Upper Tribunal Tax and Chancery Chamber

UT/2023/000068 - [2024] UKUT 00262 (TCC)

Fecha: 25-Abr-2024

Arguments of the parties

Arguments of the parties

34.

HMRC’s oral submissions on Ground 1 were ably provided by Mr Randle. Following the four stages in an Edwards v Bairstow challenge identified by the Court of Appeal in Georgiou, he argued as follows:

(1)

Stage 1: The finding challenged was the variation of Sky’s right of first call in FTT[111(6)].

(2)

Stage 2: The significance of the finding was as we have described above at [32] and [33] of this decision.

(3)

Stage 3: In relation to the evidence relevant to the challenged finding, it is not easy to discern from the Decision what evidence the FTT relied on. The FTT apparently considered it relevant that Mr Barnes would work on his standing commitments in respect of his newspaper columns and that he would provide coverage of high-profile matches over which Sky had no broadcasting rights, and that clause 1.1 of the Key Terms provided for contractual variations. There was no other evidence relevant to whether there had been a variation of the right of first call.

(4)

Stage 4: The finding was not one which the FTT was reasonably entitled to make. Pursuant to clause 1.1 of the Key Terms, any variation to the contractual terms had to be agreed in writing. Further, none of the matters relied on by the FTT were actually in conflict with the contractual right of first call. The lack of any conflict in practice or the sort of “flashpoint” situation identified in Atholl House meant that Sky was not required in practice to insist on its full contractual rights.

35.

Mr Randle also pointed out that the FTT may have thought that the actual Contracts were varied as described, which would not have been permissible given that any variations had to be agreed in writing.

36.

For SLB, Mr Collins argued that the FTT was entitled and correct to find that the contractual first call was varied so as to be subject to Mr Barnes’ newspaper commitments and coverage of high-profile matches over which Sky had no broadcasting rights. He referred to FTT[134(6)]:

…There was the long-standing understanding between the parties that Mr Barnes would be unavailable to Sky during the Six Nations season, and the World Cup tournament, although he could be requested for interviews by Sky Sports News. What Sky lost in terms of Mr Barnes’ availability was gained in return through the publicity of having one of its regular commentators as a columnist of these high-profile games, which in turn reflected well on Sky as the broadcaster with the exclusive right to Mr Barnes’ services.

37.

He also referred to FTT[69(4)]:

When Sky did not have the broadcasting rights for major game events in rugby union, such as the Six Nations tournament for the northern hemisphere, Mr Barnes would be focussing on his newspaper columns to cover the Six Nations tournament, and not be appearing in any Sky Sports game fixtures.

38.

Mr Collins said that the disputed finding was also based on ample evidence before the FTT from Mr Barnes, including paragraph 14 of his witness statement:

Every Six Nations, I focus 100% on newspaper commitments. This has long been the case and Sky have long understood the imperative of attending these games…I am more likely to be seen chairing a Times/Sunday Times Readers Plus night in either London or Dublin than to be on television around the time of the leading tournaments.

39.

Mr Collins also said that HMRC’s argument relating to the need for a variation of the Contracts to be in writing missed the point, because the terms of the hypothetical contract can include terms based on the circumstances and the conduct of the parties.