AC-2024-LON-001976 - [2025] EWHC 2479 (Admin)

The Administrative Court Guide 2025 provides at paragraph 6.4.4.2 that:

“In considering whether to grant an extension of time, the Court must first determine the date from which the relevant time period started to run so that the period of delay can be calculated correctly. The Court will then consider all the circumstances, including whether an adequate explanation has been given for the delay, the importance of the issues, the prospects of success and whether an extension will cause substantial hardship or prejudice to the defendant or any other party or be detrimental to good administration.”

The footnote to this paragraph in the Guide refers to the Privy Council decision of Maharaj v National Energy Corporation of Trinidad and Tobago [2019] 1 WLR 983, where Lord Lloyd-Jones observed at [38] that:

“Here it is important to emphasise that the statutory test is not one of good reason for delay but the broader test of good reason for extending time. This will be likely to bring in many considerations beyond those relevant to an objectively good reason for the delay, including the importance of the issues, the prospect of success, the presence or absence of prejudice or detriment to good administration, and the public interest.”

In Maharaj at [47], Lord Lloyd-Jones stated that:

“While prejudice or detriment will normally be important considerations in deciding whether to extend time, there will undoubtedly be circumstances in which leave may properly be refused despite their absence. One example might be where a long delay was wholly lacking in excuse and the claim was a very poor and inconsequential one on the merits, such that there was no good reason to grant an extension”.

In my judgment, the date from which time begins to run for the judicial review claim was the date of the closure notices: 10 May 2019. That was the date which triggered the claim for judicial review: it is the substantive decision that is under challenge. However, given that it was entirely reasonable for the Claimant to have sought a statutory review of that decision before lodging judicial review proceedings, I will examine the period after the conclusion of the statutory review on 17 December 2021 until the issue of the claim form on 11 June 2024 (over 30 months later) to see whether the further period of delay was excusable or not.

In my judgment, the further period of delay was not “wholly lacking in excuse”. The Claimant pursued the internal review process with HMRC which involved direct consideration of his claim that he had a legitimate expectation that he would continue to be treated as being domiciled in Israel until HMRC reached a different conclusion as to his domicile, and that HMRC would not apply that different conclusion retrospectively. The internal review concluded on 11 May 2022. Thereafter, on 8 August 2022, the Claimant made a referral to the AO.

On the basis of the materials that I have seen, I do not consider that the referral was a suitable alternative remedy for the Claimant to have pursued in the sense that it would have justified a stay of any judicial review proceedings. It seems clear from the remit of the Adjudicator under the SLA, as illustrated by Case Study 4 in the guidance, that the Adjudicator could not consider whether or not the Claimant had a legitimate expectation. This was a matter that would and could be addressed by the Administrative Court.

Whilst the case law referred to by Mr Elliott on the question of suitable alternative remedy does say that a stay should ordinarily be granted “if a significant part of the issues between the parties could be resolved outside the litigation process” (see Cowl at [14], per Lord Woolf CJ), it was not realistic to expect that the main issue between the parties – whether the Claimant had a legitimate expectation, such that the closure notices should not have been made at all – would or could have been resolved by the Adjudicator.

Nevertheless, the fact that a reference was made to the AO does show that the Claimant did not simply sit on his hands throughout the period after the conclusion of the internal review on 11 May 2022, and he was continuing to assert his reliance on the legitimate expectation throughout. Furthermore, although I do not know much about the ADR process that the parties engaged in, it is likely that that would have covered the tax payable by the Claimant during the periods covered by the relevant closure notices, and therefore embraced the period covered by the asserted legitimate expectation.

There was clearly a delay, however, following the ending of the ADR process which appears to have been in early April 2023 until the lodging of the judicial review proceedings 14 months later in June 2024. From that time, the Claimant did not chase up the AO to find out what was happening to his referral (even if that had been a suitable alternative remedy, which I have found it was not), and this seems to have been a deliberate act on his behalf. Whilst there is no specific obligation on a judicial review claimant to check with a decision maker as to what is happening, there is a risk that this will be considered by a Court when looking at the issue of delay. The obligation under CPR 54.5(1) is for a claim form to be filed “promptly”, and in any event not later than 3 months after the grounds to make the claim first arose.

I consider, therefore, that there was an unjustified delay in this case for a period of 14 months: following the end of the ADR process. This, however, is not the end of the matter. As was made clear in Maharaj, the question for the Court is not whether there was a good reason for the delay, but whether there is a good reason to extend time. This involves consideration of the importance of the issues, the prospect of success, the presence or absence of prejudice or detriment to good administration, and the public interest. In my judgment, there is a good reason to extend time.

First, I consider that the issues raised by the Claimant are important. They are not issues that are of significant public interest as they essentially turn on the specific treatment of the Claimant and do not involve wider policy issues. Nevertheless, the issues are not trivial to the Claimant. To the contrary, they involve an obligation to pay tax of around £3,600,000. This is a substantial sum to any person.

Second, I consider that the issues in this case are clearly arguable. There is, in my judgment, a realistic prospect of success. The Claimant’s claim for legitimate expectation does not turn simply on the letter of 27 November 2000. It also involves the subsequent conduct and statements of HMRC. The statements and conduct were arguably clear, unambiguous and devoid of relevant qualification. Furthermore, at all relevant times, the Claimant was under the impression from his dealings with HMRC that his domicile was being treated as Israel and not the United Kingdom, and the Claimant clearly relied on that impression in the way that he conducted his financial affairs.

Whether or not the claim for legitimate expectation ultimately succeeds will turn on a careful consideration of the statements and conduct made by HMRC, the way in which the Claimant conducted himself as a result, as well as whether or not he put all of his cards face up on the table when he filled out the DOM1 form. In my judgment, the merits of the case is not clear-cut for either party.

Third, there is no real prejudice or detriment to good administration caused by the delay. At all material times, HMRC was aware of the legitimate expectation point being raised by the Claimant. It has not come as a surprise to HMRC, even though protective proceedings were not issued and a judicial review claim was not specifically intimated. There is no suggestion that, for instance, the delay in bringing these proceedings affects the evidence that is available to deal with the claim.

Moreover, it is highly unlikely that the judicial review proceedings would have progressed in any significant way until the FTT had reached its decision on the underlying question of domicile. Whilst it would have been possible for judicial review proceedings to have gone ahead prior to the appeal to the FTT, that is not realistic. As Mr Elliott pointed out in argument, the appeal to the FTT covered not just the tax years relevant to the judicial review claim but subsequent years as well. Accordingly, even if the judicial review proceedings had concluded in the Claimant’s favour there would still have been a need to proceed with the appeal. On the other hand, if the appeal to the FTT had concluded in the Claimant’s favour, there would have been no need for the judicial review proceedings.

In my judgment, therefore, even if the Claimant had lodged judicial proceedings sooner than he did on 11 June 2024, including within a short period after the end of the ADR in April 2023, the substantive hearing of any application for judicial review would not have been heard until after the FTT had concluded its appeal. That did not occur until 21 March 2025. HMRC is not, therefore, in a materially worse position in having to deal with the Claimant’s judicial review claim now than it would have been in had the claim being issued more promptly.