UT (Tax & Chancery) UT-2022-000134 UT-2022-000135 UT-2022-000137 - [2025] UKUT 00214 (TCC)

Mr George, Mr Jaffey and Mr Bailin were critical of the Authority’s failure to call any witnesses of fact, whether from its own enforcement team or from MHI, with Mr George referring to them in opening as “witnesses who are not here”.

The following individuals were identified by the Traders:

In opening, reference was also made to Mr Halliday, who had been interviewed by the Authority in 2017, and “other persons engaged by MHI” in the Relevant Period. However, none of the Traders made detailed submissions as to what material evidence such persons might be able to give, or what inferences should be drawn from their absence, and, having heard all of the evidence and submissions, the Tribunal does not consider that such persons would have material evidence to give as to issues of fact and does not address their absence further.

The Tribunal has on a number of occasions been critical of the Authority for failing to call witnesses who may have had relevant evidence to give. In Forsyth v Financial Conduct Authority [2021] UKUT 162 (TCC) the Tribunal summarised the position as follows:

“75.

Furthermore, as Mr George submitted, the principle enunciated in Wisniewski v Central Manchester Health Authority [1998] 1 PIQR 324 is relevant in this regard. As was stated at page 340 of the judgment in that case, in certain circumstances the court may be entitled to draw adverse inferences from the absence of a witness who might be expected to have material evidence to give on an issue in action. In circumstances where the reason for the absence of the witness satisfies the court, then no such adverse inference may be drawn but in circumstances where it might have been expected that a party would call a particular witness then such an inference may be drawn. If the court is willing to draw such inferences, they may go to strengthen the evidence adduced on that issue by the other party or to weaken the evidence, if any, produced by the party who might reasonably have been expected to call the witness.

76.

We received no explanation as to why other witnesses who may have given relevant evidence as to the documents from which we were asked to draw inferences were not present, as mentioned at [65] above, and in those circumstances, we are entitled to draw adverse inferences from their absences. We have done so to the extent that we have given more weight to Mr Forsyth’s evidence as regards the documents in question and less weight to the evidence that the Authority sought to rely on in that regard.”

In Seiler UT the Tribunal recorded at [113] “it is the Authority who has the burden of proof in these proceedings and should be seeking to assist the Tribunal by bringing to it all relevant evidence”. The Tribunal did not accept in those proceedings that Mr Campeanu’s participation in the transactions was peripheral – “he was involved at various critical points in the narrative”.

The Authority’s position in these references was that none of the Traders had previously suggested the Authority should have taken steps to call these persons as witnesses (the issue only being raised in written skeleton arguments), there is no evidence that they attempted to do so themselves, and, moreover, these persons would not have material evidence to give as the Authority’s case is not about the Traders misleading management or compliance, and it is accepted that Mr Hill and Mr Barouti did not hear anything suspicious. In this situation, Mr Shivji submitted that there is no basis to draw adverse inferences against the Authority. Mr Shivji reiterated that the Authority takes the criticisms by the Tribunal in Seiler UT seriously; the Authority would have helped if the Traders wanted assistance in calling evidence.

The Tribunal has considered whether it should draw adverse inferences from the Authority’s decision not to call these persons as witnesses. The potential relevance of the various individuals is considered below, but a theme of the Traders’ submissions was that the Tribunal should infer that they were not called as witnesses as they would not support the Authority’s case. The Tribunal was taken to various parts of the transcripts of the interviews conducted by the Authority with Mr Hill, Mr Barouti, Mr Heiberg and Mr Joshi. The Tribunal has, as invited by the parties, read the whole of those transcripts.