughout HMRC’s enquiries in that appeal, HMRC and the taxpayer had been proceeding on the basis that the taxpayer would provide documents and information in relation to sample films, but that this would not limit the evidence to be provided in any appeal to the Tribunal. I agree that this was background that the Upper Tribunal in Ingenious Games considered to be highly relevant (see for example paragraph [50] of the decision). However, I do not consider that the presence of that background in any way limits the principles which I summarise at [16] above which are of general application irrespective of whether HMRC and a taxpayer have reached an agreement as to how enquiries are to be conducted before Tribunal litigation commences.” (Staysure.co.uk Ltd v. HMRC [2018] UKFTT 584 (TC), Judge Jonathan Richards)
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Co-operation during enquiry relevant factor
​
"When considering proportionality I shall take into account the fact that there has been a six-year enquiry during which SHL has co-operated fully and provided extensive information and documentation which was not seriously challenged by HMRC during the course of that enquiry; nor (save for the odd exception) during that enquiry, did HMRC ask SHL for the additional documents and information which are the subject of this application." (Syngenta Holdings Limited v. HMRC [2021] UKFTT 236 (TC), Judge Popplewell)
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- Broad and unfocussed request disproportionate
"However, there are elements of the disclosure request that seem disproportionate. Specifically:
(1) As drafted, the request is for all documents generated between 17 December 2013 and 28 October 2016 which are “relevant to HMRC’s liability decision and assessment” including the specific categories of documents set out at (i) to (vi) of the disclosure request. That is a broad and unfocused request. By no means every internal HMRC document that is relevant to the liability decision is one that the appellant has a legitimate interest in seeing in order to establish either the date of HMRC’s “full awareness” or its case on “reasonable excuse”.
(2) Privileged advice falls within the scope of the request as drafted. Ms Sloane rightly accepted at the hearing, HMRC should not be required to disclose any such privileged advice.
(3) Points (iv), (v) and (vi) of the request are broad and uncertain in their scope. It is not clear what it means for a document to “relate to the evidence considered by HMRC to be relevant to” the various decisions that they made." (Staysure.co.uk Ltd v. HMRC [2018] UKFTT 584 (TC), Judge Jonathan Richards)​
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Contrast with sufficiently targeted and proportionate request
​
"[84] But as for the draft minutes themselves which HMRC now seek only for the two month period that I have mentioned above, and which have not previously been disclosed to HMRC, I think this is a sufficiently targeted and proportionate request. I direct that any draft board minutes for the appellants board meetings which took place or were due to take place in December 2010 and January 2011 discussing or approving the transaction (to the extent not previously provided) should be sent to HMRC within 56 days from the date of release of this decision." (Syngenta Holdings Limited v. HMRC [2021] UKFTT 236 (TC), Judge Popplewell)
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- Broad request may be justified
"[120] We agree with the submissions of [HMRC] that the FTT was entitled to permit HMRC to test the credibility of the Appellants’ generalised assertions in relation to important factual disputes in the appeal by reference to the full set of contemporaneous documents identified in the disclosure request. The FTT was entitled to accept HMRC’s submission that the material exhibited to or referred to in the Appellants’ statements had been selected by the Appellants’ witnesses in support of their own case from a deeper reservoir of material that they held.
[121] As a matter of principle, if the circumstances of a case require comparatively wide or general orders for disclosure to deal with it fairly and justly then the Rules permit such a request. Where material has not been revealed by the taxpayer during an investigation (such as here, where the FTT found that the material should have been produced in response to the information notices), and the default disclosure regime under Rule 27 of the Rules has been set aside, the fair determination of the case may require such further disclosure.
[122] We also agree with [HMRC] that the FTT was entitled to find (at FTT Decision [48]–[49]) that the breadth of the disclosure sought was an inevitable consequence of (i) the wide-ranging nature of the material exhibited to Mr Ellis’ witness statement, (ii) the generalised nature of the assertions made by Mr Ellis in his witness statement, and (iii) and the fact that HMRC did not know the precise contents of the hard drive held by Mr Ellis. It would be impossible and impractical to further restrict the categories or sources of material sought without having had sight of the material itself. It was all potentially relevant.
[123] In this case, the categories and sources of disclosure directed, if not the specific documents themselves, were either mentioned in the witness statement or to be reasonably inferred to be relevant from the witness statements themselves. The disclosure sought was not “too broad” because the material mentioned in the Appellants’ witness statements was similarly broad in range and the assertions based on it were general in nature. " (Ellis v. HMRC [2022] UKUT 254 (TCC), Judge Greenbank and Judge Rupert Jones)
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“It does not seem to us to be an answer to a request for wider disclosure that, in effect, a litigant before the tribunal is stuck with rule 27 and cannot complain about its inadequacy. If a reasoned case is made for wider disclosure being proportionate to the importance of the case, the complexity of the issues, the anticipated costs and the resources of the parties, the tribunal should consider whether such disclosure is appropriate without being trammelled by the limited terms of rule 27… The burden on proof is on HMRC. They hold all the cards, having carried out extensive investigations and gathered information, as they are able to do, from various sources. E Buyer is necessarily unable to have any insight into what material HMRC have uncovered other than that which HMRC chooses to rely on, and is not in a position to carry out a similar investigation itself. In the circumstances it does seem to us to be appropriate for HMRC to disclose not only the material that they wish to rely on, but also any other material uncovered in the course of their investigations which might undermine 10 that case. So far as proportionality is concerned, there is little doubt that this case, alleging dishonesty against E Buyer and involving some £7m of tax, is both of very great importance to the taxpayer and highly complex. The case is also no doubt important to HMRC: we do not underestimate the significance of the Kittel principle to HMRC’s continuous attempts to combat the ingenuity of those who wish to abuse 15 the VAT system for fraudulent ends. But it does seem to us that fairness to E Buyer requires that it be given the disclosure that it seeks.” (E Buyer UK Ltd v. HMRC [2016] UKUT 123 (TC), §109).
​
“If the circumstances of a case are such that comparatively wide or general orders for disclosure are necessary to enable the FTT to deal with that case fairly and justly, the Rules are intended to enable a party to make such generalised requests for disclosure. As explained above, this will be rare in tax cases, because usually HMRC will have seen the full documentation held by a taxpayer during the investigation stage, and the default disclosure provision in rule 27 of the Rules reflects this.” (HMRC v. Ingenious Games LLP [2014] UKUT 61 (TCC), §68(i), Sales J – on the facts the scope of HMRC’s enquiry had been limited by agreement and thus it was fair).
​
“I don’t agree with this. While I accept HMRC’s point that ordering discovery of all relevant material will necessarily cause HMRC a great deal of work, and which may well involve them looking at a great deal of irrelevant material, and which would be avoided if the appellant made a more targeted application for disclosure, knowledge of connection to fraud is alleged against the appellant and a very substantial sum of money is at stake. HMRC have the burden of proof and access to the information about the various companies allegedly involved in the alleged frauds. In my view the appellant is entitled to disclosure of all relevant material held by HMRC and is not required to specify classes of material it wants disclosed. Without access to the material, it can’t know which classes of material will be relevant…Relevant documents are those which support the appellant’s case or undermine HMRC’s.” (Ronald Hull Junuior Ltd v. HMRC [2016] UKFTT 525 (TC), §§123…124).
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- Question is what is fair and just: special circumstances not required
“[The Judge was wrong to hold that] the requirement to disclose further documents would be an additional burden on ITP, IFP2 and Ingenious Games “that could only be justified by some special circumstance” and that there was no such circumstance in this case. I respectfully consider that in putting the matter in this way the Judge departed too far from the basic approach which the FTT is required to adopt, namely to ask in accordance with rule 2 what is required to 10 enable it to deal with a case “justly and fairly”.” (HMRC v. Ingenious Games LLP [2014] UKUT 61 (TCC), §68(iii), Sales J)
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- General request will be necessary where specific documents not known
“HMRC’s request for documents was, in my view, properly formulated by reference to the Statements of Case for the appellants served in early August 2013. HMRC had to ask for disclosure of documents in relatively general terms, because they did not know what documents relevant to the issues pleaded in the Statements of Case the appellant partnerships might hold. They asked only for disclosure of documents relevant to the pleaded cases of ITP, IFP2 and Ingenious Games which they had not yet been shown. I do not consider that it is appropriate to characterise this as a fishing expedition.” (HMRC v. Ingenious Games LLP [2014] UKUT 61 (TCC), §68(ii), Sales J)
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- Must be proportionate
“I acknowledge that HMRC’s searches are unlikely to have unearthed all relevant documents. I can also understand why Mr Colman was concerned when HMRC’s disclosure exercise did not provide the appellants with documents that he had obtained from other sources. However, that is not a good reason for requiring HMRC to start their searches all over again. First, as I have found, HMRC did not necessarily seize all relevant documents in the first place and Officer Condie noted that they had never obtained certain documents that were stored on storage devices in France and Monaco. It would clearly be disproportionate to require HMRC to search 17 terabytes of data based on Mr Colman’s suspicion that HMRC did not disclose relevant documents when it is not even clear that HMRC have the documents that Mr Colman thought should have been disclosed. Second, to the extent that HMRC’s searches failed to locate relevant documents because the search terms that the appellants were provided were inadequate, it would clearly be disproportionate to require HMRC to bear the consequences of that.” (Colman v. HMRC [2018] UKFTT 141 (TC), §38, Judge Jonathan Richards)
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Limited disclosure during HMRC enquiry a relevant factor
“In my judgment, the most important point on the present interlocutory appeal is that in order for the main appeal to be determined fairly and justly, in accordance with the overriding objective, HMRC should have an equal opportunity to review the further relevant documents held by ITP, IFP2 and Ingenious Games which they have not yet disclosed to HMRC and which they do not wish themselves to rely upon in the appeal. Put another way, it would be unfair and unjust for ITP, IFP2 and Ingenious Games to be able to suppress or keep from the view of HMRC and the FTT relevant documents which may be harmful to their case, as a consequence of the limitation on the extent of HMRC’s inspection of documents during the investigatory stage as a result of a sensible co-operative approach to the conduct of the investigation which was agreed as being in the interests of both sides. Even allowing for some weight to be attached to the interest of avoiding delay by postponing the hearing of the appeal, scheduled for March 2014, the Judge’s decision was not compatible with a proper consideration of the issues in the appeal (see rule 2(2)(e) of the Rules, set out above).” (HMRC v. Ingenious Games LLP [2014] UKUT 61 (TCC), §67, Sales J).
​
"[27] These passages [in Ingenious Games LLP, §68] must be seen in context. In that case, it had been agreed that there would be limited disclosure at the stage of the HMRC enquiry. When the initial disclosure directions were given, both sides appreciated that HMRC had not examined all the documents in the possession of the taxpayers, and that “the proper limits of disclosure in the case would inevitably have to be informed by the pleaded cases on both sides”: [61]. HMRC were entitled to maintain that there was a need for additional disclosure once they saw how the taxpayers were putting their case: [62]. Importantly, the taxpayers did not suggest that they did not hold further documents which had not been disclosed which were “relevant to the issues on the appeal”: [63]. Indeed, the Tribunal concluded, at [63]:
It is clear that they do hold other relevant documents. Moreover, it is entirely possible that there will be documents in that class which would be capable of undermining their case and/or of supporting HMRC’s case on the appeal.
[28] Against this background, of what the court called “the unusual circumstances of this case”, a degree of caution must be exercised in drawing from the decision principles of general application regarding disclosure. The guidance we have referred to in the subsequent Court of Appeal decisions in Ebuyer and Smart Price Midlands is of broader general application. Having said that, we note that HMRC accepted as correct the Tribunal’s statement that, in a case such as this appeal, it is appropriate for a party to see documents held by its opponent which are relevant to the opponent’s pleaded case, in order to see whether they undermine that case." (McCabe v. HMRC [2020] UKUT 266 (TCC), Fancourt J and Judge Thomas Scott)
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Full co-operation during detailed HMRC enquiry a relevant factor
[51] However, in case I am wrong on that [emails not in possession or control], it is my decision that in principle there should be disclosure of the emails sent to these individuals. However I need to consider whether it is proportionate to direct this disclosure given a likely cost in time and effort which it will cause the appellant and given too that Sarah Carter’s letter in which the involvement of these individuals was identified was sent to HMRC in 2014, more than 7 years ago. It is one thing to say that simply because there has been an enquiry into a taxpayer’s affairs, there is no embargo on seeking further documents and information at the disclosure stage. But where HMRC have had the information for that length of time, and as Mr Bradley says, it has been pored over by a number of technical groups within HMRC who appear to have indicated that no further information was required, and that the information provided was not inadequate as far as the enquiry was concerned, I am uncomfortable about directing the disclosure requested. This is notwithstanding that, as Mr Henderson says, the cost of undertaking the disclosure exercise has not been quantified by the appellant.
[52] The extent of the disclosure, too, will depend upon the search terms. These have been discussed by the parties but not agreed. In my judgment the period of two years sought by HMRC is too long and I direct that it should be reduced to one year. I further direct that the parties should discuss and if possible agree upon the search terms which should be applied and that if the parties have not reached agreement within 56 days from the date of release of this decision, either party may apply for the Tribunal to determine the appropriate search terms." (Syngenta Holdings Limited v. HMRC [2021] UKFTT 236 (TC), Judge Popplewell)
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RELEVANCE
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Must be a real likelihood of the evidence materially assisting the Tribunal
[31] Bearing in mind that under Rule 27(2) of the FTT Rules a document must in any event be disclosed if a party intends to rely on or produce it in the proceedings, what is meant, in considering an application under Rule 16, by a document being “relevant”?
...
[33] While Nugee J was dealing with the issue of admissibility of evidence under Rule 15, not disclosure of documents, we agree that in considering an application for disclosure the test of whether a document is potentially probative of one of the issues is a sensible approach." (McCabe v. HMRC [2020] UKUT 266 (TCC), Fancourt J and Judge Thomas Scott)
​
“Any application for specific disclosure must be tested by reference to relevance and proportionality. Relevance must be considered in the context of the matters which are within the jurisdiction of the Tribunal to determine.” (Ford v. FCA [2016] UKUT 41 (TCC), §38, Judge Berner).
"[75] I was not referred to the case but I agree with Judge Staker at paragraphs 45, 56(1) and (5) and 57 in Royal Bank of Scotland Group plc v HMRC [2020] UKFTT 321 (TC) where he said:
[56] ... an applicant for directions for specific disclosure will need to satisfy the Tribunal:
(1) that the material in respect of which specific disclosure is sought is necessary to deal with the case justly: this will be the case if the party applying for specific disclosure will suffer an unfair disadvantage (or the other party an unfair advantage) in the litigation as a result of lack of access to the material; that is, it is not enough that the material is merely relevant to the case or that the material would fall to be disclosed under a regime of standard disclosure
...
(5) .... that the proposed order for specific disclosure would be proportionate to the importance of the case, the complexity of the issues, the importance of the material sought to a just determination of the issues in the case, and the anticipated time and costs required to comply with the proposed order.
[57] The Tribunal considers that an example of material that satisfies criterion (1) in the previous paragraph would be material which if put in evidence could potentially affect the outcome of the case in some material respect." (Aspire In the Community Services Limited v. HMRC [2024] UKFTT 176 (TC), Judge Anne Scott)
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“In the case of an application for a witness summons or for an order for the production of documents, the guiding principle is that the Tribunal may issue such a summons or order where it considers that there is a real likelihood that the evidence of the person summonsed (or of the documents to be produced) will materially assist the Tribunal in its determination of an issue or issues in the proceedings. The test is not whether the party making the application hopes that the evidence will assist its case. The test is whether the Tribunal considers that there is a real likelihood that its determination will be assisted. That may be the case where the Tribunal considers that the evidence would be reasonably likely, one way or another, to resolve an area of uncertainty.” (Mehta v. HMRC [2015] UKFTT 396 (TC), §16).
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- How taxpayer behaved in relation to other companies may cast light on how he behaved in relation to relevant company
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"[55] Mr Hickey is correct to observe that their respective roles in the affairs of those companies was central to that question. However, he overstates matters by submitting that considerations of how Mr Mitchell and Mr Bell interacted outside the context of Payroll and Project was “necessarily irrelevant”. Mr Mitchell and Mr Bell had evidently worked together at other companies. How they interacted in a context outside that of the Universal Companies (which was the subject of Level 2C documents) had the ability to cast some light on how they might have interacted in relation to the Universal Companies. Moreover, Mr Bell’s case was that it was Mr Mitchell and not Mr Bell who had responsibility for managing the Universal Companies. The FTT was entitled to conclude that the way they worked on other business ventures had the capacity to shed some light on whether Mr Bell was correct." (Mitchell and Bell v. HMRC [2021] UKUT 250 (TCC), Judge Richards and Judge Cannan)
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- But interactions between those companies not obviously relevant
​
"[87]...We do not ourselves see how a mention in a document that one of the Universal Companies had simply “interacted” with a particular company obviously has any bearing on who was managing the affairs of the Universal Companies at the relevant time. Of course, mentions in documents of how Mr Bell and Mr Mitchell behaved in relation to the Universal Companies’ respective businesses had the potential to be much more relevant. But Mr Mitchell’s personal interactions with the Universal Companies were the province of Level 2A documents.
...
[91] Therefore, Level 2B and Level 3 documents were of some potential relevance even if that relevance was not immediately obvious from the parties’ pleaded cases. In those circumstances, the FTT had to decide, as a case management matter, the extent to which Level 2B and Level 3 documents could be included on HMRC’s list. At one extreme, the FTT could have decided that, since the documents were all of some potential relevance, they could all be included. At the other extreme, it could have required the relevance of each Level 2B and Level 3 document to be established individually. We consider that the FTT made no error of law in taking a middle course and linking the extent to which those documents were properly included on HMRC’s list of documents to the extent to which they referenced companies referred to in HMRC’s statement of case." (Mitchell and Bell v. HMRC [2021] UKUT 250 (TCC), Judge Richards and Judge Cannan)
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- Broad category of documents said to go to credibility may not be sufficiently relevant
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"[95] ... We are prepared to accept that there are certain questions of “credibility” that do not specifically need to be pleaded not least because it is possible for a party to suggest to a witness in cross-examination that the witness is not telling the truth without needing to give advance notice of that line of cross-examination. However, the FTT’s point was broader: even with the benefit of submissions made in private from HMRC, it was still not satisfied that matters of credibility were of sufficient relevance for the broad category of Level 4 documents to appear on HMRC’s list and be disclosed to Mr Bell." (Mitchell and Bell v. HMRC [2021] UKUT 250 (TCC), Judge Richards and Judge Cannan)
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- Supervisory jurisdiction cases: standard CPR disclosure (not everything HMRC considered)
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"[53] Having considered these different models of disclosure and the FTT's task in these appeals, my conclusion is that disclosure from HMRC limited to that required by rule 27(2), would not be not sufficient in these AWRS appeals, even as a starting point...
[54] I also reject HMRC's proposal that disclosure be ordered on the basis of documents "taken into account" by the decision-maker. As a practical matter, the border between documents "taken into account" on the one hand and those which have been "considered" by the decision-maker on the other hand is too uncertain and is bound to lead to disputes...
[55] On the other hand, I do not regard it as appropriate in these appeals to order disclosure of everything the decision-maker considered when deciding to refuse approval. That might be necessary if the tribunal were required to assess the fitness and properness of the trader afresh, taking into account all the potential factors listed in the Excise Notice. Here, the task of the tribunal is to consider whether the appellant trader has established that no reasonable officer could refuse approval because of the conduct relied on by HMRC in the decision to refuse approval, having regard to (a) the extent to which HMRC continues to rely on that conduct in its statement of case to defend the appeal; (b) any exonerating conduct relied on by the trader; (c) whether any disputes of primary facts relevant to that conduct are resolved by the tribunal in favour of the party asserting that the facts are well founded; and, where the issue is raised, (d) whether any conditions or restrictions short of refusal could have adequately protected the revenue. In the light of that, documents adverse to the appellant that do not relate to the misconduct on which HMRC relies are not relevant.
[56] In my judgment, HMRC should give what corresponds to standard disclosure under the CPR but with the same qualification as the Court accepted in the Namli case, that is excluding documents which are not relied on and which are entirely adverse to the applicant's case. If disclosure is generally to be given on that basis, it does not seem to me helpful for disclosure to take place before the stage at which it is envisaged by rule 27(2)..." (Smart Price Midlands Limited v. HMRC [2019] EWCA Civ 841, Rose LJ)
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Either party may apply to vary
​
"[58] In any event, even an order made after the statement of case has been served is necessarily a first step. That points in favour of adopting a conservative approach rather than an expansive approach to disclosure. Too much disclosure by one party imposes a significant burden not only on that disclosing party but also on the opposing party who has to incur the time and cost of its legal team sifting through and commenting on documents which may have no bearing on the points on which either party intends to rely. The tribunals considering these cases have recognised that the FTT's procedure allows for HMRC to apply to vary the initial disclosure direction. It also allows for the trader to seek further disclosure by category or by seeking specific disclosure as the case develops, for example if it becomes clear from the statement of case that there are still disputes of primary fact. As this court said in North Shore Ventures Ltd v Anstead Holdings Inc [2012] EWCA Civ 11, disclosure is a continuing process which is part of case management: [42]." (Smart Price Midlands Limited v. HMRC [2019] EWCA Civ 841, Rose LJ)
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- HMRC internal communication potentially relevant to discovery issue
“I am satisfied that the consultations with the ToAA team in relation to the three taxpayers referred to in Mr Finch’s witness statement at paragraphs 25 and 28 are relevant to the development of Mr Finch’s thinking in the present case, which may form part of the process of a discovery being made.” (Addo v. HMRC [2018] UKFTT 492 (TC), §107, Judge Greenbank).
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- Internal HMRC policy advice relevant where the FTT has supervisory jurisdiction
“I have concluded that the documents referred to at [26] and [27] should be disclosed unless a valid objection (such as a claim for privilege) can be made. Given that Officer Birchfield expressly relied on policy advice when making his decision on review of the invalid invoices issue and the time limit issue, I consider that the appellant is entitled to disclosure of this material and to make up its own mind as to whether it does in fact advance its case (rather than to rely on HMRC’s “self-certification”).” (Tower Bridge GP Ltd v. HMRC [2016] UKFTT 54 (TC), §31)
- HMRC decision making process not relevant where appeal not supervisory
​
"[1] This hearing was a Case Management Hearing to address the appellant's application for disclosure from the respondents ("HMRC"). An overview of that application is that in the appellant's words it:
"...is seeking to obtain the same sort of information which HMRC would typically provide in judicial review proceedings concerning the exercise of an administrative discretion. The Application sets out three categories of items. In short, these relate to the identity of HMRC's decision-makers and contemporaneous evidence of HMRC's reasons for the decision".
...
[128] I find that, having made that decision, as it were in principle, then, as Judge Bishopp pointed out in Wilf Gilbert, the provisions of VATA must be applied and the officer did so. That is the second stage or the second decision. Ms Brown is correct to say that those provisions are not discretionary. The Tribunal's jurisdiction in that regard is therefore not supervisory.
[129] That being the case, the Application for Disclosure is not, as Mr Ridley rightly concedes relevant and therefore it is refused." (A​spire in the Community Services Limited v. HMRC [2024] UKFTT 176 (TC), Judge Anne Scott)
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- Observations submitted to ECJ generally not relevant to other cases
“This application is, in my view, hopelessly misconceived. The observations made in one case by HMRC cannot have any relevance to the determination by the Tribunal of another case. That determination must be based on the arguments raised by the respective parties in that particular case, the merits of which can be assessed by the Tribunal. Nor, in any event, is there any sensible basis for Coast's suspicion [that HMRC were arguing different things before the Tribunal and the ECJ]…” (Coast Telecom Ltd v. HMRC [2012] UKFTT 307 (TC), §27)
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Test relevance by reference to pleaded cases
[25] Fourth, relevance is to be assessed by reference to the issues in the case and the positions of the parties. As the Court of Appeal succinctly observed in HMRC v Smart Price Midlands and another [2019] I WLR 5070, at [40]:
[40] Disclosure of documents is not an end in itself but a means to an end, namely to ensure that the tribunal has before it all the information which the parties reasonably require the tribunal to consider in determining the appeal. It is only one step in the overall management of the case which should, as the appeal progresses towards a substantive hearing, identify and if possible narrow the issues between the parties. The scope of the issues in contention at the trial depends in part on the legal test to be applied by the tribunal and in part on the parties’ respective positions as to which elements of that test are in contention." (McCabe v. HMRC [2020] UKUT 266 (TCC), Fancourt J and Judge Thomas Scott)
"[59] Mr Mitchell correctly emphasised the important function that statements of case perform, in both the courts and the tribunals. In Burns v Financial Conduct Authority [2017] EWCA Civ 2140, Kitchin LJ, speaking of statements of case produced by the Financial Conduct Authority in proceedings in the Upper Tribunal said, at [110] that:
…statements of case perform the vital function of informing each party, and the tribunal, of the other party’s case, thereby enabling them to direct their evidence and submissions to the issues identified by the statements. In particular, the respondent’s statement informs the applicant of the case that he has to meet.
In HMRC v IAC Associates [2013] EWHC 4382 (Ch), Nugee J said at [33] that, when dealing with an application for specific disclosure, the test of relevance must be applied:
… by reference to the issues in the case. This does not mean the issues in some abstract or generalised sense, but the issues and asserted facts as identified from each party’s pleaded case." (Mitchell and Bell v. HMRC [2021] UKUT 250 (TCC), Judge Richards and Judge Cannan)
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- Of both parties
​
"[60] However, HMRC’s statement of case was not the only articulation of a party’s position that was relevant. There was also Mr Mitchell’s and Mr Bell’s position, set out in their grounds of appeal, to consider...
...
[62] It is true that HMRC had not pleaded any reliance on the relationship between Mr Mitchell and Mr Bell in their statement of case. However, neither Mr Mitchell nor Mr Bell had, in their respective grounds of appeal, explained the precise basis on which they were “denying responsibility”. Since they had such little information on the nature of Mr Mitchell’s and Mr Bell’s grounds of appeal when they were drafting their statement of case, it would have been difficult for HMRC to plead particulars of the relationship on which they relied. It only became apparent at the hearing before the FTT that Mr Bell was making a positive case that Mr Mitchell was responsible for running the Universal Companies thereby making the wider relationship between the taxpayers of relevance. In those circumstances, it was entirely reasonable for the FTT to decide whether documents were properly included on HMRC’s list by reference both to the parties’ pleaded cases and also the appellants’ explanations, given at the hearing, as to how they expected to advance their appeals." (Mitchell and Bell v. HMRC [2021] UKUT 250 (TCC), Judge Richards and Judge Cannan)
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Degrees and categories of relevance
Degrees of relevance
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"[35] .... There is clearly a substantive difference between, say, a document which is agreed to be probative of a primary fact 10 pleaded by one of the parties and one which might possibly prompt a train of enquiry by the other party. The FTT could not discharge its duty to take into account the overriding objective if it was forbidden to distinguish between these two examples of different degrees of relevance in considering the need for and proportionality of the disclosure sought." (McCabe v. HMRC [2020] UKUT 266 (TCC), Fancourt J and Judge Thomas Scott)
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"[37(5)] Relevance is not absolute. I am not bound by the four category approach set out in rule 31.6.3 of the CPR but that categorisation is helpful. I shall take into account the sentiments expressed in [37] and [38] of McCabe." (Syngenta Holdings Limited v. HMRC [2021] UKFTT 236 (TC), Judge Popplewell)
Categories of relevance
​
"[36] We have observed that the FTT is not bound by the CPR provisions relating to disclosure. However, the approach in cases governed by the CPR to different categories of document shows clearly that the way in which a document is relevant is material to the approach which should be taken by the court to a request for its disclosure. The following commentary from the White Book sets out the position as follows: 31.6.3 Documents may be divided into the following four categories.
(1)The parties’ own documents: these are documents which a party relies upon in support of their contentions in the proceedings.
(2)Adverse documents: these are documents which to a material extent adversely affect a party’s own case or support another party’s case.
(3)The relevant documents: these are documents which are relevant to the issues in the proceedings, but which do not fall into categories 1 or 2 because they do not obviously support or undermine either side’s case. They are part of the “story” or background. The category includes documents which, though relevant, may not be necessary for the fair disposal of the case.
(4)Train of inquiry documents: these are documents which may lead to a train of inquiry enabling a party to advance their own case or damage 35 that of their opponent (as referred to by Brett LJ Compagnie Financiere et Commerciale du Pacifique v Peruvian Guano Co (1882– 83) L.R. 11 Q.B.D. 55, CA).
...
[37] We do not suggest that the FTT must or should categorise documents in this way. The FTT has its own rules on disclosure. However, the White Book categorisation is both rational and justifiable, and it demonstrates clearly why it is appropriate for the FTT to evaluate and weigh the likely effect on the determination of the case of ordering disclosure of a document. The starting point in the FTT in a complex, highvalue case may be that a document which is relevant (in the broadest sense) should be disclosed unless there are good reasons to the contrary, but that is only a starting point. On an application for disclosure, the tribunal will need to consider the degree of potential relevance of the document and whether there is a need for disclosure in order to enable a fair determination of the issues to take place. Further, in taking into account the overriding objective, what might amount to “good reasons” for refusing to order disclosure of documents that are relevant are likely to differ depending on whether a document is materially adverse to a party’s case or merely a background document or one which might lead to a train of enquiry.
[38] It follows that a document is capable of being relevant in a broad sense but of low relevance in that it is not potentially adverse but only part of the background, or one capable of leading to a train of enquiry, and therefore one that may not need to be disclosed in order for a fair determination of the issues to take place." (McCabe v. HMRC [2020] UKUT 266 (TCC), Fancourt J and Judge Thomas Scott)
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Burden on party applying for disclosure
"[75] I was not referred to the case but I agree with Judge Staker at paragraphs 45, 56(1) and (5) and 57 in Royal Bank of Scotland Group plc v HMRC [2020] UKFTT 321 (TC) where he said:
"[45] On general principles, where a party makes an application for directions imposing disclosure obligations on another party, the burden is on the party making the application to persuade the Tribunal that there are sufficient reasons for granting it. It is not for the other party to persuade the Tribunal that the application should not be granted."" (Aspire In the Community Services Limited v. HMRC [2024] UKFTT 176 (TC), Judge Anne Scott)
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"[22] The general principle is that where a party makes an application for Directions seeking disclosure from another party, the burden is on the party making the application to persuade the Tribunal that there are sufficient reasons for granting it. It is not for the other party to persuade the Tribunal that the application should not be granted." (R D Utilities Limited v. HMRC [2022] UKFTT 347 (TC), Judge Anne Scott)
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“It was HMRC’s application for disclosure and therefore for HMRC to show that the requested disclosure was relevant to the proceedings.” (Edwards-Moss v. HMRC [2016] UKFTT 147 (TC), §7).
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- But no burden of proving the applicant does not already have access to the documents sought
​
"[82(3)(a)]...While the burden is generally upon an applicant for disclosure to prove that the direction sought is necessary and proportionate, it is not a condition precedent to an application for disclosure that the applicant must prove that they do not have the material sought by first setting out all material that they have or have had access to. Indeed, in cases where vast quantities of electronic material are held, that would be impractical and disproportionate. In most cases, a party is unlikely to seek disclosure of evidence it believes it already has. The Tribunal will be alert to cases in which an application for disclosure is made which imposes an unnecessary burden on the other party and will take that into account in deciding whether or not to grant an application." (Ellis v. HMRC [2022] UKUT 254 (TCC), Judge Greenbank and Judge Rupert Jones)
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Self-certificating relevance: party generally entitled to disclosure to test other party’s claims
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- Efficacy depends on the relevance of the material
​
"[36] As regards the second point, namely self certification, then whilst self certification is not, per se, objectionable and indeed is commonplace in high value commercial litigation, its efficacy in any particular circumstance depends on the relevance of the material. The greater the relevance, the less satisfactory self certification becomes. For example, in the context of this case, if HMRC suspect that there are ten specific emails which might contain information from relevant persons at SHL, all of which show a tax avoidance motive for the transaction, then self certification by SHL that they do not is unlikely to be satisfactory given the importance of motive in an unallowable purpose case. Relevance then, of course, needs to be tested against proportionality. But given that I need to conduct a balancing act, the greater the relevance, the greater the disproportionality which will be needed to outweigh it." (Syngenta Holdings Limited v. HMRC [2021] UKFTT 236 (TC), Judge Popplewell)
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- Testing what the taxpayer says
"[80] I feel the same about these draft reports as I do about the draft tax reports. It is all very well for the appellant to say that these relate to the valuation of target and an overvaluation of target has not been pleaded. And for Pinsent Masons to say in the Report that the valuation report was not compiled for tax purposes. But I think this is an area where HMRC are entitled to make up their own mind given that the advice given to Syngenta by external advisers is of considerable significance when considering unallowable purpose. Furthermore, even on a cumulative basis I cannot see that the provision of these draft reports will be disproportionate in time and financial costs to the appellant. And this is notwithstanding that HMRC had the opportunity of seeking copies of these draft reports during the conduct of their enquiry. I therefore direct that these draft reports should be sent to HMRC within 56 days from the date of release of this decision." (Syngenta Holdings Limited v. HMRC [2021] UKFTT 236 (TC), Judge Popplewell)
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“Secondly, and significantly, the appellants themselves have already led evidence on the state of their mother’s health in the six months or so before her death. It is contrary to justice to allow the appellants to lead evidence on this matter, but deny HMRC the right to independent medical records on the same matter which will enable them to verify or not what the appellants’ witness says.” (Edwards-Moss v. HMRC [2016] UKFTT 147 (TC), §54)
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- Testing what HMRC say
“I have concluded that the documents referred to at [26] and [27] should be disclosed unless a valid objection (such as a claim for privilege) can be made. Given that Officer Birchfield expressly relied on policy advice when making his decision on review of the invalid invoices issue and the time limit issue, I consider that the appellant is entitled to disclosure of this material and to make up its own mind as to whether it does in fact advance its case (rather than to rely on HMRC’s “self-certification”).” (Tower Bridge GP Ltd v. HMRC [2016] UKFTT 54 (TC), §31).
“I think it is appropriate for HMRC to “self-certify” the extent to which the material referred to in paragraph 16 of Officer Birchfield’s witness statement [internal discussions with colleagues] is relevant to the invalid invoices issue or the time limit issue. Officer Birchfield does not appear to be suggesting that this material contributed directly to his decision: just that he discussed interim findings with Policy colleagues. Therefore, the position is different from that set out at [31] and I consider that the balance tips in favour of allowing HMRC to “self-certify” the relevance or otherwise of documents. If the documents disclosed raise questions as to whether HMRC have followed the right approach when “self-certifying”, the appellant could always make a further application for disclosure.” (Tower Bridge GP Ltd v. HMRC [2016] UKFTT 54 (TC), §33)
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- Cannot self-certify material as irrelevant if expressly referred to in order
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"[74] In relation to the scope of the Unless Order and whether or not there is scope for selfcertification, I do not regard the principles stated by Judge Richards (as he then was) in Tower Bridge to mean that HMRC can rely on self-certification of relevance to decide that documents clearly identified in the Agreed Directions as relating to issues other than the time bar issue can be ignored. It would be one thing for HMRC to have considered documents and assessed their relevance to the disputed matters including both the time bar issue and knowledge/due diligence. For example, not every internal memo or email involving Officers Ward and Post in relation to Ebuyer will necessarily be relevant. HMRC could self-certify that they have produced all such documents which are “relevant” as judged by reference to the time bar issue and the due diligence/knowledge issue. However, it is not for HMRC to decide that all documents relating to anything other than the time bar are “irrelevant”. This is directly contrary to the terms of the Agreed Directions and Unless Order. " (Ebuyer (UK) Limited v. HMRC [2023] UKFTT 611 (TC), Judge Bowler)
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Questioning the other party’s disclosure statements
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- Specific evidence or bad faith required
“In order to draw the inference that Mr Lakha invited, I would need to find that HMRC and their solicitors consciously concealed the Hawk Documentation with the intention of springing it on the Defendants at a later stage, thereby putting them at a disadvantage. It was not open to me to draw such an inference without more specific evidence about HMRC's Electronic Folder, the enhanced verification procedures carried out on Hawk, and how the Hawk Documentation was treated. Absent bad faith, which I did not find, the question of disclosure has to be approached with proportionality and I was not prepared to go behind the disclosure statement provided by HMRC to the effect that it and its solicitors had carried out the appropriate, reasonable searches required under standard disclosure.” (HMRC v. Sunico A/S [2013] EWHC 941 (Ch), §48)
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OTHER
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Documents mentioned in a witness statement
“31.14 (1) A party may inspect a document mentioned in –
(a) a statement of case;
(b) a witness statement.” (CPR 31.14)
FTT guided by CPR
“I am satisfied that in a case such as the present, whilst the tribunal is not bound to apply the CPR it is appropriate that it should be guided by principles in the CPR.” (Burnikell v. HMRC [2018] UKFTT 140 (TC), §27, Judge Cannan).
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- Specific mention of a specific document
​
"[23] Rubin v Expandable Ltd [2008] EWCA Civ 59; [2008] 1 WLR 1099 was concerned with the present CPR r. 31.14. At [23] – [24], Rix LJ was content to assume that there was no "effective or substantive" difference between the meanings of the previous and the present rule. The change in language from "reference is made" to "mentioned" underlined two matters: (1) it confirmed the test of "direct allusion" or "specific mention"; (2) the expression "mentioned" was "as general as could be" – it was not intended to be a difficult test." (Blue Holdings (1) Pte Ltd v. NCA [2016] EWCA Civ 760, Gross LJ).
​
"[23]... I am content to adopt the test of direct allusion as an elucidation of the present rule's language which speaks of "mentioned". Nevertheless, the rule is in terms of "mentioned", and any gloss can only be by way of elucidation. I am inclined myself to think that the change in the rule's language from "reference is made" to "mentioned" does underline two matters. The first is to confirm the test of "direct allusion" or, to use another gloss used by Slade LJ, "specifically mention". This is because the expression "refer" or "reference" is ambiguous between a direct or an indirect reference. Dubai Bank v. Galadari (No 2) determined that the reference must be direct or specific: hence "specifically mention" and "direct allusion". I think this is underlined by the current expression "mentioned".
[24] The second matter is that, subject to my first comment, the expression "mentioned" is as general as could be. This is not to my mind intended to be a difficult test. The document in question does not have to be relied on, or referred to in any particular way or for any particular purpose, in order to be mentioned. Subject to Mr Lightman's second point, that the mention of a document within CPR 31.14 amounts to automatic and absolute waiver of privilege in it, which if correct would give to that rule a most important effect, I do not see why there should be need for a strict approach to a request for inspection of a specific document mentioned in one of the qualifying documents. The general ethos of the CPR is for a more cards on the table approach to litigation. If a party thinks it worthwhile to mention a document in his pleadings, witness statements or affidavits, I do not see why, subject as I say to the question of privilege, the court should put difficulties in the way of inspection. I look upon the mention of a document in pleadings etc as a form of disclosure. The document in question has not been disclosed by list, or at any rate not yet, but it has been disclosed by mention in what, for the purposes of litigation, is another important and formal category of documents. If so, then the party deploying that document by its mention should in principle be prepared to be required to permit its inspection, and the other party should be entitled to its inspection. What in such circumstances is the virtue of coyness?" (Ruben v. Expandable Ltd [2008] EWCA Civ 59, Rix LJ)
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"He wrote to me" is a direct allusion to the document
​
"[25] In the present case, the expression which we have to consider begins "he wrote to me". The courts have not before had to consider such a formula for these purposes. Registrar Simmonds and Patten J considered that this expression fell on the wrong side of the line. However, in my judgment "he wrote" is not a mere reference to a transaction otherwise to be inferred as effected by a document, as in "he conveyed" or "he guaranteed", but is a direct allusion to the act of making the document itself. It is the same as saying "he wrote a writing". Suppose the question was whether there had been a direct allusion to a telephone call in the expression "I telephoned him that day": in my judgment it would make no difference whether the expression was "I telephoned him" or "I made a telephone call to him", in either case there would be a direct allusion to the telephone call. Suppose the expression was "I recorded and transcribed our telephone call that day": there would be a direct allusion to the transcript in question. If in Rigg the defence had said that the journalist had "written up the interview", there would have been a direct allusion to that document. In all these expressions, the making of the document itself is the direct subject matter of the reference and amounts in my judgment to the document being "mentioned". "Document" is defined as "anything in which information of any description is recorded". If one then asks whether the expression "he wrote to me…drawing my attention to the discrepancies" makes mention of "anything in which information of any description is recorded", I would find it hard to explain why it does not." (Ruben v. Expandable Ltd [2008] EWCA Civ 59, Rix LJ)
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Suggestion that a request for assistance not in writing "fanciful"
​
"[25] Secondly, what remains is Mr. Hall's contention that the Request was not necessarily in writing. With great respect, this is fanciful and, in any event, belied by the NCA's own evidence. The notion that a Request of this nature involved an official in (say) Washington DC telephoning an official at the NCA and reeling out orally a list of assets to the subject of a Prohibition Order beggars belief. Art. 4 of the Treaty contemplates that Requests will be in writing, save in urgent circumstances, of which there is no evidence here. Thus, without more, I would conclude that the Request in this case was in writing. It is neither here nor there that in other circumstances some state to state requests might be made orally." (Blue Holdings (1) Pte Ltd v. NCA [2016] EWCA Civ 760, Gross LJ).
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- Discretion to refuse inspection of documents mentioned
“[28] the mere fact that a document is "mentioned" in one of the documents specified in CPR r. 31.14(1) does not automatically and without more entitle the other party to inspect it. The Court retains a discretionary jurisdiction to refuse inspection.” (Blue Holdings (1) Pte Ltd v. NCA [2016] EWCA Civ 760, Gross LJ).
Proportionality
“[30] …the right to inspect under CPR r. 31.14 is not, however, unqualified; it is instead subject to CPR rules based limits, which may be invoked by the party resisting inspection - the burden resting on that party to justify displacing the general rule. Thus, "proportionality" is part of the overriding objective CPR r.1.1(2)(c) and, in an appropriate case, it would be open to a party to oppose inspection on the ground that it would be "disproportionate to the issues in the case.” (Blue Holdings (1) Pte Ltd v. NCA [2016] EWCA Civ 760, Gross LJ).
Confidentiality
“[31]...The Court's task is to strike a just balance between the competing interests involved – those of the party asserting an entitlement to inspect the documents and those of the party claiming confidentiality in the documents. In striking that balance in the exercise of its discretion, the Court may properly have regard to the question of whether inspection of the documents is necessary for disposing fairly of the proceedings in question.” (Blue Holdings (1) Pte Ltd v. NCA [2016] EWCA Civ 760, Gross LJ).
“However, as Mr Ramsden pointed out, I did not understand Ms Nathan to submit that any of the documents which are the subject of this application are subject to any duty of confidentiality which is owed to any third party except to the extent that they may contain information relating to individual taxpayers other than Ms Addo. Rather Ms Nathan submits that the documents are “sensitive” in that their disclosure may be prejudicial to HMRC’s future investigation of tax avoidance cases and that, in considering the proportionality of ordering or directing disclosure, the Tribunal should have regard to the sensitive nature of the material….I do not accept the general proposition that the alleged sensitivity of the documents – falling short of circumstances in which a claim for public interest immunity could be made or in which disclosure may of result in a breach of confidence - is itself a particular factor that I should take into account.” (Addo v. HMRC [2018] UKFTT 492 (TC), §78…82).
Documents not necessary to dispose of issues
“At this stage it does not seem to me that disclosure of the third challenge letter is necessary to dispose fairly of the appeals. In circumstances where the respondents place no reliance on the third challenge letter and Mr Kane’s evidence is that it was not relevant to the schemes under consideration in this appeal, I am satisfied that the respondents have justified non-disclosure of the third challenge letter.” (Burnikell v. HMRC [2018] UKFTT 140 (TC), §33, Judge Cannan).
Sources of HMRC documentation
HMRC Public Folder
“In his evidence Mr Macdonald referred to the HMRC Public Folder which is a method of information dissemination within HMRC. The folder in relation to EBTs held copies of presentations and speaking notes from head office specialists and advice on HMRC’s views on EBTs. Mr Macdonald produced his slides and notes from one such presentation, in which he referred to s 43 in conjunction with UITF 13, capital and revenue, wholly and exclusively and Ramsay and sham. His speaking notes indicate that s 43 would be dealt with by Linda Grant who, Mr Macdonald explained, was the person within the Revenue’s head office who was responsible for policy in this area…Also from the Public Folders is a presentation from 30 November 2001, apparently by one Gary Clarkson, entitled “SCO Approach to EBTs – Some suggestions for tackling EBT arrangements”.” (Boyer Allan Investment Services Ltd v. HMRC [2012] UKFTT 558 (TC), §§83…87).
Regional technical updates
“The correspondence makes reference in many instances to Regional Technical Updates (“RTUs”) produced by Mrs Grant. We were provided with two examples, the first from 1995 and the second from 1999.” (Boyer Allan Investment Services Ltd v. HMRC [2012] UKFTT 558 (TC), §98).
HMRC delete all employee emails when the employee retires
“In his second witness statement Mr Richard Shaw stated that both Ms Hughes and Mr Durkan have retired from HMRC, and that “in accordance with HMRC’s normal policy” their email accounts have been deleted. I have to say that I find it extraordinary that communications between public officials in respect of important decision making, which form part of the official record of public tax administration, simply disappear and are not recoverable the moment that the officials leave public service. What if, for example, many years later the integrity of a particular retiree came under scrutiny, and the former officer herself was deprived of recourse to significant communications bearing upon the matter under investigation?" (R (oao Biffa Waste Services Limited) v. HMRC [2016] EWHC 1444 (Admin), §113, Sir Kenneth Parker).
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Only documents in the party's possession or control
"Both parties are agreed that I can only direct disclosure of documents where those documents are or have been in a party’s control i.e. they are or were in its physical possession, it has or has had a right to possession of it or it has or has had a right to inspect or take copies of it. This is in compliance with CPR Part 31.8." (Syngenta Holdings Limited v. HMRC [2021] UKFTT 236 (TC), Judge Popplewell)
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Documents in the possession of non-UK group company
Disclosable of it appears that the non-UK company has given a general consent to the litigant to search its documents
​
"[54] [HMRC cite] the case of Schlumberger Holdings Ltd v Electromagnetic Geo services AS [2008] EWHC 56 (Pat) (“Schlumberger”) as authority for the proposition that common corporate structure is less important than general consent having been given to a party to search for documents properly disclosable in litigation. At paragraph 21 of Mr Justice Floyd’s decision, the judge says this:
“21. I accept that the mere fact that a party to a litigation may be able to obtain documents by seeking the consent of a third party will not on its own be sufficient to make that third party’s documents disclosable by the party to the litigation. They are not within his present or past control precisely because it is conceivable that the third party may refuse to give consent. But what happens where the evidence reveals that the party has already enjoyed, and continues to enjoy, the co-operation and consent of the third party to inspect his documents and take copies and has already produced a list of documents based on the consent that has been given and where there is no reason to suppose that that position may change? Because that is the factual situation with which I am confronted here. In my judgment, the evidence in this case sufficiently establishes that relevant documents are and have been within the control of the claimant. I should emphasise that my decision does not turn in any way on the existence of a common corporate structure. My decision depends on the fact that it appears from the evidence that a general consent has in fact been given to the claimant to search for documents properly disclosable in this litigation, subject only to the caveats contained in paragraph 4 of Mr. Griffin’s witness statement concerning corporate acquisition documents and unreasonably onerous requests.”
[55] [HMRC] submits that it is clear that SHL, and in particular Sarah Carter has been able to provide documents to HMRC which have emanated from outside SHL, from non-UK group companies. And she does not appear to have had any difficulty in obtaining these from those companies. This is similar to Schlumberger and I should direct disclosure on the basis that SHL appears to have a de facto general consent to obtain documents from non-UK group companies. If, however, I am reluctant to order such disclosure, I might direct that SHL should provide HMRC and the Tribunal with a full explanation as to why it was not possible to conduct searches whereby this direction will be considered to have been complied with.
[56] [The taxpayer] takes the view that Schlumberger is very different from the situation in this application and there is no evidence of a general consent having been given by the non-UK group companies to SHL to search the electronic records of those non-UK group companies. The documents that have been obtained by Sarah Carter have been obtained in response to specific requests by her to personnel at the non-UK group companies who provided that documentation in response to those requests. Sarah Carter was acting as agent of the appellant, and not of any of the non-UK group companies when she was providing information to HMRC during the enquiry and she had no general authority to search the electronic records of those companies to obtain information which she could then provide to HMRC during the course of that enquiry. Nor does she have that general authority to disclose the documents now sought by HMRC in this application.
[57] I agree with [the taxpayer]. In Schlumberger, the company had carried out searches of files at facilities in Texas which housed Schlumberger’s corporate patent files and also the personal files of four individuals who were employees of non-UK Schlumberger group companies. Mr Justice Floyd said that it was clear that the search of these facilities and files had been done without reference to the specific group company. It had been undertaken with the consent of the company concerned. It is equally clear, however, that this process is very different from that undertaken by Sarah Carter who did not search the electronic records of the non-UK SHL group companies, but instead sought information from personnel at those companies for onward transmission to HMRC during the enquiry. I accept that SHL enjoyed the cooperation of those companies, but that was not to inspect and take copies of documents itself. It was to ask individuals at those companies to inspect and take copies of documents.
[58] In my judgment there was no general consent given to SHL to search for documents in the possession or control of the non-UK SHL group companies, and the Schlumberger principle, therefore, does not apply to this application." (Syngenta Holdings Limited v. HMRC [2021] UKFTT 236 (TC), Judge Popplewell)
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Board minutes of non-UK company not disclosable
​
"[89] However I have decided the Schlumberger issue in favour of SHL, and the same principle applies to these minutes as applies to the emails referred to at [38] above. I do not have jurisdiction to direct disclosure of these board minutes." (Syngenta Holdings Limited v. HMRC [2021] UKFTT 236 (TC), Judge Popplewell)
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Disclosure from third parties
- Likely to assist a party
“In those circumstances…we would think it right to reject the submission that the word ‘likely’, in the condition of the threshold condition in rule 31.17(3)(a), means ‘more probable than not’’ and to hold that the word has, in that context, the meaning ‘may well’…” (Three Rivers DC v. Governor and Company of the Bank of England (No.4) [2002] EWCA Civ 1182, §32)
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- Necessary to dispose of the case fairly or to save costs
“At this point the judge has to ask himself the question whether the disclosure is needed to dispose fairly of the claim or to save costs.” (Frankson v. Home Office [2003] EWCA Civ 655, §12)
- Query whether there have to be compelling reasons
“ “20. In my view, where a third party objects to providing information requested by a party to an appeal, the Tribunal should only order a third party to produce documents where there are compelling reasons to do so. In some cases, such an order is little more than a formality to protect a third party from criticism or worse where there are actual or potential obligations of confidentiality. In this case, however, there are objections from all the Third Parties that the request would impose a real burden on them. The application acknowledged that the informal requests were “in fairly wide terms” and HMRC had sought a meeting to limit the time and expense. Neither the application nor Mr Gammie at the hearing suggested that the burden of time and expense had been eliminated or would be insignificant. It seems to me that the general nature of the information requested could involve the Third Parties in a great deal of time and expense in complying with any order to produce documents. In the circumstances, I do not consider that it would be fair or just to order the Third Parties to provide documents as requested by HMRC and I refuse the application.”… I would, however, wish to reserve judgment on whether the Judge’s formulation in para. [20] of the test to be applied would always be appropriate.” (HMRC v. Ingenious Games LLP [2014] UKUT 61 (TCC), §74, Sales J – quoting FTT and reserving judgment on its correctness).
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- Police interviews
“It is, in my judgment, clear beyond doubt that confidentiality attaches to what is said to the police in the course of a criminal investigation and that this applies whether the person giving the information is a suspect who is interviewed under caution or merely a potential witness. For my part I cannot see any distinction in principle. However, the point may be reached where the court has to conduct a balancing exercise between the public interest in maintaining this confidentiality and some other public interest. The weight to be attached to the confidentiality will at this point depend very much on the particular circumstances in which the material sought was obtained.” (Frankson v. Home Office [2003] EWCA Civ 655, §35)
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- Medical records
“The Tribunal will prepare a draft of the Order to be sent to the GP practice and will send a copy to both HMRC and the appellants for comments within 14 days…HMRC should note that Rule 16(4) will give the GP practice to which this Order is addressed the right to object to it. If such an objection is received, the parties will be notified and the Tribunal will consider the matter afresh.…Once the records are received by the Tribunal, they will be made available to both parties.” (Edwards-Moss v. HMRC [2016] UKFTT 147 (TC), §§59…60…61)
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Confidential information
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- Query whether there needs to be an application for public interest immunity
"[86] In response to HMRC's suggestion that some of the documents sought could not be produced because of their sensitivity, Mr Ridley relied upon Judge Greenbank in Addo at paragraph 82 where he said:
"I have not had sight of the relevant documents or information and so I am in no position to determine the extent to which they may or may not be regarded as 'sensitive'. While I do, of course, take into account the nature of the documents in determining their likely relevance to the issues in this case and the proportionality of ordering or directing their disclosure, my concern with the general proposition is that 'sensitivity' might easily become a cloak to disguise an unwillingness to disclose documents that are unhelpful to a party's case. That is not a good reason for non-disclosure. For that reason, I do not accept the general proposition that the alleged sensitivity of the documents - falling short of circumstances in which a claim for public interest immunity could be made or in which disclosure may of (sic) result in a breach of confidence - is itself a particular factor that I should take into account.".
[92] Ms Brown noted the appellant's reliance upon Addo in support of its Application but responded pointing to paragraph 29 of McCabe which reads:
"29. Mr Hickey also relied on various statements as to the principles applicable to disclosure in Tower Bridge GP Ltd v HMRC [2016] UKFTT 54 (TC) and Janet Addo v HMRC [2018] UKFTT 530 (TC). These were both FTT decisions which turned on their facts, and we do not consider that they are authority for any generally applicable principle in a case such as this." (A​spire in the Community Services Limited v. HMRC [2024] UKFTT 176 (TC), Judge Anne Scott)
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- HMRC should include on list of documents but seek to exclude from production
“I accept that, in some cases, there may be some material that is considered but ultimately not relied on because to do so would reveal confidential information. [Counsel for the taxpayer] submitted that the Applicants are entitled to see such material as it may be relevant to the decision maker’s decision. I do not entirely agree with that submission. If material contains intelligence or other genuinely confidential material that could have an impact on HMRC’s operations then, in my opinion, HMRC should not be required to produce it or, at least, not in unredacted form. As it was part of the material that was considered by the decision maker and, given its nature, it is very likely to have influenced the decision, I consider that it should be included in the list of documents described in general terms, if necessary, but marked as confidential. HMRC could apply, on a case-by-case basis, to exclude such material from further disclosure or production.” (OWD Ltd v. HMRC [2017] UKFTT 411 (TC), §28, Judge Sinfield)
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- Confidentiality of inter-tax authority correspondence to support future co-operation
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"[57] Overall, the FTT concluded that HMRC had put forward a “good, albeit not unassailable” case as to why the documents should not be disclosed. It considered that weight and respect should be afforded to the views of the tax authorities that “a degree of confidentiality is important to the proper functioning of the MAP (both between the UK and Belgium and other tax authorities) and, without that confidentiality, future co-operation between tax authorities might suffer, particularly since that point is echoed in the OECD Commentary”: [54].
[58] At [55], the FTT weighed up HMRC’s good but not unassailable case against its conclusion that the documents were relevant but of low relevance, and in light of the overriding objective concluded that the objections of the two tax authorities set out a good reason why the documents should not be disclosed.
...
[64] We consider that the FTT’s assessment of the confidentiality issue and the weight to give it applied the correct principles and was comfortably within the ambit of its discretion in determining the application for disclosure. It is not the role of this Tribunal to decide whether we might have struck the balance in a different way." (McCabe v. HMRC [2020] UKUT 266 (TCC), Fancourt J and Judge Thomas Scott)
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- Medical records (balance privacy against relevance)
“The deceased’s knowledge of her medical condition shortly before her death is central to a live issue in this appeal. In such a case, I would ordinarily expect the public interest in the correct amount of tax being paid to outweigh the appellants’ rights to privacy in relevant medical records. It is after all the appellants’ choice to challenge the tax assessment. They ought to be prepared to allow HMRC full access to relevant material.” (Edwards-Moss v. HMRC [2016] UKFTT 147 (TC), §49)
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Provision of documents to third parties
CPR rule
"A non-party may, if the court gives permission, obtain from the records of the court a copy of any other document filed by a party, or communication between the court and a party or another person." (CPR 5.4C(2))
Records of the court are documents it keeps for its own purposes
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"[23] The “records of the court” must therefore refer to those documents and records which the court itself keeps for its own purposes. It cannot refer to every single document generated in connection with a case and filed, lodged or kept for the time being at court. It cannot depend upon how much of the material lodged at court happens still to be there when the request is made." (Cape Intermediate Holdings Ltd v. Dring [2019] UKSC 38)
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Common law power
"[34]...There can be no doubt at all that the court rules are not exhaustive of the circumstances in which non-parties may be given access to court documents. They are a minimum and of course it is for a person seeking to persuade the court to allow access outside the rules to show a good case for doing so. However, case after case has recognised that the guiding principle is the need for justice to be done in the open and that courts at all levels have an inherent jurisdiction to allow access in accordance with that principle. Furthermore, the open justice principle is applicable throughout the United Kingdom, even though the court rules may be different.
...
[41] The constitutional principle of open justice applies to all courts and tribunals exercising the judicial power of the state. It follows that, unless inconsistent with statute or the rules of court, all courts and tribunals have an inherent jurisdiction to determine what that principle requires in terms of access to documents or other information placed before the court or tribunal in question. The extent of any access permitted by the court’s rules is not determinative (save to the extent that they may contain a valid prohibition). It is not correct to talk in terms of limits to the court’s jurisdiction when what is in fact in question is how that jurisdiction should be exercised in the particular case." (Cape Intermediate Holdings Ltd v. Dring [2019] UKSC 38)
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“The Guardian News & Media case also confirms that, subject to any statutory provision, the courts have an inherent jurisdiction to determine how the open justice principle should be applied. It follows that, even in the absence of a relevant statutory power, unless they are precluded by statute, the courts have power at common law to grant access to documents if the open justice principle requires this.” (Blue v. Ashley oao Times Newspapers Limited [2017] EWHC 1553 (Comm), §9, Leggatt J).
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Person seeking access must explain how granting access will advance the open justice principle
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"[45] However, although the court has the power to allow access, the applicant has no right to be granted it (save to the extent that the rules grant such a right). It is for the person seeking access to explain why he seeks it and how granting him access will advance the open justice principle. In this respect it may well be that the media are better placed than others to demonstrate a good reason for seeking access. But there are others who may be able to show a legitimate interest in doing so.
...
"[47]...In short, non-parties should not seek access unless they can show a good reason why this will advance the open justice principle, that there are no countervailing principles of the sort outlined earlier, which may be stronger after the proceedings have come to an end, and that granting the request will not be impracticable or disproportionate." (Cape Intermediate Holdings Ltd v. Dring [2019] UKSC 38)
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Balancing exercise
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"[45]...As was said in both Kennedy, at para 113, and A v British Broadcasting Corpn, at para 41, the court has to carry out a fact-specific balancing exercise. On the one hand will be “the purpose of the open justice principle and the potential value of the information in question in advancing that purpose”.
[46] On the other hand will be “any risk of harm which its disclosure may cause to the maintenance of an effective judicial process or to the legitimate interests of others”. There may be very good reasons for denying access. The most obvious ones are national security, the protection of the interests of children or mentally disabled adults, the protection of privacy interests more generally, and the protection of trade secrets and commercial confidentiality. In civil cases, a party may be compelled to disclose documents to the other side which remain confidential unless and until they are deployed for the purpose of the proceedings. But even then there may be good reasons for preserving their confidentiality, for example, in a patent case." (Cape Intermediate Holdings Ltd v. Dring [2019] UKSC 38)
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Consider practicality and proportionality of the request
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"[47] Also relevant must be the practicalities and the proportionality of granting the request. It is highly desirable that the application is made during the trial when the material is still readily available, the parties are before the court and the trial judge is in day to day control of the court process. The non-party who seeks access will be expected to pay the reasonable costs of granting that access. People who seek access after the proceedings are over may find that it is not practicable to provide the material because the court will probably not have retained it and the parties may not have done so. Even if they have, the burdens placed on the parties in identifying and retrieving the material may be out of all proportion to benefits to the open justice principle, and the burden placed upon the trial judge in deciding what disclosure should be made may have become much harder, or more time-consuming, to discharge. On the other hand, increasing digitisation of court materials may eventually make this easier..." (Cape Intermediate Holdings Ltd v. Dring [2019] UKSC 38)
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Query whether there is a presumption of access where placed before a judge
"[44] It was held in Guardian News and Media that the default position is that the public should be allowed access, not only to the parties’ written submissions and arguments, but also to the documents which have been placed before the court and referred to during the hearing. It follows that it should not be limited to those which the judge has been asked to read or has said that he has read. One object of the exercise is to enable the observer to relate what the judge has done or decided to the material which was before him. It is not impossible, though it must be rare, that the judge has forgotten or ignored some important piece of information which was before him. If access is limited to what the judge has actually read, then the less conscientious the judge, the less transparent is his or her decision." (Cape Intermediate Holdings Ltd v. Dring [2019] UKSC 38)
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"In a case where documents have been placed before a judge and referred to in the course of proceedings, in my judgment the default position should be that access should be permitted on the open justice principle; and where access is sought for a proper journalistic purpose, the case for allowing it will be particularly strong. However, there may be countervailing reasons. ... I do not think that it is sensible or practical to look for a standard formula for determining how strong the grounds of opposition need to be in order to outweigh the merits of the application. The court has to carry out a proportionality exercise which will be fact-specific. Central to the court's evaluation will be the purpose of the open justice principle, the potential value of the material in advancing that purpose and, conversely, any risk of harm which access to the documents may cause to the legitimate interests of others." (R (oao Guardian News and Media Limited) v. City of Westminster Magistrates’ Court [2012] EWCA Civ 420, §85).
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“This decision [in Guardian News and Media Limited] establishes that, once documents have been placed before a judge and referred to at a public hearing, access to the documents should be permitted other things being equal. But it does not remove the need for the court to consider the particular circumstances, including the nature of the documents in question, their role and relevance in the proceedings and, importantly, the purpose for which access to the documents is sought.” (Blue v. Ashley oao Times Newspapers Limited [2017] EWHC 1553 (Comm), §21, Leggatt J).
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Generally no access to witness statement before trial
“But there is no corresponding right or reason why a member of the public or press should be entitled to obtain copies of witness statements before they have become evidence in the case. Conducting cases openly and publicly does not require this. Nor is it necessary to enable the public to understand and scrutinise the justice system. The advance notice that a witness statement provides of what evidence its maker, if called as a witness, will give is provided for the benefit of opposing parties (for the reasons I have indicated), not the public. The trial is an event which must (save in exceptional circumstances) be conducted in public so that justice can be seen to be done. But preparations by the parties for the trial for the most part are not, and do not need to be, public.” (Blue v. Ashley oao Times Newspapers Limited [2017] EWHC 1553 (Comm), §15, Leggatt J).
Reason for caution: statements may contain defamatory content
“Yet if such [defamatory] statements were made public pursuant to an order of the court, a person who complained that a statement contained assertions that were untrue and defamatory of him would have no recourse against the author of the statement, who would not be responsible for its publication, nor against the publisher (who would be protected by qualified privilege unless the publication was malicious) and at the same time would also lack the opportunity for rebuttal and correction provided by the trial process. That does not strike a fair balance between the relevant interests. In addition, fair and accurate reporting of proceedings is promoted if a witness statement is put into the public domain only when it becomes evidence and its contents can also be tested and contested in a public trial.” (Blue v. Ashley oao Times Newspapers Limited [2017] EWHC 1553 (Comm), §16, Leggatt J).
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Purpose of reporting the evidence a witness will give at trial before the trial begins is not a good reason for access
“For the reasons already indicated, an interest in reporting what evidence witnesses will give at a trial before they give it does not engage the open justice principle and is not a good reason to be allowed access to witness statements before the statements are put in evidence (if they are). Nor does it become a good reason just because of the adventitious fact that reference was made to the statements at a pre-trial hearing which it is not TNL's current purpose to report.” (Blue v. Ashley oao Times Newspapers Limited [2017] EWHC 1553 (Comm), §23, Leggatt J).
Purpose of understanding arguments made at hearing better is a good reason for access
“A critical consideration in the present case, as I see it, is the purpose for which TNL is seeking access to the trial witness statements. If its purpose were to facilitate a better understanding of the arguments made at the April hearing, then, in the absence of a sufficient countervailing reason, the open justice principle would indicate that access to the statements should be allowed…There is no reason to think that TNL's purpose in seeking access to the trial witness statements at this stage is to enable the Sunday Times to report in more detail than it has already done on the attempt made by Mr Ashley in April to obtain permission to adduce expert evidence and the reasons why that attempt failed…The other two documents are the witness statements of Ms Cullen and Mr Fearnhead which were prepared specifically for the April hearing. Those documents seem to me to fall into a different category. They were put in evidence at the April hearing and, like the skeleton arguments, were prepared solely for the purpose of that hearing. In the case of these documents it seems to me that no evidence or explanation is needed to justify a request for access to them in the absence of any legitimate objection.” (Blue v. Ashley oao Times Newspapers Limited [2017] EWHC 1553 (Comm), §§22…25, Leggatt J).
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Marked up trial bundles not disclosable
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"[48] It is, however, appropriate to add a comment about trial bundles. Trial bundles are now generally required. They are compilations of copies of what are likely to be the relevant materials - the pleadings, the parties’ submissions, the witness statements and exhibits, and some of the documents disclosed. They are provided for the convenience of the parties and the court. To that end, the court, the advocates and others involved in the case may flag, mark or annotate their copies of the bundle as an aide memoire. But the bundle is not the evidence or the documents in the case. There can be no question of ordering disclosure of a marked up bundle without the consent of the person holding it. A clean copy of the bundle, if still available, may in fact be the most practicable way of affording a non-party access to the material in question, but that is for the court hearing the application to decide." (Cape Intermediate Holdings Ltd v. Dring [2019] UKSC 38)
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Disclosure of documents relating to appeal following hearing
Application by accountants/solicitors firm involved in similar case for pleadings and submissions granted
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"[11] I am satisfied from the foregoing that the applicant has demonstrated a clear legitimate interest in the Requested Documents. The “single entity” issue was a significant issue in the proceedings as the Applicant will now have seen from my decision. Neither of the parties has opposed the application, and I have seen no indication that disclosure would cause any harm to the maintenance of an effective judicial process or to the legitimate interest of others. Disclosure would not be disproportionate. The Requested Documents can readily be provided at the flick of an electronic switch. I have considered, however, whether I should grant this application on condition that the Applicant reimburses the parties for some element of the costs which they have incurred in commissioning the transcripts. It seems to me that there is much value in those transcripts from which the Applicant and their client will benefit, even though they were commissioned for the benefit of the parties and for the Tribunal with no thought to any benefit for a person such as the Applicant. The key question (see Cape) is how I exercise my jurisdiction in the particular circumstances of this case. It seems only fair to me, and I do not think it is any form of fetter on the concept of legitimate interest, that the Applicant should make a contribution to the costs of the transcripts from which they, and their client, will now benefit. I am fortified in reaching this conclusion by the provision in paragraph 47 of Cape “The non-party who seeks access will be expected to pay the reasonable costs of granting that access.” I therefore grant the application on condition that the Applicant or their client reimburses the parties 20% of the costs of the transcribers (plus VAT to the extent it is not recoverable by the parties). I leave it to the parties to deal with the detail of this reimbursement but I am happy to consider any application in relation to it should the parties fail to reach agreement." (Gunfleet Sands Limited v. HMRC [2022] UKFTT 94 (TC), Judge Nigel Popplewell)
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Application by barrister with interest in case for disclosure of evidence granted
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"[11] Mr Gordon further submits that “legitimate interest” was to be construed broadly and was not confined to journalistic purposes. For example, it could include an interest in related litigation or his interest as a barrister practising frequently in the Tribunal with a particular interest in the operation of the Taxes Management Act.
[12] I accept Mr Gordon’s submissions on this matter and I agree with Judge Sinfield’s view in Hastings, at [17], that legitimate interest does not require a direct personal or professional interest in the outcome of proceedings and that an interest in other related litigation, whether actual or in contemplation, is sufficient. Accordingly, I find that Mr Gordon has a legitimate interest in obtaining access to the document requested.
[13] With regard to the fact-specific balancing exercise I am required to carry out to determine this application, as set out in Cape, I have concluded that granting access to this document will advance the open justice principle because Mr Gordon has a legitimate interest in obtaining access. I do not consider there will be any risk of harm which its disclosure may cause to the maintenance of an effective judicial process or to the legitimate interests of others and there are no representations from the parties to suggest otherwise." (Fastklean Limited v. HMRC [2020] UKFTT 511 (TC), Judge Sukul)
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Application by journalist for skeleton for CMC granted
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"[11] In this case, there has been a hearing albeit a hearing to give case management directions rather than a substantive hearing of the appeals. At the case management hearing, the skeleton arguments which I had read before the hearing took place, were referred to by me and by both parties. The skeletons were not read out or quoted from extensively during the hearing because it was not necessary to do so. They were, however, taken into consideration by me in discussing with the parties what directions should ultimately be made. I should make it clear that no directions have as yet been made as the parties are agreeing certain details before submitting the proposed directions to me for approval. I have no doubt that an observer, such as Ms Meisel, would struggle to understand the parties’ submissions and my comments on them during the hearing without the skeletons. In such circumstances, it seems to me that providing the skeleton arguments to a journalist would further the principle of open justice in that it would enable the journalist to understand the proceedings more fully and, if they so chose, report them more accurately. I do not consider that, as suggested by JHA, it is necessary for a person requesting access to or copies of documents to do more than indicate, as Ms Meisel has done, that they are sought for journalistic purposes.
...
[14] I have also considered whether the utility of the information contained in the skeleton arguments and hearing bundle in advancing the principle of open justice is outweighed by any risk of harm which its disclosure may cause to the maintenance of an effective judicial process or to the legitimate interests of others. I cannot see that providing the skeleton arguments or hearing bundle to Ms Meisel carries any risk that the judicial process will be compromised or affected in any way. I note that JHA has never suggested that the Appellants have any legitimate interests that the documents will not be disclosed and I cannot see how they could as they must be assumed to be aware of the principle of open justice.
[15] Finally, I considered the practicality and proportionality of providing Ms Meisel with electronic copies of the skeleton arguments. It is obvious (and JHA did not contend to the contrary) that the provision of electronic copies is a straightforward matter. All that the Tribunal is required to do is send an email with the skeletons and bundle attached. Accordingly there are no issues of practicality and proportionality which could justify refusing the application." (Bouncylagoon Limited v. HMRC [2022] UKFTT 361 (TC), Judge Sinfield)
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Application by journalist for bundle for CMC not granted (because not referred to or considered in any detail)
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"[13] I do not consider, however, that providing Ms Meisel with a copy of the hearing bundle will further the principle of open justice in any material way. As the focus of the hearing was the directions to be given in relation to five lead cases, the contents of the hearing bundle were not referred to or considered in any detail because it was unnecessary for the purpose of the hearing. In those circumstances, the hearing bundle would not assist Ms Meisel to understand the proceedings or my decision in the hearing or any directions that are issued subsequently. The hearing bundle (of 1,423 pages) contained details and correspondence that referred to Appellants and matters that were not chosen as lead cases and may never become the subject of a public hearing. Providing access to such details and correspondence would not advance the principle of open justice when those appeals may never be the subject of any public hearing or judicial decision. Accordingly, I have decided that the Tribunal should not provide Ms Meisel with an electronic copy of the hearing bundle." (Bouncylagoon Limited v. HMRC [2022] UKFTT 361 (TC), Judge Sinfield)
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Disclosure of documents relating to appeal before appeal determined
General principle: to enable public scrutiny of the justice system
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"[39] I derive the following general principles from the cases, largely as summarised in Dring SC.
(1) “Open justice” is a constitutional principle which applies to all courts and tribunals exercising the judicial power of the state (Dring SC at [41]). This clearly includes the FTT.
(2) All courts and tribunals (including the FTT) have inherent jurisdiction to determine what that principle requires in terms of access to documents or other information placed before them (ibid).
(3) The extent of any access permitted by procedure rules is not determinative (save to the extent they contain a valid prohibition) (ibid). (In passing, I would observe that this affords a further rebuttal of the argument that the FTT should effectively just follow CPR 5.4C(1).)
(4) When such access is sought, the court or tribunal must therefore consider how to exercise its inherent jurisdiction in the light of the “open justice” principle.
(5) What that principle requires in any individual case is to be judged by reference to whether granting the access which is sought would advance the purpose or purposes of the principle (ibid at [45]).
(6) As a general statement, the overall purpose of open justice as originally identified in Guardian News & Media at [79] is “to enable the public to understand and scrutinise the justice system of which the courts are the administrators” (Dring SC at [37] - and it is clear that the reference to “courts” here extends also to tribunals - ibid at [36]).
(7) There are two main facets to this overall purpose:
(a) “to enable public scrutiny of the way in which court (and tribunals) decide cases - to hold the judges to account for the decisions they make and to enable the public to have confidence that they are doing their job properly” (ibid at [42]); and
(b) “to enable the public to understand how the justice system works and why decisions are taken. For this they have to be in a position to understand the issues and the evidence adduced in support of the parties’ cases” (ibid at [43]);
(8) Whilst there may be other facets, (a) these main two should not be regarded as mutually exclusive, because “public understanding of the justice system and how it works is the premise for public scrutiny of the judicial system” and (b) any attempt to identify further ones is “likely to create more heat than light, and may only result in successive exercises in special pleading” (R oao Saifullah Gharab Yar v Secretary of State for Defence [2021] EWCH 3219 (Admin)).
(9) It is for the person seeking access to explain why he seeks it and how granting him access will advance the principle of open justice. In particular, there is no “right” to access (except where relevant rules specifically afford such a right); the person seeking access must show a “legitimate interest” in doing so (Dring SC at [45]).
(10) In response to any request, the court or tribunal should carry out a “fact-specific balancing exercise” in which the person seeking access must explain why it is sought and how the grant of access will advance the open justice principle (ibid at [45]);
(11) In carrying out that exercise, the court or tribunal will consider “the purpose of the open justice principle and the potential value of the information in question in advancing that purpose”, and will weigh in the balance “any risk of harm which its disclosure may cause to the maintenance of an effective judicial process or to the legitimate interests of others” (ibid at [45] & [46]);
(12) The court or tribunal should also consider the “practicalities and proportionality of granting the request” (ibid at [47])." (Cider of Sweden Limited v. HMRC [2022] UKFTT 76 (TC), Judge Poole)
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Release of pleadings when hearing not imminent would not advance open justice
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"[46] Considering the first facet of the purpose identified at [39(7)] above (i.e. public scrutiny of the Tribunal’s decision-making process), I do not consider that the release of the Pleadings at this stage of the proceedings would advance that purpose at all. There has been no hearing, nor is a hearing imminent. No judicial decision has been made, nor is one about to be made, on the issues dealt with in the Pleadings. The appeal is at an early stage, where there has been no judicial involvement at all (save in relation to this application) and no effective hearing. The position might be different in principle with respect to the subject matter of any interim applications (and decisions), but there have been none and therefore the point does not arise. There is therefore no assistance to be gained by EY or indeed any other member of the public, in furtherance of this purpose, by access to the Pleadings or other documents which EY seek (insofar as such other documents may exist).
[47] Turning to the second facet of the purpose identified above (i.e. public understanding of how the system works, and why decisions are taken), the second limb of this (why decisions are taken) is in my view equally inapplicable in the present case (where no decision has been or is about to be taken). The first limb (public understanding of how the system works) does not apply in my view either in the present circumstances: from reading the Pleadings, a third party would certainly gain an understanding of the legal basis upon which this particular claim is being advanced and defended (indeed that is EY’s stated purpose in seeking access to them), but in advance of an effective hearing that would tell them nothing which would enable them to monitor how the system of justice in the Tribunal actually works. Again, the position might be different in relation to the subject matter of any interim applications (and associated decisions), if there had been any, but the point does not arise on the facts of this case.
[48] Standing back and considering the overarching purpose of the principle of open justice referred to at [39(6)] above, I can see no basis upon which the provision of the Pleadings to EY at this early stage of proceedings (before any substantive judicial involvement or an effective hearing) will further their ability to understand or scrutinise the justice system administered by the Tribunal, as opposed to enabling them to understand the legal arguments being deployed by the parties. Again, if there had been any interim applications or associated decisions, the position might be different (in respect of the subject matter of any such application), but the point does not arise on the facts of this case." (Cider of Sweden Limited v. HMRC [2022] UKFTT 76 (TC), Judge Poole)
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Even if open justice is engaged at early stage, balance against parties interest in keeping matters confidential
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"[52] If, contrary to the view expressed above, the provision of access to the Pleadings could be regarded as furthering the principle of open justice in some way, then it is still clear that there is no “right” to the provision of the documents (either unconditionally or absent some specific direction or strong countervailing reason): what is then required is a “fact-specific balancing exercise” on the part of the Tribunal to decide whether access should be granted.
[53] It is quite clear that simply wishing to understand the legal basis of the arguments being advanced (whether out of academic or journalistic interest, or in order to inform one’s conduct of a similar dispute) is a perfectly legitimate reason for seeking access to the documents. However, it is equally clear that the parties to the original dispute, at this early stage of the proceedings, also have their own legitimate interests in wishing to keep such matters confidential - whether because of an understandable wish for their confidential tax affairs not to become public knowledge before they are actually adjudicated on by the Tribunal (or, in the case of HMRC, their general duties of taxpayer confidentiality), or (more likely, as the High Court pleadings are already publicly available and are held by EY) because of a wish to preserve the confidentiality of the detailed lines of legal argument being deployed in the appeal.
[54] In striking a balance between the principle of open justice and the countervailing wishes of the Appellant and HMRC to maintain the confidentiality of the documents for their respective reasons, given the stage the proceedings have reached, I would therefore refuse the application in any event, on the basis that I would consider any small advancement of the principle of open justice inherent in disclosure to be outweighed by the wish for confidentiality on the part of the Appellant and HMRC at this stage of their dispute, before there has been any judicial involvement in the substance of that dispute or effective hearing of it." (Cider of Sweden Limited v. HMRC [2022] UKFTT 76 (TC), Judge Poole)
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Application when hearing about to take place would be stronger
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"[51] I should emphasise that if the application were made at a later stage of the proceedings when the substantive hearing had happened or (possibly) was about to take place (as in JTI) then the application of the open justice principle might well lead to the opposite conclusion." (Cider of Sweden Limited v. HMRC [2022] UKFTT 76 (TC), Judge Poole)
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