Martland v Revenue and Customs Commissioners
| Jurisdiction | UK Non-devolved |
| Judgment Date | 01 June 2018 |
| Neutral Citation | [2018] UKUT 0178 (TCC) |
| Date | 01 June 2018 |
| Court | Upper Tribunal (Tax and Chancery Chamber) |
[2018] UKUT 0178 (TCC)
Upper Tribunal (Tax and Chancery Chamber)
Judge Roger Berner, Judge Kevin Poole
The appellant did not attend and was not represented
Paul Luckhurst, instructed by the General Counsel and Solicitor to HM Revenue and Customs, appeared for the respondents
Excise duty – Assessment to duty and wrongdoing penalty – Application for permission to make late appeal – Test to be applied – Appeal dismissed.
[1] This is the appeal of the appellant, William Martland, from the decision of the First-tier Tribunal (“FTT”) (Judge Anne Fairpo), neutral citation [2017] TC 06131. In that decision (“the FTT Decision”), the FTT refused his application for permission to notify a late appeal to the FTT in connection with an assessment of Excise Duty of £24,694 and a related wrongdoing penalty of £9,507. Accordingly, it struck out the appeal.
[2] The appellant appeals against the FTT Decision with permission of the Upper Tribunal (Judge Herrington).
[3] The appellant had been represented by Rainer Hughes, solicitors, but the Tribunal received notice on 28 March 2018 (less than a month before the hearing) that they were no longer acting. When no skeleton argument was submitted by the appellant two weeks before the hearing as directed by the Tribunal, he was contacted and required to indicate his intentions in relation to the appeal. He did so, informing the Tribunal that he had not been told about the hearing date by his former representatives, had not seen the grounds of appeal to this Tribunal or the permission to appeal that had been granted. He indicated that he would not be able to attend the hearing as he had just started full time employment, but he still wished the matter to go to the Tribunal. He submitted some short written representations in support of his appeal.
[4] In the circumstances, we decided it was in the interests of justice to proceed with the hearing in the appellant's absence, taking account of the written representations which he had put forward and the formal grounds of appeal which had previously been submitted by his former representatives.
[5] The FTT made the following findings of fact (at [2] to [12] of the FTT Decision):
[2] The Respondents (HMRC) issued the applicant with an assessment in respect of excise duty on a load of mixed beer brought into the United Kingdom on 18 December 2013 on a vehicle driven by the applicant. It appears that the importation was a “mirror load” as the Administrative Reference Code (ARC) used for the import had been used on a previous occasion. The load and the vehicle were accordingly seized at the border. Neither the seizure of the load nor the seizure of the vehicle was challenged by any person.
[3] The CMR and the Electronic Movement Control System showed the haulier as “Walker Transport”; the applicant advised HMRC that he had been engaged by “T & C Metals & Haulage” to drive the load. He was paid cash in hand and had no documentary evidence of employment.
[4] HMRC were unable to establish contact with either Walker Transport or T&C Metals & Haulage.
[5] On 17 May 2014, HMRC wrote to the applicant to inform him that they intended to issue him with an assessment to excise duty on the basis that he was the person “holding the goods intended for delivery” under regulation 13(1) & (2) of the Excise Goods (Holding, Movement & Duty Point) Regulations 2010. A wrongdoing penalty was issued under regulation 41(4)(1)(a) Finance Act 2008 on the basis that the applicant had acquired possession of the goods as he had physically carried the goods.
[6] On 17 June 2014, the applicant's solicitors wrote to HMRC to advise that they had been instructed on the applicant's behalf. HMRC requested written authorisation from the applicant to enable them to respond to the solicitors' correspondence.
[7] The assessment for excise duty of £24,694 and a penalty of £9.507 was raised on 30 June 2014.
[8] A letter of authority from the applicant in respect of his solicitors was received by HMRC on 20 July 2015.
[9] The applicant requested a review of the decision to issue the assessment and penalty on 27 August 2015. On 22 September 2015 HMRC requested that the applicant provide reasons for the late review request.
[10] On 1 October 2015, the applicant's solicitors wrote to HMRC to advise that they had not been in receipt of funds or instructions and so had not been able to take action earlier.
[11] HMRC rejected the late request for a review on 5 October 2015.
[12] The notice of appeal in respect of the assessment and penalty was submitted on 29 October 2015.
[6] Put briefly, the FTT decided:
- that, in considering the exercise of its jurisdiction to permit the appeal to be notified out of time, it was bound in the first instance to apply the overriding objective set out in rule 2 of the Tribunal Rules1Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (the FTT Rules), to deal with cases fairly and justly (at [24]); and
- (at [25]) that, in doing so, it was appropriate to carry out a balancing exercise, considering the questions set out by the Upper Tribunal in Data Select Ltd v R & C Commrs [2012] BVC 1,743, namely:What is the purpose of the time limit?How long was the delay?Is there a good explanation for the delay?What will be the consequences for the parties of an extension of time?What will be the consequences for the parties of a refusal to extend time?
- In considering these questions, it was appropriate to consider all the circumstances of the case, including the matters set out in rule 3.9 of the Civil Procedure Rules. In that context, following the decision in BPP Holdings Ltd v R & C Commrs [2016] BVC 9, where the Court of Appeal had held that compliance ought to be expected unless there was good reason to the contrary, there was no justification for tribunals taking a more relaxed approach than that under the CPR, and the interests of justice in this context encompassed not just the particular parties but also the wider justice system.2This approach was subsequently effectively endorsed by the Supreme Court in BPP Holdings Ltd v R & C Commrs [2017] BVC 36
[7] Under the five headings which it derived from Data Select, the analysis of the FTT was, in summary, as follows:
- The purpose of the time limit was, in the public interest, to promote legal certainty and security. As such, it was to be respected unless there was good reason to the contrary.
- The length of the delay in this case was from 30 July 2014 (the statutory deadline for the appeal) to 29 October 2015, almost 15 months. This was clearly a significant and serious delay.
- The explanation for the delay was that the appellant could not afford representation earlier, though he had instructed solicitors when first advised by HMRC that they would be issuing an assessment and penalty. The FTT observed that limited information as to the applicant's finances has been provided and, in any case, an applicant's financial position cannot be determinative. It saw no reason why the appellant could not have brought his appeal without legal representation or, at the very least, have continued his communication with HMRC or obtained other advice as to how to proceed. He could also have asked his solicitors what his options were when they informed him they were unable to continue acting. The FTT went on to say that, in summary, I do not consider that it has been shown that a lack of funds for representation is a reasonable excuse for the delay in bringing the appeal.
- Clearly an extension of the time limit would be of significant benefit to the appellant, allowing him to bring his appeal. It was argued that HMRC would not be prejudiced, as the appellant had at least a prima facie case, and cases on similar facts were under examination by the Upper Tribunal. The FTT discounted that argument altogether:I do not consider the fact that there are similar cases which may be appealed should be regarded as meaning that HMRC cannot be entitled to regard the matter as closed, nor should that fact mean that time limits can be breached.The FTT also made this comment about the merits of the appeal:the evidence provided and the state of case law do not indicate however that the case is not without merit … this case seems neither very strong nor very weak and so I have concluded that no significant weight for or against the extension of time should be given to the strength or otherwise of the applicant's case in the substantive appeal.
- The FTT noted that the appellant would quite possibly be made bankrupt if not permitted to appeal, but essentially regarded that as a simple consequence of the appellant failing to appeal in time without good reason. HMRC might be regarded as receiving a windfall if the appeal was not allowed to proceed, but the appellant's argument that the procedural rules should not permit a potential misapplication of the law in a case where the legal principles are not settled did not, in the FTT's view, afford sufficient reason for extending time:To permit an extension of time of more than a year because there is potential legal uncertainty in the subject matter of the substantive appeal would have a significant impact on the wider system and not just on the parties involved in this case.
[8] After “[c]onsidering the various questions in Data Select, and all the circumstances of the case”, the FTT decided not to allow the appeal to be notified out of time, and accordingly struck out the proceedings.
[9] The appellant sought permission to appeal against the FTT Decision, essentially on two grounds. In summary, these were:
- First, that the FTT had wrongly meshed together two questions that it was required to consider separately, namely (a) the reason for the delay; and (b) the consequences of a refusal to extend time. This arose from the FTT's statement at [46] as follows:The submissions in respect of the applicant's...
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