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M9: Evidence
Parties should produce statement of agreed facts for facts not in dispute
"[6] We were informed that the facts in this appeal were not in dispute. Nonetheless, for reasons which were never explained, the parties lamentably failed to produce an agreed statement of facts. The parties are reminded that part of the duty to cooperate with the Tribunal, contained in Rule 2 The Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009, is that they should produce an agreed statement of facts in those cases where, or to the extent that, the facts are not in dispute. Failure to do so results in the commitment of unnecessary judicial time." (Canadian Solar EMEA GmbH v. HMRC [2024] UKFTT 85 (TC), Judge Brannan)
Domestic law not a question of evidence
“As regards 1), putting aside the question of foreign law, evidence does not need to be called for the tribunal to take notice of the law.” (Deloitte LLP v. HMRC [2016] UKFTT 479 (TC), §49 – in relation to expert evidence on insurance law).
Evidence of whether Parliament intended to give effect to EU law or derogate from it is admissible
“At this point it is relevant to consider the legislative history, as set out in the judgment of Dyson LJ, and the preparatory legislative materials. They are relied on directly in construing the provisions of Group 8 of Sch 8, as can be done in cases which satisfy the requirements laid down in Pepper (Inspector of Taxes) v Hart. In this instance the materials have been introduced not to construe the legislation, but to establish the fact that the purpose of the relevant national amending legislation was to make national law compatible with the Sixth Directive.” (HMRC v. EB Central Services Ltd [2008] EWCA Civ 486, §36).
Special meaning of statutory words
“It is the duty of the Court to construe a statute according to the ordinary meaning of the words used, necessarily referring to dictionaries or other literature for the sake of informing itself as to the meaning of any words, but any evidence on the question is wholly inadmissible…It is a public Act of Parliament, and the Court must take judicial cognizance of the language used without evidence.” (IRC v. Marquess of Camden [1914] 1 KB 641 at 649, Swinfen Eady LJ);
Scottish law in England and Wales
Applying Scottish law without any expert evidence
Scottish law was applied by the FTT sitting in Leeds, without any expert evidence in Scott v. HMRC [2015] UKFTT 266 (TC), although the Tribunal Judge was dual qualified in Scottish and English law. This is consistent with the approach suggested in Spring Salmon & Seafood Ltd:
“If the 2004 Contract Settlement involved a point of Scottish law then this should be drawn to the attention of the Tribunal before the hearing of the substantive appeal so that a Judge qualified as a lawyer in Scotland can be appointed to hear the case.” (Spring Salmon & Seafood Ltd v. HMRC [2013] UKFTT 320 (TC), §116).
English law in Scotland
“Normally English law, like any legal system other than Scots law and other systems such as the law of the European Union that have been incorporated into Scots law, is treated as foreign law, which is a question of fact and must be established by evidence. In the absence of evidence or agreement between the parties, it will be presumed that foreign law is the same as Scots law. In the present case, however, proceedings were initiated in the First-tier Tribunal and the first appeal was heard in the Upper Tribunal. Both of those tribunals have United Kingdom-wide jurisdiction, and it is agreed between the parties that both of them have judicial knowledge of English law. In the event of an appeal from the Inner House to the United Kingdom Supreme Court, that court too has judicial knowledge of English law. The critical question is whether in that structure of tribunals and courts the Court of Session has judicial knowledge of English law…In our opinion it has such judicial knowledge. The result otherwise would be highly artificial. The lower tribunals would have judicial knowledge of English law; the court to which a final appeal may be taken would have judicial knowledge of English law; but this court would be constrained by the findings on English law of the First-tier and Upper Tribunals. We cannot believe that that was the intention when the structure of appeals in sections 11-14 of the 2007 Act was set up. We do not think that this will give rise to any practical difficulties. The basic legal concepts of Scots and English law, in this case the trust, the contract and the loan, are broadly similar. No doubt the theoretical nature of a trust is different, being based on the notion of legal estate and equitable interest in England, whereas in Scotland it is based on the notion of dual patrimonies of the trustee. Nevertheless the practical results are similar, and the institution of the trust fulfils similar functions in both jurisdictions. Consequently Scottish judges should not have any great difficulty in understanding English law, and are expected to do so in the Upper Tribunal and UK Supreme Court. Moreover, it can be expected that the parties will present careful and informed submissions on English law, as occurred in the present case, and the Court of Session will obviously check submissions against the cases and textbooks that are referred to. Finally, we note that in IRC v City of Glasgow Police Athletic Association, 1953 SC (HL) 13, it was held that the Court of Session could take judicial notice of the English law of charity where that became relevant to liability for income tax, in accordance with the earlier decision in Commissioners for Special Purposes of Income Tax v Pemsel, [1891] AC 531. Although that decision is not directly in point, because the result of the decision inPemsel’s case was that for revenue purposes the English law of charity became part of Scots law, it points to the fact that there is no objection in principle to the Scottish courts’ taking judicial notice of English law.” (Advocate General For Scotland v. Murray Group Holdings Ltd [2015] CSIH 77, §§49…50).
Facts must usually be proved by evidence
"[67] In his Reply, Mr Homer asserted that HMRC could not have known about the £383 figure for lunchtime takings until after the Visit, and he submitted that this showed the cashing-up record had been incomplete when signed by Mr Kyriacou. However, Mr Homer accepted that he had not put this point to Ms Rushforth and there is no evidence in the Bundle to support his assertion. It thus has no evidential basis and I reject it." (The Great British Takeaway v. HMRC [2022] UKFTT 315 (TC), Judge Redston)
"[12] It is also vital to remember that the Tribunal proceeds on the basis of evidence. Tribunal proceedings are judicial proceedings and although Tribunals may take a more relaxed or informal approach than some Courts, that does not undermine the essential need for facts to be proved by evidence." (Anstock v. HMRC [2017] UKFTT 307 (TC), Judge Geraint Jones QC)
“…the appellant produced no evidence at all…I had no evidence they [the summonsed witnesses] visited the UK on any other occasion and make no finding to that effect.” (Clavis Liberty Fund 1 LP [2014] UKFTT 1077 (TC), §17)
Statutory declaration in relation to enabler penalty legislation
(1)Subject to sub-paragraph (5), a declaration under this paragraph is to be treated by—
(a)HMRC, or
(b)in any proceedings before a court or tribunal in connection with a penalty under paragraph 1, the court or tribunal,
as conclusive evidence of the things stated in the declaration.
(2)A declaration under this paragraph is a declaration which—
(a)is made by a relevant lawyer,
(b)relates to one or more communications falling within sub-paragraph (3), and
(c)meets such requirements as may be prescribed by regulations under sub-paragraph (4).
(3)A communication falls within this sub-paragraph if—
(a)it was made by a relevant lawyer (whether or not the one making the declaration),
(b)it is legally privileged, and
(c)if it were not legally privileged, it would be relied on by a person for the purpose of establishing that that person is not liable to a penalty under paragraph 1 (whether or not that person is the person who made the communication or is making the declaration).
(4)The Treasury may by regulations impose requirements as to the form and contents of declarations under this paragraph.
(5)Sub-paragraph (1) does not apply where HMRC or (as the case may be) the court or tribunal is satisfied that the declaration contains information which is incorrect.
(6)In this paragraph “a relevant lawyer” means a barrister, advocate, solicitor or other legal representative communications with whom may be the subject of a claim to legal professional privilege or, in Scotland, protected from disclosure in legal proceedings on the grounds of confidentiality of communication.
(7)For the purpose of this paragraph, a communication is “legally privileged” if it is a communication in respect of which a claim to legal professional privilege, or (in Scotland) to confidentiality of communications as between client and professional legal adviser, could be maintained in legal proceedings." (FA (No.2) 2017 Sch 16, para 44)
"(1)Where a person carelessly or deliberately gives any incorrect information in a declaration under paragraph 44, the person is liable to a penalty not exceeding £5,000.
(2)For the purposes of this paragraph, incorrect information is carelessly given by a person if the information is incorrect because of a failure by the person to take reasonable care.
(3)Paragraphs 19(1), 20, 22(1), 37, 38 and 39(1), (2) and (5) apply in relation to a penalty under this paragraph as they apply in relation to a penalty under paragraph 1, subject to the modifications in sub-paragraphs (4) and (5).
(4)In its application to a penalty under this paragraph, paragraph 22(1) has effect as if for “the relevant time” there were substituted “the end of 12 months beginning with the date on which facts sufficient to indicate that the person is liable to the penalty came to the Commissioners’ knowledge”.
(5)In its application to a penalty under this paragraph, paragraph 38(3) has effect as if the reference to the arrangements to which the penalty relates were to the arrangements to which the declaration under paragraph 44 relates.
(6)In paragraph 44 any reference to a penalty under paragraph 1 includes a reference to a penalty under this paragraph." (FA (No.2) 2017 Sch 16, para 45)
Submissions and statements of case etc. are not evidence
Information provided by Counsel is not evidence
“[16]...In the light of the fact that the appellants advanced a positive case supported by signed witness statements, but then elected to call no evidence at trial, I am reluctant to place significant reliance on information based purely on instructions, not least because more than six months have passed during which the appellants have had the opportunity to deal in evidence with the source and deployment of the cash briefly credited to Mr. Amstrup's client account, but have evidently chosen not to do so.” (Sunico A/S v. HMRC [2014] EWCA Civ 1108, Briggs LJ)
"[72] During the course of his closing submissions, Mr Turnbull mentioned (for the first time) that HMRC believed that Mr Hackmey had incurred expenses in Singapore relating to Victoria using an overseas credit card, which had been reimbursed by SRD. However, Mr Turnbull acknowledged that there was no evidence before the Tribunal in relation to these expenses – it was not mentioned by Mr Henstock in his witness statement nor his oral evidence, nor is there any document in the bundle which refers to these expenses.
...
[74] I consider that it was inappropriate for Mr Turnbull to introduce new matters into his closing submissions. Be as that may, there was no evidence of any kind before me to support his submission that Mr Hackmey had incurred expenses on behalf of SRD using one of his overseas credit cards – and submissions are not evidence..." (Hackmey v. HMRC [2022] UKFTT 160 (TC), Judge Aleksander)
“We also point out what should be obvious to all concerned, which is that assertions from a presenting officer or advocate that this or that “would have” or “should have” happened carries no evidential weight whatsoever. An advocate’s assertions and/or submissions are not evidence, even if purportedly based upon knowledge of how any given system should operate.” (Galiara v. HMRC [2018] UKFTT 190 (TC), §16, Judge Geraint Jones).
“But HMRC must prove the facts on which their submission relies. Here, the appellant does not accept the reliability of what HMRC said in the various letters in evidence before me; I had no written or oral evidence from the officers, (despite some of them being present in the hearing room). So I have no evidence on which I can conclude that the disputed factual position is as HMRC represent it to be…I have therefore not been satisfied in the absence of evidence that HMRC’s three year delay in asking for the relevant documents/information was justified; and it seems to me that unless the delay is justified, the closure application ought to be granted.” (Martin v. HMRC [2017] UKFTT 488 (TC), §§44 - 45, Judge Mosedale, emphasis original).
“Mr James sought to assure us that the letter had been sent, but the assertions of advocates do not amount to evidence.” (Anstock v. HMRC [2017] UKFTT 307 (TC), §14, Judge Geraint Jones QC).
Statement of case is not evidence
“It is important to note that a Statement of Case is not evidence, rather it is a pleading, setting out the HMRC’s case. Where the onus of proof falls upon HMRC (as it does in this case), for HMRC to succeed (absent admissions from the appellant), they must prove their case with appropriate evidence…As HMRC have not adduced any evidence to show that the return was received late, and the Appellant has not admitted this fact, it inevitably must follow that the appeal succeeds.” (Golden Gate Fleet Ltd v. HMRC [2017] UKFTT 631 (TC), §§9…10, Judge Aleksander).
Skeleton argument is not evidence
“A Skeleton Argument is not a document produced by a witness and it is not evidence.” (McCord v. HMRC [2017] UKFTT 620 (TC), §28, Judge McNall).
Tribunal cannot rely on its “perception”
“In particular, Mr Rees criticised the findings of the FTT, at [113] – [114] to the effect that a pensions administrator would “normally” and “perhaps invariably” exercise its discretion in accordance with a statement of wishes, and that it was “virtually inevitable” that Mrs Staveley’s wishes would be honoured…We consider that the FTT was wrong to rely on what appears to have been its own perception. There was no evidence before the FTT as to the general practice of administrators of the AXA PPP, or the practice of scheme administrators generally. The FTT was not entitled to make a finding contrary to such evidence that it did have, namely the terms of the transfer-in application in respect of the AXA PPP itself on which discretion was conferred on the scheme administrator.” (HMRC v. Personal Representatives of Staveley [2017] UKUT 4 (TCC), §§71…72).
Judicial notice of facts with which persons of ordinary intelligence or acquainted
"[55] Sometimes the law relating to fact-finding is a practical response. For example, the court can take judicial notice of facts with which persons of ordinary intelligence are acquainted, whether in human affairs, including the way in which business is carried on, or human nature, or in relation to natural phenomena. A party does not need to prove that, for example, 13 April 1960 was a Wednesday or that Easter Monday will fall on 6 April in 2026. I myself agreed to take judicial notice of the fact that in 2012 Bradley Wiggins won the Tour de France when hearing a case about top of the range cycling clothing." (The Art and Science of Judicial Fact-Finding, Lady Rose, p.16)
- Judicial notice of effect of Covid illness
"[33] I do not agree with Border Force that no good reason for the delay has been established or evidenced. There is a positive Covid-19 test demonstrating that the Appellant had Covid-19 on 22 February 2022. The documents on the Tribunal file show that the Appellant is middle aged, and I take judicial note of the fact that, the older a person is, the more likely it is that they will be adversely affected by Covid-19. I also consider it to be well-established that many people do suffer significant ill health after contracting Covid-19, and that there are people who do not appear to recover fully from Covid-19 years after first becoming infected." (Mikalic v. DBF [2023] UKFTT 377 (TC), Judge Bailey)
Evidence recorded in other judgments
- Not to be relied on
"[8] However, at times [Counsel for the taxpayer] has relied upon evidence of Mr Jenkins given in the case of PCP Capital Partners LLP & Anor v Barclays Bank PLC [2021] EWHC 307 (Comm) We have declined to rely upon that evidence save to the extent reflected in the findings made by Judge Waksman in his judgment or otherwise reflected in the documentary evidence before us. This is because Mr Jenkins did not attend the hearing to be cross examined on any evidence. In addition, we take into account that Judge Waksman said (at [516-522] of PCP) that Mr Jenkins was prepared to be dishonest and was dishonest at the time of the capital raising." (Barclays Banks Plc v. HMRC [2024] UKFTT 246 (TC), Judge Bowler)
Other judicial decisions' findings of facts
- Not permissible to rely on findings of fact in other decisions (if contested)
“[39] As the judge rightly recognised the foundation on which the rule must now rest is that findings of fact made by another decision-maker are not to be admitted in a subsequent trial because the decision at that trial is to be made by the judge appointed to hear it (the trial judge), and not another. The trial judge must decide the case for himself on the evidence that he receives, and in the light of the submissions on that evidence made to him. To admit evidence of the findings of fact of another person, however distinguished, and however thorough and competent his examination of the issues may have been, risks the decision being made, at least in part, on evidence other than that which the trial judge has heard and in reliance on the opinion of someone who is neither the relevant decision-maker nor an expert in any relevant discipline, of which decision-making is not one. The opinion of someone who is not the trial judge is, therefore, as a matter of law, irrelevant and not one to which he ought to have regard.
[40] In essence, as the judge rightly said, the foundation of the rule must now be the preservation of the fairness of a trial in which the decision is entrusted to the trial judge alone.” (Hoyle v. Rogers [2014] EWCA Civ 257).
“When the Court of Appeal described the opinion of the criminal court as “irrelevant”, I therefore do not think that the term was being used in the sense defined earlier to denote evidence which is not logically probative. What I believe they meant is that the opinion of another court, like the opinion of a bystander, is not a matter to which a court required to decide the issue ought to have regard. The underlying rationale in my view, albeit not clearly spelt out in the judgment of the Court of Appeal, is the rationale to which I referred earlier for the exclusion of opinion evidence in general: namely, that it is the duty of a court to form its own opinion on the basis of the evidence placed before it; and that it would not be proper for the court in forming that opinion to be influenced by the opinion of someone else, however reliable that person's opinion is likely to be. In so far as the evidence before the later court is the same as the evidence before the earlier court, the later court is in as good a position to draw inferences and conclusions from the evidence. In so far as the evidence is different, the opinion of the earlier court does not assist the court's task.” (Rogers v. Hoyle [2013] EWHC 1409 (QB), §93)
"[125] It was accepted that the submissions and summary of evidence in both cases was admissible and that this should be admitted. However, as Christopher Clarke LJ (with whom Arden and Treacy LJJ agreed) said in Hoyle v Rogers and another (Secretary of State for Transport and another intervening) [2015] 1 QB 265 at [39]:
“… findings of fact made by another decision maker are not to be admitted in a subsequent trial because the decision at that trial is to be made by the judge appointed to hear it (“the trial judge”), and not another. The trial judge must decide the case for himself on the evidence that he receives, and in the light of the submissions on that evidence made to him. To admit evidence of the findings of fact of another person, however distinguished, and however thorough and competent his examination of the issues may have been, risks the decision being made, at least in part, on evidence other than that which the trial judge has heard and in reliance on the opinion of someone who is neither the relevant decision maker nor an expert in any relevant discipline, of which decision making is not one. The opinion of someone who is not the trial judge is, therefore, as a matter of law, irrelevant and not one to which he ought to have regard.”
[126] As the factual decisions in the present case were a matter for us we have placed no weight and ignored any findings of fact made in previous proceedings by any judges, no matter how distinguished." (Sintra Global Inc v. HMRC [2022] UKFTT 365 (TC), Judge Brooks)
- Except where it would be an abuse to challenge those findings
"[95] I have already decided it would be an abuse of process for Mr Trees to advance those grounds at the FTT hearing of his appeal against the DLN. Consistently with that conclusion, I find that it is fair for the judgment itself to be admitted as relevant evidence in the hearing of his appeal." (Trees v. HMRC [2023] UKFTT 339 (TC), Judge Redston)
“I am satisfied that the decision of the tribunal in Intekx 2014 is relevant. This is a case where, although questions of input tax recovery are necessarily viewed by reference to individual accounting periods, transactions must be examined not in isolation but having regard to their attendant circumstances and context, the relevance of "similar fact" evidence and the fact that the tribunal, in examining the state of knowledge of the company and Mr Hackett, is entitled to look at the totality of the deals effected by Intekx, and their characteristics (see the judgment of Christopher Clark J in Red 12 Trading Ltd v Revenue and Customs Commissioners [2010] STC 589, at [109] - [111]). It will be for the tribunal that hears Mr Hackett's appeal to determine what weight, if any, is to be accorded to the Intekx 2014 decision outside the confines of its own facts and circumstances. It cannot, however, in the circumstances of this appeal, be regarded as irrelevant, nor have I been able to identify any compelling reason why the decision should not be admitted.” (Hackett v. HMRC [2016] UKFTT 781 (TC), §43, Judge Berner).
- FTT relying on findings in judgment both parties relied on, but only as starting point
"[8] However, at times [Counsel for the taxpayer] has relied upon evidence of Mr Jenkins given in the case of PCP Capital Partners LLP & Anor v Barclays Bank PLC [2021] EWHC 307 (Comm) We have declined to rely upon that evidence save to the extent reflected in the findings made by Judge Waksman in his judgment or otherwise reflected in the documentary evidence before us. This is because Mr Jenkins did not attend the hearing to be cross examined on any evidence. In addition, we take into account that Judge Waksman said (at [516-522] of PCP) that Mr Jenkins was prepared to be dishonest and was dishonest at the time of the capital raising.
...
[14] However, we have had the benefit of the decision of Judge Waksman in the case of PCP. This judgment has been provided to us in the evidence bundle and is relied upon by both parties to varying extents.
[15] The findings of fact made by Judge Waksman in that decision are treated by us as no more than a starting point. We are not bound by them and to the extent that evidence before us shows departure therefrom is correct we have reached our own conclusions based on that evidence. We are bound to reach our findings based on the evidence before us, but the findings made by Judge Waksman were made on the basis of evidence provided by some of those directly involved in the transactions. That is of some significance, particularly where the Appellant has not produced any such witnesses in this appeal." (Barclays Banks Plc v. HMRC [2024] UKFTT 246 (TC), Judge Bowler)
- Charity commission findings inadmissible
"[88] We have reviewed the report of the Charity Commissioners, and have included above a reference in it to statements allegedly made by Mr Plitnick in his evidence to the Charity Commissioners. We do not and cannot, in accordance with Hoyle v Rogers, consider this persuasive factual evidence on which we can rely for the purposes of our decision. We include it only because it provides a possible explanation for Mr Plitnick’s failure to seek proper investment advice. We do not place any reliance on it." (Reb Moishe Foundation v. HMRC [2020] UKFTT 303 (TC), Judge Gillett)
- Earlier decision's findings of fact treated as hearsay evidence
"[64] It is well-established that the findings of one fact-finding tribunal do not bind another fact-finding tribunal; I have not seen the documentary evidence before the Tribunal in Ashe, or heard evidence from the witnesses who gave evidence in that hearing and thus been able to reach conclusions about credibility. The findings made by the Tribunal in Ashe are hearsay evidence in this appeal; they are admissible, but I need to assess the weight to be given to this evidence. Mr Burchett had not heard HMRC’s recorded message himself, Officer Thomas was not able, when asked at the hearing, to provide any information in relation to it (whether as to existence or content), and it is clear from reading the decision in Ashe that the Tribunal had not been provided with a copy of the recorded message. I recognise that there is a risk of unfairness to taxpayers if the conclusion reached as to whether there is a temporary pause differs according to whether or not the taxpayer had called the helpline rather than communicating with HMRC in writing at the relevant time. However, it is clear from s97(8) that I am required to reach a conclusion, not as to HMRC’s general approach to HICBC appeals (whether against assessments or penalties) but as to the status of the appeal which had been made by Mr Burchett." (Burchett v. HMRC [2024] UKFTT 121 (TC), Judge Zaman)
- Competition Appeals Tribunal approach (potentially admissible but similar concerns)
"[100] There is no need for the CAT to be hidebound by a common law rule on fairness. Whilst the CAT does not apply the strict rule in Hollington it does, of course, endeavour to secure fairness but it is a sophisticated tribunal well able to form its own view on the value, if any, of prior findings.
[101] The CAT, if confronted with prior findings said to be relevant, will carefully decide what weight can be attached to those findings. Without intending to be exhaustive, it will examine such matters as: whether the decision is a follow-on decision and the limits of the binding effect under section 60A CA 1998; where not a follow-on decision, the extent of the overlap between the prior findings of facts and the present case; who the earlier decision maker was and whether it was a specialist fact finder or otherwise; what the standard of proof was which was applied to the findings; and the nature of the legal analysis in the prior decision and the extent to which this affects the findings of fact made. The CAT will also consider to what forensic use the earlier findings are sought to be deployed. There might be many relevant uses some of which fall short of reliance upon earlier conclusions about the ultimate merits. The earlier decision might for instance identify relevant evidence and thereby demonstrate lines of inquiry relevant only to disclosure. The CAT will be conscious of the risk that being invited to perform a detailed inquiry into how prior findings came about draws it into disproportionate, satellite, litigation: see Consumers Association (ibid) paragraph [30]." (Evans v. Barclays Bank plc [2023] EWCA Civ 876, Green LJ)
"[29] Mr Armitage also contended that the correct approach of this Tribunal, particularly having regard to Rule 55(1), should be that a finding of another court or regulator should not be excluded ab initio but should be given appropriate weight in all the circumstances at trial, which could at that stage include considerations of fairness to both parties.
[30] We see, however, that this could present considerable difficulty. How would this Tribunal, at trial, go about assessing how much weight should be given to a particular decision of another court or regulator? That would almost inevitably involve a detailed consideration of the evidence that was before the other decision-maker and the nature of the decision-making process. It might also require an assessment of the way in which the arguments were put to that decision-making body, on both sides. There would in consequence be what HHJ Paul Matthews (sitting as a judge of the High Court) described at [51] of Crypto Open Patent Alliance v Wright [2021] EWHC 3440 (Ch) as “satellite litigation about the circumstances in which the earlier decision was come to, and how far it could properly be helpful in the later proceedings”.
[31] Which? accepted that, if paragraph 4 of its Reply was to remain in its current form, evidence might indeed be required in relation to the proceedings on which it relies. This is another reason why in our view it would not be appropriate to accept that evaluative assessments of other courts and regulators may be taken into account at trial. Such a satellite debate would, in our view, be an entirely unnecessary additional complication to the proceedings. The task of this Tribunal is not to second-guess the quality of the assessment of another decision-making body. It is to evaluate the body of evidence before the Tribunal in the proceedings in hand and reach its own assessment based on that evidence." (Consumers' Association v. Qualcomm Incorporated [2023] CAT 9, Bacon J)
Meaning of evidence
Anything from which a fact can logically be inferred
“The normal rules of evidence apply to this case as with any other. At least where no specific form of proof is prescribed by law a litigant can prove any fact or disprove any fact by either direct evidence or by indirect or circumstantial evidence from which any fact can logically be inferred.” (Northern Lincolnshire & Goole Hospitals NHS Foundation Trust v. HMRC [2015] UKFTT 103 (TC), §39).
Public information
Google maps
“Although some criticism was made of Judge Berner’s use of the information he derived from Google Maps, substantial parts of the arguments advanced before us, by both sides, adopted the same information, albeit with different caveats.” (HMRC v. SDM European Transport Limited [2015] UKUT 625 (TCC), §170, Judge Bishopp (Judge Cannan dissenting at this point)).
Rail brochures
“Judge Berner assumed that the time required to cross the Channel was one hour from check-in...I have no mechanism similar to Google Maps which might assist and instead shall adopt the Eurotunnel brochure to which I have referred as the best evidence and take the 90 minutes indicated in it as the likely time.” (HMRC v. SDM European Transport Limited [2015] UKUT 625 (TCC), §176, Judge Bishopp (Judge Cannan dissenting at this point)).
Criminal convictions
Fact of conviction not proof of contents
“the conviction of Mr Ahmed would be a matter of public record but it carries no weight on its own. Thus if HMRC’s application is rejected it inevitably follows that HMRC will be prejudiced by its exclusion….” (HMRC v. Atlantic Electronics [2013] EWCA Civ 651, §84).
“It appears that the evidence in the previous action might be relevant but it needs to be assessed and reproven see Land Securities Plc v Westminster City Council [1993] 4 All ER 124. What is crystal clear however is that the conviction of itself cannot simply be deployed as a means of proving matters referred to therein against Infinity.” (HMRC v. Infinity Distribution Ltd [2015] UKUT 219 (TCC), §29, Peter Smith J).
But does raise presumption
"[32] ... Criminal convictions are the result either of a confession by the entering of a guilty plea before a court, or proof to the criminal standard. There is a right of appeal, and a person may also apply to vacate a guilty plea to the trial court. On the face of it, a criminal conviction is compelling evidence of guilt in cases where the civil standard of proof is engaged, unless there is some compelling evidence to show that it would be wrong to accept it as such. That is particularly true in this case, for the reasons given in the previous paragraph. The FTT and the Upper Tribunal were not, therefore, wrong to apply the machinery of section 11 of the 1968 Act." (Munir v. HMRC [2021] EWCA Civ 799, Edis LJ)
“The FTT was right to identify that conviction of an offence is not conclusive evidence that a person has committed that offence. There is however a presumption that the person has committed the offence, unless the contrary is proved.” (HMRC v. Munir [2019] UKUT 280 (TCC), §25, Judge Cannan and Judge Greenbank).
Prosecution opening notes must be raised as a distinct matter
“No attempt was made to introduce the Opening Notes by the admission of fresh evidence on appeal and, if it had been, it would in all probability have failed. This court hears appeals from the tax tribunals based on error of law. Since neither of the tribunals were invited to deal with the Wafer statement by reference to the link supposedly provided by the Opening Notes, there plainly cannot have been a relevant error of law in what is otherwise a perfectly reasonable analysis of the irrelevance of the Wafer statement, and its contents, viewed on their own.” (HMRC v. Infinity Distribution Ltd [2016] EWCA Civ 1014, §21).
Spent convictions
A conviction resulting in a sentence for a period longer than 30 months never becomes spent. For shorter sentences, rehabilitation periods are specified in Rehabilitation of Offenders Act s.5.
General rule: spent convictions and ancillary circumstances inadmissible
“Subject to sections 7 and 8 below, a person who has become a rehabilitated person for the purposes of this Act in respect of a conviction shall be treated for all purposes in law as a person who has not committed or been charged with or prosecuted for or convicted of or sentenced for the offence or offences which were the subject of that conviction; and, notwithstanding the provisions of any other enactment or rule of law to the contrary, but subject as aforesaid—
(a) no evidence shall be admissible in any proceedings before a judicial authority exercising its jurisdiction or functions in England and Wales to prove that any such person has committed or been charged with or prosecuted for or convicted of or sentenced for any offence which was the subject of a spent conviction; and
(b) a person shall not, in any such proceedings, be asked, and, if asked, shall not be required to answer, any question relating to his past which cannot be answered without acknowledging or referring to a spent conviction or spent convictions or any circumstances ancillary thereto.” (Rehabilitation of Offenders Act 1974, s.4(1) ancillary circumstances includes the conduct constituting the offence – see s.4(5)).
Power to admit where justice cannot otherwise be done
"(3) If at any stage in any proceedings before a judicial authority in [England and Wales] (not being proceedings to which, by virtue of any of paragraphs (a) to (e) of subsection (2) above or of any order for the time being in force under subsection (4) below, section 4(1) above has no application, or proceedings to which section 8 below applies) the authority is satisfied, in the light of any considerations which appear to it to be relevant (including any evidence which has been or may thereafter be put before it), that justice cannot be done in the case except by admitting or requiring evidence relating to a person's spent convictions or to circumstances ancillary thereto, that authority may admit or, as the case may be, require the evidence in question notwithstanding the provisions of subsection (1) of section 4 above, and may determine any issue to which the evidence relates in disregard, so far as necessary, of those provisions." (Rehabilitation of Offenders Act 1974, s.7(3)).
Spent convictions: higher threshold than relevance
“But relevance is by no means the end of the matter. The court or tribunal has to make a judgment about how important the conviction really is to the issues which it has to decide. That is because the critical question is whether the only way in which justice can be done is by admitting evidence of the conviction. There may be cases in which the conviction, though relevant to an issue which the court or tribunal has to decide, is not so important to the fair resolution of that issue that justice cannot be done without evidence of it being given.” (A v. B [2013] UKEAT 25).
“Not only must the evidence in relation to the spent convictions be relevant, but section 7(3) requires that we should also be satisfied that without the evidence justice cannot be done…The business relationship between Ms Prouost and Mr Hill goes to the heart of this case. Ms Prouost's convictions for dishonesty and whether Mr Hill knew about them are an important element in forming a conclusion whether Mr Hill had a legitimate and innocent business relationship with Ms Prouost or whether that relationship was tainted by knowledge of fraudulent conduct. We believe that justice cannot be done and a fair resolution achieved unless HMRC are allowed to put Ms Prouost's previous convictions to Mr Hill in cross-examination.” (3G Mobile Phones Ltd v. HMRC [2013] UKFTT 719 (TC), §§40…44).
FTT to consider admissibility even if parties do not contest issue
“The fact that the Appellant does not contest the admission of the evidence of Ms Prouost's convictions cannot, in our view, absolve this Tribunal of the duty to consider, independently of the views of the parties, whether the evidence should be admitted pursuant to section 7(3). Indeed, in a case involving the rights of a third party, who is not represented before us, it is all the more important that the Tribunal should consider carefully whether it should exercise its power to admit such evidence, taking account of all relevant factors.” (3G Mobile Phones Ltd v. HMRC [2013] UKFTT 719 (TC), §43)
Foreign language: expert evidence
"[53] The essence of Mr Cooper’s ground is that the FTT was not entitled to conclude that the translation was wrong. Mr Birkbeck referred us to the decision of the High Court in Sobrinho v Impresa Publishing [2015] EWHC 3542 (QB). That case concerned 18 a libel action and the disputed English meaning of words of Portuguese in a magazine. The court considered that:
“23…Any evidence of what foreign words mean in English is expert evidence, if it comes from a person who has a basis in training or experience sufficient to enable them to give reliable evidence on the issue.
24. The issue, whether it is described as one of fact or opinion, is one the court is not equipped to decide without help from a person skilled in the process of translation, that is to say, in both languages and the way in which they interrelate.”
[54] There was no dispute about these propositions. However, we consider they do not help Mr Cooper and that this ground must fail. His ground is based on the incorrect premise that the FTT went behind the professional translation to reach its own view on how the original version should be interpreted." (Qolaminejite v. HMRC [2021] UKUT 118 (TCC), Judge Raghavan and Judge Andrew Scott)
Inferences
“That judgement reminds us that a Court or Tribunal may only draw proper inferences and an inference will only be properly drawn in a civil action if it is more probable than not that the inference contended for is probably the only available inference that can be properly drawn. An equally feasible inference in this case is that the appellant was and is not aware that it is a prerequisite to the imposition of a penalty that a Notice to File has been sent to him.” (Galiara v. HMRC [2018] UKFTT 190 (TC), §7, Judge Geraint Jones).
- Must be sufficient evidence to support inference (assumption insufficient)
"[22] We agree with Mr Gordon that an inferential conclusion of fact has to be soundly based on primary facts found or admitted: it cannot just be an assumption. There was no evidence before the FTT on this occasion capable of justifying the inference that officers of HMRC decided the criteria on the basis of which computers were programmed to give effect to them, resulting in the service of the full return on Mr Marano. We are unclear how the FTT managed to reject the possibility, posited by Mr Vallis, that the computer had been programmed by persons other than HMRC staff; or indeed that the function had been outsourced.
...
[28] In our judgment, design of the relevant computer programs by an officer of HMRC was not the only reasonable inference to be drawn from the evidence. It was a reasonable possibility that a consultant had been provided with the necessary inputs to create an automated program to send out penalty assessments, and that this had been done by someone on behalf of HMRC without authority to decide the applicable criteria for sending out penalty assessments. The automated system might have been outsourced and run by a third party, with HMRC having access to it. Whether in any such circumstances there was sufficient officer authorisation of the input criteria or control over the operation of the system would be likely to depend on the particular facts.
[29] The very slight evidential material was in our judgment insufficient to enable the FTT to draw the inference that it did, on a contested factual issue of whether an officer authorised assessment and notification of the penalties. Each individual appeal of this kind must be decided on the evidence that HMRC places before the FTT, not on the basis of the FTT's experience or an understanding gained from evidence adduced in other appeals." (Marano v. HMRC [2023] UKUT 113 (TCC), Fancourt J and Judge Tilakapala)
- Inferring intention
"[28] So, we have had to make a number of inferences from primary fact, and when making those inferences, we have adopted the principle set out by Lady Justice Arden in Barlow Clowes International Limited v Henwood [2008] EWCA C IV 577 (“Henwood”) where at [68] she stated:
“To ascertain whether such an intention was shown on the evidence, the judge had to make primary findings of fact and then make a global evaluation of all the relevant facts. The ultimate fact in issue was Mr Henwood’s intention. This had to be a matter of inference from all the relevant facts, giving such weight to Mr Henwood’s declarations as to his own intention as the law allows. An inference of this kind must be drawn on the balance of probabilities, and thus the judge had to be satisfied that the inference that he drew as to Mr Henwood’s intention was more likely than not on all the relevant and proved facts”." (M R Currell Limited v. HMRC [2023] UKFTT 613 (TC) Judge Popplewell)
- Inferring intention
"[28] So, we have had to make a number of inferences from primary fact, and when making those inferences, we have adopted the principle set out by Lady Justice Arden in Barlow Clowes International Limited v Henwood [2008] EWCA C IV 577 (“Henwood”) where at [68] she stated:
“To ascertain whether such an intention was shown on the evidence, the judge had to make primary findings of fact and then make a global evaluation of all the relevant facts. The ultimate fact in issue was Mr Henwood’s intention. This had to be a matter of inference from all the relevant facts, giving such weight to Mr Henwood’s declarations as to his own intention as the law allows. An inference of this kind must be drawn on the balance of probabilities, and thus the judge had to be satisfied that the inference that he drew as to Mr Henwood’s intention was more likely than not on all the relevant and proved facts”." (M R Currell Limited v. HMRC [2023] UKFTT 613 (TC) Judge Popplewell)
Presumption of continuity
“… so far as the discovery point is concerned, once the Inspector comes to the conclusion that, upon the facts which he has discovered, Mr Jonas has additional income beyond that which he has so far declared to the Inspector, then the usual presumption of continuity will apply. The situation will be presumed to go on until there is some change in the situation, the onus of proof of which is clearly on the taxpayer.” (Jonas v. Bamford 51 TC 1 at 25).
“Once the threshold requirement is satisfied for there to be a ‘discovery’ of loss of tax, the presumption of continuity applies in the raising of assessments for earlier years. The onus is on the taxpayer to rebut the presumption.” (Allan v. HMRC [2016] UKFTT 504 (TC), §27).
“In our view, this quotation [from Jonas v. Bamford] expresses no legal principle. It seems to us that it would be quite wrong as a matter of law to say that because X happened in Year A it must be assumed that it happened in the prior year. An officer is not bound by law and in the absence of some change to make or to be treated as making a discovery in relation to last year merely because he makes one for this year. This Tribunal is not bound to conclude that what happened this year will happen next year. It seems to us that Walton J is instead expressing a common sense view of what the evidence will show. In practice, it will generally be reasonable and sensible to conclude that if there was a pattern of behaviour this year then the same behaviour will have been followed last year. Sometimes, however, that will not be a proper inference: there will be occasions when the behaviour related to a one-off situation, perhaps a particular disposal, or particular expenses; in those circumstances continuity is unlikely to be present.” (Dr I Syed v. HMRC [2011] UKFTT 315 (TC), §38 approved in Why Pay More For Cars Limited v. HMRC [2015] UKUT 468 (TCC), §37, Newey J and Judge Sinfield).
- Applies to the level of taxable income
"[92] ... However, it is important to note that the presumption is focused on the amount of taxable income." (Stirling Jewellers (Dudley) Limited v. HMRC [2020] UKUT 245 (TCC), Judges Herrington and Richards)
- Only needed if there is no positive evidence of continuity of turnover
"[92] The Appellant also contended that HMRC were not entitled to rely on the principle of continuity so as to conclude, for corporation tax purposes at least, that the suppression demonstrated in 2016 and/or 17 could be presumed for earlier years. In this regard they referred to the judgment of the Upper Tribunal in Stirling Jewellers (Dudley) Limited v HMRC [2020] UKUT 245 (TCC). On the basis of our factual findings, we do not consider the Stirling judgment to be relevant. Here HMRC do not need to apply a presumption of continuity per se as such a presumption is only needed where there is no positive evidence of continuity. Here, there is evidence that turnover was consistent throughout the period assessed such that it is highly likely that cash sales were similarly consistently suppressed." (Cheon Fat Limited v. HMRC [2024] UKFTT 180 (TC), Judge Brown KC)
- Not applicable if there were relevant changes
“This is not a case where arrangements continued throughout a period and there was no evidence that anything had changed, so that it can be assumed that the same pattern of payments occurred throughout the period. Here there was an abrupt change. The direct debit was cancelled and HMRC’s records show that no payments were made for an extended period from that point. We cannot apply the principle of continuity to assume that the quarterly bills were paid when there is documentary evidence that they were not.” (Porter v. HMRC [2016] UKFTT 792 (TC), §119).
- HMRC take a risk if they rely exclusively on the presumption for other periods
"[103] ...we think the FTT is saying that HMRC’s strategy in their enquiry was to focus on the profits of one accounting period and, if they were successful in adjusting Stirling’s tax liability for that accounting period, to rely on the presumption of continuity to adjust taxable profits for all other accounting periods in dispute. It was entirely open to HMRC to adopt that strategy, but it left HMRC vulnerable to a finding that the situation in certain accounting periods was different from that in APE 2011 so that the presumption of continuity was rebutted in those accounting periods and no adjustment would be made to the profits of such periods. From HMRC’s perspective such an outcome would compare unfavourably to the result that might obtain if they performed a detailed enquiry in all accounting periods in dispute." (Stirling Jewellers (Dudley) Limited v. HMRC [2020] UKUT 245 (TCC), Judges Herrington and Richards)
- Can be relied upon by HMRC or taxpayer
“Further, if a presumption is to operate it is difficult to see why the appellant should not be able to rely on a presumption of continuity from 1999 onwards. At that time the respondents accept that he was properly declaring his takings. There is no reason to think that the appellant immediately sought to evade VAT once that visit was completed. Nor is there any evidence of a change in circumstances until April 2005 when we have found that there was dishonesty.” (Hussein v. HMRC [2014] UKFTT 307 (TC), §155, Judge Cannan)
- Query whether it applies to prove dishonesty
“It is difficult to see why the presumption of continuity should apply in favour of the respondents in a case which depends on establishing dishonesty. The respondents must satisfy us that there was dishonest evasion. The burden is on them to establish dishonesty. In part they rely on a presumption, in the absence of evidence to the contrary, that the appellant was dishonest in periods prior to 2005. In effect they are shifting the burden to the appellant to establish that he was not dishonest in the prior periods. In our view that is inconsistent with section 60(7) VATA 1994.” (Hussein v. HMRC [2014] UKFTT 307 (TC), §154, Judge Cannan)
- HMRC not bound by statement that taking recorded accurately once HMRC investigation started
"[78] The appellant also submitted that HMRC had accepted that any suppression had stopped once the enquiry started. We note that in a letter dated 2 June 2020, relating to the preparation of the bundl es for the hearing, an HMRC litigator who was not involved in the hearing wrote “It is agreed that following the start of enquiries in to the business, takings were accurately recorded”. The statement is made in response to a statement in a letter from th e appellant which contends that details of takings between May 2016 and October proved that takings were accurately recorded.
[79] Officer Jones stated that there was no basis for such a statement and that she did not agree with it, nor had she been asked whet her such a statement could be made. We note that there is no reason given by the litigator for the statement and no other correspondence which supports the statement. The appellant did not apparently pursue the point in any subsequent correspondence.
[80] We al so note that the same litigator prepared one of the statements of case in this matter and did not make the same statement there. Given the importance of such a statement, we would have expected to see it in the statement of case or at least separately recorded with details. In the circumstances we consider that is not outside the realms of credibility that the word ‘not’ was inadvertently omitted after the word ‘It’ at the start of the sentence.
[81] We therefore do not consider it appropriate to treat this sentence as binding HMRC with regard to the presumption of continuity." (Jin Fu Chinese Takeaway Limited v. HMRC [2022] UKFTT 191 (TC), Judge Fairpo)
Presumption of honesty
“A taxpayer is presumed to be honest in his dealings and arrangements and whatever facts must be proved to resolve the issues raised by the assessment can only be approached on that basis unless and until the contrary is shown.” (Hull City AFC (Tigers) Ltd v. HMRC [2017] UKFTT 629 (TC), §103, Judge Gammie QC).
Presumption of correctness
If an intention to do something is proven, it is presumed (unless the contrary is shown) that it was done correctly
“We should note at once that that presumption only applies to the means by which an intention is given effect and it does not assist in deciding what that intention is or was or whether there was anything of substance underlying the intention. In other words the appellant cannot rely on the presumption of correctness to prove that a right to a refund existed or that it was intended to be transferred but if it proves that any such right did exist and that it was intended to be transferred then it contends that the right can be assumed to have been given effect by proper means at T3 and T4.” (Northern Lincolnshire & Goole Hospitals NHS Foundation Trust v. HMRC [2015] UKFTT 103 (TC), §22 and see also §49).
Statement of agreed facts
Not allowed to challenge agreed fact
“HMRC challenged the accuracy of this statement because the Appellant adduced no evidence to substantiate it. The Tribunal rules that HMRC was not entitled to do this because it was an agreed statement of fact.” (Mercedes-Benz Financial Services UK Ltd [2013] UKFTT 381 (TC), §104).
Appeal conducted on the basis of agreed facts and unchallenged documents (FTT not entitled to go beyond)
“I am bound to say that I am doubtful whether it is open to the Appellants to advance arguments of this kind where the factual scope of the appeals is not 'at large' but is circumscribed by the parties' agreement in terms of the Agreed Facts. Given that the Agreed Facts set out, with a degree of precision (and doubtless as the result of an iterative and collaborative process between the parties) the parameters of these particular appeals by these particular appellants, I am not persuaded that I can properly go beyond the Agreed Facts, except insofar as I can have regard to contemporary, and unchallenged, documentation.” (Farnborough Airport Properties Company Ltd v. HMRC [2016] UKFTT 431 (TC), §33).
Proof of certain VAT matters by certificate
"(1) A certificate of the Commissioners—
(a) that a person was or was not, at any date, registered under this Act; or
(b) that any return required by or under this Act has not been made or had not been made at any date; or
(c) that any statement or notification required to be submitted or given to the Commissioners in accordance with any regulations under paragraph 2(3) or (4) above has not been submitted or given or had not been submitted or given at any date;
(d) …
shall be sufficient evidence of that fact until the contrary is proved.
(2) A photograph of any document furnished to the Commissioners for the purposes of this Act and certified by them to be such a photograph shall be admissible in any proceedings, whether civil or criminal, to the same extent as the document itself.
(3) Any document purporting to be a certificate under sub-paragraph (1) or (2) above shall be deemed to be such a certificate until the contrary is proved." (VATA 1994, Sch 11, para 14)
FTT’s general power to control evidence
“(1) Without restriction on the general powers in rule 5(1) and (2) (case management powers), the Tribunal may give directions as to--
(a) issues on which it requires evidence or submissions;
(b) the nature of the evidence or submissions it requires;
(c) whether the parties are permitted or required to provide expert evidence, and if so whether the parties must jointly appoint a single expert to provide such evidence;
(d) any limit on the number of witnesses whose evidence a party may put forward, whether in relation to a particular issue or generally;
(e) the manner in which any evidence or submissions are to be provided, which may include a direction for them to be given--
(i) orally at a hearing; or
(ii) by written submissions or witness statement; and
(f) the time at which any evidence or submissions are to be provided.” (FTT Rules, r.15(1)).
Power to admit evidence irrespective of admissibility under CPR
“(2) The Tribunal may--
(a) admit evidence whether or not the evidence would be admissible in a civil trial in the United Kingdom;” (FTT Rules, r.15(2)(a)).
Key question is still relevance
“Notwithstanding that greater liberty of case-management discretion, no-one doubts that the FtT, like a civil court, will usually treat the question whether proffered evidence is relevant as a cardinal factor in deciding whether it should be admitted or excluded. The admission of evidence which is irrelevant is as detrimental to the economical and proportionate conduct of tribunal proceedings as it is in relation to court proceedings. Nonetheless, where irrelevant material is mixed up with relevant material, it may frequently be disproportionate to spend time before a final hearing disentangling the two, if the admission of the irrelevant alongside the relevant material causes no unfairness or inconvenience calling for active case management.” (HMRC v. Infinity Distribution Ltd [2016] EWCA Civ 1014, §11).
Rule 15 not to be invoked lightly
“…one starts with asking the question whether the evidence is admissible. It is admissible if it is relevant. It is relevant if it is potentially probative of one of the issues in the case. One then asks, notwithstanding that it is admissible evidence, whether are good reasons why the court (or tribunal in this case) should nevertheless direct that it be excluded. As I have said in relation to the FTT's powers, that is found in rule 15 which requires the FTT to find that it is unfair to admit the evidence.” (HMRC v. IA Associates Ltd [2013] EWHC 4382 (Ch), §35, Nugee J)
“In any event, rule 15(2)(a) confers a discretion on the FTT. The rule does not justify, much less require, a wholesale departure from the rules of evidence. It can allow a degree of flexibility in relation to rules of evidence, such as hearsay, which is appropriate given the nature of appeals before the FTT and the need to give effect to the overriding objective in the FTT Rules. The established authorities state that there are good reasons for the long-established practice of not admitting evidence of good character in civil proceedings and the FTT should not lightly cast that practice aside.” (Prizeflex Limited v. HMRC [2016] UKUT 436 (TCC), §118, Morgan J and Judge Sinfield).
Hearsay evidence
Civil approach
"[9] It is accepted by the parties that the hearsay evidence is admissible in evidence, but the weight which can be given to it must be weighed with care. As stated in Welsh v Stokes [2008] 1 WLR 1224 by Dyson LJ the correct approach was to consider those factors set out in section 4 of the Civil Evidence Act 1995 which provides:
"4 Considerations relevant to weighing of hearsay evidence.
(1)In estimating the weight (if any) to be given to hearsay evidence in civil proceedings the court shall have regard to any circumstances from which any inference can reasonably be drawn as to the reliability or otherwise of the evidence.
(2)Regard may be had, in particular, to the following—
(a)whether it would have been reasonable and practicable for the party by whom the evidence was adduced to have produced the maker of the original statement as a witness;
(b)whether the original statement was made contemporaneously with the occurrence or existence of the matters stated;
(c)whether the evidence involves multiple hearsay;
(d)whether any person involved had any motive to conceal or misrepresent matters;
(e)whether the original statement was an edited account, or was made in collaboration with another or for a particular purpose;
(f)whether the circumstances in which the evidence is adduced as hearsay are such as to suggest an attempt to prevent proper evaluation of its weight."
[10] Further Dyson LJ stated:
"[22] Even if the hearsay evidence were the only evidence on which the claim was based, I would not accept that this was necessarily a reason for giving it no weight. It would depend on all the circumstances. I accept that there will be cases where it is so unfair to hold a defendant liable solely on the basis of hearsay evidence that a court should place little or no weight on the evidence. Consideration of the factors stated in section 4(2) will point the way, but will not necessarily be determinative. In some cases the defendant may be able to adduce evidence to contradict, or at least cast doubt on, the hearsay evidence. But there will also be cases, like the present, where the defendant is not in that position. Apart from the unidentified motorist and the claimant, there were no witnesses to the accident. In such a case there may be said to be unfairness to the defendant in having to face hearsay evidence which he cannot directly challenge. On the other hand, there would be unfairness to the claimant to place no weight on the hearsay evidence, since without it her claim would inevitably fail.
[23] The decision what weight (if any) to give to hearsay evidence involves an exercise of judgment. The court has to reach a conclusion as to its reliability as best it can on all the available material. Where a case depends entirely on hearsay evidence, the court will be particularly careful before concluding that it can be given any weight. But there is no rule of law which prohibits a court from giving weight to hearsay evidence merely because it is uncorroborated and cannot be tested or contradicted by the opposing party. I do not consider that the statements in the authorities relied on by Miss Rodway in her skeleton argument support such an extreme proposition."
[11] I accept that considerable care must be exercised in consideration of hearsay evidence. Such evidence has not been tested in cross -examination. The motivation behind the provision of such evidence and the reasoning behind the unwillingness to be involved in police or other proceedings has not been clarified. There are certainly arguments as to how much weight can properly be given to such evidence. In assessing the hearsay evidence in this case, I adopt the approach endorsed in Welsh and will address the relevant parts of s4 CEA 1995 later in this judgment. I recognise in doing so that the legal and evidential burden remains throughout on the claimant in this matter. As Dame Janet Smith in Lambert v Clayton EWCA Civ 737 at Paragraph 39 stated:-
"If there are inherent uncertainties about the facts, as there were here, it is dangerous to make precise findings. This may well mean that the party who bears the burden of proof is in difficulties. But that is one of the purposes behind a burden of proof; that if the case cannot be demonstrated on the balance of probabilities, it will fail." (Brown v. Sestras [2023] EWHC 1220 (KB), HHJ Howells)
Anonymous caller evidence found to be highly persuasive
"[88] I weigh up all the evidence in the round and turn to the evidence of the anonymous caller. For the reasons set out above, I consider that evidence, although hearsay, as highly persuasive. I have listened with care to the transcript of the call. I have considered whether this could be an elaborate ploy by the caller to detract attention from himself. I reject that as implausible. The detail of that account, when tied in with the other evidence as a whole, leads me to conclude that the account by the anonymous caller of following the car, from the accident scene and noting down its registration, is evidence upon which I can place weight. The proposition that he may simply be mistaken and got the wrong car does not tie in with his evidence of immediately giving chase. In addition, although this is a relatively modest point in support, the vehicle he followed went in the direction of the 1st Defendant's home. The vehicle he followed must, on balance have been that of Mr Sestras." (Brown v. Sestras [2023] EWHC 1220 (KB), HHJ Howells)
Evidence must be relevant
"[104] In the modern law of evidence relevance is the paramount consideration. The general test of whether evidence is admissible is whether it is relevant (or of more than minimal relevance) to the determination of any fact in issue in the proceedings." (Shagang Shipping Company Ltd v. HNA Group Company Ltd [2020] UKSC 34)
“Any evidence, to be admissible, must be relevant. Contested trials last long enough as it is without spending time on evidence which is irrelevant and cannot affect the outcome. Relevance must, and can only, be judged by reference to the issue which the court (whether judge or jury) is called upon to decide. As Lord Simon of Glaisdale observed in Director of Public Prosecutions v Kilbourne [1973] AC 729, 756, ‘Evidence is relevant if it is logically probative or disprobative of some matter which requires proof … relevant (ie. logically probative or disprobative) evidence is evidence which makes the matter which requires proof more or less probable’.” (O’Brien v. Chief Constable of South Wales Police [2005] UKHL 26, §3).
Evidence of marginal relevance (judgment required)
“While the argument against admitting evidence found to be legally admissible will necessarily depend on the particular case, some objections are likely to recur. First, it is likely to be said that admission of the evidence will distort the trial and distract the attention of the decision-maker by focusing attention on issues collateral to the issue to be decided. This is an argument which has long exercised the courts … and it is often a potent argument, particularly where trial is by jury. Secondly, and again particularly when the trial is by jury, it will be necessary to weigh the potential probative value of the evidence against its potential for causing unfair prejudice: unless the former is judged to outweigh the latter by a considerable margin, the evidence is likely to be excluded. Thirdly, stress will be laid on the burden which admission would lay on the resisting party: the burden in time, cost and personnel resources, very considerable in a case such as this, of giving disclosure; the lengthening of the trial, with the increased cost and stress inevitably involved; the potential prejudice to witnesses called upon to recall matters long closed, or thought to be closed; the loss of documentation; the fading of recollections. It is, I think, recognition of these problems which has prompted courts in the past to resist the admission of such evidence … In deciding whether evidence in a given case should be admitted the judge's overriding purpose will be to promote the ends of justice. But the judge must always bear in mind that justice requires not only that the right answer be given but also that it be achieved by a trial process which is fair to all parties.” (O’Brien v. Chief Constable of South Wales Police [2005] UKHL 26, §6).
Similar fact evidence
In principle admissible, but consider whether prejudice disproportionate to relevance
[3] Any evidence, to be admissible, must be relevant. Contested trials last long enough as it is without spending time on evidence which is irrelevant and cannot affect the outcome. Relevance must, and can only, be judged by reference to the issue which the court (whether judge or jury) is called upon to decide. As Lord Simon of Glaisdale observed in Director of Public Prosecutions v Kilbourne [1973] AC 729, 756, "Evidence is relevant if it is logically probative or disprobative of some matter which requires proof ….. relevant (ie. logically probative or disprobative) evidence is evidence which makes the matter which requires proof more or less probable".
[4] That evidence of what happened on an earlier occasion may make the occurrence of what happened on the occasion in question more or less probable can scarcely be denied.
...
[6] While the argument against admitting evidence found to be legally admissible will necessarily depend on the particular case, some objections are likely to recur. First, it is likely to be said that admission of the evidence will distort the trial and distract the attention of the decision-maker by focusing attention on issues collateral to the issue to be decided. This… is often a potent argument, particularly where trial is by jury. Secondly, and again particularly when the trial is by jury, it will be necessary to weigh the potential probative value of the evidence against its potential for causing unfair prejudice: unless the former is judged to outweigh the latter by a considerable margin, the evidence is likely to be excluded. Thirdly, stress will be laid on the burden which admission would lay on the resisting party: the burden in time, cost and personnel resources, very considerable in a case such as this, of giving disclosure; the lengthening of the trial, with the increased cost and stress inevitably involved; the potential prejudice to witnesses called upon to recall matters long closed, or thought to be closed; the loss of documentation; the fading of recollections. … In deciding whether evidence in a given case should be admitted the judge's overriding purpose will be to promote the ends of justice. But the judge must always bear in mind that justice requires not only that the right answer be given but also that it be achieved by a trial process which is fair to all parties." (O'Brien v Chief Constable of South Wales Police [2005] UKHL 26)
“On the other hand, the policy considerations that have given rise to the more stringent rules of criminal evidence must be borne in mind by a court or tribunal in determining whether, in a particular case, evidence which is admissible in civil proceedings should be so admitted. Thus, the question of prejudice must be considered; evidence of impropriety, which was in issue in O’Brien, which reflects adversely on the character of a party, may risk causing prejudice that is disproportionate to its relevance.” (CF Booth Ltd v. HMRC [2015] UKFTT 407 (TC), §31).
Propensity: consider the alleged events together
"[43] The proper issue for the jury on the question of propensity… is whether they are sure that the propensity has been proved. … That does not mean that in cases where there are several instances of misconduct, all tending to show a propensity, the jury has to be convinced of the truth and accuracy of all aspects of each of those. The jury is entitled to - and should - consider the evidence about propensity in the round. There are two interrelated reasons for this. First the improbability of a number of similar incidents alleged against a defendant being false is a consideration which should naturally inform a jury's deliberations on whether propensity has been proved. Secondly, obvious similarities in various incidents may constitute mutual corroboration of those incidents. Each incident may thus inform another. The question … is whether, overall, propensity has been proved." (R v Mitchell [2016] UKSC 55)
"[26] Again, this analysis is applicable to civil and family cases, with appropriate adjustment to the standard of proof. In summary, the court must be satisfied on the basis of proven facts that propensity has been proven, in each case to the civil standard. The proven facts must form a sufficient basis to sustain a finding of propensity but each individual item of evidence does not have to be proved." (R v. P [2020] EWCA Civ 1088)
Power to exclude evidence
“(2) The Tribunal may--
[…]
(b) exclude evidence that would otherwise be admissible where--
(i) the evidence was not provided within the time allowed by a direction or a practice direction;
(ii) the evidence was otherwise provided in a manner that did not comply with a direction or a practice direction; or
(iii) it would otherwise be unfair to admit the evidence.” (FTT Rules, r.15(2)(b)).
Tendency towards fewer exceptions to admission of relevant evidence
"[104] ... The tendency of the law has been and continues to be towards the abolition of such rules. Thus, the rule excluding hearsay evidence has been abolished in civil proceedings. The modern approach is that judges (and, increasingly, juries) can be trusted to evaluate evidence in a rational manner, and that the ability of tribunals to find the true facts will be hindered and not helped if they are prevented from taking relevant evidence into account by exclusionary rules." (Shagang Shipping Company Ltd v. HNA Group Company Ltd [2020] UKSC 34)
Exclude evidence obtained by torture
"[106] It is accordingly settled law, and common ground in this case, that if it is proved on a balance of probabilities that a confession (or other statement) on which a party wishes to rely in legal proceedings was made as a result of torture, evidence of the statement is not admissible and must be excluded from consideration altogether when deciding the facts in issue.
[...]
[108] It does not follow, and there is no rule, that if it is not proved on a balance of probabilities that a statement was made as a result of torture, evidence that torture was used is not admissible and must be ignored when deciding the facts in issue. There is no legal or logical reason for treating such evidence as inadmissible and good reason to treat it as admissible given its obvious relevance.
[109] We go further. A rule that required a court, in assessing the reliability of a confession, to disregard entirely evidence which discloses a serious possibility that the confession was made as a result of torture would not only be irrational; it would also be inconsistent with the moral principles which underpin the exclusionary rule." (Shagang Shipping Company Ltd v. HNA Group Company Ltd [2020] UKSC 34)
Exclude evidence alleging fraud/bad faith where that is not part of the party’s positive case
“He therefore made no attempt to re-introduce into HMRC's evidence those parts of the Holden statement which, as I have summarised, appeared to assert fraud, participation, bad faith or knowledge of fraud on the part of Infinity. In my view that concession was sensibly made. For as long as HMRC's stance in these proceedings abjured any positive case of that kind against Infinity, it was in my view highly unsatisfactory, and verging on abusive, that their evidence should at the same time do precisely that, and pursue no other legitimate purpose. As the judge said, if a positive case of fraud, dishonesty or bad faith is to be advanced in civil litigation (whether in a court or a tribunal) it must be distinctly advanced and set out with the requisite particularity. If (as here) no such positive case is advanced, then evidence purporting to substantiate such misconduct is inherently objectionable, unless it is shown to serve some other legitimate purpose.” (HMRC v. Infinity Distribution Ltd [2016] EWCA Civ 1014, §16).
Unless the evidence is to be used for a different purpose
“In my judgment it cannot be an objection to the deployment of evidence in support of a positive case that does not allege fraud or misconduct against a party to proceedings, that the same evidence is supportive of such a case, merely because that additional case is not being pursued. It not infrequently happens in civil litigation that the same evidence may serve more than one purpose.” (HMRC v. Infinity Distribution Ltd [2016] EWCA Civ 1014, §28).
Party seeking to exclude evidence on the basis that the argument it is relevant to is wrong in law should apply to strike out
“Looking at the matter as it must have appeared to the FtT, at a stage when the sophisticated arguments of principle about the necessary elements of HMRC's case in a zero rated appeal had yet to be deployed, it would in my view have been wrong for the tribunal judge to have refused to admit evidence relevant to a case which a party wished to put forward as its positive case at trial, in circumstances where the party seeking to exclude it was not submitting that the case was itself liable to be struck out in its entirety…It follows that the only basis upon which Judge Porter's decision to exclude the Magic Transport evidence could be justified is that HMRC has no case at all on the Zero Rated Appeals fit for trial, as is indeed implicit in Peter Smith J's analysis. It is not in my view good or appropriate case management to decide an objection to the admissibility of part of the evidence in support of a pleaded case in that way. For as long as a party has a positive pleaded case to which evidence upon which it wishes to rely is relevant, then it seems to me that it ought to be admitted unless and until that case is itself struck out or abandoned…As Arden LJ suggested during the course of argument, for as long as a party has a pleaded case which has not been struck out, then case management for the final hearing should not generally exclude evidence supportive of it.” (HMRC v. Infinity Distribution Ltd [2016] EWCA Civ 1014, §§27…29).
Evidence not excluded simply because it is voluminous
“[HMRC] accepts that the documentary evidence concerned is contextually relevant but because of its volume, it fills 12 lever arch files, it should not be admitted. [HMRC] suggests that it would be possible to deal with the matters contained in this evidence more concisely and gives the example of a witness statement with exhibits. However, [the taxpayer] contends that it is necessary to include all of these documents in their entirety so as to prevent any allegations of “cherry picking” the evidence to the advantage of Mr Gill…Given that it is accepted that the evidence is relevant, the appeal has not yet been listed for hearing and that the parties will have an opportunity to make submissions on the weight to be attached (if any) to it, I consider that it should be admitted. I and therefore dismiss HMRC’s application for its exclusion.” (Gill v. HMRC [2017] UKFTT 597 (TC), §§22…23, Judge Brooks).
Sequence of providing evidence
Simultaneous list of documents and witness statement exchange where mixed burden
“Also, given the mixed burdens of proof in this case, HMRC in the competence issue and Mr Hargreaves in the substantive issue, and having regard, as I must, to the overriding objective of the Tribunal Procedure (First-tier Tribunal)(Tax Chamber) Rules 2009, to deal with cases “fairly and justly”, I consider that a mutual exchange of lists of documents and witness statements to be appropriate and have directed accordingly.” (Hargreaves v. HMRC [2016] UKFTT 772 (TC), §23, Judge John Brooks).
Evidence to prove primary facts not pleaded normally inadmissible (particularly if relating to dishonesty)
“At trial the court will not normally allow proof of primary facts which have not been pleaded, and will not do so in a case of fraud. It is not open to the court to infer dishonesty from facts which have not been pleaded, or from facts which have been pleaded but are consistent with honesty. There must be some fact which tilts the balance and justifies an inference of dishonesty, and this fact must be both pleaded and proved.” (Three Rivers DC v. Bank of England [2001] UKHL 16, §186, Lord Millett);
Evidence from non-parties not usually permitted
“Based on the above analysis, I find that the Tax Chamber has an adversarial jurisdiction. As a result, it is not possible to use Rule 5(1) as a gateway to allow a non-party to provide witness evidence…These are the Appellants’ appeals, and it is for the parties to decide what evidence to call. The BBC Application would undermine their right to put forward their case. I agree with the parties that this would be unfair and unjust, and a departure from the overriding objective. ” (Paya Ltd and Tim Wilcox Ltd v. HMRC [2016] UKFTT 660 (TC), §§132…276).