Court of Appeal confirms stricter approach to breach of tax tribunal orders
The Court of Appeal has held that it is appropriate for tax tribunals to apply the stricter approach to compliance with rules and directions made under the CPR as set out in Mitchell v News Group Newspapers Ltd [2013] EWCA Civ 1537 and Denton v TH White Ltd and other appeals [2014] EWCA Civ 906 when dealing with non-compliance.
The case before the Court concerned whether the First-tier Tribunal (FTT) was right to debar HMRC from further participation in the substantive proceedings before the FTT for their serious and prolonged breach of an order requiring them to give proper particulars of their pleaded case against the appellant, BPP Holdings. The appeal turned on the proper approach of tax tribunals in cases where there has been breach of an order.
The Court of Appeal held that there was nothing in the wording of the overriding objective of the tax tribunal rules that was inconsistent with the general legal policy described in Mitchell and Denton. Further, it could see no justification for a more relaxed approach to compliance with rules and directions in the tribunals: the tribunal’s orders, rules and practice directions are to be complied with in like manner to a court’s.
In allowing the appeal, the Court restored the order of the FTT debarring HMRC from further involvement in the proceedings.
The decision resolves the previous conflict between the Upper Tribunal decisions in Leeds City Council v HMRC [2014] UKUT 0350 (TCC) and HMRC v McCarthy & Stone (Developments) Ltd and another [2014] UKUT B1 (TCC).
