DX Lingajothy t/a Flying Dragon v The Commissioners for HMRC
[2023] UKUT 63 (TCC)
The Commissioners for HMRC v Michael Breen
16 October 2023
[2023] UKUT 252 (TCC)
Upper Tribunal
Mr. Breen's tax appeal was thrown out because he didn't follow the rules. A judge brought it back, but a higher court said the judge made mistakes and sent the appeal back to be thrown out again. The higher court said it was important to follow the rules of the court.
Key Facts
- •Mr. Breen's appeal concerned income tax assessments totaling £942,131.68 for the years 1996/97 to 2011/12.
- •Mr. Breen repeatedly failed to comply with various FTT directions and orders, including deadlines for providing a list of documents and other information.
- •His appeal was automatically struck out due to non-compliance with an 'unless order' issued by Judge Bailey.
- •Mr. Breen applied for reinstatement of his appeal.
- •The FTT reinstated the appeal, a decision appealed by HMRC.
Legal Principles
Martland test for reinstatement after automatic strike-out: (1) seriousness of delay, (2) reasons for delay, (3) all relevant circumstances, with emphasis on efficient litigation and compliance.
[2018] UKUT 178 (TCC) (Martland v HMRC)
In reinstatement applications following an unless order, the Upper Tribunal should generally disregard the merits of the underlying appeal, except where the appellant's case is 'unanswerable'.
[2019] UKUT 2009 (Chappell v The Pensions Regulator)
Appellate courts should not interfere with case management decisions unless the decision is plainly wrong or outside the ambit of discretion.
[2017] UKSC 55 (BPP Holdings v HMRC)
If an error of law might have affected the outcome of an FTT decision, justice usually requires setting aside the decision.
[2017] EWCA Civ 1427 (Degorce v HMRC)
Outcomes
HMRC's appeal allowed.
The FTT erred by finding no prior requirement for Mr. Breen to provide points of objection and witness information (perverse finding), and by considering the burden of proof in the underlying appeal as a relevant factor for reinstatement.
FTT's reinstatement decision set aside and remade.
The Upper Tribunal remade the decision, finding that Mr. Breen's appeal should remain struck out due to his extensive history of non-compliance.