[2024] UKUT 105 (AAC)

The first task of the Upper Tribunal in an appeal such as this is to decide whether the FTT’s decision involved the making of an error on a point of law. The Court of Appeal’s brief summary of the most commonly encountered such legal errors, in R (Iran) v SSHD [2005] EWCA Civ 982, is well known. Also of assistance is the Supreme Court’s recent summary of the correct approach to challenges on appeal to first-instance evaluative judgements in Lifestyle Equities CV v Amazon UK Services Ltd [2024] UKSC 8, handed-down after the hearing of this appeal, but not, we think, making any material change to the law in this area:

“The Correct Approach on Appeal

46.

This is another important matter, and it is appropriate to summarise the correct approach at this stage. A finding that an activity is or is not targeted at consumers in the UK necessarily involves an evaluation by the judge of a range of different facts and matters. It requires, in other words, a multifactorial assessment of the documents, the evidence and the submissions made by the parties. The evaluation is also one which, when made in that way, the trial judge is peculiarly well placed to carry out.

47.

Conversely, an appeal court is inevitably at a disadvantage, as Lord Hoffmann explained in Biogen Inc v Medeva plc [1997] RPC 1 at 4, and so, where the application of a legal standard such as negligence or obviousness involves no question of principle, but is simply a matter of degree, an appellate court should be very cautious in differing from the judge’s evaluation.

48.

We consider that the position was well summarised by Lewison LJ in Fage UK Ltd v Chobani UK Ltd [2014] EWCA Civ 5; [2014] FSR 29; [2014] ETMR 26 in these terms at para 114:

“Appellate courts have been repeatedly warned, by recent cases at the highest level, not to interfere with findings of fact by trial judges, unless compelled to do so. This applies not only to findings of primary fact, but also to the evaluation of those facts and to inferences to be drawn from them. The best known of these cases are: Biogen Inc v Medeva plc [1977] R.P.C. 1; Piglowska v Piglowski [1999] 1 W.L.R. 1360; Datec Electronics Holdings Ltd v United Parcels Service Ltd [2007] UKHL 23; [2007] 1 W.L.R. 1325; In re B (A Child) (Care Proceedings: Threshold Criteria) [2013] UKSC 33; [2013] 1 W.L.R. 1911 and, most recently and comprehensively, McGraddie v McGraddie [2013] UKSC 58; [2013] 1 WLR 2477. These are all decisions either of the House of Lords or of the Supreme Court. The reasons for this approach are many. They include:

i)

The expertise of a trial judge is in determining what facts are relevant to the legal issues to be decided, and what those facts are if they are disputed.

ii)

The trial is not a dress rehearsal. It is the first and last night of the show.

iii)

Duplication of the trial judge’s role on appeal is a disproportionate use of the limited resources of an appellate court, and will seldom lead to a different outcome in an individual case.

iv)

In making his decisions the trial judge will have regard to the whole of the sea of evidence presented to him, whereas an appellate court will only be island hopping.

v)

The atmosphere of the courtroom cannot, in any event, be recreated by reference to documents (including transcripts of evidence).

vi)

Thus even if it were possible to duplicate the role of the trial judge, it cannot in practice be done.”

49.

That does not, however, mean the appeal court is powerless to intervene where the judge has fallen into error in arriving at an evaluative decision such as whether an activity was or was not targeted at a particular territory. It may be possible to establish that the judge was plainly wrong or that there has been a significant error of principle; but the circumstances in which an effective challenge may be mounted to an evaluative decision are not limited to such cases. Many of the important authorities in this area were reviewed by the Court of Appeal in In re Sprintroom Ltd [2019] EWCA Civ 932; [2019] BCC 1031, at paras 72–76. There, in a judgment to which all members of the court (McCombe LJ, Leggatt LJ and Rose LJ) contributed, the court concluded, at para 76, in terms with which we agree, that on a challenge to an evaluative decision of a first instance judge, the appeal court does not carry out the balancing exercise afresh but must ask whether the decision of the judge was wrong by reason of an identifiable flaw in the judge’s treatment of the question to be decided, such as a gap in logic, a lack of consistency, or a failure to take into account some material factor, which undermines the cogency of the conclusion.

50.

On the other hand, it is equally clear that, for the decision to be “wrong” under CPR 52.21(3), it is not enough to show, without more, that the appellate court might have arrived at a different evaluation.”

“Perversity” challenges (i.e. ones based on a finding of fact by the first-instance tribunal being perverse or one which no reasonable tribunal could have reached on the evidence before it) must also bear in mind the expertise of the first-instance tribunal: as was said by Lloyd Jones LJ (as he then was) in Department for Work and Pensions v Information Commissioner & Zola[2016] EWCA Civ 758 at [34]:

“The approach to be followed in perversity challenges to decisions of specialist Tribunals … is simply a reflection of the respect which is naturally paid to the decisions of a specialist Tribunal in an area where it possesses a particular expertise. Given such expertise in a Tribunal, it is entirely understandable that a reviewing court or Tribunal will be slow to interfere with its findings and evaluation of facts in areas where that expertise has a bearing. This may be regarded not so much as requiring that a different, enhanced standard must be met as an acknowledgement of the reality that an expert Tribunal can normally be expected to apply its expertise in the course of its analysis of facts ….”

Where, having completed its “first task” as just described, the Upper Tribunal finds that the making of a decision by the FTT did involve the making of an error on a point of law, the Upper Tribunal may (but need not) set aside the FTT decision and, if it does, must either (i) remit the case to the FTT with directions for its reconsideration, or (ii) re-make the decision.