Gardner (t/a Gardner's Transport Co v Revenue & Customs [2010] UKFTT 133 (TC)

FTT-Tax
Gardner (t/a Gardner's Transport Co v Revenue & Customs
[2010] UKFTT 133 (TC) · 2010-03-26
[1]Mr Gardner filed a notice of appeal with the Tribunal on 10 December 2009 requesting leave for an extension of time in which to bring his appeal. HMRC gave notice on 28 January 2010 that they objected to the appeal being lodged out of time.[2]In the normal course of events the Tribunal would list a hearing at which the parties could make oral representations and the judge would decide whether or not to allow the appeal to proceed.[3]This is an unusual case. The Appellant states that the appeal is against an estimated assessment for VAT raised against him on 1 July 1980 by HM Customs & Excise for period 1 January- 31 March 1978.[4]Due to the lapse in time, therefore, the Tribunal wrote to Mr Gardner on 23 February 2010 informing him that it seemed most unlikely that he would be given leave to appeal out of time and asking if he wished to make representations as the Judge was minded to strike out his appeal as having no reasonable prospect of success.[5]Mr Gardner replied promptly on 3 March 2010. The reply comprises some 39 numbered paragraphs, some of which appear to be recitals of legal documents. From this reply, I have discerned the following reasons put forward by the Appellant why he considers the Tribunal should allow in his appeal late. His claims are:(1) HMRC have not stated when the assessment was made so he does not consider that the Tribunal can find the appeal against it is out of time (paragraphs2-5);(2) The assessment appealed against was out of time when issued (paragraph 6-9);(3) The assessment appealed against was not served on the Appellant (paragraph 10-12);(4) The writ should not have been dealt with in the Queen’s Bench Division as it did not have jurisdiction (paragraph 13);(5) HMRC should not have summarily entered judgement against the Appellant (paragraph 13);(6) HMRC should not have filed a bankruptcy petition against the Appellant as they had entered into a time to pay arrangement with the Appellant which the Appellant had kept to (paragraph 14-26, and 31);(7) HMRC should not have filed a bankruptcy petition against the Appellant as their affidavit in support was perjured as the Appellant had paid all the VAT due (paragraph 27);(8) The Appellant has paid all the VAT due (paragraph 28, 33-34);(9) The bankruptcy petition was heard in his absence (paragraph 29);(10) The affidavit in support of the petition sworn by an HMRC officer was perjured (paragraph 30);(11) The Appellant has a claim for damages because in breaching the time to pay arrangement HMRC frustrated his legitimate expectations (paragraph 32);(12) HMRC should not have issued an estimated assessment (paragraph 35-36) for 1/1/78-31/3/78. The grounds for saying this seem to be that the Appellant’s case is that he had filed a VAT return for that period (paragraph 34);(13) The Appellant has not acted with undue delay because HMRC obtained a Grepe v Loam restriction order dated 14 July 1984 against the Appellant. In 2009 the Appellant approached the High Court who ruled on 24 November 2009 that the Order did not prevent the Appellant filing proceedings in the Tax Tribunal. (paragraphs 37-39).[6]Dealing with the representations numbered as I have numbered them above, some I can dispose of shortly. Grounds of actual appeal[7]Grounds 2, 3, and 12 are all grounds of appeal on the substantive issue of whether or not the assessment against which Mr Gardner wants leave to appeal was properly made by HMRC. Although not in any way an explanation of why the Appellant has taken so long to make the appeal, they are relevant to the issue of whether leave to appeal out of time should be given. A tribunal is more likely to give leave to appeal out of time where there are strong grounds of appeal.[8]There are no strong grounds of appeal here. Grounds 3 and 12 are matters of fact: was the assessment notified and did the Appellant file a VAT return? On the face of it Ground 2 – whether the assessment was out of time when issued – is a legal question but it also comes down to a question of fact. S31 Finance Act 1972 provided:
“An assessment….shall not be made after the later of the following:- (a) two years after the end of the prescribed accounting period; or (b) one year after evidence of facts, sufficient in the opinion of the Commissioners to justify the making of the assessment, comes to their knowledge….”
The question is therefore whether the assessment, issued according to the Appellant on 1 July 1980 and in respect of an accounting period which ended on 31 March 1978, was made within one year after evidence of facts, sufficient in the opinion of the Commissioners to justify the assessment, came to their knowledge. This is also a question of fact.[9]A tribunal will be most reluctant to make findings of fact about things that happened more than 30 years ago. Records will have been lost or destroyed. The memories of all concerned (if they are still alive) will have faded or entirely disappeared. The chances of ascertaining the truth are very low. The Tribunal’s overriding objective is to deal with cases fairly and justly (Rule 2). My conclusion is therefore that so far from supporting his case that leave to appeal should be given, the grounds of his appeal provide strong reasons for deciding that leave to appeal out of time would not be given. After a 30-year time lapse it will not possible to deal with the matter fairly and justly. Grounds for which the Tribunal has no jurisdiction[10]Grounds 4,5,6,7,8,9,10 & 11 all relate to matters outside the jurisdiction of this Tribunal. This Tribunal has jurisdiction to decide whether tax has been correctly assessed: it has no jurisdiction whatsoever in respect of matters arising in proceedings in the courts (grounds 4-7 & 9-10). With respect to ground (8) this Tribunal has jurisdiction to ascertain whether tax is due: it does not have jurisdiction over enforcement and so questions of whether tax has actually been paid is for the courts and not the Tribunal. With respect to Ground (11) this Tribunal does not have power to order damages.[11]Therefore, the Tribunal having no jurisdiction whatsoever over grounds 4-11 it follows that no extension of time should be granted to bring an appeal in respect of them. Indeed, it is extremely likely that an appeal on these grounds alone would have been struck out even if brought within the time limit and not 30 years late. Is the appeal late?[12]The Appellant’s first ground for why he considers leave to appeal out of time should be given seems to be that the appeal was not out of time because the assessment in question was never served on the Appellant. He says at paragraphs 2-5 as follows:
“2. with respect I believe that the Judge has misdirected ones good self on the mere objection of HMRC: that HMRC objects to the appellants appeal being lodged out of time. 3. HMRC must produce prima facie evidence, when they actually made the assessment for 1 January 1978 to 31 March 1978. 4. How it was notified and served upon the appellant, were served, in what form and by whom. Only then can it be decided if this appeal is lodged out of time. 5. HMRC, HMCC& Excise as they then were in 1978, have not established service of an assessment upon the Appellant for the period 1 January 1978 to 31 March 1978 for any other VAT tax accounting period, therefore HMRC objection that the appeal is lodged out of time is ill founded and cannot be upheld”
[13]Not knowing that an assessment had been made might be good reason for making a late appeal against it. However, from what Mr Gardner says (paragraph 7 of his reply) it is clear that he knew of the assessment no later than 19 June 1982 when the High Court writ for enforcement was served on him. He gives no explanation of why he did not then apply to the VAT Tribunal for leave to appeal the assessment out of time. Leave might well be given to appeal late against an assessment of which a taxpayer was previously unaware: but the Tribunal would expect such late appeal to be made promptly once the taxpayer became aware of the assessment. In this case it seems Mr Gardner has waited over 27 years. In these circumstances I find that this ground would have no reasonable prospect of success. Grepe v Loam order[14]The last ground (13) given is that the Appellant believed he was constrained from bringing an appeal because of the Grepe v Loam order made against him and that once it was made clear to him that this order did not extend to proceedings in this Tribunal he acted promptly in making his appeal. The Decision of the Court of Appeal was dated 24 November 2009 and the Appellant lodged his appeal with the First-tier Tribunal on 10 December 2009.[15]A Grepe v Loam order is one which constrains a person from bringing actions in the courts. It is named after the case of that name which can be found at (1887) 37 Ch D 168 in which the Court of Appeal made an order prohibiting the Appellants in that case, who had made repeated frivolous applications to impeach a judgment, from making any further application without leave of the Court. Such an order was made against the Appellant on 14 July 1994.[16]He made an application to the Court of Appeal on 19 November 2009 for leave to “serve notice of objection” to the 1 July 1980 VAT assessment. The application was refused by Lord Justice Lloyd on the grounds that the Grepe v Loam order did not extend to proceedings in front of the First-tier Tribunal: in other words, the Grepe v Loam order did not prevent the Appellant’s present appeal.[17]A Tribunal hearing an application for leave to appeal out of time might find for the Appellant that he was labouring under a mistaken impression for many years that he could not bring an appeal without leave against the assessment in the VAT Tribunal. However, I still consider that that application would have no reasonable prospect of success because firstly the Tribunal would be bound to consider that the Grepe v Loam order was only made in 1994. No explanation has been given why no appeal was brought against the assessment in the period from the date of the assessment in 1980 to 1994 when the order was made. Secondly, not only is there this unexplained gap of 14 years, the Grepe v Loam order itself allowed the Appellant to bring proceedings if leave was given: and indeed in his application to the Court of Appeal of 19 November 2009 he was seeking such leave. No explanation has been given why the application for leave from the Court of Appeal was not made earlier: why did the Appellant wait for a further 15 years to apply for leave?[18]I conclude that were this application for leave to appeal out of time to proceed it has no prospect of success. The Tribunal would be extremely reluctant to give leave in any event where the matter is quite stale and the grounds of appeal (in so far as this Tribunal has jurisdiction) are based on questions of fact which occurred over 30 years ago. But in addition in this application no arguable case has been forward which could justify the 30 years it has taken Mr Gardner to appeal this assessment. Neither his claim that he was not notified of the assessment nor the Grebe v Loam order, as explained above, could remotely justify the time delay.[19]I conclude that the application for leave to appeal out of time has no prospect of success and should be struck out under the Tribunal Procedure (First-tier Tribunal)(Tax Chamber) Rules 2009 Rule 8(3)(c). It seems to me that it is not strictly necessary to strike out the appeal itself because there is no appeal in front of the Tribunal unless and until leave to appeal out of time is given: this follows from Rule 20(4)(b) which provides that unless the Tribunal gives an extension of time for service of a late appeal “the Tribunal must not admit the notice of appeal”.[20]I therefore direct the application for leave to appeal out of time filed by Mr Gardner with this Tribunal on 10 December 2009 is hereby struck out on the grounds that the Tribunal considers that there is no reasonable prospect of it succeeding.[21]As this Direction effectively disposes of the application and the appeal and is therefore a decision which disposes of the proceedings under Rule 35, I have set out above in full my reasons for making it. I chose not to call a hearing: I have the power not to hold a hearing under Rule 29(3) which provides that the Tribunal may dispose of proceedings without a hearing in exercise of its power to strike out under Rule 8. I have read the representations made by the Appellant and decided that the position on the facts of this particular application are so clearly against the Appellant based on his own representations that there is no need to hear HMRC’s objections to the application nor to hold a hearing.[22]This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The application must be received by this Tribunal not later than 56 days after this decision is sent to that party. The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice. Barbara Mosedale TRIBUNAL JUDGE RELEASE DATE: 26 March 2010