Paul Daniel v The Commissioners for HM Revenue and Customs
| Jurisdiction | England & Wales |
| Judge | Lord Justice Tomlinson,Mr Justice Morgan,Lord Justice Rix |
| Judgment Date | 21 December 2012 |
| Neutral Citation | [2012] EWCA Civ 1741 |
| Docket Number | Case No: A3/2012/0532 |
| Court | Court of Appeal (Civil Division) |
| Date | 21 December 2012 |
[2012] EWCA Civ 1741
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
UPPER TRIBUNAL (TAX AND CHANCERY CHAMBER)
Upper Tribunal Judge Bishopp
TCC/JR/05/2011
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Rix
Lord Justice Tomlinson
and
Mr Justice Morgan
Case No: A3/2012/0532
Philip Coppel QC, Keith GordonandXimena Montes Manzano (instructed by Winston and Strawn London) for the Appellant
Akash Nawbatt and Christopher Stone (instructed by Solicitors Office, HMRC) for the Respondent
Hearing date : 19 July 2012
The Appellant taxpayer challenges a case management decision made by Upper Tribunal Judge Bishopp on 12 January 2012. I should emphasise at the outset that nothing I say in this judgment is intended to express any view in relation to the merits of the underlying dispute between the taxpayer and HMRC. My observations are intended to be restricted to matters of case management.
On 8 December 2009 HMRC issued to the Appellant a determination to the effect that he had been resident and ordinarily resident in the UK during the tax year 1999/2000. On 21 December 2009 HMRC issued to the Appellant a "Discovery Assessment" to tax in the sum of £10,004,998 in respect of that year. HMRC concluded that the time limit for making a Discovery Assessment was extended by reason of negligent conduct of the taxpayer who should have known that his residence status was in doubt when completing his 1999/2000 tax return and in declaring himself non-resident.
It is the Appellant's case that he left the UK on 5 March 1999 in order to take up full time employment abroad. In March 2000 he sold shares in Morgan Stanley Dean Witter, by an associate company of which he had been employed before March 1999, thereby realising a very substantial gain. He accepts that he was resident and ordinarily resident in the UK in both the 1998/1999 and 2000/2001 years of assessment. His dispute with HMRC concerns the year 1999/2000 in which the disposal took place.
The Appellant requested a review of both decisions. By decision letter of 3 February 2011 an Inspector of Taxes announced that she had reviewed both decisions and had determined that they should be upheld.
The Appellant thereupon issued two sets of proceedings challenging the decisions. He issued a statutory appeal which falls within the jurisdiction of the First tier Tribunal. Separately, he issued proceedings in the Administrative Court seeking permission to proceed with a claim for Judicial Review of the decision of 3 February 2011, and thereby of the two underlying decisions. He contended that he had had a legitimate expectation that HMRC would apply to his case the provisions of its general guidance booklet, IR 20, published in October 1996, which sets out general guidance as to the approach to be taken to decisions concerning a person's residence status for tax purposes. He contended that HMRC had in his case failed properly to adhere to and to apply the relevant guidance.
On 3 August 2011 His Honour Judge Thornton QC, sitting as a Deputy Judge of the Administrative Court, acting pursuant to powers given by s.31A of the Senior Courts Act 1981, transferred the Judicial Review proceedings to the Tax and Chancery Chamber of the Upper Tribunal.
On 9 December 2011 there took place a combined case management hearing in respect of both the statutory appeal and the application for permission to proceed with the claim for Judicial Review. It was heard by Upper Tribunal Judge Bishopp sitting as both a judge of the Upper Tribunal and as a judge of the First tier Tribunal, of which he is as it happens President.
Upper Tribunal Judge Bishopp granted the Appellant permission to seek Judicial Review and there is no appeal against that decision.
Upper Tribunal Judge Bishopp was asked to stay the statutory appeal until after determination of the claim for Judicial Review. He declined to do so. Rather he stayed the claim for Judicial Review until 28 days after the release of the First tier Tribunal's decision in the statutory appeal, and gave directions intended to lead to a hearing of that appeal in the period May to July 2012.
It is against that latter decision that the Appellant now appeals, with permission of the Upper Tribunal Judge. Upper Tribunal Judge Bishopp considered that "The manner in which these Chambers should handle applications for Judicial Review when there is a related appeal against an assessment is unclear and of sufficient importance to warrant consideration by the Court of Appeal, and I accordingly give permission."
Judge Bishopp gave succinct reasons for his case management decision, as follows:-
"2. The appellant, by Mr Philip Coppel QC, argued vigorously that he should be given permission, and that his judicial review application should be heard first. A judicial review hearing would take no more than two days, and could be determined on the facts as they are set out in the appellant's witness statement. The only question to be determined was whether, on those facts (which would be assumed to be correct for that purpose) the Commissioners had failed to apply their own published guidance, IR20, correctly. An outcome favourable to the appellant would compel the respondents to think again, and therefore make a fresh decision. This was the most economical and effective course.
3. The respondents, through Mr Akash Nawbatt, argued equally vigorously that the judicial review application could not be decided on assumed facts, since the appellant had, as a necessary pre-condition, to show that he fell within the terms of IR20. That was an issue of fact which had to be determined after hearing live evidence; it could not be done on assumed facts when those facts were disputed. It was nothing to the point that the judicial review might take no more than two days on assumed facts; the matter simply could not proceed on assumed facts. A detailed enquiry into the facts could not be avoided and it was for the First-tier Tribunal to undertake that enquiry. Indeed, the Commissioners go further in arguing that I should not even give permission for judicial review since unless the appellant can show that the impugned decision was irrational (which he does not even attempt) his application is bound to fail.
4. I was referred by both parties to observations of the Court of Appeal and the Supreme Court in R (Davies) v Revenue and Customs Commissioners and ( R (Gaines-Cooper) v Revenue and Customs Commissioners [2010] STC 860 and [2011] STC 2249respectively) about the sequence in which hearings should take place in cases of this kind. It does not seem to me that any of the judges was seeking to lay down a hard and fast rule. There will inevitably be some cases in which there is no dispute about any relevant fact, and others in which the facts are hotly disputed, and yet more in between. The appropriate course must inevitably be determined on a case-by-case basis.
5. Assuming permission to seek judicial review is to be granted (a topic with which I shall deal shortly) I have come to the conclusion that the appropriate...
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