UT/2024/000022 - [2025] UKUT 00309 (TCC)

As recorded by the FTT, both parties’ submissions referenced the principles discussed in Katib regarding attribution of the adviser’s failures, either explicitly by reference to Katib or implicitly. As mentioned, the FTT noted HMRC’s submission in relation to Katib (at [61]). It had previously also recorded (at [58]) the Appellant’s acceptance that reliance on external advice could not provide a “knockout point” but that the courts could and did take into account the prejudice to a claimant who might be reduced to a claim against their former advisers.

However, when it came to the FTT’s reasoning it is notable that the FTT, as Ms Goldring’s submissions highlighted, specifically stated it was not relying on Katib for any general proposition that litigants are always liable for their advisers’ failings. This is clear from the express statement at paragraph [72] of the FTT’s decision. As Ms Goldring also noted, the FTT also did not place any reliance on any assumption that Mr Pawar could sue his adviser. The FTT’s reasoning was not that Mr Mann’s failings were to be attributed to Mr Pawar but in essence that Mr Pawar was responsible for his own failings. He had been issued personally with a review conclusion which had specifically advised him of the need to appeal to the FTT within 30 days if he disagreed.

The FTT also noted the lack of evidence as to any interaction between Mr Pawar and his then adviser and that it was not known whether he even spoke to his adviser about it. (The FTT had noted at [72] “There was no evidence before us as to any interaction between the Appellant and his then adviser in relation to HMRC’s review conclusion letter. It is not known whether, he even spoke to his adviser about it.”) That was despite the Upper Tribunal’s guidance in Katib (at [49]) advising that in most cases where reliance was placed on an adviser being deficient the appellant “…should expect to provide a full account of exchanges and communications with those advisers”.) We also note that Mr Pawar had received a copy of the 1 May 2019 email that Mr Mann had sent HMRC but had not then followed up on that. At some point thereafter, it might reasonably be expected that Mr Pawar ought to have followed up to check the status of the matter. It was not reasonable to leave the issue unresolved for over three years.

The FTT’s lack of reliance on the general rule in Katib is a sufficient answer to the points raised that the FTT misapplied the principle in Katib (by failing to have regard to the exceptions) or that it should be read as not applying in situations where the litigant did not have recourse in a negligence claim against the adviser.

Mr McNall’s submission in response was that the FTT could not “sidestep” Katib by placing responsibility on Mr Pawar. The purpose of appointing a representative was to be able to rely on them. The FTT either erred in not treating itself as bound by Katib, or, if it did apply it, the reasoning in paragraph [72] did not follow. Mr Pawar, it was said, was “entitled to repose confidence” in his representative. That was what representatives were for. This seems to us to be extending the proposition that there are exceptions to the principle in Katib into a proposition that engaging an adviser discharges a litigant from any responsibility. Ms Goldring pointed out that the Appellant had not set out any authority to make good the proposition that a litigant is always entitled to rely on their representative in this way.

In fairness we note that in one of the authorities Mr McNall referred us to (Corbin’s case at [22] (Corbin v Penfold Metallising Co Ltd [2000] 4 WLUK 152 referred to in Tyers v Aegis Defence Service (BVI ) Ltd and others [2023] EWHC 896 (KB) it was described how the litigant did what a person in his position might be expected to do “which is to go to [their] solicitors, who are apparently efficient and responsible in this areas of work, and left them to get on with it”. But in our view that cannot be read as a general proposition that applies across the board irrespective of the particular factual circumstances so as to preclude a tribunal finding that a litigant retained some responsibility even when a representative was instructed. We therefore agree there is no authority for a general proposition that a representative could be relied on in all circumstances. Here the FTT highlighted that the notification letter was sent personally to Mr Pawar. It also highlighted the lack of evidence on his communications, if any, with his adviser.

There was thus no error of law regarding the misapplication of Katib since the FTT did not rely on the general proposition in Katib. Nor was there any error in the FTT placing an independent responsibility on Mr Pawar.

That is sufficient to dispose of this ground.

It was further contended that strict adherence to the general rule was inconsistent with the “venerable principle” that taxpayers should pay the right amount of tax. It was argued that this principle was relevant to the fairness assessment. However, the point in essence is simply another way of saying the tax amount might be different than the figure the taxpayer is fixed with by virtue of the relevant assessment if permission to make a late appeal is not granted. As Judge Cannan observed when refusing permission in relation to this being raised as a factor, the point adds nothing to the consideration of the prejudice suffered that is already part of the Stage 3 analysis (and we have held above the Appellant’s other challenges to such analysis under Grounds 1 and 2 have not succeeded in showing any error of law in the FTT approach to such prejudice).

In conclusion we reject this ground of appeal.

We ought also to mention that the Appellant sought, in the skeleton argument filed on his behalf on 15 April 2025, to challenge the FTT decision on the basis that the general rule as set out in Katib was wrong as a matter of law. It appears this was prompted by a paragraph in the grant of permission decision of 10 September 2024 in Medpro, regarding whether the general rule in Katib was good law. Before us there was a dispute over whether permission was necessary to run this argument, and if it was, whether it should be granted. HMRC sought to respond in the time available to the challenge in their skeleton argument.

Given we have concluded the FTT did not rely on Katib we do not need to, and therefore do not, address these arguments.