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Bradford – Tribunal refuses HMRC's application for further and better particulars

24 February 2021. Published by Rebekka Sandwell, Associate

In Darren Bradford v HMRC [2021] UKFTT 2 (TC), the First-tier Tribunal (FTT) refused HMRC's application for Mr Bradford to provide further and better particulars of his grounds of appeal and directed HMRC to provide its Statement of Case.

Background

Mr Darren Bradford (Mr Bradford) appealed to HMRC against a decision that he was not entitled to loss relief and his agent, Henton & Co LLP (Hentons) submitted a Notice of Appeal to the FTT. 

The FTT categorised the appeal as 'standard' under Rule 23 of the Tribunal Procedure (First-tier Tribunal) Tax Chamber Rules 2009 (the Tribunal Rules) and directed HMRC to provide its Statement of Case within 60 days. HMRC claimed that it was unable to provide its Statement of Case because Mr Bradford "had not provided properly particularised grounds of appeal". 

HMRC applied to the FTT for Mr Bradford to be directed to provide further and better particulars of his grounds of appeal (the Application). Hentons objected to the Application and further correspondence between the parties ensued.

The FTT directed, at an earlier hearing,  that the FTT would decide, on the papers, the Application and whether the appeal should be struck out.

FTT decision

The Application was refused and the appeal was not struck out.

HMRC submitted that Mr Bradford's appeal should be struck out under Rule 8(3)(b) of the Tribunal Rules, on the basis that he had failed to co-operate with the FTT to such an extent that the FTT could not deal with the proceedings fairly and justly. The FTT said that it was not in the interests of justice to strike out the appeal. The FTT also noted that, in any event, Mr Bradford had not been given the opportunity to make representations about a possible strike out, as required by Rule 8(4) of the Tribunal Rules.

In the view of the FTT, HMRC's submission that Mr Bradford had failed to set out his “factual and legal case” and that his appeal should therefore be struck out in its entirety did not engage with the relevant case law (including Doncaster Pharmaceuticals Group Ltd v Bolton Pharmaceutical Co 100 Ltd [2007] FSR 63 and Swain v Hillman [2001] 1 All ER 91). 

HMRC submitted that the Application should be allowed because there was uncertainty as to what Mr Bradford's grounds of appeal were and it was therefore not possible for HMRC to provide its Statement of Case.

In the view of the FTT, Mr Bradford's grounds of appeal contained sufficient information to enable HMRC to provide a Statement of Case. The FTT commented that it was not in the interests of justice for HMRC to seek to identify, before it provided its Statement of Case, every detailed piece of Mr Bradford's evidence and "all the nuts and bolts of his arguments".

The judge quoted Lord Justice Saville, who delivered the leading judgment in the Court of Appeal in British Airways Pension Trustees Ltd v Sir Robert McAlpine (1994) 72 BLR 26: 

"The basic purpose of pleadings is to enable the opposing party to know what case is being made in sufficient detail to enable that party properly to prepare to answer it. To my mind it seems that in recent years there has been a tendency to forget this basic purpose and to seek particularisation even when it is not really required. This is not only costly in itself, but is calculated to lead to delay and to interlocutory battles in which the parties and the court pore over endless pages of pleadings to see whether or not some particular point has or has not been raised or answered, when in truth each party knows perfectly well what case is made by the other and is able properly to prepare to deal with it. Pleadings are not a game to be played at the expense of the litigants, nor an end in themselves, but a means to the end, and that end is to give each party a fair hearing. Each case must of course be looked at in the light of its own subject matter and circumstances". [FTT's emphasis]

In the view of the FTT, HMRC had continued to insist on particularisation when it was not required. Each party knew what the other party's case was and was able properly to prepare to deal with it. Accordingly, the FTT directed that HMRC provide its Statement of Case within 60 days.

Comment

This decision is notable for the robust way in which the FTT refused HMRC's Application and its implicit criticism of HMRC's conduct. 

We have noticed an increased tendency on the part of HMRC to seek further and better particulars of appellants' grounds of appeal in cases where it is well aware of the taxpayer's case. This approach should not be tolerated by the FTT, which rightly prides itself on a lack of formality. Such tactics may be commonplace in the Commercial Court, where evenly matched litigants can 'slog it out', but there should be no place for such tactics in proceedings before the FTT, where one of the parties is a government department with deep pockets. In this decision, the FTT has indicated that it will not tolerate misconceived applications of this nature, and it is to be hoped that HMRC will think carefully before making similar applications in the future.

The decision can be viewed here.