Pachangas Mex Rest Ltd v Revenue & Customs (VAT deposit - no reasons - unlawful decision) [2019] UKFTT 436 (TC)
FTT-Tax
Pachangas Mex Rest Ltd v Revenue & Customs (VAT deposit - no reasons - unlawful decision)
[2019] UKFTT 436 (TC) · 2019-06-20
[66]“The causation test shifts the focus of the tort on to the question of how the defendant would have acted on the hypothesis of a lawful self-direction, rather than on the claimant's right not in fact to be unlawfully detained. There is no warrant for this. A purported lawful authority to detain may be impugned either because the defendant acted in excess of jurisdiction (in the narrow sense of jurisdiction) or because such jurisdiction was wrongly exercised. Anisminic Ltd v Foreign Compensation Commission [1969] 2 AC 147 established that both species of error render an executive act ultra vires, unlawful and a nullity. In the present context, there is in principle no difference between(i) a detention which is unlawful because there was no statutory power to detain and(ii) a detention which is unlawful because the decision to detain, although authorised by statute, was made in breach of a rule of public law. For example, if the decision to detain is unreasonable in the Wednesbury sense, it is unlawful and a nullity. The importance of Anisminic is that it established that there was a single category of errors of law, all of which rendered a decision ultra vires: see Boddington v British Transport Police [1999] 2 AC 143 , 158D-E.” 16. We note that in Lumba Ld. Dyson specifically referred to and approved the dictum in R v Civil Service Appeal Board ex parte Cunningham [1991] 4 All E R 310 , per McCowan LJ at 322H – 323C and Leggatt LJ at 325F – 326D that reasons must be given for a discretionary decision if a right of appeal is of little or no practical value absent reasons being given. 19. We are satisfied that in circumstances where the appellant : (1) Was not told what, if any, facts the respondents had taken into account in arriving at its decision, and/or (2) Had been given not a single reason for the 27 September 2017 decision made by the respondents, it was unlawful and thus unreasonable. That is because we are satisfied that this is a category of public law decision which requires the decision maker to set out the salient facts relied upon in arriving at the stated decision before going on to set out the reason(s) why those facts led to the particular discretionary decision or conclusion being reached. 20. In our judgement this is plainly a case where the appellant’s right of appeal was of little or no practical value unless reasons for the decision were provided so that the appellant could understand the basis upon which the decision was reached. It is only then that the appellant would be in a position to take advice upon whether there would be merit in that decision being appealed. A right of appeal is of little value unless a person can take an informed decision as to whether the right of appeal should or should not be exercised. It is extremely important that a person should be aware of the facts and reasons relied upon by a public authority which imposes a requirement or decision, not only because common fairness so demands, but also because there will usually be significant cost implications if a person has to seek legal advice in circumstances where, had adequate reasons been set out initially, that person may not have incurred the expense of obtaining what might turn out to be unnecessary legal advice. 21. There is a second and equally serious deficiency in the way in which this public law decision was reached. It is common ground in this appeal that the appellant was not afforded any opportunity whatsoever to make any representations, or to comment upon, any of the facts (which the respondents did not disclose to the appellant) upon which the respondents based the decision. In our judgement this is a situation where a “minded to” letter is appropriate, which affords the company or person to whom it is addressed a reasonable opportunity to respond to, comment upon and/or make representations in respect of the facts and matters disclosed in the “minded to” letter. The appellant was afforded no such opportunity and, having heard the evidence of Miss Hageman-Rowe, which we need not set out, this is a case where we readily conclude that if she had had the opportunity to inform the respondents of the facts and matters which she disclosed to us in evidence, it might be the case that the respondents might have reached a different conclusion. It is not for us to decide whether the respondents would have, or ought to have, reached a different conclusion. It suffices for this appeal to succeed on this second basis that the facts and matters that would have been disclosed, being facts and matters in existence immediately prior to the respondents making their decision, would have been relevant and ought to have been considered and taken into account by the respondents because they might have resulted in a different decision being made by the respondents. 22. This is an appeal where we have not considered it necessary to set out the evidentially unsupported facts asserted in the respondents’ Statement of Case. It would have been open to us to make relevant findings of fact in circumstances where, although Miss Hageman-Rowe, the appellant’s Director, did not dispute many of the primary facts asserted in the respondents’ Statement of Case, she nonetheless sought to place many of them into a particular context or to explain how or why certain factual situations had come about and/or to explain why the appellant should be regarded as detached or distanced from some of the events alleged in the Statement of Case. 23. We keep in mind that in Balbir Singh Gora v HMCR [2003] EWCA Civ 255 the Court of Appeal considered an appeal against a decision not to restore goods seized under the 1979 Act. The provisions of Finance Act 1994 applied to that appeal in the sense that it was an appeal by way of review only; as is the current appeal. 24. Two preliminary points were considered by the Court of Appeal. One of these was whether the jurisdiction of the tribunal was sufficient to satisfy the requirements of Article 6 of the European Convention on Human Rights . In the course of argument, it emerged that HMRC took a broader view of the jurisdiction of the tribunal than had originally appeared. HMRC said that, although “strictly speaking” it appeared that section 16 limited the tribunal to considering whether there was sufficient evidence to support the appealed decision; in practice the tribunal could make findings of fact and then in the light of its factual findings decide whether the decision was reasonable. Pill L.J., with whom the other members of the Court agreed, said at [39] that he would accept that view of the jurisdiction of the tribunal subject only to doubting whether the “strictly speaking” limitation was correct, once it had been accepted that the tribunal had a fact finding jurisdiction. 25. In Charles Miller Ltd v Home Office [2015] UKFTT 556 (TC) the Tribunal (Judge Jonathan Richards) put the position admirably succinctly at [34] “ In Balbir Singh Gora v C&E [2003] EWCA Civ 525 Pill L. J. accepted that the Tribunal could decide for itself primary facts and then go on to decide whether, in the light of its findings of fact, the decision of restoration was reasonable. Thus, the Tribunal exercises a measure of hindsight and a decision which, in the light of the information available to the officer making it could well have been quite reasonable may be found to be unreasonable in the light of the facts as found by the Tribunal.” We adopt that statement of principle but given the way in which this appeal proceeded, with the respondents relying solely upon documents and the evidence from Mrs Wilkie (which was of only marginal relevance) we consider it appropriate to allow this appeal on the two bases set out above. 26. However, in circumstances where we conclude that this appeal must succeed for the two public law reasons which we have already set out above, we do not consider it necessary to go on to make findings of fact notwithstanding that it is usually the primary function of the First Tier Tribunal to make relevant factual findings. If I we had embarked upon that function we would have started from the position that only one party has adduced witness evidence to support its pleaded case. That may not have suited the respondents particularly well and so it was unsurprising that after we had retired and returned to indicate the outcome of the appeal, with our reasons therefor being stated briefly, the parties were content for this appeal to be decided in accordance with the legal principles that we have set out above. 27. Although we allow this appeal we make it plain that we are expressing no view whatsoever as to whether the respondents could have or should have made the requirement for VAT security to be provided, if some or all of the facts asserted by it are established. 28. Thus our Decision is that the respondents’ Decision, set out in its Notice dated 27 September 2017, is set aside and quashed. Right to apply for permission to appeal 29. This document contains full 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. GERAINT JONES QC. TRIBUNAL JUDGE Release date: 02 JULY 2019 [1] Even though he may later be shown to have been wrong.