© 2024 by Michael Firth KC, Gray's Inn Tax Chambers
Contact: michael.firth@taxbar.com
Procedure.Tax
For additional search results use Google and enter:
site:procedure.tax [search term]
Consider inviting trial judge to comment if no transcript of hearing
"[45]...In relation to a hearing which has not been recorded and so cannot be made the subject of a transcript, such as a hearing before the Immigration and Asylum Chamber of the First-tier Tribunal, it may well be appropriate to invite the judge to comment in writing and perhaps to provide his or her own note of the hearing: Sarabjeet Singh v Secretary of State for the Home Department [2016] EWCA Civ 492, [2016] 4 WLR 183, para 53. But where, as in the present case, there is a full transcript of the relevant part of the proceedings, it is less likely to be appropriate to invite the judge to comment. On the one hand, as I know from personal experience, the anxiety of a trial judge may be profound if he considers that what he perceives to be the baselessness of criticisms of him in a forthcoming appeal is likely to go unexposed. On the other hand, unlike a disciplinary inquiry into his conduct, the focus of the appeal is not - directly - upon him. It is upon the alleged breach of the appellant’s right to a fair trial both at common law and under article 6 of the European Convention. Most appeals involve criticism of trial judges in one way or another and no doubt most judges would welcome an opportunity to respond to it. Where would the line be drawn and, if the appellant were to take issue with the judge’s responses, would resolution of the appeal be even more problematical? The observation of Black LJ in the G case therefore raises a difficult issue. All that need here be said is that, where a transcript exists, it is not the present practice of appellate courts to invite the judge to comment; but that the absence of his ability to comment places upon them a requirement to analyse the evidence punctiliously." (Serafin v. Malkiewicz [2020] UKSC 23)
​
Result of finding of unfair trial: retrial
​
"[49] What order should flow from a conclusion that a trial was unfair? In logic the order has to be for a complete retrial. As Denning LJ said in the Jones case, cited in para 40 above, at p 67,
“No cause is lost until the judge has found it so; and he cannot find it without a fair trial, nor can we affirm it.”
Lord Reed observed during the hearing that a judgment which results from an unfair trial is written in water. An appellate court cannot seize even on parts of it and erect legal conclusions upon them." (Serafin v. Malkiewicz [2020] UKSC 23)
​
Tribunal relying on point it identified without giving parties opportunity to address it​
See further N8: Tribunal role (facts)
​
"[10] We should say at this stage that we were told that neither party before the FTT submitted that section 75A FA 2003 was engaged and the point was not raised by the FTT at the hearing. The parties only became aware that the FTT considered that section 75A was engaged when the Decision was released. Mr Ridgway was acting in person before the FTT and HMRC were represented by their own litigator. Before us, both parties have been represented by counsel. We are sure that the FTT was intending to be fair to the parties in raising section 75A as a point of law. However, in circumstances where a significant issue has not previously been canvassed, fairness and justice demands that the FTT should indicate to the parties that it considers the issue to be relevant. A letter to the parties raising the issue and inviting written submissions would suffice." (HMRC v. Ridgway [2024] UKUT 36 (TCC), Judges Cannan and Tilakapala)
​
"[129] [HMRC] argued that the FTT’s decision on Issue 2 was actually a decision on HMRC’s “fairly represents” argument, and that the applicability of the conditions in section 307(3) was “undoubtedly a live issue” which Shinelock had an opportunity to address in submissions and evidence. We do not agree. The “fairly represents” argument was in issue, but the FTT decided it did not have to determine that argument, because it had identified “a more fundamental problem” resulting from the opening lines of section 307(3). That more fundamental problem was a new argument, conceived by the FTT itself, and it was procedurally unfair for the FTT to have denied Shinelock the opportunity to respond to it. As the FTT’s discussion of the new argument demonstrates, whether or not the Payment was “in respect of” Shinelock’s loan relationships was largely a question of fact, so it is possible that Shinelock would have produced evidence to rebut the argument if it had been given an adequate opportunity to do so.
[130] If we had not decided that the Payment was prevented from giving rise to a NTLRD because it was a distribution, we would have allowed Shinelock’s appeal in relation to Issue 2 and set aside the FTT’s decision on that issue as being vitiated by procedural unfairness. Given that Issue 2 turns largely on the facts, if it had been material to the outcome of Shinelock’s appeal given our decisions on the other issues in the appeal, we would have remitted Issue 2 for reconsideration by the FTT. We do not need to decide whether the FTT was correct in law in relation to the distinct issue which it considered arose from the use of the words “in respect of” in section 307(3), and we consider it appropriate to leave that question to a case where the point is dispositive." (Shinelock Limited v. HMRC [2023] UKUT 107 (TCC), Judge Thomas Scott and Judge Greenbank)
​
- Argument on which party bore the burden of proof and produced evidence which HMRC were entitled to dispute
​"[133] However, we have concluded that, unlike Issue 2, Issue 1 [that the payment was not recognised in the relevant accounts] was sufficiently in play in the hearing before the FTT, and its consideration by the FTT should not have amounted to an ambush from Shinelock’s perspective. We reach that conclusion for two reasons.
[134] First, it was clear from Shinelock’s appeal and its skeleton argument that the Payment was claimed to give rise to a debit under the loan relationship provisions. The skeleton asserted that the Payment gave rise to such a debit, and in a section headed “The Loan Relationship Code” recorded that as a result there must be relevant loan relationships of Shinelock and the Payment must come within section 307(3) and be a loss or expense. Shinelock chose in framing its case to focus on those two requirements. However, while section 307(3) does operate to define further the debits and credits to be brought into account, section 307(2) sets out what is described in that subsection as “the general rule”, namely that the debits and credits to be brought into account are “those that are recognised in determining the company's profit or loss for the period in accordance with generally accepted accounting practice”. The recognition in Shinelock’s accounts for 2015, in accordance with GAAP, was therefore what Mr Ripley described as an “inherent element” of Shinelock’s argument. The burden of proof (to the normal civil standard) was on Shinelock in its appeal to establish that a NTLRD arose for the period. Shinelock should not, therefore, have been ambushed when the FTT probed the treatment in the 2015 accounts and tested whether the Payment satisfied the general rule in section 307(2).
[135] Second, we agree with Mr Ripley that Mr Ahmed’s evidence further operated to put the accounting issue in play. He discussed the actual and potential accounting entries which were or might have been made in relation to the transactions. The FTT set out in some detail at [81] what was explained by Mr Ahmed in his written and oral evidence in this regard. HMRC were entitled to take issue with that evidence, leaving the FTT in the position of having to consider the competing views. As the FTT recorded at [129]:
…Mr Vallis was clear that HMRC was not challenging whether or not the accounts of Shinelock were GAAP-compliant, this did not mean that HMRC accepted that there was a debit of £305,000 within s307(2) or, if there was such a debit, that such amount fairly represented Shinelock’s losses or expenses within s307(3). Indeed, Mr Vallis relied on the £305,000 not being shown in the accounts of Shinelock and challenged Mr Ahmed’s evidence as to the alternative accounting treatments (submitting that I should treat the evidence of Mr Ahmed on accounting with extreme care as he was not an independent expert witness).
[136] We therefore reject Shinelock’s argument that the FTT’s decision on Issue 2 was vitiated by procedural unfairness.
...
[138] Stepping back, the FTT correctly directed itself in law as to the issues raised by Issue 1. In considering whether the statutory requirements were met on the facts found by the FTT, the FTT was in our view taking an approach to Shinelock’s case which was generous, in attempting to make the necessary findings by inference in the absence of the relevant accounts. Bearing in mind that the burden was on Shinelock to establish that a NTLRD was due, the FTT might have simply concluded that Shinelock had failed to discharge that burden. We do not think it can now be said to have erred in law by taking that more generous approach. What matters is the FTT’s finding, at [132], that this was a case where it was concluded in preparing the accounts that no entry needed to be made, so nothing was recorded as required by section 308(2). In those circumstances, the FTT reached the right decision on Issue 1." (Shinelock Limited v. HMRC [2023] UKUT 107 (TCC), Judge Thomas Scott and Judge Greenbank)