[2025] UKUT 281 (LC)

The approach which should be taken by the FTT to procedural defaults was considered by this Tribunal in Jalay Enterprises Ltd v Ramsdale [2023] UKUT 247 (LC), where at paragraph 1 the Deputy President said

“For a court or tribunal to debar a party from participating in the final hearing of a claim brought against them is a draconian step.  Sometimes where, by their conduct, a party has prevented the tribunal from determining the claim in a way which is fair to both sides and to others whose cases are waiting to be heard, it may be necessary to impose such an extreme sanction. But in general, and especially where the claim involves allegations of criminal conduct and may result in a substantial financial penalty, the interests of justice require that both parties be given a full opportunity to participate in the proceedings.”

The Court of Appeal in Denton v TH White Ltd [2014] 1 WLR 3926 gave guidance about the approach to be taken to procedural defaults in the courts, and the Supreme Court in BPP Holdings v Commissioners for Her Majesty’s Revenue and Customs [2017] 1 WLR 294 has indicated that all tribunals should follow that guidance. Accordingly the FTT’s decision should have been made after considering the matter in three stages:

It is important that a consistent approach is taken by all tribunals to avoid unfairness. It is not clear that the FTT in this case had the relevant principles in mind. In particular, it appears to have considered only whether the appellant had provided a good reason for the delay in making his application; its approach seems to have been that if there was no good reason for delay then the FTT’s discretion could not be exercised in the appellant’s favour.

In particular, the FTT appears to have given little or no consideration to the relevance of the applicant’s email contact with the FTT a few days after the expiry of the time limit in which he explained that he wished to appeal the penalty notice. If the appeal is taken as having been commenced on that date the period of delay was trivial; even by 22 July the period of delay was not lengthy and a properly directed decision maker might have regarded it as less than serious. Nor does the FTT appear to have taken into account that the consequence of refusing to admit the appeal would be that a significant penalty would be imposed on the appellant without any judicial consideration at all.

The FTT was also in error about the appellant’s fifth reason, namely the lack of prejudice to the respondent. The issue there is not whether it would be expensive for the respondent to defend the appeal, but whether the cost or other prejudice would be any greater by virtue of the appeal being made late. In the present case a delay of just over three weeks could not have made any difference to the respondent in terms of the cost, in time or money, of participating in the FTT proceedings.

The FTT was of course making a discretionary decision whether to extend time, and the Tribunal cannot interfere unless the FTT made an error of law or unless it can be seen that the decision was irrational. In this case the FTT failed to take into account material considerations, and the decision is set aside.