“10 – (1) The Tribunal may only make an order in respect of costs (or, in Scotland, expenses) – (a) … 30 (b) if the Tribunal considers that a party or their representative has acted unreasonably in bringing, defending or conducting the proceedings”
“Where the application of a legal standard such as negligence or obviousness involves no question of principle but is simply a matter of degree, an appellate court should be very cautious in differing from the 10 judge’s evaluation.”
“… because the decision involves the application of a not altogether precise legal standard to a combination of features of varying 20 importance, I think that this falls within the class of case in which an appellate court should not reverse a judge’s decision unless he has erred in principle …”
“In our view, a tribunal faced with an application for costs on the basis 30 of unreasonable conduct where a party has withdrawn from the appeal should pose itself the following questions: (1) What was the reason for the withdrawal of that party from the appeal? (2) Having regard to that reason, could that party have withdrawn at 35 an earlier stage in the proceedings? (3) Was it unreasonable for that party not to have withdrawn at an earlier stage?”
“(1) It was to be noted that the test in the Tribunal Rules that a party or representative had “acted unreasonably” required a lower threshold than the costs awarding power of the former Special Commissioners in 30 Regulation 21 of theSpecial Commissioners (Jurisdiction and Procedure) Regulations 1994 which was confined to cases where a party had acted “wholly unreasonably”
“It seems to us that it cannot be that any wrong assertion by a party 25 to an appeal is automatically unreasonable…before making a wrong assertion constitutes unreasonable conduct in an appeal that party must generally persist in it in the face of an unbeatable argument that he is wrong…” (9) As cautioned by Judge Brannan in Eastenders Cash and Carry Plc 30 v HMRC[2012] UKFTT 219 (TC) at [91] Rule 10(1)(b) should not become a “backdoor” method of costs shifting.”
“It is, quite plainly, an inclusive phrase designed to capture cases in which an appellant has unreasonably brought an appeal which he should know could not succeed, a respondent has unreasonably resisted an obviously meritorious appeal, or either party has acted unreasonably 40 in the course of the proceedings, for example by persistently failing to comply with the rules or directions to the prejudice of the other side.”
“Taking account of the concerns outlined above as to the need to be aware of the effect of hindsight, I will consider whether at the various stages of the proceedings (which the appellant has highlighted as being points in time the case could have settled) it was unreasonable on the 15 part of HMRC to continue to defend the proceedings considering what was reasonably available to them at the time. In doing this I will also take into account what if any new information or arguments which advanced the appellant’s case became available to HMRC. This is on the basis that given HMRC’s view at settlement must be take to be that 20 its case was weak, if it then turns out they had the same information available to them at the outset then this would tend to support a finding that HMRC ought to have appreciated the weakness of their case sooner and settled earlier.”
“Where the issue is whether the case could have been settled sooner one approach would be to assume that whatever information was available to HMRC at the time of the settlement was enough to mean they had a weak case and then to scroll back along the timeline of the 30 case to consider what if any new material or arguments HMRC could reasonably have been expected to be aware of at a given point in time in order to see whether the case could have been settled sooner. But, in my view to only consider the matter on this basis would be to fail to acknowledge the way in which hindsight may colour an assessment of 35 whether a party acted unreasonably. A party may have acted reasonably in defending proceedings at a given point in time even though with the benefit of hindsight it might be said the appeal could have been settled then. Also as pointed out by the Tribunal in Eastenders Cash and Carry there is a need to guard against creating a 40 “backdoor” costs shifting regime.”
“A link was being made between it being accepted that if claims for input tax were valid in respect of the capped period (i.e. no input tax 20 claims had already been made in the capped period) even though certain handbooks were in operation, then it was more likely than not, if similar handbooks were in operation in the disputed period, that claims for input tax were similarly not being made in the disputed period. With the benefit of hindsight the link between the capped 25 period and the claim period might have been understood from the appellant’s skeleton but it was not an obvious point in my view. (Given I was the tribunal judge on the panel at the substantive hearing who asked for clarification on the significance of the 1995 Handbook claim forms I am conscious it might be said that it is not surprising that I 30 would come to the view that the point was not an obvious one. But even putting that to one side I would still say it was not an obvious point). To say that HMRC ought to have settled on the back of this argument I think the point would need to have been made more explicitly. By the time of the hearing it was in any event a matter of 35 dispute between the parties whether payments of allowances (in relation to which the input tax said to not have been claimed arose) had in fact been made by the company to the researchers.”
“What is reasonable in the circumstances of a particular case is a value judgment on which reasonable people may differ. Since judges are people, their views may differ, but some degree 5 of diversity is an acceptable price to pay for the flexibility enshrined in the statute …”
Showing the 50 most senior of 51.