Gurney (H.M.I.T.) v Petch

A statutory time limit for transmitting a Case Stated to the High Court is ordinarily mandatory where transmission invokes the court’s jurisdiction and the statute provides no power to extend time. Treating the limit as directory would remove the only prescribed limit. The court must determine mandatory effect by legislative intention, considering the subject matter, importance of the requirement and its relation to the statute’s object. A composite Case Stated sent by one party does not satisfy another party’s separate duty to transmit the case on that party’s appeal. A Case Stated is statutory, not a pleading, so an application under Order 18 rule 19 is misconceived. The court retains an exceptional inherent power to strike out a non-compliant Case Stated or an abuse of process.

Mr Raymond John Petch appealed from orders made by Harman J on 5 November 1992. One order struck out his Case Stated appeal under section 56(4) of the Taxes Management Act 1970 because it reached the High Court outside the prescribed 30-day period. The other refused his application to strike out a separately transmitted Case Stated lodged by the Inland Revenue.

The appeals arose from a Special Commissioner’s determination of two income tax assessments. Each party had required a Case Stated concerning a different determination, and the Commissioner prepared a single composite document. The central issues were whether the statutory time limit could be extended or excused, whether the Inland Revenue’s transmission satisfied the taxpayer’s obligation, and whether the Revenue’s Case Stated was liable to be struck out.

1. Appeal dismissed. Millett LJ delivered the judgment, with which Henry LJ agreed. The orders of Harman J were upheld and the taxpayer was ordered to pay the costs.
2. Section 56 of the Taxes Management Act 1970 provided the statutory route from a Special Commissioner to the High Court. The court had no power under RSC Order 3 rule 5(1) or RSC Order 91 rule 5 to extend the time in this case. The principle in Pepper v Hart (1993) AC 593 was not applicable because the absence of an extension power was clear. The Hansard material relied upon concerned the Commissioners’ power under section 49 to extend time for an appeal to them, not the transmission of a Case Stated to the High Court.
3. Whether a statutory requirement was mandatory or directory depended on legislative intention. The relevant considerations included the subject matter of the provision, the importance of the requirement and its relation to the statute’s general object. The court applied the approach in Liverpool Borough Bank v Turner 30 LJ Ch 379 and Howard v Bodington 2 P.D. 203. The immediacy requirement in section 56(1) was directory, but the written notice requirement in section 56(2) was mandatory, consistently with R v General Commissioners of Income Tax for Freshwell ex parte Clark 47 T.C. 691.
4. Transmission of the Case Stated was the act by which the appellant invoked the High Court’s jurisdiction. The decisions in Valleybright Ltd. v Richardson 58 T.C. 290 and Brassington v Guthrie S.T.C. 47 were rightly decided. A time limit is ordinarily obligatory where the substantive act cannot be dispensed with and no power of extension or alternative final limit exists. The court adopted the qualified approach stated in Barker v Palmer 8 Q.B.D. 9. The taxpayer’s late transmission therefore deprived the High Court of jurisdiction, and the composite document transmitted by the Inland Revenue did not satisfy his separate obligation.
5. The court had an exceptional inherent jurisdiction to strike out a Case Stated that failed to comply with the statutory requirements or amounted to an abuse of process. Order 18 rule 19 was misconceived because a Case Stated is a statutory document, not a pleading or an indorsement on a writ. The Revenue’s Case Stated disclosed no basis for strike-out. Delay in raising the jurisdictional objection could not create jurisdiction, and delay in one appeal could not justify striking out a distinct appeal.
6. Henry LJ expressed regret at the inflexibility of the statutory rule and considered that a limited discretion to extend time might avoid injustice without undermining expedition or finality. That was a concurring policy observation and did not affect the result.

• Court of Appeal (Civil Division): In [1994] EWCA Civ 9, the court dismissed the taxpayer’s appeal against both orders and awarded costs.
• High Court: Harman J struck out the taxpayer’s late Case Stated appeal and refused the taxpayer’s application to strike out the Inland Revenue’s Case Stated.