HMRC v Charles Michael O'Rorke
| Jurisdiction | UK Non-devolved |
| Judge | MR JUSTICE HILDYARD |
| Judgment Date | 13 April 2013 |
| Neutral Citation | [2013] UKUT 0499 (TCC) |
| Respondent | MR CHARLES MICHAEL O’RORKE |
| Appellant | REVENUE AND CUSTOMS |
| Court | Upper Tribunal (Tax and Chancery Chamber) |
| Appeal Number | FTC/39/2012 |
[2013] UKUT 0499 (TCC)
Appeal number FTC/39/2012
National Insurance Contributions – Personal Liability Notice – decision on
preliminary issue – personal liability to pay NICs which the company has
failed to pay – whether attributable to the “neglect” of the company’s officer
– meaning of “neglect” – whether a subjective or objective test – held by
FTT that it is a subjective test – in consequence, medical evidence excluded
at earlier directions hearing to be readmitted for consideration by the
Tribunal – held allowing the appeal that it is an objective test – but matter to
be remitted back to the Tribunal for further directions, given relevance of
medical evidence to plea of fraud
UPPER TRIBUNAL (TAX AND CHANCERY CHAMBER)
THE COMMISSIONERS FOR HER MAJESTY’S
REVENUE AND CUSTOMS Appellants
- and -
MR CHARLES MICHAEL O’RORKE Respondent
TRIBUNAL: MR JUSTICE HILDYARD
Sitting in public at the Rolls Building, London EC4A 1NL on 12 & 13 April 2013
Ms Elizabeth Wilson, instructed by the General Counsel and Solicitor to HM Revenue
and Customs for the Appellants
The Respondent in person
© CROWN COPYRIGHT 2010
2
DECISION
Mr Justice Hildyard :
The issue on appeal
1. In this appeal from a decision of the First Tier Tribunal (“the FTT”, 5 constituted in this case by Sir Stephen Oliver QC and Ms Anne Redston) the
sole issue (which was directed to be heard as a preliminary issue) is as to the
meaning of the term “neglect” in section 121C of the Social Security
Administration Act 1992 (“SSAA 1992”).
2. The preliminary issue arises in the context and course of a substantive appeal 10 by the Respondent (“Mr O’Rorke”) against a personal liability notice issued to
him on 3 September 2009 under that section 121C (“the main proceedings”).
3. Put very shortly, and as amplified later, section 121C SSAA 1992 creates an
ancillary (but alternative) personal liability for payment of NIC for certain
officers of a company where that company is primarily liable but has failed to 15 pay the contributions in question in consequence of a relevant officer’s “fraud
or neglect”.
Procedural background and context in which the issue arises
4. In the main proceedings, a differently constituted FTT (comprised of Judge
Nicholas Aleksander) made a case management direction (dated 24 June 2010) 20 that Mr O’Rorke should not be permitted to rely on expert medical evidence
(nor certain correspondence relating to it) on the ground that the term
“neglect” imports an objective test, the standard being what the reasonable and
prudent man of business would have done. On that basis, Judge Aleksander
considered that the proposed expert evidence as to the subjective state of mind 25 and condition of Mr O’Rorke could be of no assistance and he refused its
admission.
5. However, Mr O’Rorke then caused the issue to be referred to a differently
constituted FTT; and upon that reference, Sir Stephen Oliver QC and Ms
Redston, both noted experts in the field, did not agree with Judge Aleksander. 30 On 11 March 2011, after submissions on a preliminary issue as to the true
meaning of the term “neglect”, they resolved the issue in favour of Mr
O’Rorke. They set aside Judge Aleksander’s direction accordingly under Rule
5(2) of the Tribunal Procedure (First Tier Tribunal) (Tax Chamber) Rules
2009. 35
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