Singleton Birch Ltd and Another
| Jurisdiction | UK Non-devolved |
| Judgment Date | 29 November 2021 |
| Neutral Citation | [2021] UKFTT 440 (TC) |
| Court | First Tier Tribunal (Tax Chamber) |
[2021] UKFTT 440 (TC)
Judge Geraint Williams
Akash Nawbatt QC, counsel, instructed by Stewarts LLP appeared for the appellants
James Puzey, counsel, instructed by the General Counsel and Solicitor to HM Revenue and Customs, appeared for the respondents
Procedure – Admissibility of expert report which included law, opinion on legal issues and opinion on statutory question – Parts of the report ruled to be inadmissible – Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (SI 2009/273), r. 2, 15.
The First-tier Tribunal (FTT) granted HMRC's application for permission to rely on an expert witness report concerning the treatment of certain waste for landfill tax purposes, subject to the removal of various sections.
HMRC applied for permission to admit a report as expert evidence in respect of a substantive appeal concerning the treatment of certain waste for the purposes of landfill tax.
Singleton Birch Ltd and FCC Recycling (UK) Ltd (together “the appellants”) objected to the application. They submitted that the “question of judgment” for the Tribunal was whether the waste fell within the statutory description and as this was a question of law expert evidence would not assist the Tribunal in making such judgment.
The FTT found that:
- HMRC had failed to follow the correct procedure by not making an application for permission to adduce expert evidence before serving the expert evidence;
- there were no compelling reasons to exclude the evidence, whereas HMRC would be prejudiced by not being able to properly advance their case if the evidence was not admitted, and on balance the evidence should be allowed;
- the Tribunal's determination of the appeal would be assisted by the expert evidence;
- some of the questions answered in the report concerned law or mixed fact and law, so that they fell to be determined by the Tribunal and therefore those answers were inadmissible; and
- some of the report was excerpts of the legislation and regulatory requirements with submissions on their relevance, purpose and interpretations and, therefore not expert evidence, and again should be excluded from the report.
The FTT therefore granted HMRC's application, subject to the report being amended to remove the inadmissible sections.
[1] This decision concerns the Respondents' (“HMRC”) application for permission to admit expert evidence on matters concerning the classification of the waste in issue in the appeal. The substantive appeal concerns the correct Landfill Tax (“LT”) treatment of certain waste (“the FCC waste”). Singleton Birch Limited (“SB”) is a landfill site operator and accepts waste from two businesses, FCC Environment Limited (“FCC”) and Cristal Pigment UK Limited (“Cristal”). The waste is processed via one waste stream by FCC and via another stream by Cristal. The issue in the appeal is whether the FCC waste received by SB from FCC falls within the definition of Group 6(i) and Note 9(a) of The Landfill Tax (Qualifying Material) Order 2011 (“QMO”) as “calcium based reaction wastes from titanium dioxide production” and could be accounted for at the lower rate of LT.
[2] The expert evidence, which is the subject of HMRC's application, is a report dated 9 July 2020 by Dr Andrew Godley, a Principal Consultant in the Due Diligence group of the Waste and Resources Management business practice at Ricardo Energy and Environment. HMRC submit that it is necessary for the report to be admitted to reply to the witness evidence and exhibits of Mr Ian Martin, the general manager of FCC, as his evidence and exhibits address in detail the technical processes of the production of the FCC and Cristal waste, their chemical composition, the production and chemical composition of Air Pollution Control Residue (“APCr”) waste, a comparison of the FCC and Cristal waste chemical composition and comments on the regulatory regime for LT. HMRC argue that Dr Godley's report addresses matters that are likely to be central to the determination of the appeal and are matters of a complex, technical and scientific nature.
[3] The Appellants objected to the application on the following inter-related grounds: (i) HMRC had failed to follow the correct procedure/were premature in instructing Dr Godley; (ii) the questions posed to Dr Godley are variously inappropriate, irrelevant or too vague and usurp the role of the Tribunal; (iii) the “equality of arms” claim by HMRC does not arise; (iv) HMRC has not established that Dr Godley has the necessary knowledge to answer and/or there is a reliable body of knowledge or experience to underpin his evidence on each of the questions raised; there is a relevant area of expertise or that Dr Godley has relevant expertise; (v) Dr Godley's report is not independent and impartial; and (vi) the majority of Dr Godley's report is irrelevant or unnecessary for the resolution of the issues in the appeal.
[4] It is convenient at this point to set out the relevant provisions of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (“ the Tribunal Rules”).
[5] Rule 2 of the Tribunal Rules provides for the overriding objective and parties' obligation to co-operate with the Tribunal and provides where relevant:
(1) The overriding objective of these Rules is to enable the Tribunal to deal with cases fairly and justly.
(2) Dealing with a case fairly and justly includes–
- dealing with the case in ways which are proportionate to the importance of the case, the complexity of the issues, the anticipated costs and resources of the parties;…
(3) The Tribunal must seek to give effect to the overriding objective when it–
- exercises any power under the Rules; or
- interprets any rule or practice direction.
(4) Parties must–
- help the Tribunal to further the overriding objective; and
- co-operate with the Tribunal generally.
[6] Rule 15 of the Tribunal Rules deals with evidence and submissions and provides where relevant:
(1) Without restriction on the general powers in rule 5(1) and (2) (case management powers), the Tribunal may give directions as to–
- issues on which it requires evidence or submissions;
- the nature of the evidence or submissions it requires;
- whether the parties are permitted or required to provide expert evidence, and if so whether the parties must jointly appoint a single expert to provide such evidence;
- any limit on the number of witnesses whose evidence a party may put forward, whether in relation to a particular issue or generally;…
(2) The Tribunal may–
- admit evidence whether or not the evidence would be admissible in a civil trial in the United Kingdom; or
- exclude evidence that would otherwise be admissible where– …it would otherwise be unfair to admit the evidence.
[7] The parties took me to various cases on the subject of admissibility of expert evidence, the procedure to be followed for a party to rely upon expert evidence, admissibility of matters of law and of mixed fact and law and the question of whether the report should be admitted or excluded in its entirety or the Tribunal should carry out the task of deleting inadmissible sections of the report. I have referred to the cases that were relevant to determine the Respondents' application.
[8] The Appellants' starting point was CPR Part 35.1 – Duty to restrict expert evidence which provides that “Expert evidence shall be restricted to that which is reasonably required to resolve proceedings.” The underlying policy objective explained in CPR Part 35.1.1 is to reduce the “incidence of the inappropriate use of experts to bolster cases”, an aim that furthered the overriding objective, British Airways plc v Spencer (Trustees of the Airways Pension Scheme) [2015] EWHC 2477 (Ch) at [22]. At [25] in British Airways Warren J stated “I do not suggest that there is any tension between the overriding objective and the restriction of expert evidence to that which is reasonably required to resolve the proceedings. But I do suggest that what is reasonably required is informed by the overriding objective and that the court should not be over-zealous in excluding evidence in order to save time and cost.”
[9] The Appellants rightly accepted that whilst there is no specific rule in the Tribunal Rules that mirrored CPR Part 35.1, it considered it was relevant and the Tribunal should take account of the case law based on the rule in CPR Part 35.1 given the overlap between the underlying policy objective of the CPR rules and the overriding objective of the Tribunal Rules. The Tribunal in Deloitte LLP [2016] TC 05231 after having considered the case law based on the rule in CPR Part 35.1 said at [21]: “Given the extra time, cost and complexity involved in proceedings which involve expert evidence, the admission of expert evidence which is not reasonably required to resolve the proceedings is unlikely to be consistent with the tribunal's overriding objective.”
[10] The Respondents position is that whilst the strict application of CPR Part 35.1 is not applicable to the Tribunal, Dr Godley's report would, nevertheless, satisfy the tests set out in the case law based on the rule in CPR Part 35.1.
[11] In Mobile Export 365 Ltd v R & C Commrs [2009] BVC 913 where Sir Andrew Park at [17(2)(b)] said:
In any case the Value Added Tax Tribunal rules provide as follows in para.28:
[28] Evidence at a hearing
(1) … a tribunal may direct or allow evidence of any facts [sic] to be given in any manner it may think fit and shall not refuse evidence tendered to it on the grounds only that such evidence would be inadmissible in a court of law.
This rule is not an open sesame for any party to an appeal to call anyone to give evidence on anything. It does however relax, and in my judgment is intended to relax, some of the more rigid evidential rules which can arise in High Court proceedings.
[12] It should be noted that rule 28 of the Value Added Tax Tribunal Rules...
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