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N11c. Abuse of process
Preventing misuse of the court's procedure
"[39] Two aspects of Lord Diplock's statement should be noted. First, the power in question is a power to prevent misuse of the court's procedure. It follows that the power cannot be exercised if the claimant is making proper use of the civil jurisdiction of the court to protect his rights. Secondly, the court's procedure must be being misused in a way which would be "manifestly unfair" to one or more of the parties or would otherwise "bring the administration of justice into disrepute among right-thinking people". The primary purpose of the doctrine, in other words, is to preserve public confidence in the administration of justice." ​(Mueen-Uddin v. Secretary of State for the Home Department [2024] UKSC 21)
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(1) Generally abusive to reargue the same point
Due to the very narrow scope of issue estoppel in tax litigation, abuse of process takes on greater relevance in stopping persons re-litigating points that have previously been decided.
“Moreover, while I was not specifically addressed on this matter, there is an issue to what extent findings of fact and law I made in the first Qualapharm decision ([2015] UKFTT 479 (TC)) are relevant to this second Qualapharm case. It seems to me that as both proceedings concerned not only the same parties but arise out of the same tax enquiries and to a large extent involve related submissions, albeit a different subject matter (information notices rather than closure notices) it would be an abuse of process to allow either party to re-open decided matters.” (Qualapharm Ltd (No.2) v HMRC [2016] UKFTT 100 (TC), §108)
“Abuse of process appears to be very like issue estoppel save perhaps for flexibility where there are special circumstances…And unlike issue estoppel, abuse of process applies to tax cases. So I find that abuse of process does prevent previously litigated issues being re-tried between the same parties in tax cases unless there are special circumstances.” (Foneshops Ltd v. HMRC [2015] UKFTT 410 (TC), §31).
“While the doctrine of res judicata, which prevents parties re-litigating issues which have already been decided in proceedings between them, may not apply to Tribunal proceedings, raising the issue of the scope of the 2004 Contract Settlement may nevertheless be an abuse of process by the appellant.” (Spring Salmon & Seafood Ltd v. HMRC [2013] UKFTT 320 (TC), §119).
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- Not generally concerned with pre-litigation conduct
“The Tribunal has case management powers to regulate the conduct of litigation that is before it. Yet Mr Hackett is not making any complaint as to how HMRC have conducted the litigation from the point at which the appellants notified their appeals to the Tribunal. He is, therefore asking the Tribunal to punish HMRC for what the appellants consider to be unacceptable delay before Tribunal proceedings were commenced. I do not consider that would be a proper exercise of case management powers. The authorities that Mr Hackett showed me dealt primarily with delay after proceedings were commenced and, although Foulser was not focused on questions of delay, it dealt with a situation where HMRC were argued to have taken certain prejudicial actions while proceedings before the Tribunal were current.” (Always Sheet Metal Ltd v. HMRC [2017] UKFTT 198 (TC), §106, Judge Jonathan Richards).
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- Generally abusive to reargue the same point
“In particular, [HMRC] put Grattan (ECJ) at the forefront of his submissions, arguing that just as it was a decision of such significance as to engage the Arnold exception, so too it negated any abuse of process…In my view this was the only basis upon which the Revenue could hope to justify what would otherwise be as clear-cut a case of abuse of process as one could readily imagine. It is enough to recall that, in addition to accepting the decision in Littlewoods (CA) and subsequently freely entering into the 2004 and 2008 section 85 Agreements, after first putting the Littlewoods group to the time, trouble, expense and anxiety of protracted litigation on the underlying liability issues, the Revenue then expressly conceded in the First Trial before Vos J that all of the VAT upon which interest is now claimed by all of the active claimants had been overpaid. Furthermore, this concession underlay, and was repeated in, the order for reference to the ECJ made by Vos J on 4 November 2010, as well as the United Kingdom's written observations submitted to the Court on 6 April 2011.” (Littlewoods Retail Ltd v. HMRC [2014] EWHC 868 (Ch), §§247…248).
“My conclusion is that in this case there are no special circumstances which apply to justify permitting the appellant to argue in this appeal matters which it could and should have argued in the original £300 penalty appeal. It cannot put the case for the second time that the information notice, and specifically item 8(c), was invalid.” (Spring Capital Ltd v. HMRC [2016] UKFTT 232 (TC), §49)
“Would abuse of process apply if Gnutti were to seek to take proceedings against HMRC or the appellant after the tribunal settled this case one way or another? It certainly seems that it might apply. As Henderson J explained it in Littlewoods at [243] there is public interest in the finality in litigation. Intervening events might justify re-litigating (see Littlewoods at [251]) so I am unable to say whether or not abuse of process would be found to apply: but there seems to be a real possibility. That issue estoppel does not apply to tax cases appears to be no bar to a court concluding that re-opening a decided issue is an abuse of process.” (Bradonbay Ltd v. HMRC [2015] UKFTT 229 (TC) §60 – concerned an application to add a party in order to try and bind them by the FTT’s findings of fact).
Unless there has been a change in the legal or factual landscape
“…I emphasise that my conclusion on this issue might have been different if Grattan (ECJ) were in truth a case which had changed the relevant legal landscape in such a way as to show that the underlying VAT had been due all along. In those circumstances, it is possible that the balance would have come down in favour of allowing HMRC to re-open the question, even at this very late stage. I do not think it profitable, however, to speculate further about what my decision would have been in such an event.” (Littlewoods Retail Ltd v. HMRC [2014] EWHC 868 (Ch), §251).
Lack of funds in related proceedings might mean it is not abusive to reargue
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"[97] The FTT first concluded (at [135], in Mr Kishore’s favour) that in some instances lack of funds, particularly where the other party was to blame, might mean that it was not abusive to re-litigate a matter that had already been decided. Accordingly, since there was a disputed issue of fact as to whether the reason the Kittel appeals were not pursued was because the appellant ran out of funds and whether this was the fault of HMRC, this issue would ordinarily have to go to trial." (Kishore v. HMRC [2020] UKUT 233 (TCC), Zacaroli J and Judge Raghavan)
- Second strike out application on essentially the same grounds (but relying on different test) is abusive
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"[72] [HMRC's] response relied on contrasting the different bases of the two applications. HMRC’s 2018 strike-out application was put on the basis that the findings in SDM meant that the appellants’ appeals stood no reasonable prospect of success, whereas the current strike-out application turned, she argued, on the different basis of whether the appellants’ case represented an Ashmore style abuse (that re-litigation of factual issue should not take place without fresh evidence to suggest the answer might be different). The FTT’s conclusion in 2018 was thus based on different test that the FTT was not satisfied that the appellants’ appeals stood no reasonable prospect of success; a high threshold for the strike-out applicant to show.
[73]...It is true the applications were put by HMRC on different bases (the FTT too noted “HMRC’s grounds...[were] not quite the same as the grounds put forward in 2018” ([172]). However that does not detract from the fact that the issue that lay at the heart of the 2018 application - whether the factual finding the goods did not arrive in UT2 SDM was determinative of that issue in the appellant’s appeals (such that the appellants’ appeals stood no reasonable prospect of success) - was identical to the central issue in HMRC’s application, namely whether the appellants were seeking to relitigate a matter that had already been determined. The different test involved in a “no reasonable prospect of success” was irrelevant because the key issue in the 2018 application was the binary one of whether the factual finding in UT2 SDM was determinative. On that the FTT made a decisive, and final (given there was no appeal) finding that the factual finding in UT2 SDM was not determinative. (We also note in any case that the reasoning in the Court of Appeal’s decision in Shiner (at [19] would suggest that an abuse of process argument would be accommodated under Rule 8(3)(c) (no reasonable prospect of success) in any case, so the ultimate test would not be different)." (Parnham v. HMRC [2023] UKUT 285 (TCC), Judges Raghavan and Brannan)
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- Includes disputing findings of fact relevant to later appeal
"[73] It is true, as Mr Trees says, that the issue to be decided in his appeal is different: the FTT hearing his appeal will have to decide whether he was dishonest, not whether he knew the transactions were connected with fraud. But that does not give him an unfettered right to put forward any grounds of appeal. In Gore Wood, Lord Bingham approved the dictum that it would be an abuse of process to allow a person “to litigate a second time what has already been decided between himself and the other party to the litigation”. Litigation between HMRC and CCA, of which Mr Trees was the controlling mind, has already been concluded on the basis that Mr Trees knew the transactions were connected to fraud. Allowing him to reargue that point would be to permit him to litigate it a second time.
[74] That does not mean that Mr Trees cannot argue, at the hearing of his appeal, that he was not dishonest: that is a new point and the burden of proving it will rest with HMRC. But in deciding whether or not he was dishonest, the parties and the FTT hearing his appeal must start from the position that he knew the transactions were connected with fraud." (Trees v. HMRC [2023] UKFTT 339 (TC), Judge Redston)
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- Issues decided in judicial review give rise to abuse in tax appeal
“As a matter of principle, an opportunity to take a point in the judicial review proceedings in the present matter could be taken to be sufficient to render a subsequent appeal an abuse on Johnson grounds. The difference in types of proceedings does not render this inapposite.” (Shiner v. HMRC [2015] UKUT 596 (TCC), §64, Mann J).
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- Points arising in litigation concluded otherwise than by adjudication are within the principle
“an order dismissing proceedings is capable of giving rise to issue estoppel even though the court making such order has not heard argument or evidence directed to the merits….the effect of the second defendant declining to proceed with the hearing and acknowledging that her application must be dismissed, must in our judgment have been finally to determine the issue against the second defendant” (SCF Finance Co Ltd v. Masri [1987] 1 QB 1028 at 1047).
“My conclusion on the question of abuse of process is that I agree with HMRC, that, barring special circumstances, it would be an abuse of the litigation process if the appellant were able to raise in this appeal an issue that was effectively decided against it when its MTIC appeal was struck out. While the appellant complains it is unfair if all the facts are not considered in his penalty appeal, that is really the point: the facts he wants considered are the facts that ought to have been considered in the MTIC appeal. The appellant’s own conduct led to that appeal being lost and in my view, based on the above binding authority in SCF, the same consequences must flow as if the hearing had taken place and the Tribunal had decided against the appellant. For true fairness, there must be finality in litigation. There is no second bite of the cherry. The MTIC appeal was the appellant’s only opportunity to litigate the question of connection to fraud and knowledge/means of knowledge of these 181 transactions. It threw away that opportunity by failing to comply with an unless order and lost the appeal: barring special circumstances, it cannot have another opportunity now to argue the same issues, albeit the subject matter of the appeal (a £3 million penalty) is different to the subject matter of the MTIC appeal (a £25 million input tax rejection).” (Foneshops Ltd v. HMRC [2015] UKFTT 410 (TC), §31).
“Therefore, on 18 April 2011, as a result of withdrawing its appeal there was in effect a binding Tribunal determination that Meridian’s claims for input tax for 04/06 and 05/06 was incorrect as it was overstated and had no right to deduct input tax attributable to the transactions for which its recovery had been denied on the basis that it knew or should have known that these transaction were connected to fraud. This therefore disposes of the issue of whether the 04/06 and 05/06 returns are correct and, as such, Meridian is estopped from advancing the same arguments in the present appeal. In addition we find that it would be an abuse of process were it to be allowed to do so.” (Meridian Defence & Security Ltd v. HMRC [2014] UKFTT 300 (TC), §24, Judge John Brooks).
But only points necessarily taken to be determined against the party
“However, in so far as the appellant’s grounds of appeal in the penalty appeal amount to saying that it had no actual knowledge of the fraud, I do not think it can be said that it is seeking to re-litigate an issue that was in effect decided against it when its MTIC appeal was struck out. As I have said, knowledge is the more serious allegation and therefore, when the appeal was struck out, only the less serious allegation (means of knowledge) can be taken as having been unsuccessfully defended. The appellant’s actual knowledge is therefore not an issue that has already been decided. It would not be an abuse of process for this issue to be raised.” (Foneshops Ltd v. HMRC [2015] UKFTT 410 (TC), §49).
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- Appeals withdrawn not within the principle
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“As Lord Millett explained in Johnson v Gore Wood, at p 59, the abuse of process principle is no more than a procedural rule based on the need to protect the process of the court from abuse and the defendant from oppression. In the case of the prior appeals of Intekx for which on account of the withdrawal of those appeals there has been no determination of the facts and issues by the tribunal, it would in my judgment not be an abuse of the processes of the tribunal for those facts and issues to fall to be determined by the tribunal on this appeal by Mr Hackett. I would go further. To fix Mr Hackett with deemed findings in respect of those appeals, in the circumstances where he is appealing against a personal liability which has arisen only after those appeals were withdrawn would in my judgment be contrary to the interests of justice. Nor do I consider that requiring HMRC, on whom the burden of proof is accepted to fall in this appeal, to prove relevant facts which have so far not been substantively determined could be regarded in any sense as oppressive.” (Hackett v. HMRC [2016] UKFTT 781 (TC), §45, Judge Berner).
- Need not be the same litigant if there is substantial identity
“The correct approach is that formulated by Sir Robert Megarry V.-C. in Gleeson v. J. Wippell & Co. Ltd. [1977] 1 W.L.R. 510 at 515 where he said: "Second, it seems to me that the substratum of the doctrine is that a man ought not to be allowed to litigate a second time what has already been decided between himself and the other party to the litigation. This is in the interest both of the successful party and of the public. But I cannot see that this provides any basis for a successful defendant to say that the successful defence is a bar to the plaintiff suing some third party, or for that third party to say that the successful defence prevents the plaintiff from suing him, unless there is a sufficient degree of identity between the successful defendant and the third party. I do not say that one must be the alter ego of the other: but it does seem to me that, having due regard to the subject matter of the dispute, there must be a sufficient degree of identification between the two to make it just to hold that the decision to which one was party should be binding in proceedings to which the other is party. It is in that sense that I would regard the phrase 'privity of interest . . . .'" On the present facts that test was clearly satisfied.” (Johnson v. Gore Wood & Co [2000] UKHL 65).
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- - Substantial identity between director and company
"[77] I add for completeness that Mr Trees did not seek to argue that there was no abuse of process because the parties were different: CCA was the appellant in the MTIC appeal and he is the appellant in the DLN appeal. He was right not to take that point. It is clear from Gleeson (approved in Gore Wood) that where the parties are different there can still be abuse of process if there is “a sufficient degree of identity” between the original party and the new appellant. Both parties accepted that CCA was Mr Trees’ alter ego, or, as Lord Bingham put it, his “corporate embodiment”. CCA 2020 is therefore binding in this new litigation between Mr Trees and HMRC." (Trees v. HMRC [2023] UKFTT 339 (TC), Judge Redston)
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“Mr Hackett, in his capacity as director of Intekx, has had an opportunity to put forward his case that in that period there was no connection between the transactions of Intekx in that period and fraudulent evasion of VAT, and that Intekx did not know of any such connection. It would be contrary to the principle of finality of litigation to allow that determination to be re-visited on this appeal. It would be a clear abuse of process to do so, and there are no circumstances that could justify such a course.” (Hackett v. HMRC [2016] UKFTT 781 (TC), §43, Judge Berner).
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“In this case, as Mr Galvin was the sole director of Reddrock, Reddrock can only have acted as his alter ego. In the light of the decision of the House of Lords in Johnson I find that it would therefore be an abuse of process for Mr Galvin to be able to re-litigate factual issues that were previously decided in the Original Appeal.” (Galvin v. HMRC [2016] UKFTT 577 (TC), §90)
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- Applies to penalty appeals
"[56] It is clear from cases dealing with the civil head of Article 6 that the right to a fair trial does not preclude a court or tribunal from striking out an action or giving summary judgment either on the grounds that it is an abuse of process or because there is no reasonable prospect of success: see Rampal v Rampal (No 2) [2001] EWCA Civ 989 per Thorpe LJ at §32, Summers v Fairclough Homes Ltd [2012] UKSC 26 per Lord Clarke at §46 and Mannion v Ginty [2012] EWCA Civ 1667 per Lewison LJ at §13.
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[58] In our judgment, the essential requirement of Article 6 is that in the current proceedings the Appellant has a right to a fair trial, bearing in mind that fiscal penalties do not fall within the hard-core of the criminal law and that the “criminal-head” requirements of Article 6 do not (as the ECtHR found in Jussila) apply with their full stringency. The exact requirements necessary to ensure a fair trial will depend on the nature of the issue to be tried, its seriousness and all the circumstances of the individual case. What is required is a broad assessment of whether the particular charge brought against the Appellant is dealt with in a manner which provides a fair hearing when the proceedings are viewed as a whole.
[59] In relation to the 2017 Decision, which determined the question of the Appellant’s knowledge that the relevant transactions were connected with fraud, we consider that the Appellant received a fair hearing before an independent tribunal..." (C F Booth Limited v. HMRC [2022] UKUT 217 (TCC), Bacon J and Judge Brannan)
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Points not determined in earlier litigation generally not within strict principle​
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- Appeals withdrawn not within strict principle
"[44] Abuse of process, properly understood, therefore is referring to the abuse of the process of the Court or Tribunal. This is consistent with the observation of Lord Millett, also in Johnson v Gore Wood at [page 59] that the abuse of process principle is no more than a procedural rule based on the need to protect the process of the Court from abuse and the defendant from oppression.
[45] That is of course why abuse of process, as Lord Bingham explained, has much in common with cause of action estoppel and issue estoppel which may prevent a party to litigation from challenging a conclusion reached by a Court or Tribunal in prior proceedings between the same parties (or their privies).
[46] Given this underlying principle, it is difficult to see how it can be an abuse of the Tribunal’s process to raise an issue which has not previously been raised before the Tribunal in other proceedings. The Tribunal has not previously been required to expend resources in determining the matter and HMRC has not (in the words of Lord Bingham) previously been vexed by the same matter." (C4C Investments Limited v. HMRC [2022] UKFTT 367 (TC), Judge Vos)
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“As Lord Millett explained in Johnson v Gore Wood, at p 59, the abuse of process principle is no more than a procedural rule based on the need to protect the process of the court from abuse and the defendant from oppression. In the case of the prior appeals of Intekx for which on account of the withdrawal of those appeals there has been no determination of the facts and issues by the tribunal, it would in my judgment not be an abuse of the processes of the tribunal for those facts and issues to fall to be determined by the tribunal on this appeal by Mr Hackett. I would go further. To fix Mr Hackett with deemed findings in respect of those appeals, in the circumstances where he is appealing against a personal liability which has arisen only after those appeals were withdrawn would in my judgment be contrary to the interests of justice. Nor do I consider that requiring HMRC, on whom the burden of proof is accepted to fall in this appeal, to prove relevant facts which have so far not been substantively determined could be regarded in any sense as oppressive.” (Hackett v. HMRC [2016] UKFTT 781 (TC), §45, Judge Berner)
- Penalty appeals not within strict principle where earlier substantive proceedings struck out due to procedural failings
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"[29] In my view, however, the UT was correct to proceed on the basis that Johnson v Gore Wood & Co principles applied. As I see it, the question whether Mr Kishore should be permitted to contest in the penalty appeals issues which arose in the Kittel appeals (notably, whether he should have known that he was participating in transactions connected with the fraudulent evasion of VAT) is to be determined on the basis of the "broad, merits-based judgment" of which Lord Bingham spoke, not the Arbuthnot line of authority.
[30] As was pointed out by Mr Brendan McGurk, who appeared for Mr Kishore, the focus of the Arbuthnot-type authorities has been on whether a claimant can bring a second civil claim. In the present case, Mr Kishore has of course been the appellant in the penalty appeals as he was in the Kittel appeals, but in substance he is defending himself, challenging penalties which HMRC have sought to impose on him. We were not referred to any case in which it has been held that, absent a special reason, it is an abuse of process for a defendant to a civil claim to raise by way of defence a point that he ran in previous proceedings in which his claim or defence (as the case may be) was struck out on account of procedural failings. Even assuming that to be the law, however, the stricter Arbuthnot-type approach must, as it seems to me, be of no more than limited significance in the context of appeals against tax penalties. I can see that it might be in point if, say, a person brought a second appeal against a penalty, a previous appeal against the same penalty having been struck out. In contrast, I do not consider that an Arbuthnot test should be applied in a case such as the present one. Had the Kittel appeals reached a final hearing and the FTT decided against Mr Kishore on, say, means of knowledge, it appears that there would have been no issue estoppel and so he would not automatically have been debarred from denying means of knowledge in the penalty appeals: whether he should be allowed to do so would, rather, have fallen to be decided on Johnson v Gore Wood & Co principles. It would strike me as odd if Johnson v Gore Wood & Co's "broad, merits-based" approach applied in circumstances where a Tribunal had already decided a point but a stricter approach were taken when the previous proceedings had never been the subject of a decision but had instead been struck out. It is also, I think, important that the penalty appeals concern punitive measures. That, to my mind, militates in favour of a "broad, merits-based" approach rather than an Arbuthnot test." (HMRC v. Kishore [2021] EWCA Civ 1565, Newey LJ)
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Broad merits based judgment for points not determined
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- Lack of funds to pursue earlier litigation can be relevant
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"[33] With regard to the first of these points, Mr Singh did not dispute that a litigant's lack of funds could potentially be relevant to a Johnson v Gore Wood & Co assessment. In fact, Lord Bingham said in terms in Johnson v Gore Wood & Co that he "would not regard [lack of funds] as necessarily irrelevant, particularly if it appears that the lack of funds has been caused by the party against whom it is sought to claim", and in the present case Mr Kishore says that he ran out of money at least in part because of the way HMRC had conducted the Kittel appeals and their refusal to pay a repayment supplement which they eventually conceded was due to him in relation to the 12/05 period. Mr Singh's argument was essentially to the effect that lack of funds would be irrelevant to the application of an Arbuthnot-type test, but, as I have said, I do not consider such a test appropriate. In short, this ground of appeal is parasitic on the ground of appeal which I have already rejected and fails with it." (HMRC v. Kishore [2021] EWCA Civ 1565, Newey LJ)
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- Absence of notification of potential penalty can be relevant
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"[34] The position is similar with HMRC's final ground of appeal, that the UT erred in considering that the absence of any notification of an intention to impose a misdeclaration penalty was relevant to whether the penalty appeals were abusive. Once again, Mr Singh accepted that the absence of notification could potentially be of relevance to a Johnson v Gore Wood & Co assessment such as is, in my view, apposite. He was right to do so. In Johnson v Gore Wood & Co, Lord Bingham explained that the "broad, merits-based judgment" should take account of "all the facts of the case". In the circumstances, this ground of appeal must also fail." (HMRC v. Kishore [2021] EWCA Civ 1565, Newey LJ)
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- Abuse to appeal same decision twice after original appeal struck out
"[57] It is clear from the facts that the First Appeal was struck out following Mr WrightAnderson’s failure to comply with the Unless Order, and that this was the last in a long line of failures to comply with the Tribunal’s directions. It is thus a case where there has been both “want of prosecution” and inexcusable procedural failures. It follows that the New Appeal should therefore be struck out for abuse of process unless there is a “special reason” not to do so.
[58] The heart of Ms Anderson’s submissions was that Mr Henry had not known about these failures of his representative, and should be allowed to make the New Appeal. I considered whether this was a “special reason”.
...
[63] Although UT in Katib was considering a different issue (a late appeal application), the case illustrates the application of the principles set out in Hytec. I similarly find that reliance on Mr Wright-Anderson does not provide Mr Henry with a special reason, so as to provide an exception from the approach set out in Securum and Kishore. In my judgment, allowing Mr Henry with a “second bite of the cherry” would be an abuse of process. I therefore strike out the New Appeal under Rule (3)(c) of the Tribunal Rules." (Henry v. HMRC [2024] UKFTT 237 (TC), Judge Redston)
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- Not an abuse for HMRC to withdraw decision in relation to one product and then rely on it in relation to similar products
"[121] I am not persuaded that, applying a broad-based merits test, it was an abuse of the process of the Tribunal for the Commissioners to decline to repay the amount by which the duty paid by Matalan exceeded what would have been due if the qualifying swimwear received a "10" classification ("the excess duty"). I say that for the following reasons:
(a) there had been no judicial determination of the validity or otherwise of the essential proposition, which is a question of interpretation of the Code in relation to to facts which are not in dispute;
(b) whatever Matalan's expectations were, there was no agreement that the outcome of the first appeal would determine the classification for tariff purposes of Matalan's qualifying swimwear;
(c) the principle set out in paragraph 116 (a) derived from the decisions in Broken Hill, Hope, and Cafoor means that, even if the Tribunal had decided the essential proposition in Matalan's favour, neither it nor HMRC would be bound by that determination, as a matter of res judicata, in relation to future transactions or BTIs (although any BTIs put in place as a result of the Tribunal's decision would take effect, subject to the Code, in accordance with their terms);
(d) that result may be said to be inconsistent with the approach of the law in other contexts, but the "result is not to be regretted in the public interest";
(e) specifically it is in the public interest that traders should pay the correct amount of tax or duty – no more and no less;
(f) it is also in the public interest that taxpayers should receive fair treatment but I am not persuaded that in the present case Matalan has been unfairly treated to an extent that the latter should outweigh the former interest;
(g) if the doctrine of issue estoppel would not preclude HMRC from refusing to repay for the reasons stated above it is not easy to see how, in present circumstances, the doctrine of abuse of process could do so;
(h) the effect of holding that HMRC must repay the excess duty will be that Matalan receives a competitive advantage compared with other importers who have had to pay the correct amount. It is true that some traders within the Community may have had their goods in this category receive the "10" classification as a result of decision made in the Member States concerned (on the evidence there was considerable uniformity in applying the "90" classification); but that does not negate the desirability of ensuring as far as possible that duty is paid at the correct rate;
(i) Matalan has been put to trouble and expense in appealing the initial review decision. But that expense is not very considerable and Matalan have received £ 37,500 from HMRC in respect of it.
(j) Whilst the right-thinking man would be distinctly unimpressed by the way in which HMRC (taken as a whole) had handled this case, he would not, in my judgment, regard it as unjust that HMRC should not have to pay Matalan the excess duty." (Matalan Retail Ltd v. HMRC [2009] EWHC 2046 (Ch), Clarke J)
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- Abuse for litigant intended to be covered by sample case to seek to reargue
"[26] ... The Ashmore case is essentially a case of the marshalling of litigation. Where a civil court (or tribunal) is faced with an incident for which a defendant may be liable and which injured a large number of people or some situation where a large number of people similarly placed wish to make a contested claim against another, as was the case with the sex discrimination claim against the British Coal Board being made in the Ashmore case, the court, as a necessary part of the administration of justice, has to be prepared to make orders requiring the interested parties to come forward so that appropriate cases can be selected for trial and the parties can address the court upon whether their case raises any different issues from those selected. Each party has an opportunity to persuade the court that its case requires special treatment and should not follow the result of the selected cases. Any aggrieved party may seek to appeal such a procedural order. Where some interested party has been content not to intervene and awaits the outcome of the substantive trial, he must abide by the result, even if adverse, save possibly for seeking belatedly to intervene in order to support an appeal against the substantive decision. Simply to seek to relitigate the whole thing over again is an abuse of process and will not be allowed, as is more fully explained in the judgment of Stuart-Smith LJ in that case, [1990] 2 QB 338, at 345-355." (Re Norris [2011] UKHL 34)
- Not an abuse for HMRC to impose penalties after substantive litigation
"[50]...Johnson v Gore Wood & Co confirms that the "bringing of a claim or the raising of a defence in later proceedings may, without more, amount to abuse if the court is satisfied (the onus being on the party alleging abuse) that the claim or defence should have been raised in the earlier proceedings if it was to be raised at all". In the present case, however, Mr Kishore is complaining of HMRC's failure to do something other than make a claim or advance a defence in proceedings, viz. issue penalty assessments. Any proceedings were always going to be initiated by Mr Kishore; HMRC could never have invoked the penalties by way of defence to the Kittel appeals; and the penalties could not have been put in issue before the FTT, whether in conjunction with the Kittel appeals or otherwise, until after they had been raised. In any event, it is "wrong to hold that because a matter could have been raised in earlier proceedings it should have been, so as to render the raising of it in later proceedings necessarily abusive", as Lord Bingham explained in Johnson v Gore Wood & Co. For a party to be held to be acting abusively, it must be the case that he should have raised a claim or defence in previous proceedings, not just that he could have done so...
[51] ... For completeness, I should record that section 77(2) of the VATA provides that a penalty assessment "may be made at any time before the expiry of the period of 2 years beginning with the time when the amount of VAT due for the prescribed accounting period concerned has been finally determined"." (HMRC v. Kishore [2021] EWCA Civ 1565, Newey LJ)
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- HMRC not bound by position taken at earlier stage in litigation
"[92] Although HMRC did argue in FII CA 1 that section 33 ousted the common law claims, we do not consider that the stance it took in 2010 provides useful insight into the proper approach to be taken on these appeals to Issue 2, not least given the assumed and hypothetical basis on which the section 33 issue was canvassed in that case (see [251] of FII CA 1)." (HMRC v. Applicants in Post Prudential Closure Notice Applications Group Litigation [2024] UKUT 23 (TCC), Richard Smith J and Judge Cannan)
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- Query whether abuse for HMRC to take contradictory positions against same T in different litigations
"[33] Mr Thornton's second submission has similar roots. He says that it is an abuse of process for HMRC to submit before this Tribunal that the test for hardship is not met in circumstances where it is taking an inconsistent position in other proceedings against the appellant (Malik and others v Malik [2019] EWHC 1843 (Ch) per Falk J at [41]-[48]). Mr Thornton suggested that, in these circumstances, the appropriate action for the Tribunal to take was either to direct that HMRC could not make submissions which were inconsistent with its submission to the High Court in the winding up proceedings under the Tribunal's general case management powers in rule 5 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (the "Tribunal Rules") or to bar HMRC from taking part in these proceedings under rule 8 of the Tribunal Rules.
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[37] For reasons that will become apparent, it has not been necessary for us to determine the abuse of process issue in reaching our decision on the substantive issue and we do not do so." (Clear Pay Payroll Limited v. HMRC [2025] UKFTT 916 (TC), Judge Greenbank)
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(2) Party should bring whole case in single set of proceedings
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"[40] The law in relation to abuse of process has developed in the manner characteristic of the common law. Relevant principles have emerged as the courts have considered the circumstances of cases in which the issue has arisen in different contexts. As Lord Diplock indicated in Hunter at p 536, it would be unwise to confine the concept of an abuse of process to fixed categories. Nevertheless, a number of categories have become well established. Examples include the unfair or oppressive treatment of an accused, the rule in Henderson v Henderson (1843) 3 Hare 100 that requires a party to bring its whole case in a single set of proceedings, and the power to stay or dismiss proceedings which are frivolous or vexatious." ​(Mueen-Uddin v. Secretary of State for the Home Department [2024] UKSC 21)
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- Argument or evidence that could and should have been raised in related proceedings: must be abusing the process of the court
"[77] But for the court to uphold a plea of abuse of process as a bar to a claim or a defence it must be satisfied that the party against whom the bar is asserted is abusing the process of the court by oppressing the other party by repeated challenges relating to the same subject matter. It is not sufficient to establish abuse of process for a party to show that a challenge could have been raised in a prior litigation or at an earlier stage in the same proceedings. The party must go further and show that it should have been raised at that earlier stage and that it is abusive to raise the matter at the later stage.
[78] We are satisfied that there is no such abuse on this issue. The FII GLO litigation and the related GLO litigations proceeded against a background in which both domestic and EU law were in a state of significant development and interacted with each other in this GLO litigation. Henderson J in FII (HC) 2 (para 468) correctly spoke of “a complex and evolving legal landscape”. The three judgments of the CJEU on references in the FII GLO litigation in 2006, 2012 and 2013 together with judgments on references in other relevant proceedings, and the now three appeals to this court in the FII GLO litigation as well as the appeals to the House of Lords in Sempra Metals and to this court in Littlewoods and Prudential, are testimony to the evolving nature of that landscape. Issues which affect the FII GLO litigation have been decided in the other legal proceedings such as Littlewoods and the portfolio dividends GLO (including in Prudential) and vice versa. Against that background, it is unsurprising that questions that are of central importance to the claims in the FII GLO litigation have only recently been decided or are yet to be decided." (Test Claimants in FII Group Litigation v. HMRC [2021] UKSC 31)
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“Having a second go at proceedings on the basis of evidence which was available first time round but not adduced is likely to be the sort of abuse at which Johson v Gore Wood is aimed…For the reasons appearing in Johnson, they should not be entitled to fight on a limited factual basis in one tribunal, and keep some facts back and then deploy them in another tribunal in due course, and indeed use those facts as a reason for having a second bite at the cherry. There was nothing in the nature of the judicial review proceedings which forced that course on them. It was a litigation choice.” (Shiner v. HMRC [2015] UKUT 596 (TCC), §§63…66, Mann J).
“The crucial question is whether, in all the circumstances, a party is misusing or abusing the process of the court by seeking to raise an issue which could have been raised previously…It seems to us that the most appropriate forum for Mr Huitson to raise the Article 56 issue was in his own judicial review claim. There was no explanation as to why he did not raise the issue either in the Administrative Court or before the Court of Appeal…In all the circumstances and in the absence of any explanation we are satisfied that the application to amend was an abuse of process. That was one reason for which we refused permission to amend to introduce the Article 56 ground.” (Huitson v. HMRC [2015] UKFTT 448 (TC), §§63 – 65).​
- Consider the importance of the argument in the related proceedings
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"[117] First, as was emphasized by Lord Bingham in Johnson v Gore Wood (in the passage quoted above) the fact that Mr Kishore could have raised a point does not mean that he should have done so. It is still necessary to consider, in light of all the circumstances, whether it would be abusive to raise it now.
[118] We consider that an important consideration is the relevance of the point (that was not raised) to the issue that was determined in the first proceedings and its likely impact on the determination of that issue. As we have already pointed out, the fact (if it is so) that the Kittel appeals were struck out as a result of Mr Kishore’s lack of funds was a relevant factor to weigh in the balance as part of the fifth of the guidelines derived from the Data Select case." (Kishore v. HMRC [2020] UKUT 233 (TCC), Zacaroli J and Judge Raghavan)
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- Not abusive where taxpayer did not realise he could argue in the alternative
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“taking into account all the facts and circumstances of the case, in particular,
(1) that neither the paragraph 92 nor the undertaking argument has been previously considered by the Tribunal;
(2) that it was clearly not possible for Judge Brannan to have regard to the views expressed by Lord Glennie in Spring Salmon & Seafood Limited, almost 18 months after his decision was released;
(3) that Mr Thomas did not realise that he could argue in the alternative; and
(4) as Lord Bingham observed in Johnson v Gore Wood & Co, in the passage cited by Henderson J in Littlewoods (see paragraph 5, above), just because a matter could have been raised in earlier proceedings it does not follow that it should have been so as to render the raising of it in later proceedings necessarily abusive,
I have come to conclusion that the Company is not misusing or abusing the process of the Tribunal by seeking to advance the paragraph 92 argument and/or the undertaking argument.” (Spring Capital Ltd v. HMRC [2017] UKFTT 465 (TC), §16, Judge Brooks).
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- Abusive where HMRC allege dishonesty in penalty appeal and could have raised it in substantive tax appeal (but did not need to)
"[60] In our view, HMRC not only could but should have raised the allegation of dishonesty in the Kittel appeal. The failure to do so resulted in findings of fact against CCA and Mr Trees which have been used as prima facie evidence of his dishonesty in the section 61 DLN proceedings culminating in the 2024 Decision. This effectively circumvented the principle that a defendant should only face allegations of dishonesty when those allegations are clearly pleaded and particularised and where an opportunity is given to the defendant to answer those allegations." (Trees v. HMRC [2026] UKUT 92 (TCC), Rajah J and Judge Brannan)
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(3) Collateral attack on decision of a court of competent jurisdiction
"[44] Lord Diplock laid down what has since been regarded as the governing rule on this subject ([1982] AC 529, 541):
"The abuse of process which the instant case exemplifies is the initiation of proceedings in a court of justice for the purpose of mounting a collateral attack upon a final decision against the intending plaintiff which has been made by another court of competent jurisdiction in previous proceedings in which the intending plaintiff had a full opportunity of contesting the decision in the court by which it was made."
By "collateral" Lord Diplock meant an attack not made in the original proceedings which gave rise to the decision which the subsequent proceedings sought to impugn: an attack, in other words, which was not made by way of appeal in those original proceedings. Lord Diplock's statement of the relevant principle was not confined to collateral attacks on criminal convictions, and the authorities on which he relied were concerned with collateral challenges to previous decisions in civil proceedings." (Mueen-Uddin v. Secretary of State for the Home Department [2024] UKSC 21)
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"[122] More recently, in Tinkler v Ferguson [2021] EWCA Civ 18, the Court of Appeal (Peter Jackson LJ, with whom Dingemans LJ and Sir Richard McCombe agreed) confirmed (at [62]) that there is a group of cases, admittedly rare, where litigation may be abusive and therefore vulnerable to being struck-out even though not formally between the same parties or their privies. Peter Jackson LJ identified several mischiefs and relevant factors:
(1) Collateral attack;
(2) Overlap;
(3) Risk of inconsistent verdicts;
(4) Manifest unfairness to a Defendant;
(5) The public interest in the propriety of duplicative litigation.
[123] In my view, and applying the binding guidance outlined above, the present appeals are abusive and should be struck-out:
(1) The transactions are the same ones already considered and adjudicated on by the Tribunal in the Wilmslow Decision;
(2) These appeals do now seek, quite openly, to mount a collateral attack on those findings;
(3) The evidence would be the same as already considered by the Tribunal in the Wilmslow Decision;
(4) There is only the prospect of 'further' (sic) witness evidence from Messrs Grundy. This does not, in my view, constitute 'new' or 'fresh' evidence of a kind which could entirely change the aspect of the case, or which would justify allowing these appeals to go forward.
[124] There are also justice and public policy elements.
[125] As to justice: Recognising the caution in deploying my strike-out powers, I am nonetheless of the view that the interests of justice are justified in striking out these appeals. They are relitigation, using valuable (and scarce) public resources, many years after the relevant events, and thereby concerning matters which are, on any view, extraordinarily stale." (Mediability Limited v. HMRC [2023] UKFTT 315 (TC), Judge McNall)
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- Collateral attack on criminal conviction not permitted
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"[139] RB’s evidence and the case put forward at his criminal trial was that LPIP had treated the sale of the units to Anthology as taxable and accordingly VAT was payable. Clearly if no VAT was payable then there could have been no fraudulent evasion of it, contrary to section 72 (1) VATA.
[140] RB was the person controlling LPIP and the Tribunal did not find it credible that that he and LB, based on their statements made for their trial, thought ‘consistently’ that no tax was payable as the sale was instead a TOGC and only said the tax was payable at the Crown Court, and again at the Criminal Court of Appeal, on ‘the advice of their legal defence team’.
[141] Similarly, the Tribunal did not find it credible that LPIP had paid £535,000 to HMRC because of ‘the advice of their legal defence team’ that this was necessary to “avoid a custodial sentence”, as this payment was made only the day after BB were arrested.
[142] As stated by the Vice-Chancellor in Court of Appeal in Secretary of State for Trade and Industry v. Bairstow;- “ a collateral attack on an earlier decision of a court of competent jurisdiction may be, but is not necessarily, an abuse of the process of court if “the parties to the latest civil proceedings were not parties to or privies of those who were parties to the earlier proceedings then it will only be an abuse of process of the court to challenge the factual findings and conclusion of the judge and jury in an earlier action if (i) would be manifestly unfair to the party to the later proceedings that the same issues should be relitigated or (ii) to permit such re-litigation would bring the administration of justice into disrepute.
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[147] The administration of justice depends upon the evidence being given to any court or tribunal being the “truth, whole truth and nothing but the truth”. The evidence given to both the Crown Court and the Criminal Court of Appeal had, therefore, to be truthful and not subject to perjury. Whereas the Crown Court has not made any binding ruling on HMRC, and nor could it, it did hold a trial whose whole basis was that there was fraudulent behaviour in relation to tax due to HMRC.
[148] Accordingly, the Tribunal considers that if the FTT were to decide that a hearing should take place to reassert the very basis on which a court and a jury had been led to believe by BB was the basis of a transaction would bring the administration of justice into disrepute.
[149] The Tribunal does not accept that the legal tax issues were ‘not considered’ when in fact they were to the extent that tax was self-evidently considered to be payable.
[150] The Tribunal could not see that there was any ‘fresh evidence’ available now that was not available at the time: - a) the transaction was treated as taxable on exchange, b) at the time of the Crown Court hearing and c) at the time of the appeal to the Criminal Court of Appeal.” (Binfield v. HMRC [2022] UKFTT 364 (TC), Judge Gemmell)
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- Unless there is fundamental new evidence that could not have been obtained with reasonable diligence
"[45] Lord Diplock also made it clear at p 545 that there could be exceptions to "the general rule of public policy that the use of civil actions to initiate collateral attacks on final decisions against the intending plaintiff by criminal courts of competent jurisdiction should be treated as an abuse of the process of the court". In particular, he acknowledged that an exception would be justified where the plaintiff had come into possession of fresh evidence which was not available in the original proceedings and could not with reasonable diligence have been obtained then, but which entirely changed the aspect of the case. That exception was derived from the speech of Lord Cairns LC in Phosphate Sewage Co Ltd v Molleson (1879) 4 App Cas 801, 814." (Mueen-Uddin v. Secretary of State for the Home Department [2024] UKSC 21)
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Similar principle applies to foreign decisions and convictions
"[47] Hunter was concerned with proceedings impugning a decision taken in earlier criminal proceedings in this country. It is not in dispute on this appeal that the Hunter principle can also apply where a decision in foreign proceedings is impugned. However, whereas the risk that two inconsistent decisions of courts in the United Kingdom might bring the administration of justice into disrepute is evident, the risk may be less evident where the previous decision is that of an overseas court. Accordingly, it was submitted on behalf of the claimant that the Hunter principle could not be applied to foreign convictions without qualifications." (Mueen-Uddin v. Secretary of State for the Home Department [2024] UKSC 21)
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- As long as the person had a full and fair opportunity of contesting the decision in the proceedings
"[63] In the light of these authorities, it is plain that the present proceedings cannot be regarded as an abuse of process of the kind described in Hunter. As I have explained, Lord Diplock's statement of the relevant principle, cited at para 44 above, included as an essential element that the plaintiff "had a full opportunity of contesting the decision [in the previous proceedings] in the court by which it was made". That requirement was met in Hunter: the plaintiff had participated fully in the criminal proceedings against him and had an unrestricted ability to appeal against his conviction. The fairness of the proceedings was unimpeached. The same was true in subsequent cases where the principle laid down in Hunter was applied. In the present case, on the other hand, the claimant was tried in absence before the ICT. He could not realistically be expected to attend the trial or any subsequent appeal, since he faced a real risk of execution. Counsel appointed to represent him was seemingly either unwilling or unable to obtain his instructions. It is unclear what grounds, if any, he might have advanced on appeal, since he was debarred by the 1973 Act from relying on the procedural guarantees contained in the Bangladesh Constitution or on the Criminal Procedure Code or the Evidence Act, and was unable to challenge the ICT's decisions as to the admission of evidence (para 13 above). Furthermore, it is said on behalf of the claimant, without contradiction, that success in any appeal would in all likelihood have resulted in a retrial, at which he would again have been unable to appear because of the risk of execution, and at which the rules of evidence would again have been disapplied. In these circumstances, he did not have a full opportunity of contesting the decision of the ICT in the proceedings in which it was made. Accordingly, the fact that the present proceedings involve a challenge to the outcome of the trial before the ICT cannot render them an abuse of process." (Mueen-Uddin v. Secretary of State for the Home Department [2024] UKSC 21)
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- Difficult of now proving the relevant facts not a reason for a different approach
"[66] In the present case, the majority of the Court of Appeal considered that it was manifestly unfair for the Secretary of State to have to prove the claimant's guilt, so long after the events in question, in order to establish a defence of truth. I am unable to agree. But for the fact that the courts below reached a different conclusion, I should have regarded the Secretary of State's submission that the claimant's action is an abuse of process because it is difficult for him to establish his proposed defence as unarguable. It is difficult to accept that, if the Secretary of State is unable to establish the truth of his allegations against the claimant, therefore he can defame the claimant with impunity." (Mueen-Uddin v. Secretary of State for the Home Department [2024] UKSC 21)
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