The Commissioners for HMRC v Michael Breen
[2023] UKUT 252 (TCC)
DX Lingajothy t/a Flying Dragon v The Commissioners for HMRC
13 March 2023
[2023] UKUT 63 (TCC)
Upper Tribunal
Someone's tax appeal was thrown out for missing a deadline. They tried to get it back, saying the judge made mistakes. The higher court looked at the case and said the judge didn't make any big mistakes that would change the outcome, so they kept the appeal thrown out.
Key Facts
- •The appellant appealed against the First-tier Tribunal's (FTT) refusal to reinstate an appeal automatically struck out for non-compliance with an unless order.
- •The appellant's underlying appeal concerned discovery assessments and a closure notice totaling approximately £160,000.
- •The appellant's representative applied to vary the unless order on the same day compliance was due, but the parties dispute whether this application was filed in time.
- •The FTT refused to reinstate the appeal without determining the variation application.
- •The Upper Tribunal granted permission to appeal on grounds that the FTT erred by not determining the variation application, not considering the application and unsigned witness statement, and not seeking submissions from the parties on the variation application.
Legal Principles
Three-stage test for reinstatement applications following a strike-out (seriousness and significance of breach, reasons for breach, all circumstances of the case).
Martland v HMRC [2018] UKUT 178 (TCC); Denton v TH White Ltd [2014] EWCA Civ 906
In-time applications to vary an unless order do not engage principles concerning relief from sanctions; out-of-time applications do.
Everwarm Ltd v BN Rendering Ltd [2019] 4 WLR 107
A breach of an unless order is a pointer towards seriousness and significance, but not determinative.
British Gas Trading Ltd v Oak Cash & Carry Ltd [2016] EWCA Civ 153
The Upper Tribunal will be slow to interfere with the FTT's exercise of discretion in case management decisions unless the judge has made errors of principle or failed to take into account relevant matters.
NTK Leisure Limited v HMRC [2022] UKUT 00289 (TCC); Walbrook Trustee (Jersey) Ltd v Fattal [2008] EWCA Civ 427; BPP Holdings Ltd & Ors v HMRC [2017] UKSC 55
Judges should consider the tribunal file, including material not specifically relied on by the parties, when making decisions, and draw parties' attention to relevant material on file for submissions.
Balls v Downham Market High School & College [2011] IRLR 217
Outcomes
Appeal dismissed.
The FTT’s finding that the variation application was out of time was a finding of fact supported by the evidence. Even if in time, the FTT was entitled to consider the application abandoned. The FTT’s error in not considering the unsigned witness statement at Stage 1 of the Martland test was not material. The FTT was not obliged to search the file for all potentially relevant, unmentioned documents and seek submissions.