Fuels Ltd v Revenue & Customs [2009] UKFTT 274 (TC)

FTT-Tax

Fuels Ltd v Revenue & Customs

[2009] UKFTT 274 (TC) · 2009-10-19

The application coming before the Tribunal is an application for the reinstatement of an appeal which has been made by the Appellant and objected to by HMRC.

Having heard Stephen McQuitty of Counsel for the Appellant (instructed by Messrs. Tiernans) and Josh Shields of Counsel for HMRC, instructed by the Solicitors’ Office of HM Revenue & Customs, the Tribunal DIRECTS that the Appeal be struck out.

The reasons for this direction are as follows:

1. the appeal in this matter originally came on for hearing on the 4 October 2007 when neither the Appellant nor its representatives appeared. On that occasion, the Appeal was dismissed and costs were awarded against the Appellant ("the October 2007 Direction");

2. on the application of the Appellant for the October 2007 Direction to be set aside, this Tribunal directed on the 16 November 2007 ("the November 2007 Direction"), that the application should be referred for hearing.

3 That application came before the Tribunal on the 18 February 2008 when the Appellant, represented by Counsel, made the case that the non-attendance of the Appellant and its advisers at the original hearing on the 4 October 2007 was due to an

administrative error. On that occasion, the Appeal was re-listed and specific directions given for the case management of the Appeal. A direction was also give that the then outstanding costs awarded against the Appellant be discharged. The parties were granted liberty to apply for variations, but no such applications were made.

4. Subsequent to the February 2008 hearing, the HMRC made an application that the Appeal be dismissed for want of prosecution. That application came on for hearing on the 29 April 2009 when the Tribunal gave the following directions:

“1. The Appellant shall, by 5 June 2009, show cause in writing served on the Tribunal and the Respondents at their Solicitors Office why this Appeal should not be struck out.

2. In default, this Appeal shall be struck out with no further direction, but the Appellant’s liability to pay the Respondent’s costs referred to at paragraph 5 of the Direction made herein on the 18 th February 2009 shall remain in effect”;

5. The Appellant’s advisers, Messrs. Tiernans, wrote to the Tribunal Office on the 5 June 2009 (ie. the operative date set out in the Direction) requesting a hearing of the application to strike out. In that letter, the following reason was given for the failure to comply with the earlier Directions:

“We advise the solicitor dealing with this matter ceased his employment with this office without notice. Consequently we have been endeavouring to get to terms with his caseload.

Consequently it appears that this application was overlooked”.

6. That letter was received at the Tribunal Office on the 8 June 2009 and has resulted in this hearing.

7. At the hearing, Counsel for the Appellant produced a fax dated the 3 August 2009 from a firm called Business Account Services, a firm which previously appeared on record as the accounting advisers to the Appellant. That faxed letter is in the following terms:

“In our opinion there are a number of inaccuracies in the Officer’s calculations of the assessment. We have received the documentation from the clients, and are currently compiling an analysis of the papers so that a report can be forwarded to yourselves [here meaning Tiernans Solicitors]. This report involves a complete analysis of purchase invoices, bank lodgements and sales analysis. We would anticipate that the report will be available before the end of August.”

8. It is, however, noted that a letter in similar form appears from the Tribunal file to have been received from Business Accounts Services previously on 7 November 2007 in which it was equally suggested that evidence in support of the Appellant’s argument would be advanced.

9. Within the Tribunal Procedure (First Tier Tribunal) (Tax Chamber) Rules 2009 ("the Rules") the following provision is made in relation to the striking out of a party’s case:

“8(1) The proceedings, or the appropriate part of them, will automatically be struck out if the Appellant has failed to comply with a direction that stated that failure by a party to comply with the direction would lead to the striking out of the proceedings or that part of them.”

In addition, rule 8(3) provides that:

“The Tribunal may strike out the whole or a part of the proceedings if –

(a) the appellant has failed to comply with a direction which stated that failure by the Appellant to comply with the direction could lead to the striking out of the proceedings or part of them”.

The rider to that provision is that the Tribunal may not do so without first giving the Appellant opportunity to make representations.

10. In the present case, it is the Tribunal’s view that the decision notice released on the 29 May 2009 (quoted at paragraph 4 above) made it quite clear that unless “cause in writing" showing why the appeal should not be struck out was served on the Tribunal before the 5 June 2009, that the Appeal would be struck out without further direction.

9. In the circumstances that have occurred, this Tribunal finds:

(a) that the letter dated 5 June 2009 (which was received by the Tribunal on the 8 June 2009) fails to comply with that direction in that it was not served within the time limits imposed;

(b) further, this Tribunal finds that the substance of that letter (quoted at paragraph 3) fails to disclose a sufficient cause as to why the Appeal "should not be struck out". The letter by its tenor is a plea in mitigation because of administrative issues within the Appellant’s representative’s office, and does not show “cause” in the manner which is specified in the direction;

(c) lest there be any doubt on that point, this Tribunal already had, by virtue of its direction of the 4 March 2008, set out exactly what was required for the case management of the appeal through to hearing;

(d) none of those directions have been adhered to;

(e) the letter of the 3 August 2009 from Business Account Services (quoted at paragraph 7 above) is, by its nature, an assertion of opinion – an opinion which has been asserted in much the same language consistently since the first listing of this substantive appeal, but those assertions have not throughout that period been further developed or substantiated.

11. This Tribunal finds, therefore, that the provisions of Rule 8(1) apply and that the Appellant’s failure to comply with the earlier directions has resulted in the appeal being struck out.

12. In this regard, the Tribunal has given cognisance to the representations made by the Appellant’s Counsel as to why this appeal should be reinstated. These representations, however, have focused solely on the administrative errors within the Appellant’s Representative’s offices – errors which it is suggested also resulted in the Appellant’s original failure to attend the October 2007 hearing. On enquiry, the Appellant’s Counsel acknowledged that the solicitor originally having carriage of the case left employment of the Appellant’s Representatives in January 2009. That being the case, this Tribunal finds that there was more than sufficient time in the intervening period prior to the hearing of this Appeal in August 2009 to progress the matters originally directed in the earlier hearings. No such action appears to have been taken.

13. For those reasons, this Tribunal DIRECTS that the appeal be struck out.

14. HMRC made application for costs, and we direct that reasonable costs be awarded in their favour, but in default of agreement they are to be determined by this Tribunal on the application of either party.

IAN WILLIAM HUDDLESTON

TRIBUNAL JUDGE

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