Budhdeo and Others
| Jurisdiction | UK Non-devolved |
| Judgment Date | 29 March 2019 |
| Neutral Citation | [2019] UKFTT 216 (TC) |
| Date | 29 March 2019 |
| Court | First Tier Tribunal (Tax Chamber) |
[2019] UKFTT 216 (TC)
Judge Barbara Mosedale
Mr Budhdeo appeared in person
Mr K Koonjah appeared for Mr Mathew
Mr Hundal appeared in person
Procedure – Application for stay by one appellant subject to COP9 enquiry the scope of which might encompass matters the subject of this appeal – Whether real risk of serious prejudice which might lead to injustice if these appeals proceed – No – Stay refused – Directions for resolution of appeals given – Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (SI 2009/273), r. 5(3)(j).
The First-tier Tribunal (FTT) refused a taxpayer's request to stay an appeal as it was not satisfied that by the appeal proceeding there was a real risk of serious prejudice to the taxpayer which could have led to injustice.
Mr Budhdeo, Mr Hundal and Mr Mathew had each appealed against decisions of HMRC which imposed personal liability on them for PAYE which was allegedly underpaid by Intercare Homecare Ltd (Intercare) of which they were directors. It had been directed that the appeals be joined for case management and hearing.
Mr Budhdeo asked for the appeal to be stayed on the basis that: (a) he was a party to judicial review proceedings against HMRC; and (b) he was subject to a COP9 enquiry which amounted to a criminal charge (see Gold Nuts Ltd [2016] TC 04875 [116]) and engaged his right not to self-incriminate. HMRC objected to the application. Mr Hundal wanted the cases to be heard together but did not advance a positive case that Mr Budhdeo's appeal should be stayed. Mr Mathew wanted his case heard as soon as possible and did not want his appeal stayed whatever happened with Mr Budhdeo's case.
The FTT accepted that the affairs of Intercare were not the main focus of the COP9 investigation at least initially, but it did not accept HMRC's position that any overlap between the affairs of Intercare and the COP9 investigation would be necessarily limited.
The FTT noted that fundamentally, the objective was to resolve the three appeals fairly and justly. Therefore, in considering whether to stay the appeal, as it could under SI 2009/273, r. 5(3)(j), it had to consider all relevant matters, such as:
- the public and the parties’ interest in resolving appeals without unnecessary delays;
- the fact that these three appeals had been directed to be heard together because they concerned the same facts so that it followed that separate determinations would risk different outcomes, with the potential for bringing the administration of justice into disrepute; and
- HMRC as well as one of the appellants opposed the stay.
The FTT also found that it needed to consider whether there was potential unfairness to Mr Budhdeo and/or a breach of his right not to self-incriminate in requiring him to prosecute this appeal while the COP9 enquiry was hanging over his head.
In accordance with Akciné Bendrové Bankas Snoras (in bankruptcy) v Antonov [2013] EWHC 131 (Comm), the FTT noted that it should only stay pending criminal proceedings where “there is a real risk of serious prejudice which may lead to injustice”.
The FTT found that compelling Mr Budhdeo to answer questions in this appeal might be a breach of his rights under the European Court of Human Rights (ECHR). However, Mr Budhdeo's right not to self-incriminate was easily protected in that the tribunal would simply not exercise its powers under SI 2009/273, r. 16 to compel Mr Budhdeo to give evidence. So, Mr Budhdeo's right not to self-incriminate could be protected without any stay.
The right not to self-incriminate did not extend to documents (per Saunders v UK (1996) 23 EHRR 313 and the Attorney General's Reference No 7 of 2000 [2001] WLR 1879).
The FTT found the real issue to be fairness: Mr Budhdeo could exercise his right not to self-incriminate by refusing to give evidence. The question was whether it was fair to continue with the appeal and put him in a position where he might have had to choose between answering a question in order to support his appeal or refusing to answer in order not to self-incriminate.
The FTT decided that:
- Any stay would have been for an uncertain period, and potentially indefinitely.
- It had already been decided that the three appeals should proceed together and by staying Mr Budhdeo's appeal indefinitely it would have the effect of staying Mr Hundal and Mr Mathew's appeals indefinitely for no reason connected with those two appellants.
- Mr Budhdeo had not identifed any specific prejudice to him if he gave oral evidence in the civil proceedings but was later prosecuted.
- It was not obvious that a good defence in this case could prejudice him in any COP9 enquiry.
- There should be no procedural prejudice to Mr Budhdeo in these proceedings by refusing the stay.
The FTT concluded that a stay was not justified as it was not satisfied that there was a real risk of serious prejudice to Mr Budhdeo which could lead to injustice. On the contrary, it considered that the balance of fairness to all parties was in the three appeals proceeding jointly without any stay.
The taxpayer wanted proceedings in joined appeals against the imposition of personal liability for PAYE on three directors to be stayed because he was subject to a COP9 enquiry and had a right not to self-incriminate. The FTT found that the taxpayer could exercise his right not to self-incriminate by refusing to give evidence, but found the real question to be whether it was fair to continue with the appeal and put the taxpayer in a position where he might have had to choose between answering a question in order to support his appeal or refusing to answer in order not to self-incriminate. The FTT concluded that a stay was not justified with one of the factors being that the taxpayer had not identified any specific prejudice to him if he gave oral evidence in these...
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Budhdeo and Others
...and the application was set down for hearing. That application was refused by the Tribunal following a hearing on 12 December 2018 ([2019] TC 07063 released on 29 March 2019). The reasons given by Judge Mosedale in her decision speak for themselves, but we note that she held that, although ......