UT (Tax & Chancery) UT/2022/000155 - [2025] UKUT 00003 (TCC)

This appeal turns on the construction of Rule 11(2) which provides:

The general approach to interpreting statutory provisions is to some extent contentious in this appeal. The outcome sought by the appellant requires a literal construction of Rule 11(2), although Professor Zarkov did refer to the purpose behind the distinction between the notification requirements. There are many cases setting out the modern approach to interpretation. We must identify the meaning borne by the words in the particular context and have regard to the purpose of the provision seeking to construe it, as far as is possible, in a way which best gives effect to that purpose. These principles have recently been confirmed by the Supreme Court in R (on the application of PACCAR Inc and others) v Competition Appeal Tribunal and others [2023] UKSC 28 (“PACCAR”). In the judgment of Lord Sales (with whom Lord Reed, Lord Leggatt and Lord Stephens agreed, Lady Rose dissenting):

A court should not interpret a statute by a plain construction if it produces an absurd result. It is open to a court to adopt another possible interpretation (even if that is more strained) to avoid an absurd result. This is not without limits as explained by Lord Sales in PACCAR:

In construing the requirements of Rule 11(2) we begin by considering the purpose behind it.

The purpose of Rule 11(2) is agreed by the parties. It seeks to distinguish between the notification requirements of the appointment of legal representatives who are to act for parties in tribunal proceedings as opposed to other non-legal representatives. It also worth noting that Rule 11(2) only concerns the notification requirements regarding the appointment of a representative and not the validity of the appointment itself.

When a party instructs a representative other than a legal representative ie. a non-legal representative, in this case an accountant, 11(2) requires that the Tribunal be given notice from the party that it has instructed the representative to act by the means of the party sending notice of the representative’s name and address.

There is a strong public interest which Rule 11(2) seeks to promote.

Legal representatives, as defined under the Legal Services Act 2007, are bound by all manner of laws, regulations, rules and codes of conduct or ethics. For example, lawyers are subject to regulation by regulators such as the Solicitors Regulation Authority (for solicitors) or the Bar Standards Board (for barristers). They are required to carry professional indemnity insurance. The Tribunal can be reasonably confident that where a legal representative states to the Tribunal that they are acting or have been authorised to act – for example when the legal representative signs a notice of appeal on behalf of an appellant – they have been duly appointed and authorised to do so. Therefore, the Tribunal can have a degree of confidence that a legal representative is acting on the instructions and authority of a party. The Tribunal is not under a duty to investigate the assertion made in the signing of a notice of appeal that a person is indeed a legal representative and that they are in fact instructed by the taxpayer but should this turn out not to be the case, then a party should be able to seek redress against the representative through mechanisms provided by law.

The same level of regulation, rules and conduct rules do not necessarily apply to non-legal representatives. Some non-legal representatives, such as accountants, may be bound by professional rules, regulations and ethical or conduct codes which are enforceable through regulators, courts or tribunals. Nonetheless, some other representatives, whether professionals, tax advisors or simply ordinary members of the public, may not be so regulated. In the absence of the same level of protection, Rule 11(2) requires that the party gives notice to the Tribunal that it has duly authorised the non-legal representative to act on its behalf in the proceedings.

In our view the purpose of the Rule in drawing a distinction between the notification requirements as between legal and non legal representatives is intended to be achieved through some form of independent evidence from the party itself that it had authorised the representative to act. This will give both the Tribunal and the other parties the confidence that the representative is instructed to advise and represent the party in the proceedings fundamentally altering the conduct of the proceedings in that the Tribunal will only communicate with the representative thereafter.

The context of the Rule is also important when considering the purpose. There are generally benefits of having a representative to act in proceedings on an appellant’s behalf particularly where, as in tax cases, there are often technical and complex legal and procedural issues arising. One of the benefits is that the representative will undertake to file documents on an appellant’s behalf. The Rule should not be interpreted so as to frustrate the wider purpose of ensuring that an appellant can be effectively represented.

We note that the Tribunal’s own guidance contained in its notice of appeal is consistent with this. A non-legal representative is instructed “…we will only communicate with you if the appellant signs this form, or if the appellant provides us with written notice of your name and address.” A party is required to sign the notice of appeal in person where they are unrepresented or represented by a non-legal representative. The party is thereafter instructed to send in notice of the representative’s name and address before the Tribunal with communicate with them.

The Tribunal administrative staff cannot be expected in ordinary circumstances to conduct investigations into what is asserted in a notice of appeal by a party or its legal or non-legal representative or the identity of the sender. For the Tribunal to be under an obligation to investigate the authority of any representative, there must “a situation in which there may be some concern as to whether a representative has sufficient current instructions or authority”. In such a situation, it is a matter for the Tribunal how to manage that concern, which should not be lightly overturned on appeal (see London United Busways Limited v Dankali [2023] EAT 123 at paras 55-56). Any disputes of fact can, if necessary, later be resolved by the hearing of evidence by the Tribunal.

On a literal reading of Rule 11(2), although the words ‘itself’ or ‘by its own hand’ are not contained in the Rule, it is correct to say that the ‘party’ must refer to the party itself which is required to send or deliver to the Tribunal the notice of the non-legal representative’s name and address.

In this case the Appellant did not sign the notice of appeal but nothing turns on this and despite the original representative incorrectly asserting it was a legal representative, the Appellant subsequently signed a standard template form of authority which is used for non-legal representatives. The issue in this appeal is the consequence of the fact that the form of authority was sent or delivered to the Tribunal by the representative as an attachment to its email and not personally sent by the Appellant itself.

Rule 11(2) requires that ‘if a party appoints a representative, that party …must send or deliver to the Tribunal … written notice of the representative's name and address.’ We accept that it is not only to be read in a literal sense. To do so may cause absurdity or become unworkable in some situations as discussed below.As quoted in PACCAR, it is noted inBennion, Bailey and Norbury that absurdity is given a wide meaning by courts using it to include virtually any result which is impossible, unworkable or impracticable etc.

For example, the Rule literally only requires that the name and address of the representative be provided to the tribunal and not any written confirmation from either the representative or the party that the representative has been instructed or authorised to act.

Rule 11(2), read literally, seeks to require that the party itself or by its own hand send or deliver the notice to the Tribunal but this would not be possible to verify in all cases because of the variety of methods by which documents may be sent or delivered pursuant to Rule 13. While the sender of an email may be identifiable and attributable to a party, the same may not be said of mail delivered by post or by use of a public fax machine. On a literal reading the party may send the name and address of the representative by post but it may be impossible, unworkable and impracticable for the Tribunal, or any other party, to verify that the post was actually sent or delivered by the party rather than the representative or some other person. On a such a literal understanding of the rule, the public policy in requiring confirmation that a non-legal representative has been authorised by a party is not protected and such a construction may lead to absurd results. We consider that such a construction is not necessary to give effect to the purpose of the provision. What is required to give effect to the purpose is for the provision to be read so as to require that there is independent evidence from the party that a non-legal representative has been instructed. Often a party’s signature confirming a particular statement will satisfy such evidential requirements.

In practice this may not cause so much of a difficulty because the notice of appeal itself requires a party to sign when it does not have a legal representative and state the name and address of its non-legal representative. The requirement contained in the notice of appeal for the party to sign exceeds the requirements in Rule 20 which only requires that a person (the appellant or representative) state the appellant’s name and address and that of its representative and send or deliver the notice of appeal to the Tribunal. Further, this case demonstrates that the practice required by the notice of appeal that the party sign when not represented by a legal representative is not always followed and the authorisation form is routinely sent to the Tribunal by the non-legal representative. We do not suggest that because a practice has developed the Rules should be interpreted so as to give effect to that practice.

We are satisfied that Rule 11(2) should be interpreted more broadly as being satisfied where the party causes or authorises written notice of the representative’s name and address to be sent or delivered to the Tribunal on its behalf. The Rule should therefore be read as requiring that if a party appoints a non-legal representative, that party must send or deliver to the Tribunal or cause or authorise to be sent or delivered written notice of the representative's name and address. This can be effected by the party signing a notice of appeal and stating the name and address of its non-legal representative therein and causing/authorising the notice of Appeal to be served on the Tribunal or separately by causing a signed form of authority stating the name and address of the representative to be sent to the Tribunal. In our view this statutory construction gives effect to the purpose of the provision. Further, the approach to interpretation the Rules should accord with the overriding objective by virtue of Rule 2(3). This includes avoiding unnecessary formality and seeking flexibility.

Therefore, we do not consider that there was any error of law in the FTT’s acceptance that the Appellant’s representative was properly authorised to act on its behalf in this appeal at the time that the notification of the allocation decision and complex categorisation was sent to it. Thus, there was no error in it deciding it had the power to make the costs order. We agree with Mr Way’s primary submission that Rule 11(2) can be interpreted more broadly and on the broader interpretation, its requirements were complied with on the fact of this case.

As set out above the FTT at [9(1)] of the decision made a finding of fact that the Appellant ‘submitted’ the form of authority. In light of our decision on the construction of 11(2) this finding is not material. It is accepted by the parties, and having considered the documents we concur, that the Appellant itself did not send or deliver to the FTT the form of authority which had been completed and signed by an officer of the Appellant and which confirmed that its then representative, Accura, had been authorised to act on its behalf. The form of authority was sent to the Tribunal in an email from Accura on 11 March 2016 rather than in any email from the Appellant itself. We proceed on this factual basis.

Applying our interpretation of Rule 11(2) to the factual basis contained in the undisputed primary documents before us we consider that the FTT was correct to consider that the Appellant’s representative was properly authorised to act at the time that the notification of the allocation decision and complex categorisation was sent to it. The requirement of Rule 11(2) is satisfied in this case because the Appellant caused or authorised the signed form of authority to be sent to the Tribunal by its representative. The documents evidence that the Appellant authorised Accura to act in proceedings and intended and caused this to be notified to the Tribunal.

The Appellant’s officer, Mr Stoykov, duly signed and dated the Tribunal’s standard template form confirming it had authorised its then representative, Accura, to act on its behalf in the proceedings. The form of authority stated the name and address of the representative, contained the Appellant’s name and signatory on its behalf together with his signature. The form contained the statement: ‘I authorise my representative to act on my behalf in this appeal.’ In the absence of or any evidence to the contrary, and consistent with the finding by the FTT at [9(1)], the completed form of authority is evidence that the Appellant instructed and caused/authorised the representative to send or deliver the form to the Tribunal. Thereby the Appellant caused written notice of its representative’s name and address to be sent to the Tribunal.

We should briefly deal with Professor Zarkov’s attempt to argue that the notice of appeal or original form of authority from Accura contained fraudulent misrepresentations: either in fraudulently asserting Accura was a legal representative; or in Accura filling out the form and fraudulently asserting it was instructed; or in fraudulently asserting that the Appellant itself or its purported signatory had actually signed the form of authority. We did not permit the representative to pursue this argument during the hearing for the following reasons: the Appellant had no permission to argue this as a ground of appeal; it was not argued before the FTT; it was a question of evidence and indeed there was no evidence presented but merely the late assertion and speculation of the representative; it was directly contradicted by the findings of the FTT; and there had been no application by the Appellant to admit any fresh evidence on appeal.

The Appellant did not have permission to argue in this appeal that Accura did not in fact have the Appellant’s authority to commence proceedings on its behalf. If the Appellant had had permission to make such assertions, it would have been incumbent on it “to provide a full account of exchanges and communications” with that representative (see Katib v HMRC [2019] UKUT 0189 (TCC) at para 49). Without doing so, the Upper Tribunal should not entertain any argument that the Appellant had not in fact authorised Accura Accountants Limited to act on its behalf as a representative.

In any event, we are satisfied that Accura was properly appointed as the Appellant’s representative. The FTT was entitled to take both of the following as authorisation that Accura was appointed as the Appellant’s representative: the form of authority was proper notification of the appointment of a representative; and the FTT was entitled to accept the notification contained in the Notice of Appeal.

It appears from Mr Blech’s covering email of 11 March 2016 that the FTT sought clarification and sent the form of authority to Accura, but the FTT would in any event have been entitled to accept the statement on the Notice of Appeal that Accura was the Appellant’s legal representatives. Rule 11(2) permits a legal representative to provide notice themselves that they are the Appellant’s representative. In this case, the Notice of Appeal was signed by Accura, stating itself to have submitted the appeal as the Appellant’s legal representative. There was nothing on the face of that document, or in any other correspondence which accompanied it, including the form of authority, which could have given rise to any concern as to the status of that representative. No enquiry was required; the FTT would have been entitled to take that statement at face value and conduct the appeal accordingly, albeit it appears that it sought clarification and confirmation of the type of representative that it was and that it had the Appellant’s authorisation to act.

We finally address the decision in Aquarius. Professor Zarkov relied on [22] in particular: