UT (Tax & Chancery) UT/2023/000103 - [2025] UKUT 00102 (TCC)

At [83], the FTT recorded some evidence from Mr Tatum, one of HMRC’s experts, who “said that ‘the database (which had not been seen by any of the valuers including him) may have use but [no] (Footnote: ⁶) it had no value’”. Before us, Mr Simpson sought to displace that finding by referencing various responses given by Mr Tatum during cross examination, and a passage from Mr Tatum’s witness statement which read:

“The Employer may consider paying an amount to the purchaser of the Trademark to continue to use the Trademark to avoid the nuisance of having to remove the Trademark from aspects of its business e.g. website, removal vans, etc. However, due to the lack of other options for the purchaser of the Trademark to monetise the asset the Employer would be in a strong bargaining position and in my view offer no more than say £1,000 to continue to use the Trademark.”

Mr Simpson submitted that the evidence pointed “in favour of a finding that the database has some material value”. This is, however, a classic example of the “island hopping” referred to by Lewison LJ in Fage UK Ltd v Chobani UK Ltd [2014] EWCA Civ 5 (“Fage”) at [114] when he said that “in making his decisions the trial judge will have regard to the whole of the sea of evidence presented to him, whereas an appellate court will only be island hopping”; that was, he said, one reason why appellate courts should not interfere with factual findings made at first-instance “unless compelled to do so”.

Mr Simpson also invited us to accept the amended figures for the valuation of the database given during the hearing by the Appellants’ expert, Ms Cawdron, saying these were “reasonable”. But that was not the view of the FTT which had considered all the evidence. At [85] the FTT found that Ms Cawdron applied her preferred relief from royalty method “without considering the market in which the sale of the IP assets would actually be made”, and went on to hold at [100] that her valuation “failed to seriously consider whether there was a realistic market for those assets”. The FTT also said at [91] that:

“The fact that the Appellant’s valuers at the time (Metis) and to a lesser extent Ms Cawdron were prepared to defend this [Gannon] valuation by reference to royalty rates and discount rates suggests to us that, for this Appellant at least, the harsh light of reality was never allowed to penetrate the comfortable conclusions provided by the valuers and MLT in support of the client’s need for funding.”