P5: Consideration of application for permission
FTT must consider whether to review decision
“(1) On receiving an application for permission to appeal the Tribunal must first consider, taking into account the overriding objective in rule 2, whether to review the decision in accordance with rule 41 (review of a decision).” (FTT Rules, r.40(1))
Decision on permission if no review undertaken
"(2) If the Tribunal decides not to review the decision, or reviews the decision and decides to take no action in relation to the decision, or a part of it, the Tribunal must consider whether to give permission to appeal in relation to the decision or that part of it.
(3) The Tribunal must send a record of its decision to the parties as soon as practicable.
(4) If the Tribunal refuses permission to appeal it must send with the record of its decision--
(a) a statement of its reasons for such refusal; and
(b) notification of the right to make an application to the Upper Tribunal for permission to appeal and the time within which, and the method by which, such application must be made.
(5) The Tribunal may give permission to appeal against part only of the decision or on limited grounds, but must comply with paragraph (4) in relation to any part of the decision or grounds on which it has refused permission.” (FTT Rule, r.40(2) – (5))
No hearing required
“(1) Subject to rule 26(6) (determination of a Default Paper case without a hearing) and the following paragraphs in this rule, the Tribunal must hold a hearing before making a decision which disposes of proceedings, or a part of proceedings, unless--
(a) each party has consented to the matter being decided without a hearing; and
(b) the Tribunal considers that it is able to decide the matter without a hearing.
(2) This rule does not apply to decisions under Part 4 (correcting, setting aside, reviewing and appealing Tribunal decisions).” (FTT Rules, r.29(1) – (2)).
Nature of review
“(1) The Tribunal may only undertake a review of a decision--
(a) pursuant to rule 40(1) (review on an application for permission to appeal); and
(b) if it is satisfied that there was an error of law in the decision.” (FTT Rules, r.41)
FTT must be of the opinion that there is an error of law (FTT does need to be correct about this)
“There is no requirement that there actually be an error of law, merely that the FTT be satisfied that there is, which is a very different matter..” (Vital Nut Co Limited v. HMRC  UKUT 192 (TCC), §45(6), Marcus Smith J and Judge Bishopp)
Decision to carry out a review is discretionary
“The power is discretionary…” (Scriven v. Calthorpe Estates  UKUT 469 (LC), §38)
“We agree with Mr Barnes that consideration whether or not to review a decision involves a large element of judgement or discretion. Indeed, even if the First-tier Tribunal is satisfied that there is a clear error of law, it may decide not to review a decision but instead to give permission to appeal. The error may be a common one and, for that or other reasons, it may be helpful to have an authoritative decision of the Upper Tribunal on the point.” (R (oao RB) v. FTT  UKUT 160 (AAC), §27)
FTT should clearly identify the scope of the review
" Where the FTT undertakes a review of one of its own decisions, it must make it clear which parts (if any) of that decision it is prepared to review and, following the carrying out of the review, which parts (if any) of that decision it intends to set aside. Otherwise one is left in the thoroughly unsatisfactory situation that has arisen in this case, where the parties are at odds about what exactly the FTT intended to do." (Point West GR Ltd v. Bassi  EWCA Civ 795, Lewison LJ)
Binding authority subsequent to decision
“HMRC had submitted to us an application for permission to appeal, which we had not determined as we were aware that the Supreme Court’s judgment was likely to be available in the near future. Once it was available, HMRC invited us to review our decision, rather than proceed to deal with the application for permission to appeal…[The taxpayer] did not argue that rule 45(1)(b) was not engaged but said that, on proper analysis, the Supreme Court’s judgment showed that our conclusion on the first issue was correct. He added that we should exercise the power of review only in a clear case. We do not need to decide whether that proposition is correct since in our view, as we shall explain, this is a clear case.” (R (oao Rouse) v. HMRC  UKUT 615 (TCC), §§2…3, Warren J and Judge Bishopp).
Purpose of review is to clarify or correct clear errors without unnecessarily burdening UT (not to usurp UT appeal function)
" The exercise of the power to review a decision of the FTT was considered in R (RB) v First-tier Tribunal (Review)  UKUT 160 (AAC) by a strong panel of the UT (Administrative Appeals Chamber) presided over by the then Senior President of Tribunals, Carnwath LJ. They held:
i) that the power of review on a point of law is intended, among other things, to provide an alternative remedy to an appeal. In a case where the appeal would be bound to succeed, a review will enable appropriate corrective action to be taken without delay;
ii) It was not intended that the power of review should enable the FTT to usurp the UT's function of determining appeals on contentious points of law. Nor was intended to enable a later FTT judge or panel, or the original FTT judge or panel on a later occasion, to take a different view of the law from that previously reached, when both views are tenable. Both these considerations demonstrated that if a power of review is to be exercised to set aside the original decision because of perceived error of law, this should only be done in clear cases;
iii) There were occasions when it would be desirable for a case to be reconsidered by the FTT so that further findings might be made even if it was likely to go to the UT eventually.
iv) The key question was what, in all the circumstances of the case including the degree of delay that may arise from alternative courses of action, would best advance the overriding objective of dealing with the case fairly and justly.
 Thus the primary purpose of the power to review is to avoid an unnecessary appeal to the UT, where the FTT has made an obvious error of law." (Point West GR Ltd v. Bassi  EWCA Civ 795, Lewison LJ)
“The purpose of the review is clarificatory. The process is intended to give the FTT a second chance to provide adequate reasons for its decision without the inconvenience that might be involved were the Upper Tribunal to allow a reasons challenge and then have to remit the case.” (Vital Nut Co Limited v. HMRC  UKUT 192 (TCC), §45(8)(a), Marcus Smith J and Judge Bishopp)
“…the clear purpose behind rule 45, which is to provide a filter mechanism to help ensure that obvious errors based on oversight of a legislative provision or binding authority can be corrected (and set aside under rule 47) without unnecessarily burdening the Court of Appeal.” (AA  UKUT 330 (IAC), §6)
“The self-evident purpose of these provisions is to allow the First-tier Tribunal to avoid the need for an appeal to the Upper Tribunal in the case of clear errors…As the panel decided, the power of review must not be used in a way that subverts the appeal process and bypasses the proper function of the Upper Tribunal.” (JS v. Secretary of State for Work and Pensions  UKUT 100 (AAC), §28)
Point of law includes challenges to fact finding
"...In this context an "error of law" would undoubtedly include a case in which the FTT had reached a factual conclusion which had no evidence to support it; or which was contrary to the only reasonable conclusion on the evidence. In this context a point of law is widely defined. In Railtrack plc v Guinness Ltd  EWCA Civ 188,  1 EGLR 124 at  Carnwath LJ said:
"This case is no more than an illustration of the point that issues of "law" in this context are not narrowly understood. The Court can correct "all kinds of error of law, including errors which might otherwise be the subject of judicial review proceedings…. Thus, for example, a material breach of the rules of natural justice will be treated as an error of law. Furthermore, judicial review (and therefore an appeal on law) may in appropriate cases be available where the decision is reached "upon an incorrect basis of fact", due to misunderstanding or ignorance … A failure of reasoning may not in itself establish an error of law, but it may "indicate that the tribunal had never properly considered the matter…and that the proper thought processes have not been gone through."" (Point West GR Ltd v. Bassi  EWCA Civ 795, Lewison LJ)
And Ladd v. Marshall new evidence
" I do not overlook the possibility that an appeal may sometimes be mounted on the ground that fresh evidence has come to light. Such an appeal may be allowed where the evidence satisfies the principles in Ladd v Marshall  1 WLR 1489. If a party applies to the FTT for permission to appeal to the UT on that basis, and the FTT considers that the appeal is likely to succeed, then it may decide to review its factual findings in the light of the new evidence. But that is not what happened in this case; not least because there was no attempt to demonstrate that the evidence that the FTT did consider fell within the scope of the Ladd v Marshall principles." (Point West GR Ltd v. Bassi  EWCA Civ 795, Lewison LJ)
FTT should not advance arguments against grounds of appeal or seek to justify decision on additional grounds
" I agree [with the UT in Vital Nut, below], subject to one qualification. If, having considered the grounds of appeal the FTT is satisfied that that one or more of the grounds are likely to succeed, it may set aside its decision (or part of its decision) and re-decide the matter. That may require the FTT to promulgate a decision based on different grounds in relation to that part of the decision that it has set aside." (Point West GR Ltd v. Bassi  EWCA Civ 795, Lewison LJ)
“In short, whilst it is perfectly permissible for the FTT to use the review process to clarify what has already been decided, the FTT should refrain from seeking to justify its decision on other, even better, grounds or from seeking to defend its decision in advance from an attack that is anticipated in an appeal.” (Vital Nut Co Limited v. HMRC  UKUT 192 (TCC), §45(8)(a), Marcus Smith J and Judge Bishopp)
“The FTT should avoid the temptation to advance arguments in defence of its decision and against the grounds of appeal. The FTT should not engage or appear to engage in advocacy rather than adjudication.” (Vital Nut Co Limited v. HMRC  UKUT 192 (TCC), §45(8)(b), Marcus Smith J and Judge Bishopp)
No carte blanche to re-open all factual findings
" Mr Dovar relied on the power given to the FTT by section 9 (8) of the 2007 Act to make further findings of fact. But in my judgment that does not give the FTT carte blanche to re-open all its factual findings. Scriven v Calthorpe Estates  UKUT 469 (LC) provides a good example of when a decision to review a decision might require the finding of further facts. An application was made to vary an estate management scheme. The LVT decided, on the basis of a previous decision of the LVT, that it had no jurisdiction to do so. It did not, therefore, consider the merits of the application. Unknown to the LVT, however, the decision on which it relied had been successfully appealed to the Lands Tribunal. So the LVT's decision on the question of jurisdiction was wrong in law. In the UT, the Deputy President said that that would have been a clear case for a review, which would have resulted in the original decision to be set aside, thus clearing the way for the determination of the application on its merits. Precisely how the merits would be decided would be a matter for the FTT to consider." (Point West GR Ltd v. Bassi  EWCA Civ 795, Lewison LJ)
Review not confined to correcting certain types of error
“Once these “gateway” requirements are met, there is nothing in either the 2007 Act or the FTT Rules to constrain the FTT in terms of the sort of review it undertakes. We stress that this does not mean that the FTT is entirely unfettered in the manner it may review its decision: the only point we make is that neither the 2007 Act nor the FTT Rules provide any support for the contention of Vital Nut that the power of review was in some way confined to certain types or kinds of correction.” (Vital Nut Co Limited v. HMRC  UKUT 192 (TCC), §45(4), Marcus Smith J and Judge Bishopp).
But is limited to dealing with the error of law identified
“There is always the risk and so an apparent danger that the presiding judge will seek to defend the tribunal’s decision rather than reproduce faithfully the reasons that actually determined the appeal. That danger is the greater if the judge is given a representative’s detailed criticisms. The safeguard against the natural temptation to drift into responding to those criticisms lies in the way that the salaried judge identifies the error of law on which the review is founded. That judge should identify with precision the respects in which the reasons are inadequate and therefore in error of law before inviting the presiding judge to provide amended reasons, if that is possible.” (JS v. Secretary of State for Work and Pensions  UKUT 100 (AAC), §35)
Not an opportunity to allow new points to be taken
" As far as the ground on which the FTT eventually absolved the liability of the leaseholders to pay anything is concerned, I do not consider that the FTT ought to have allowed the leaseholders to take an entirely new point on a review. In so doing, the FTT (and for that matter the UT) lost sight of the important principle of finality in dispute resolution." (Point West GR Ltd v. Bassi  EWCA Civ 795, Lewison LJ - CA went on to note that new points of law may be taken on appeal but that this new point went beyond the original evidence)
Examples of permissible approach on review
Correcting error of formulation
“It is obvious, when reading the Original Decision, that  contained a simple misstatement [that there was no evidence on a particular point], no doubt made in error. It is also obvious, from the earlier paragraphs of the Original Decision, that the FTT “excluded” no evidence, but considered all the evidence before it. All that the review did was to correct an (obvious) error of formulation.” (Vital Nut Co Limited v. HMRC  UKUT 192 (TCC), §46, Marcus Smith J and Judge Bishopp)
“Another example of a permissible amendment would be a passage that was ambiguous or otherwise unclear in what it was saying. In such a case, it would be clear that something had gone wrong with the composition of the reasons and there would be limited scope for the judge to drift away from the task of explaining what the passage meant.” (JS v. Secretary of State for Work and Pensions  UKUT 100 (AAC), §48)
Correcting internal inconsistency
"The FTT judge, Judge Cannan, convened an oral hearing on 24 April 2018. Following that hearing, Judge Cannan issued a decision notice to the parties in which the FTT decided:
(1) to review the original decision pursuant to rule 40 of the Tribunal Procedure (First- tier Tribunal) (Tax Chamber) Rules 2009:
(2) on that review, that there was an internal inconsistency in the original decision which amounted to an error of law;
(3) to amend the original decision by replacing the original paragraph  with the following paragraph” (Lunar Missions Ltd v. HMRC  UKUT 298 (TCC), §34, Barling J and Judge Greenbank).
Correcting a failure to consider an issue raised at the hearing
“A clear example of a permissible amendment would be an issue that had been expressly raised on the appeal and explored at the hearing, but not mentioned in the written reasons. In such a case, it would be clear that part of the tribunal’s reasoning was missing by oversight, and there would be no danger of the judge writing a justification by reference to the grounds of appeal.” (JS v. Secretary of State for Work and Pensions  UKUT 100 (AAC), §47)
Correcting failure to take account of legislative provision
" We have given careful consideration to those submissions. The error of law, as identified in the Respondents grounds of appeal, is that the Tribunal failed to take into account section 1020 (1) (b) of the Corporation Act 2010: a transfer of assets to a company by its members. This error pervaded the reasoning contained in paragraphs 44-46 (inclusive) of the Original Decision. Those paragraphs of the Original Decision should be, and are, set aside. However, we are not satisfied that this error of law is such that the entirety of the Original Decision should be set aside or that it would be in furtherance of the overriding objective (as set out in Rule 2) for us to do so. The Original Decision, in our judgment, remains otherwise sound and, for the reasons given below, the outcome remains unaffected." (Pickles v. HMRC  UKFTT 327 (TC))
Examples of impermissible approach on review
Review of evidence not undertaken in original decision
“Had the FTT sought to incorporate – by way of revision – a review of evidence not actually undertaken in the original decision, then this would have been a questionable use of the review process.” (Vital Nut Co Limited v. HMRC  UKUT 192 (TCC), §47, Marcus Smith J and Judge Bishopp)
Correcting defective reasoning
“One of the limits on the power to supplement reasons is that it must not be used to correct defective reasoning or to provide a commentary on the grounds of appeal. Again, in our view, that is equally applicable to the review power under section 9…[A]n example of an impermissible amendment would be a passage that gave a poor explanation of a tribunal’s analysis of a piece of evidence. In such a case, it would not be self-evident that something had gone wrong, and there would be an effectively unavoidable risk that the judge, in seeking to bolster the reasons already given, would drift into supplementing the tribunal’s actual reasons and, perhaps, into justification. And both those dangers would undermine confidence in the judicial decision-making process and in the finality of decisions. It is unlikely that the amendment would avoid the desire to appeal.” (JS v. Secretary of State for Work and Pensions  UKUT 100 (AAC), §§36…50)
Taking a different view of the law (except in cases of clear error)
“It cannot have been intended that the power of review should enable the First-tier Tribunal to usurp the Upper Tribunal’s function of determining appeals on contentious points of law. Nor can it have been intended to enable a later First-tier Tribunal judge or panel, or the original First-tier Tribunal judge or panel on a later occasion, to take a different view of the law from that previously reached, when both views are tenable. Both these considerations demonstrate that if a power of review is to be exercised to set aside the original decision because of perceived error of law, this should only be done in clear cases…One indication that it is not clear that the original decision was erroneous in point of law in this case is the length of the review decision. If an error of law is clear it should be possible to give reasons in a couple of paragraphs. Often a single sentence is sufficient, where, for instance, all that needs to be done is to draw attention to an overlooked authority or statutory provision or to agree with a ground of appeal.” (R (oao RB) v. FTT  UKUT 160 (AAC), §§24…32)
Outcome of review
“(4) Where the First-tier Tribunal has under subsection (1) reviewed a decision, the First-tier Tribunal may in the light of the review do any of the following—
(a)correct accidental errors in the decision or in a record of the decision;
(b)amend reasons given for the decision;
(c)set the decision aside.
(5) Where under subsection (4)(c) the First-tier Tribunal sets a decision aside, the First-tier Tribunal must either—
(a)re-decide the matter concerned, or
(b)refer that matter to the Upper Tribunal.” (TCEA 2007, s.9(4) – (5))
Parties to be given opportunity to make representations before any action taken
“(2) The Tribunal must notify the parties in writing of the outcome of any review, unless the Tribunal decides to take no action following the review.
(3) The Tribunal may not take an action in relation to a decision following a review without first giving every party an opportunity to make representations in relation to the proposed action.” (FTT Rules r.41)
Amended reasons must show reasons used to reach decision, not later rationalisation
“The purpose of amended reasons is the same as the purpose of the original reasons: to show how the tribunal made its decision. They must be the reasons that led the tribunal to decide as it did, flawed though they may be, not a later attempt to rationalise the decision. And they must be the reasons of the panel as a whole. As a result, a tribunal’s reasons, whether original or amended, can only properly be written by the presiding judge or, exceptionally, another member of the panel.” (JS v. Secretary of State for Work and Pensions  UKUT 100 (AAC), §35)
Unnecessary for same FTT to redecide the matter
“Where the First-tier Tribunal is to re-decide a case, the composition of the tribunal must be the same as was required for the original decision, although the particular judge and members may be different.” (R (oao RB) v. FTT  UKUT 160 (AAC), §29)
Referral to the Upper Tribunal
(6)Where a matter is referred to the Upper Tribunal under subsection (5)(b), the Upper Tribunal must re-decide the matter.
(7)Where the Upper Tribunal is under subsection (6) re-deciding a matter, it may make any decision which the First-tier Tribunal could make if the First-tier Tribunal were re-deciding the matter.
(8)Where a tribunal is acting under subsection (5)(a) or (6), it may make such findings of fact as it considers appropriate.” (TCEA 2007, s.9(6) – (8)).
Challenging a review
“In the present case the question we ask ourselves is whether the reviewing judge properly directed himself as to the law governing the power of review. In particular, did he focus upon the need to make sure that the review did not usurp the Upper Tribunal’s function of determining appeals on contentious points of law? This was a case where the law had to be particularly clear if a review was to be justified.” (R (oao RB) v. FTT  UKUT 160 (AAC), §31)
Normal approach to wait for new decision and appeal it
“The substantial element of judgment or discretion is no doubt a reason for review decisions not being appealable and it is also a reason for expecting that the Upper Tribunal will seldom interfere with review decisions when judicial review proceedings are brought. Moreover, the Upper Tribunal might in an appropriate case refuse permission to apply for judicial review on the ground that the applicant should wait for the case to be re-decided and then, if less successful than before, consider appealing on the ground that the review was unlawful.” (R (oao RB) v. FTT  UKUT 160 (AAC), §31)
Only one review possible
“As far as the FTT is concerned, as [the appellant] observed, section 9(10) of the Act prohibits a decision of the FTT being reviewed more than once and since Judge Blewitt had herself undertaken a review when she received the application for permission to appeal against the Decision it was no longer possible for the FTT to review its decision.” (Clear Plc v. HMRC  UKUT 347 (TCC), §53, Judges Herrington and Aleksander).
Original decision and review decision must be appealed separately
" Section 9 (11) of the 2007 Act makes it clear that, in the case of a review, the original decision and the decision on review are separate decisions. The only decision under appeal to the UT was the review decision.
 Because, in my judgment, the FTT did not re-open the question of quantum (as opposed to liability) in its review decision, I do not consider that it was open to the UT to do so..."(Point West GR Ltd v. Bassi  EWCA Civ 795, Lewison LJ)
Decision on permission should clearly identify grounds in respect of which permission is granted
“(6) when a tribunal gives permission to appeal, it should ensure that the ground of appeal on which permission is granted is succinctly and clearly expressed; this is particularly important where the relevant tribunal grants permission on some grounds of appeal and refuses it on other grounds of appeal.” (HMRC v. CCA Distribution Ltd (in administration)  UKUT 513 (TCC), §37, Morgan J and Judge Herrington).
Difference between reason for granting permission and ground for which permission granted
“In my view the appellant was given general permission. It is true that the UT said in its decision notice (),
“Although Pierhead has identified five grounds on which it is said that the FTT made a decision that was plainly wrong, I have concluded that permission to appeal should be given on the general ground that the FTT may have made an error of law in failing to take sufficient account of the lack of fault on the part of Pierhead in withdrawing an appeal without having been advised of all the consequences of doing so, and the possibility therefore that of Pierhead had been so advised, it would not have withdrawn.”…
However, this was the reason for granting permission to appeal, not that the permission is limited by this ground. That seems to me to be plain by the observation at , “For that reason, I consider it would be appropriate to grant Pierhead permission to appeal”, and the unconditional conclusion at , “I give Pierhead permission to appeal the FTT decision.” (Pierhead Purchasing Limited v. HMRC  UKUT 321 (TCC) §15, Proudman J).
Disputes as to the scope of permission
" There is one further procedural matter which we need to mention. It was clear from the skeleton argument which the LLPs filed on 12 March 2020, after permission to appeal had been granted, that they interpreted the scope of the permission as extending to permit numerous challenges to the findings of fact made by the FTT and/or to the review by the UT of those findings of fact. On that basis, the LLPs estimated that fifteen days should be allocated for the hearing of the appeal, instead of the four days estimated by Arnold LJ. On 20 May 2020, Lewison LJ directed that the time estimate would remain at HMRC's estimate of six days, pointing out that the time estimate given by Arnold LJ showed that he clearly did not consider that fifteen days of this court's time would be devoted to a detailed examination of the facts on a second appeal. If this court decided that there had been an error of law in the approach of the UT, it would remit the matter for detailed examination of the facts.
 Despite this clear indication, however, disagreement continued about the proper scope of the appeal for which permission had been granted, and HMRC eventually applied in December 2020 for a case management hearing to take place. This application was granted by Lewison LJ on 17 December 2020, and the hearing duly took place before David Richards LJ on 2 February 2021. By his order of that date, David Richards LJ ordered that the grounds for which Arnold LJ had given permission to appeal were those set out in the grounds of appeal dated 2 January 2020 in paragraphs 9 to 12 and 15 to 17 only. Permission to appeal had not been given in respect of challenges to the FTT's findings of fact or the UT's review of those findings. The parties were therefore directed to try to agree which paragraphs in the LLPs' skeleton argument of 12 March 2020 were impermissible, and to inform the court of any areas of disagreement. The LLPs were further directed to file and serve an amended skeleton argument by 15 February 2021, to be followed by an amended skeleton argument in response from HMRC by 1 March 2021.
 In the event, David Richards LJ determined the deletions to be made from the LLPs' original skeleton argument, with the exception of one issue which was adjourned to be heard with the appeal..." (Ingenious Games LLP v. HMRC  EWCA Civ 1180)
Grounds of appeal may overlap: refusal on one does not lead to narrower interpretation of another
" We acknowledge that there is an overlap between HMRC’s second argument and Ground A since both involve HMRC expressing dissatisfaction with the FTT’s conclusion that HMRC’s failure to prove a fact that was common ground between the parties resulted in the penalty not being due. However, the fact that there is an overlap does not mean that HMRC’s second proposition falls exclusively within the province of Ground A, on which permission to appeal was refused. Ground B entitles HMRC to challenge the way the FTT allocated the burden of proof. That Ground necessarily requires an examination of what precise burden the FTT allocated. HMRC’s second argument summarised in paragraph  appropriately focuses on the nature of the burden being allocated. In essence, HMRC say that the FTT was wrong to impose on HMRC the burden it did because that burden required HMRC to prove a factual proposition that had hitherto been common ground between the parties.
 We consider that this argument falls within a fair interpretation of Ground B on which HMRC have permission to appeal. We are reinforced in that conclusion by the fact that HMRC expressly mentioned in their grounds of appeal that Ground B involved, in part, arguments to the effect that it was common ground that supplies of the alcohol had taken place. Mr Donnelly could have been in no doubt that, even though permission to appeal had been refused on Ground A, these arguments would feature prominently in HMRC’s submissions on Ground B." (HMRC v. Donnelly  UKUT 296 (TCC), Miles J and Judge Richards)