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

Mr Firth’s essential submission is that HMRC have misunderstood the nature of their obligation under the duty of candour and that the disclosure sought simply seeks what HMRC should have provided under that duty. He says HMRC’s answer, that the decision is the decision letter is wrong. Decisions are made by persons and although the letter may be evidence, what is key is the factual matter of what was in the decision-makers mind. Moreover, here the inconsistencies between Ms Murphy’s evidence and the letter and her evidence that the alternative condition was considered when that was not apparent from the letter mean the position that 5 January 2024 letter was a complete record of HMRC’s decision breaks down. Disclosure of the material sought in respect of HMRC’s decision making process is, he submits, accordingly justified. The material was clearly necessary to fairly and justly dispose of the issue material sought as it will equip the tribunal with the best contemporaneous evidence to make the required findings of fact. Those facts include for instance the test which the decision maker used and whether the decision maker in fact considered the alternative condition.

As regards the scope of the disclosure sought, this was originally framed as follows in the claimant’s written application.

“notes and correspondence (including emails) recording the internal discussions and considerations undertaken by HMRC prior to communicating HMRC’s decision of 5 January 2024 refusing the Claimant’s claim concerning the interpretation and proposed application of legislation, case law (including R (oao) GMGRM North Limited v Ritchie [2013] EWHC 4114 (Admin); [2014] EWCA Civ 844) and HMRC published guidance and internal manuals (including Statement of Practice 5/01).”

At the hearing Mr Firth clarified, that in line with his oral submissions, the essential focus of the disclosure was on documents, whether internal correspondence, notes of meetings or phones calls, which showed the discussions or inputs informing Ms Murphy’s decision making process. These could be from or amongst Ms Murphy’s team or other internal HMRC teams (such as the BAI (Business, Assets and International) policy team and FIIGLO (Franked Investment Income group litigation) team Ms Murphy’s statement had mentioned communications with. Mr Firth also confirmed, in response to the concern I expressed as to the breadth of potential disclosure sought in the original application, that the relevant start point to the time period was from 8 June 2023 (when the claimant issued its judicial review claim). HMRC’s position remained that they had complied with their duty of candour: they had identified in their defence that the letter contained the reasons for the decision. When each of the judicial review grounds were analysed, it was plain the disclosure sought was irrelevant and that the disclosure sought was clearly not necessary to fairly and justly determine any of the issues.