UT/2024/000060 - [2024] UKUT 00315 (TCC)

The first issue between the parties to resolve is the different starting points they each adopt to defining the nature of the decision in respect of which the judicial review is brought. Mr Firth emphasises that a decision is taken by a person. It was the actual reasons in the decision maker’s mind that were significant. What was written in a letter might be evidence of what was in the decision maker’s mind but the letter was not the decision. By contrast, the starting point for HMRC’s submissions was that the decision was the decision letter and the lawfulness of the decision stood or fell by it. It did not therefore matter what an internal colleague may have said in an e-mail or memo to the decision-maker; what mattered was what was actually concluded as ultimately recorded in the decision letter. In support, and by way of example of the centrality of the decision letter, HMRC referred to Friends of the Earth Limited v Secretary of State for Levelling Up, Housing and Communities [2023] EWHC 3255 (KB) a decision of the Administrative Court (Sir Duncan Ouseley). The background facts concerned judicial review proceedings against a grant of planning permission in relation to a planning matter the Secretary of State had called in. The Secretary of State had issued a 15 page Decision Letter in which he had accepted the recommendations of a planning inspector who had prepared a more detailed report. The claimant sought disclosure of policy advice given to the Secretary of State in a ministerial submission. The court’s decision refused the application emphasising the Secretary of State “must stand or fall by his reasoning” and rejected the suggestion the submission might have illuminated the mind of the Secretary of State explaining that “If the illumination were important, it would be in the Decision Letter” ([34]).

In agreement with Mr Firth, it is important to recognise the pre-eminence accorded to the Decision Letter and inspector’s report there was however rooted in the particular statutory duty that arose in that planning context for the decision letter and inspector’s report to provide the complete reasoning (see [6]). Mr Birdling argued that did not restrict the ambit of the principles to be drawn from the case as, although there was no statutory duty to give reasons, HMRC accepted they were under a common law duty to give reasons. But if that were right it does not seem to me the court would have gone to the trouble of mentioning on the specific duty to give reasons in the way it did. The court also mentioned (at [7]) that “the planning statutory duty to provide reasons, as developed by well-known judicial authority, encompasses and embodies the duty of candour”. Mr Birdling also suggested such authority applied equally to adequacy of reasons more generally.However, again it is difficult to see why the court would have specifically mentioned the statutory duty to encapsulate reasons in certain documents. It does not appear to me the court was not suggesting that the common law duty to give reasons was necessarily exhaustive of the duty of candour generally.

I do not therefore take from Friends of the Earth that decision letters have some special significance as an embodiment of reasons. The specific statutory planning context is also why certain later statements that it was hard to see how the ministerial submission in that case would be useful let alone necessary, and warning of the “risk of collateral distractions” when interpreting critical documents indirectly ([10] –[12]) were not laying down general propositions that documents extraneous to the written decision should be seen as inherently irrelevant. It is clear, even in the planning context relevant in Friends of the Earth, that disclosure will depend on the particular facts and circumstances and what is in issue in the case. I therefore do not rule out, in principle, the need to consider what reasons were in the decision makers mind, but consider that as Mr Firth’s submissions rightly acknowledge, the decision letter may constitute evidence of that.Nevertheless, it can still be the case that, on the given facts of the case, a letter setting out the decision will represent a complete expression of the reasons. That is the position HMRC take here. I do not see that in the circumstances of this case that position falls short of HMRC’s duty of candour. They have explained in their grounds of resistance, as they are entitled to (according to the CPR Rule and the Administrative Court guidance referred to above) that the reasons for HMRC’s decision are set out in the 5 January 2024 letter.While Mr Firth emphasised the fact the duty covering the “decision making process” and the reference to “underlying” reasoning I do not consider these terms necessarily connote a duty to explain the considerations and discussions which took place prior to the decision to refuse. Rather, those terms are directed to the duty on the authority to explain what the reasons for the decision were together with any relevant facts. That is consistent with the reference endorsed in the IAB case to the “reasoning process” and to the CPR’s reference to “reasoning” (at [19] and [21] above). It is also consistent with the case-law seeking to capture the broad diversity of public decision making which might include decisions and measures where an action is taken but the reasons are not apparent and the public authority needs to identify and explain what they are. Similarly the reference to reasoning “underlying” the decision does necessarily cover a duty to explain what led to the decision (in terms of all the run up considerations and discussions). It can simply refer to having to explain what the reasons for the decision are. That is not to say there would not be cases where the duty to explain the decision making process or relevant facts would extend to needing to address the various steps taken, and discussions and considerations prior to the decision (for instance where there are allegations of bias, failure to consult, or improper purpose).

Mr Firth also suggested that HMRC’s position that it is was not necessary to provide a witness statement and their reliance on a briefly worded document recording the decision did not amount to compliance with their duty. However, consistent with the extract from IAB and the CPD and Administrative Court Guidance above, there is nothing which dictates that the defendant public authority’s compliance must involve preparing a witness statement. Also, if the actual reasons for the decision happen to be brief (I would not for my part describe those set out in the 5 January 2024 that way) that would not indicate the duty of candour had not been complied with. The duty would be to identify that those brief reasons were the reasons. (If the brevity of those reasons was so as to render them inadequate then that could then constitute a separate ground of challenge.)