TC09523 - [2025] UKFTT 00544 (TC)

The Tribunal has the power to relieve a party of a failure to comply with a time limit contained in the Tribunal Rules. Whether or not to allow a party leave to appeal out of time is a discretionary decision.

The approach to be taken to applications for leave to appeal out of time was considered by the Upper Tribunal in the case of Data Select Limited v the Commissioners for Her Majesty’s Revenue and Customs [2012] STC 2195. The Upper Tribunal provided guidance as to the factors to be considered in such an application. It stated, at [34], that:

“Applications for extensions of time limits of various kinds are commonplace and the approach to be adopted is well established. As a general rule, when a court or tribunal is asked to extend a time limit, the court or tribunal asks itself the following questions: (1) what is the purpose of the time limit? (2) how long was the delay? (3) is there a good explanation for the delay? (4) what will be the consequences for the parties of an extension of time? and (5) what will be the consequences for the parties of a refusal to extend time? The court or tribunal then makes its decision in the light of the answers to those questions.”

The position was considered further by the Upper Tribunal in the case of Martland v Revenue and Customs Commissioners [2018] UKUT 178:

“[44] When the FTT is considering applications for permission to appeal out of time, therefore, it must be remembered that the starting point is that permission should not be granted unless the FTT is satisfied on balance that it should be. In considering that question, we consider the FTT can usefully follow the three-stage process set out in Denton :

(1)

Establish the length of the delay. If it was very short (which would, in the absence of unusual circumstances, equate to the breach being "neither serious nor significant"), then the FTT "is unlikely to need to spend much time on the second and third stages" - though this should not be taken to mean that applications can be granted for very short delays without even moving on to a consideration of those stages.

(2)

The reason (or reasons) why the default occurred should be established.

(3)

The FTT can then move onto its evaluation of "all the circumstances of the case". This will involve a balancing exercise which will essentially assess the merits of the reason(s) given for the delay and the prejudice which would be caused to both parties by granting or refusing permission.

[45] That balancing exercise should take into account the particular importance of the need for litigation to be conducted efficiently and at proportionate cost, and for statutory time limits to be respected. By approaching matters in this way, it can readily be seen that, to the extent they are relevant in the circumstances of the particular case, all the factors raised in Aberdeen and Data Select will be covered, without the need to refer back explicitly to those cases and attempt to structure the FTT's deliberations artificially by reference to those factors. The FTT's role is to exercise judicial discretion taking account of all relevant factors, not to follow a checklist.

[46] In doing so, the FTT can have regard to any obvious strength or weakness of the appellant's case; this goes to the question of prejudice - there is obviously much greater prejudice for an applicant to lose the opportunity of putting forward a really strong case than a very weak one. It is important however that this should not descend into a detailed analysis of the underlying merits of the appeal.”

Following Martland, the Tribunal should apply a three stage test looking first at the length of the delay, secondly at the reason for the default and finally considering the case in the round. In considering the case in the round, the Tribunal should take into account the particular importance of the need for litigation to be conducted efficiently and at proportionate cost and for statutory time limits to be respected.

For completeness, in considering an application for leave to reinstate out of time, the Tribunal should not rely simply on assertions made by an appellant. In the case of Smith v Brough [2005] EWCA Civ 261, the Court of Appeal determined that it was for the appellant to prove any facts intended to be relied upon in support of an application for extension of time.

The deadline for making an application for reinstatement in this case was 12 February 2024 (28 days after the Strike Out Order). The application for reinstatement was received by the Tribunal on 28 March 2024. That is more than 6 weeks after the deadline had passed: over one and a half times the period which Parliament has provided for the making of the application. That cannot be described as a short or insignificant delay.

The application for reinstatement noted that it was late but did not give any real explanation of why that was the case. For example, the references to the conduct of VP’s previous solicitor contained in the application cannot be relevant to the question of why VP himself did not respond to the Tribunal, when his solicitor withdrew from acting.

The only statement that could touch upon the delay is the statement that VP is a vulnerable individual who is very unwell and partially blind. However, that explanation is so lacking in detail that it cannot be taken to explain his failure. Moreover, the Appellant forwarded the email from the Tribunal attaching the direction in question to RS on the day it was issued.

This must all be viewed against the conduct of the litigation by VP.

An investigation against tax fraud was issued in April 2014 covering a 20 year period. In July 2015, VP’s accountant prepared a disclosure report which was issued to HMRC and which detailed expenses. Income was assessed based on an analysis of VP’s bank statements. In 2017, an assessment was issued using these sources of information.

The appeal commenced in 2018. As a result of the coronavirus pandemic, there were understandable delays in progressing matters in the early part of 2020.

The Respondents advised the Tribunal in June 2020 that, subject to lodging additional documents, the Respondents were ready to proceed to a hearing. VP’s agent advised the Tribunal, in July 2020, that further investigations were required and that the case was not ready for a hearing. In response to VP’s email, the Tribunal determined that a case management hearing should be fixed so that appropriate directions could be made to move the proceedings towards a substantive hearing. A hearing was fixed for 12 October 2020.

In advance of that hearing, VP provided a letter from a doctor stating that he was one third of the way through a six month course of treatment. At the hearing on 12 October 2021 the appeal was sisted until 26 February 2021. This was not opposed by the Respondents.

Following expiry of the sist in 26 February 2021 there was a period of delay. This arose because: (i) lockdown provisions meant that hearings could not take place in person; and (ii) it was necessary to establish VP’s medical position. Ultimately a two day hearing was fixed for 01 and 02 December 2021.

On 3 September 2021, VP made an application to postpone the hearing on the basis that more time was required. That application was granted.

By order dated 23 November 2021, the appeal was sisted for a month to enable parties to reach agreement on directions. The order directed VP’s agents to contact the agents for the Respondent. The order recorded that it was highly unlikely that any further application for sist would be granted. The sist was however extended to 23 January 2022.

Thereafter, by order dated 24 June 2022, the parties were directed to provide specified information to the Tribunal by 18 July 2022. VP failed to respond prior to the deadline. The Tribunal issued an order dated 25 July 2022 providing that, unless VP responded to the previous order by 2 August 2022, a hearing would be fixed without further reference to him. Thereafter, a hearing was fixed for 17-21 April 2023.

In February 2023, VP sought the discharge of that hearing on the grounds that his medical condition meant that his solicitors had been unable to obtain instructions from him. They sought to adjourn the appeal for 4-6 months. Given the explanation provided by VP’s representatives, the Respondents did not oppose that application. The case was then sisted until 7 August 2023 to enable VP’s medical condition to be assessed.

In May 2023, the Respondents noticed a decision on the Scottish Courts website which showed that VP was progressing litigation in the Court of Session. The decision identified that the Appellant had participated in a four day proof before answer in May 2023. The same solicitors were instructed by VP in that action. VP was not only able to give instructions to them but had also appeared and given evidence. The Respondent raised this with VP’s solicitors and initially received no response.

In July 2023, the Appellant sought a further sist of his appeal The Respondent opposed that on the grounds that VP had been able to give instructions in the Court of Session action and that progress required to be made. A case management hearing was fixed before Judge Anne Scott for 21 September 2023.

At the case management hearing, senior counsel represented VP. It was no longer said that VP could not give instructions. Judge Anne Scott fixed a timetable to ensure progress would be made.

The Appellant failed to comply with the timetable. Thereafter, the agents for the Appellant withdrew from acting on 11 December 2023. VP’s application to reinstate his appeal suggests that the reason his solicitors took no steps to advance his case was that he did not put them in the funds necessary for them to do so.

It is of particular importance that litigation be conducted efficiently and at proportionate cost. It is also important that statutory time limits be respected. This case has now been ongoing for almost seven years with no real progress having been made. The Appellant has not made proper preparations to progress his appeal. He appears to be no further forward than when his appeal was first lodged. By his own admission his previous solicitors withdrew from acting because he did not provide them with the funds necessary to progress his case.

Moreover, the Respondents are concerned that VP has not been open and honest with the Respondents or the Tribunal in respect of his health in the past. His previous agents advised both the Respondents and the Tribunal that VP was not fit to give instructions or to attend at a tribunal hearing in April and May 2024. The Respondents took that explanation at face value and did not oppose an application to discharge the hearing. However, despite these representations, VP was in fact well enough to give instructions in another litigation. Significantly, VP has failed to explain why his application to reinstate the appeal was not made timeously. He clearly received it on the day that it was sent to him. In all of the circumstances, the interests of justice do not justify the granting of the extension sought.