Daniel v Revenue and Customs

Case-management decisions about the sequence of a statutory tax appeal and related judicial review are fact-sensitive. There is no hard and fast rule that either proceeding must be heard first. The court should identify the jurisdiction best able to resolve disputed facts and consider which sequence is most likely to determine the underlying dispute efficiently, while avoiding delay and wasted costs. A statutory appeal will ordinarily precede judicial review where factual findings within the tribunal’s fact-finding jurisdiction are necessary to resolve the public-law challenge. The position may differ where judicial review requires no disputed facts and could finally dispose of the dispute.

The taxpayer challenged a determination that he was resident and ordinarily resident in the United Kingdom in 1999/2000 and a related discovery assessment of £10,004,998. He brought a statutory appeal in the First-tier Tribunal and sought judicial review of HMRC’s review decision, alleging failure to apply the published guidance in IR 20.

The judicial review proceedings were transferred to the Upper Tribunal. Upper Tribunal Judge Bishopp granted permission for judicial review but stayed that claim until 28 days after the statutory appeal had been determined, directing that the tax appeal proceed first. The taxpayer appealed that case-management decision to the Court of Appeal. The central issue was the appropriate sequence where the public-law challenge and statutory appeal arise from the same tax dispute and disputed facts may be material to both.

1. Appeal dismissed. The Upper Tribunal’s decision to stay the judicial review claim while the statutory appeal proceeded was upheld. The court announced that the parties had agreed amended directions for the statutory appeal.
2. There is no hard and fast rule governing the sequence of related statutory appeals and judicial review claims. The appropriate course must be determined case by case, having regard to the issues, the existence and importance of disputed facts, the respective jurisdictions, and the practical risk of delay and wasted costs.
3. The taxpayer’s proposed judicial review could not finally resolve the dispute merely by deciding whether HMRC had properly applied IR 20. To bring himself within paragraph 2.2, the taxpayer required factual findings that he had left the United Kingdom to work full time abroad under a contract of employment and that the employment continued for at least a whole tax year. The Upper Tribunal exercising judicial review jurisdiction could not substitute those necessary findings of fact.
4. The underlying factual dispute could be conclusively resolved only by the First-tier Tribunal. Success in the statutory appeal appeared capable of determining the taxpayer’s residence status and liability. By contrast, success in judicial review might require a fresh HMRC determination and a further appeal. It was therefore pragmatic and proper to proceed first with the statutory appeal.
5. The position may differ where judicial review requires no resolution of disputed facts and has the potential finally to dispose of the underlying dispute. The court declined to give more extensive general guidance. Lord Justice Rix and Mr Justice Morgan agreed with Lord Justice Tomlinson.

• Court of Appeal (Civil Division): Appeal dismissed and the Upper Tribunal’s case-management decision upheld.
• Upper Tribunal (Tax and Chancery Chamber): Upper Tribunal Judge Bishopp granted permission for judicial review but stayed the judicial review claim until 28 days after determination of the statutory appeal, directing that the statutory appeal proceed first.
• Administrative Court: The judicial review proceedings were transferred to the Upper Tribunal under section 31A of the Senior Courts Act 1981.