Gardner-Shaw (UK) Ltd and Others v Revenue and Customs Commissioners
| Jurisdiction | UK Non-devolved |
| Judgment Date | 25 January 2019 |
| Neutral Citation | [2018] UKUT 419 (TCC) |
| Date | 25 January 2019 |
| Court | Upper Tribunal (Tax and Chancery Chamber) |
Upper Tribunal (Tax and Chancery Chamber)
Tribunal Mr Justice Fancourt, Judge Charles Hellier
Jonathan Hall QC and Will Hays, instructed by the General Counsel and Solicitor to HM Revenue and Customs, appeared for the respondents
David Bedenham, instructed by Rainer Hughes appeared for the appellants
Procedure – Appeal against variation by FTT of directions for disclosure – Tibbles v SIG plc [2012] 1 WLR 2591 applied – Appeal allowed.
[1] This is an appeal against the decision of Tribunal Judge Mosedale in the First-tier Tribunal (Tax Chamber) (“FTT”) made on 3 August 2018, brought with permission of the Judge. The issue raised is whether it was proper for the Judge, on case management grounds, to revise directions about disclosure that had been given previously by the FTT, at a time when those directions had been the subject of an unsuccessful appeal by HMRC to the Upper Tribunal and a further appeal to the Court of Appeal was pending.
[2] The circumstances of the underlying proceedings are set out in the decision of the Upper Tribunal just referred to – R & C Commrs v Hare Wines Ltd [2017] UKUT 465 – and it is not necessary to repeat them here. They concern the introduction of the so-called Alcohol Wholesalers Registration Scheme (“AWRS”) with effect from 1 April 2016. The underlying appeals by the appellants are against HMRC's decision, in each case, that they are not fit and proper persons to carry on the controlled activity of wholesale trade in duty-paid alcohol. The decisions are treated as “ancillary matters” for the purposes of section 16(4) of the Finance Act 1994 and so the appeals consist of a review of the decision-making of HMRC. The issue is whether the decision is one that the decision maker could not reasonably have made. These appeals have yet to be heard in the FTT. Until 20 June 2018 they were stayed. We refer to the underlying appeals in this judgment as the “substantive appeals”, to distinguish them from the procedural appeals to which we referred in para 1 above.
[3] The relevant procedural history is the following.
- On various dates between 7 October 2016 and 4 April 2017, the first nine Appellants issued the substantive appeals to the FTT against the decision of HMRC that they were not fit and proper persons.
- On various dates between 4 November 2016 and 22 May 2017, the FTT issued directions for disclosure in relation to those nine appellants, which included a requirement that HMRC send a list of all documents which were considered by the Respondent's officer when reaching the decision at issue in this appeal. There were also directions for an expedited trial in a trial window within a few months of the date of the directions. The directions included a statement that any party might apply at any time for the directions to be amended, suspended or set aside.
- In the case of Magicspellbrewery Limited, the appeal was not lodged until 14 June 2017 and directions were subsequently issued in a different form on 4 November 2017.
- In those substantive appeals where extended disclosure directions were given before 15 May 2017, HMRC promptly applied to the FTT in each case seeking to vary the directions about disclosure of their documents. They sought a standard order (in terms of rule 27(2) of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009) for disclosure of those documents on which they intended to rely or that they intended to produce at the hearing of the appeal. The appellants refused to agree the proposed variation.
- A hearing of these applications in the case of five appellants took place on 8 May 2017 before Judge Sinfield. He dismissed HMRC's applications to vary the disclosure directions in a written decision dated 15 May 2017 ([2017] TC 05875). He gave detailed reasons why, in a case where the FTT is exercising a supervisory jurisdiction over decisions made by HMRC, a more extensive order for disclosure was necessary for the fair hearing of the appeals. Judge Sinfield's decision, at para [28], gave his reasons for concluding that any confidential material considered by the decision-maker should be included in HMRC's list of documents, marked as such, and stated that HMRC could then apply, on a case by case basis, to exclude such material from further disclosure or production.
- In those substantive appeals in which extended disclosure directions had not already been given, such directions for disclosure were made shortly after the decision of Judge Sinfield.
- HMRC did not comply with any of the disclosure directions. They notified the FTT that they were intending to appeal Judge Sinfield's decision and requested a suspension of the directions ordered pending the decision on their application for permission to appeal.
- On 12 June 2017, HMRC applied for permission to appeal against Judge Sinfield's decision. It was granted on about 28 June 2017.
- At about the same time, in each of the substantive appeals then pending, HMRC applied for a stay pending the decision of the Upper Tribunal. These applications were made on the basis that the decision of Judge Sinfield affected all the substantive appeals and/or addressed an issue that arose in respect of the substantive appeal in question and the order for directions that had been made in it. When the appellants indicated that they were not willing to proceed on an expedited basis without the disclosure that had been ordered, the FTT ordered a stay of the substantive appeals until 14 days after the Upper Tribunal's decision.
- On 6 December 2017, the Upper Tribunal (Tax and Chancery Chamber) issued a decision (identified in para 2 above) rejecting HMRC's appeal against Judge Sinfield's decision. The appellant in Magicspellbrewery Limited applied for the directions in its substantive appeal to be varied in accordance with the Upper Tribunal's decision.
- On 22 December 2017, HMRC applied for permission to appeal, on the basis that the Upper Tribunal's judgment, if correct, would justify similar directions in all AWRS appeals to the FTT.
- HMRC then applied in each of the substantive appeals for a further stay of the directions or the substantive appeal pending the outcome of the application. The further stays were granted.
- On 21 February 2018, the Upper Tribunal refused HMRC permission to appeal.
- The following day, HMRC applied for stays in each of the substantive appeals for a period of a month pending its decision whether or not to seek to appeal to the Court of Appeal.
- On 15 March 2018, HMRC applied to the Court of Appeal for permission to appeal.
- On 19 March 2018, HMRC applied to the FTT for a further stay of directions in all the substantive appeals until after the Court of Appeal had finally disposed of the proposed appeal.
[4] On this occasion the appellants vigorously objected to any further stay. Accordingly, a hearing of HMRC's application was held by Judge Mosedale on 2 May 2018. In a written decision dated 20 June 2018, she gave detailed reasons for refusing any further stay. Her decision was made essentially on the basis that potential prejudice to the appellants in delaying a substantive determination was considerably greater than potential prejudice to HMRC in having to conduct a disclosure exercise that the Court of Appeal might later hold to be inappropriate. The Judge allowed the parties to make representations on what was a reasonable time within which HMRC should carry out and complete the disclosure exercise, making it clear that time would run from the date of the decision and that HMRC should begin the exercise immediately.
[5] At the expiry of the period of 14 days within which HMRC was to make representations about what was a reasonable period of time, HMRC adduced evidence and made representations on two matters. First, that up to 6 months was needed to review documents and prepare and make any appropriate public interest immunity (“PII”) application, on the basis that there were about 1,400 documents in the 11 remaining appeals of which about 500 might be “sensitive” documents. Second, HMRC applied to amend the wording of the disclosure direction to...
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