“In this case, Mr Carey in his submissions at the hearing conducted a whirlwind tour of the evidence, dipping into parts of the various witness statements and hearing bundle (which comprised over 1000 pages).”
“8. Striking out a party’s case … (3) The Tribunal may strike out the whole or a part of the proceedings if— 6 (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; (b) the appellant has failed to co-operate with the Tribunal to such an extent that the Tribunal cannot deal with the proceedings fairly and justly; or (c) the Tribunal considers there is no reasonable prospect of the appellant's case, or part of it, succeeding.”
“Although the summary in Fairford Group Plc is very helpful, we prefer to apply the more detailed statement of principles in respect of application for summary judgment set out by Lewison J, as he then was, in Easyair Ltd (t/a Openair) v Opal Telecom Ltd[2009] EWHC 339 (Ch) at [15]. This was subsequently approved by the Court of Appeal in AC Ward & Sons v Caitlin Five Limited[2009] EWCA Civ 1098 . The parties to this appeal did not suggest that any of these principles were inapplicable to strike out applications. "i) The court must consider whether the claimant has a 'realistic' as opposed to a "fanciful' prospect of success: Swain v Hillman[2001] 1 All ER 91 ii) A 'realistic' claim is one that carries some degree of conviction. This means a claim that is more than merely arguable: ED & F Man Liquid Products v Patel[2003] EWCA Civ 472 at [8] iii) In reaching its conclusion the court must not conduct a 'mini-trial': Swain v Hillman iv) This does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents: ED & F Man Liquid Products v Patel at [10] v) However, in reaching its conclusion the court must take into account not only the evidence actually placed before it on the application for summary judgment, but also the evidence that can reasonably be expected to be available at trial: Royal Brompton Hospital NHS Trust v Hammond (No 5)[2001] EWCA Civ 550 vi) Although a case may turn out at trial not to be really complicated, it does not follow that it should be decided without the fuller investigation into the 2 HMRC v Fairford Group[2015] STC 156 12 10 facts at trial than is possible or permissible on summary judgment. Thus the court should hesitate about making a final decision without a trial, even where there is no obvious conflict of fact at the time of the application, where reasonable grounds exist for believing that a fuller investigation into the facts of the case would add to or alter the evidence available to a trial judge and so affect the outcome of the 7 case: Doncaster Pharmaceuticals Group Ltd v Bolton Pharmaceutical Co 100 Ltd[2007] FSR 63 vii) On the other hand it is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should grasp the nettle and decide it. The reason is quite simple: if the respondent's case is bad in law, he will in truth have no real prospect of succeeding on his claim or successfully defending the claim against him, as the case may be. Similarly, if the applicant's case is bad in law, the sooner that is determined, the better. If it is possible to show by evidence that although material in the form of documents or oral evidence that would put the documents in another light is not currently before the court, such material is likely to exist and can be expected to be available at trial, it would be wrong to give summary judgment because there would be a real, as opposed to a fanciful, prospect of success. However, it is not enough simply to argue that the case should be allowed to go to trial because something may turn up which would have a bearing on the question of construction: ICI Chemicals & Polymers Ltd v TTE Training Ltd[2007] EWCA Civ 725 .”
“… this summary jurisdiction of the court was never intended to be exercised by a minute and protracted examination of the documents and facts of the case, in order to see whether the plaintiff really has a cause of action. To do that is to usurp the position of the trial judge, and to produce a trial of the case in chambers, on affidavits only, without discovery and without oral evidence tested by cross-examination in the ordinary way. This seems to me to be an abuse of the inherent power of the court and not a proper exercise of that power.”
“Fairford, like the present case, was what is called an MTIC appeal involving the application of the Kittel principle. However, in that case the taxpayer did not accept that there was a tax loss or that it resulted from fraudulent evasion and at least in one case did not accept that its transactions were connected to the fraudulent evasion of VAT. The FTT concluded that those matters had to be determined at a substantive hearing and refuse[d] the application to strike out the taxpayer’s appeal.”
“The Upper Tribunal upheld the FTT’s decision. First, at [30], the Upper Tribunal rejected the argument advanced on behalf of the taxpayer that the strike out power in Rule 8(3)(c) did not arise where there was no positive case being advanced by the taxpayer and where, instead, the taxpayer was simply putting HMRC to proof i.e. the strike out power in Rule 8(3)(c) could only apply to cases where the appellant bore the burden of proof: “… The FTT has the power to strike out a part of the proceedings if it concludes that there is no reasonable prospect of all or part of an appellant’s case succeeding. A party’s case is not confined to its positive case, nor to a form of pleading. Although Rule 8(3)(c) is in different terms, the parties 13 11 (rightly in our view) accepted thatCPR Part 3.4 , which applies to the formal statements of case which are served in civil proceedings, was a helpful source of guidance on the proper 9 application of Rule 8(3)(c).CPR Part 3.4 (2)(a) confers a power to strike out a statement of case, including a defence, even where the burden of proof is on the Claimant; and it would be surprising if it were otherwise. The Court’s powers may be exercised if a defence is vague, evasive, incoherent or obviously ill-founded, although in such cases the objectionable nature of the party’s case can often be cured by amendment or further particulars.”
“An appellant who advances a positive case will be required, by virtue of other customary directions, to set it out in witness statements or, if that is not practicable, in a response or a letter, or in some similar way. Accordingly, an appellant putting a positive case must disclose his hand in advance; we see no reason why one merely putting HMRC to proof should be in a better position. If there is a real challenge to HMRC’s evidence it should be identified; if there is not, the evidence should be accepted. We see no reason why an appellant who does not advance a positive case should be entitled to require HMRC to produce witnesses for cross-examination when their evidence is not seriously disputed. Such a course is wasteful not only of HMRC’s resources but also of the resources of the FTT, since it increases the length of hearings and adds to the delays experienced by other tribunal users.”
“The FTT concluded that those matters had to be determined at a substantive hearing and refuse[d] the application to strike out the taxpayer’s appeal.”
“[23] First, I think the Upper Tribunal should exercise extreme caution in 10 entertaining appeals on case management issues. Mr Gammie QC for HMRC drew my attention to the decision of the Court of Appeal in Fattal v Walbrook Trustee (Jersey) Ltd[2008] EWCA Civ 427 ,[2008] All ER (D) 109 (May) not as establishing any novel proposition but as containing in [33] the following convenient statement from the judgment of Lawrence Collins LJ: ‘… I do not need to cite authority for the obvious proposition that an appellate court should not interfere with case management decisions by a judge who has applied the correct principles and who has taken into account matters which should be taken into account and left out of account matters which are irrelevant, unless the court is satisfied that the decision is so plainly wrong that it must be regarded as outside the generous ambit of the discretion entrusted to the judge.’ [24] I am clear that that principle applies with at least as great, if not greater, force in the tribunals’ jurisdiction as it does in the court system.”
“77. I accept that the evidence put forward by the Appellant is sparse. Since my decision is that this appeal should not, at this stage [be] struck out and therefore should go forward to a substantive hearing, I shall carefully restrict my comments on the evidence in order not to influence, in any way, the outcome of that hearing.”
“I accept the substance of Mr Kinnear’s submission. In my judgment, the UT’s treatment of the respondents’ repayment position provides a clear example of over compartmentalisation of the factors rather than a consideration of the totality of the evidence. The UT accepted Mr Scorey’s submission, also made to us on this appeal, that the respondents’ abnormally large repayment position was just a consequence of the Transactions ([2014] STC 39 at [50]). But that is to leave out of consideration the role of this factor as a factor which is capable of supporting knowledge to the no other reasonable explanation standard. The UT did not consider its relevance in this way and its failure to do so was an error of law. When a factor is considered in that way it may be that there is an explanation which means that the knowledge does not meet the required standard. At that stage, the factor, while relevant, ceases to be probative. The example which I have given is repeated in relation to the other factors which the UT considered. Moreover, although, in para [55] of its decision, the UT stated that the no other reasonable explanation standard was not met ‘whether the factors were looked at individually or as a whole’, it did not elucidate why that was so. I give that statement little weight in the light of the general tenor of the decision, which was to look at factors in isolation.”
“I think, therefore, that issue (4) is unlikely to be one which is suitable in most cases to be determined in summary proceedings and without the benefit of hearing all the evidence at a full hearing.”
“46. We have considered carefully, with the benefit of the parties’ submissions, whether we are ourselves in a position to re-make the decision we have set aside. There are obvious disadvantages in terms of cost and further delay in remitting the case, but the real question is whether we are satisfied that it would be in the interests of justice for us to re-make the decision or whether justice would better be served by remitting the case.”
“(3) In acting under subsection (2)(b)(i), the Upper Tribunal may also— (a) direct that the members of the First-tier Tribunal who are chosen to reconsider the case are not to be the same as those who made the decision that has been set aside; (b) give procedural directions in connection with the reconsideration of the case by the First-tier Tribunal.”
“68 The principle as it seems to me must be that remission will be made to the same decision-maker unless that would cause reasonably perceived unfairness to the affected parties or would damage public confidence in the decision-making process. The basis on which the court will approach these two interlocking concepts of “reasonably perceived unfairness to the affected parties” and “damage to the public confidence in the decision making process” may depend heavily on the circumstances of the remission. 69 A variety of factors will undoubtedly be relevant to the application of these principles. I would not want to limit those factors by setting out anything that could be regarded as an exhaustive list as the Employment Appeal Tribunal seems to have attempted to do in the Sinclair Roche case. There will be many different situations which cannot be predicted from a single case. 70 It is, however, always the case that the presence of actual bias, apparent bias or confirmation bias would make remission to the original decision-maker undesirable, because any such bias would amount both to reasonably perceived unfairness to an affected party and potentially serious damage to public confidence in the decision-making process. 71 It is important also to understand the kind of unfairness that is relevant to the question of whether the decision should be remitted to the original decision-maker. The unfairness concerned is such as contravenes the public law duty of fairness, not some abstract concept of unfairness based on a colloquial usage of that word. It is well- established that what fairness requires will vary with the factual circumstances …”