TC09602 - [2025] UKFTT 00930 (TC)

In Hytec Information Systems v Coventry City Council [1997] 1 WLR 666 (“Hytec”), the Court of Appeal considered a similar issue: whether a case should be struck out for breach of an “unless” order that was said to be the fault of the representative. Ward LJ, giving the leading judgment, said:

“Ordinarily this court should not distinguish between the litigant himself and his advisers. There are good reasons why the court should not: firstly, if anyone is to suffer for the failure of the solicitor it is better that it be the client than another party to the litigation; secondly, the disgruntled client may in appropriate cases have his remedies in damages or in respect of the wasted costs; thirdly, it seems to me that it would become a charter for the incompetent…were this court to allow almost impossible investigations in apportioning blame between solicitor and counsel on the one hand, or between themselves and their client on the other. The basis of the rule is that orders of the court must be observed and the court is entitled to expect that its officers and counsel who appear before it are more observant of that duty even than the litigant himself.”

In Katib,the UT applied the principles in Martland to a case where the appellant, Mr Katib had been deceived and misled by his adviser, a Mr Bridger. When that case was before the FTT, that Tribunal had found as a fact that Mr Bridger had given “extraordinary” advice, including that Mr Katib:

“should cease to be a man by making a declaration to that effect to enable Mr Bridger to communicate to the world that the Appellant was dead, that there was plenty of time to deal with an enforcement notice as the Bills of Exchange Act governed the counting of the time limit to do so.”

The FTT had also found that “Mr Bridger misled the Appellant as to what steps were being taken and needed to be taken to challenge the personal penalty notices”; told him that matters were in hand and there was no need to be concerned, and had also told Mr Katib that he had the expertise to deal with the issue, see [8] of the UT judgment.

However, the UT nevertheless held that reliance on Mr Bridger did not provide a good reason for the delay in Mr Katib’s appeal, saying at [49] (their emphasis):

“We accept HMRC’s general point that, in most cases, when the FTT is considering an application for permission to make a late appeal, failings by a litigant’s advisers should be regarded as failings of the litigant.”

The UT returned to the same issue at [54], saying:

“It is precisely because of the importance of complying with statutory time limits that, when considering applications for permission to make a late appeal, failures by a litigant’s adviser should generally be treated as failures by the litigant.”

The UT then cited the passage from Hytec set out above, and continued at [56] by concluding that the correct approach in Mr Katib’s case was:

“…to start with the general rule that the failure of Mr Bridger to advise Mr Katib of the deadlines for making appeals, or to submit timely appeals on Mr Katib’s behalf, is unlikely to amount to a ‘good reason’ for missing those deadlines when considering the second stage of the evaluation required by Martland.”

This was followed by the following comment at [58]:

“…the core of Mr Katib’s complaint is that Mr Bridger was incompetent, did not give proper advice, failed to appeal on time and told Mr Katib that matters were in hand when they were not. In other words, he did not do his job. That core complaint is, unfortunately, not as uncommon as it should be. It may be that the nature of the incompetence is rather more striking, if not spectacular, than one normally sees, but that makes no difference in these circumstances. It cannot be the case that a greater degree of adviser incompetence improves one’s chances of an appeal, either by enabling the client to distance himself from the activity or otherwise.”

In deciding that little weight be given to Mr Katib’s reliance on his adviser, the UT also took into account that Mr Katib should have noticed “warning signs”, including direct contact from HMRC in the form of enforcement action, which “should have alerted him”, and the UT concluded Mr Katib was “not without responsibility in this story”.

In the subsequent case of Uddin, the taxpayer alleged that he had been misled by his adviser. The UT stated at [30]:

“A client will always rely on their advisers, but their adviser’s failings are still laid at their door. Why the adviser failed and how they led their client to continue to rely on them is not relevant to the Martland analysis, unless the client can show that they did whatever a reasonable taxpayer in that situation would have done (which would generally be to make sufficient efforts to keep tabs on the adviser and make sure that matters were on track). Mr Uddin lost because he did not demonstrate more than a cursory interest in what was (not) going on, he had not done what a reasonable taxpayer in his position would be expected to do…”