Upper Tribunal Tax and Chancery Chamber

UT/2023/37 - [2024] UKUT 00229 (TCC)

Fecha: 05-Ago-2024

The Tribunal’s jurisdiction

The Tribunal’s jurisdiction

72.

The Authority’s decision to impose requirements under s55L may be referred to the Tribunal pursuant to s133 FSMA.

73.

In resolving any issues, the burden of proof lies on the Authority, and is to the usual civil standard (balance of probabilities).

74.

There is a distinction between the powers of the Tribunal on what is described in s133 as a “disciplinary reference” and other references. In relation to non-disciplinary references (such as this one), the powers of the Tribunal are set out in ss133(6) and (6A) as follows:

(6)

[…] the Tribunal must determine the reference or appeal by either—

(a)

dismissing it; or

(b)

remitting the matter to the decision-maker with a direction to reconsider and reach a decision in accordance with the findings of the Tribunal.

(6A) The findings mentioned in subsection (6)(b) are limited to findings as to—

(a)

issues of fact or law;

(b)

the matters to be, or not to be, taken into account in making the decision; and

(c)

the procedural or other steps to be taken in connection with the making of the decision.

75.

The decision-maker for the purposes of s133(6)(b) is the Authority (acting by Mr McGruer).

76.

The powers of the Tribunal in relation to non-disciplinary references are supervisory. The law relating to supervisory references was described by this Tribunal in its decision in Markou v FCA [2023] UKUT 101 (TCC):

61.

The Tribunal in Hussein v FCA [2018] UKUT 0186 (TCC) described the Tribunal’s jurisdiction as “a supervisory rather than a full jurisdiction; in that unless the Tribunal believes the reference to have no merit and therefore dismisses it, its powers are limited to remitting the matter to the Authority with a direction to reconsider its decision in accordance with the findings of the Tribunal.”

62.

Unless the Tribunal believes the matter to have no merit and is dismissed, its powers are limited to remitting the matter to the Authority with a direction to reconsider their decisions in accordance with the findings of the Tribunal: Carrimjee v FCA [2016] UKUT 0447 (TCC) (“Carrimjee 2016”) at [39] and [40].

38.

If, having reviewed all the evidence and the factors taken into account by the Authority in making its decision, and having made findings of fact in relation to that evidence and such other findings of law that are relevant, the Tribunal concludes that the decision to prohibit is one that is reasonably open to the Authority then the correct course is to dismiss the reference.

39.

Alternatively, if the Tribunal is not satisfied that in the light of its findings that the decision is one that in all the circumstances is within the range of reasonable decisions open to the Authority, the correct course is to remit the matter with a direction to reconsider the decision in the light of those findings. For example, that course would also be necessary were the Tribunal to make findings of fact that were clearly at variance with the findings made by the Authority and which formed the basis of its decision. That course would also be necessary had there been a change of circumstance regarding the applicant which indicated that the original findings made on which the decision was based, for example as to his competence to undertake particular activities, had been overtaken by further developments, such as new evidence which clearly demonstrated the applicant’s proficiency in relation to the relevant matters. Such a course would not usurp the Authority’s role in making the overall assessment as to fitness and propriety but would ensure that it reconsidered its decision on a fully informed basis. In our view such a course is consistent with the policy referred to at [31] and [32] above as it leaves it to the Authority to make a judgment as to whether a prohibition order is appropriate.

[Emphasis Added]

63.

The effect of the above, is that the Upper Tribunal must dismiss the Reference unless it makes findings of fact and/or law which lead to a conclusion that the Decision (whether the prohibition order or withdrawal of approval) was not one that was reasonably open to the Authority.

64.

Even in the case where the Tribunal has not accepted all of the factors that led the Authority to conclude that a prohibition order (or withdrawal of approval) was appropriate and it might therefore be said that the Authority has taken into account irrelevant considerations in deciding whether to impose a prohibition order, it would not be appropriate to remit the decision to the Authority for further consideration where the seriousness of the matters which the Tribunal has found would lead inevitably to the Authority reaching the same decision were that course to be followed: Palmer v FCA [2017] UKUT 313 (TCC) at [270].

65.

Therefore, even if the Tribunal finds flaws in the Authority’s decision-making process, for example by making findings of fact which contradict or are inconsistent with the findings on which the Authority based its decision, it should not remit the Reference if it is of the view that despite such failings, it is inevitable that if the matter were remitted, the Authority would come to the same conclusion.

77.

It follows that whilst we conduct a full rehearing of the issues, we can only determine the reference by either dismissing it or by referring it to the Authority for reconsideration. We have no power to determine what action the Authority ought to have taken.

78.

We must dismiss the reference unless we make findings which lead us to the conclusion that the decision reached by the Authority was one that was not reasonably open to it.

79.

Even if we decide that the Authority made an error in reaching its decision, it would not be appropriate to remit the reference to the Authority for further consideration if our overall findings meant that it was inevitable that the Authority would make the same decision.