TC09523 - [2025] UKFTT 00544 (TC)

In the case of BPP Holdings v The Commissioners for Her Majesty’s Revenue and Customs [2017] UKSC 55 the Supreme Court considered the proper approach for Tribunals to take where there has been a breach of an order. The Supreme Court observed that the cases on time limits and sanctions under the English Court Rules did not apply directly to Tribunals but that the Tribunals would usually follow a similar approach. It also emphasised the important role that the Upper Tribunal has in determining the approach to the interpretation of the Tribunal Rules. It was observed that:

“[24]. In this case, when considering the proper approach to the making of a debarring order in the Ft-T, the Ft-T, and indeed the UT, the Court of Appeal, and counsel before us, concentrated on recent English cases... . These cases provide a salutary reminder as to the importance that is now attached in all courts and tribunals throughout the UK to observing rules in contentious proceedings generally, but they are directed to, and only strictly applicable to, the courts of England and Wales, save to the extent that the approach in those cases is adopted by the UT, or, even more, by the Court of Appeal when giving guidance to the Ft- T.

[25]. Such guidance to tribunals on tax cases was given by Judge Sinfield in the UT in McCarthy & Stone. In para 43, after referring to differences and similarities between the CPR and the tribunal rules, in that case the Tribunals Procedure (Upper Tribunal) Rules 2008 (SI 2008/2698), he accepted that "the CPR do not apply to tribunals" but added that he did not "accept that the UT should adopt a different, i.e. more relaxed, approach to compliance with rules, directions and orders than the courts that are subject to the CPR". The same view was expressed by Ryder LJ in paras 37 and 38 in the Court of Appeal in this case, including this: "I can detect no justification for a more relaxed approach to compliance with rules and directions in the tribunals", and added that "[i]t should not need to be said that a tribunal's orders, rules and practice directions are to be complied with in like manner to a court's."

[26]. It is not for this Court to interfere with the guidance given by the UT and the Court of Appeal as to the proper approach to be adopted by the Ft-T in relation to the lifting or imposing of sanctions for failure to comply with time limits (save in the very unlikely event of such guidance being wrong in law)... The guidance given by Judge Sinfield in McCarthy & Stone was appropriate: as Mr Grodzinski QC, who appeared for BPP pointed out, it is "an important function" of the UT to develop guidance so as to achieve consistency in the Ft-T: see R (Jones) v First-tier Tribunal (Social Entitlement Chamber) [2013] 2 AC 48, para 41, per Lord Carnwath. And, by confirming that guidance in this case, the Senior President, with the support of Moore-Bick V-P and Richards LJ, has very substantially reinforced its authority. In a nutshell, the cases on time-limits and sanctions in the CPR do not apply directly, but the Tribunals should generally follow a similar approach.”

It has been confirmed by the Upper Tribunal that the guidance in Martland applies to cases where the Tribunal is being asked to grant relief from sanctions (see BMW Shipping Agents Limited at [26]). Accordingly, the relevant test to be applied is the three stage test.

The relevant failure for these purposes is the failure by VP to advise the Tribunal of his intention to continue with his appeal following his agents’ withdrawal from acting. He ought to have done so on or before 8 January 2024.

However, he did not contact the Tribunal until 28 March 2024 which is over two and a half months after the date on which he was required to confirm his position. The only explanation given for this is his health for which the information provided is so lacking in detail that it does not enable the Tribunal to form a view on whether VP was, in fact, unable to respond timeously.

This is of particular concern where the Tribunal has been advised, on a previous occasion, that VP was unable to give instructions to solicitors when he was, in fact, instructing solicitors in a separate litigation.

The respondents say that VP has changed his position from his written statement to the evidence given at the tribunal and has contradicted his previous statements which related to the failure of his former solicitors MBS to communicate with him and has failed to prove that the ABC whom he also blamed were negligent.

HMRC say that VP did not want to continue with the costs of bringing his appeal and accordingly instructed his accountants, ABC, to seek to negotiate with HMRC. It was only when HMRC moved to recover the sums that were due that the applications were made.

VP was not willing to provide the payments required by MBS and their correspondence makes it clear that no work was undertaken, as a consequence, for any appeal. MBS stated that VP was not cooperating and had not provided the accounts which they consider to be a very important part of his defence.

Accordingly, HMRC say that the case was not being prepared because VP was not prepared to pay his solicitors and counsel to do so and that this was a conscious decision.

This being so, this was not a good reason for the appeal being made late.

Considering matters in the round, 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 seven years with no real progress having been made.

VP 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. There is nothing in the appeal to suggest that his approach to the litigation would change.

Moreover, he has not been open and honest with the Respondents or the Tribunal in respect of his health in the past. Nor has he explained why he did not respond to the Unless Order issued to him directly by the Tribunal nor has he explained that he wishes to progress matters and how he would do so such as by funding his legal team and producing the required accounts.

HMRC say that these applications are another attempt to delay the enforcement action and that his case is weak and that his untruthfulness at the tribunal hearing makes this even weaker.

In all of the circumstances, the application to reinstate the appeal should be refused.