Phillips v Upper Tribunal (Tax and Chancery Chamber) & Anor

A judicial review challenge to the Upper Tribunal’s refusal of permission to appeal is subject to the second-tier appeal criteria. Permission requires an important point of principle or practice, or some other compelling reason. The latter limb is narrow and requires a legally compelling case.

An alleged error of fact can amount to an error of law only where the finding is material to the determination and was one which no properly directed tribunal could have made, or where the determination could not reasonably follow from the findings. Identifying immaterial factual errors, without addressing the decisive evidential deficiency, does not satisfy either the second-tier criteria or the irrationality threshold.

The claimant challenged by judicial review the Upper Tribunal’s refusal of permission to appeal against the First-tier Tribunal’s dismissal of his VAT appeals. The First-tier Tribunal had found that he had failed to prove that the business was carried on through companies rather than by him as a sole proprietor.

Permission to apply for judicial review had been granted on the basis that it was arguable that the second-tier appeal criteria might be satisfied. The central issues were whether the Upper Tribunal’s approach raised an important point of principle or practice, whether there was some other compelling reason for a further appeal, and whether alleged factual errors could amount to material errors of law.

1. Claim dismissed. The second-tier appeal criteria identified in R (Cart) v The Upper Tribunal [2011] UKSC 28 applied. The claimant had to show either an important point of principle or practice, or some other compelling reason.
2. No important point of principle or practice arose. The Upper Tribunal judge had applied the permission question by asking whether an arguable material error of law had been shown. Any complaint about the application of that test did not itself raise an important point requiring general guidance. A judge who reserves a decision may properly reconsider the matter after hearing submissions, even if an earlier indication suggested a provisional view.
3. The “some other compelling reason” limb was narrow. Disappointment with the First-tier Tribunal’s factual conclusions, or the opportunity to correct an alleged error affecting an individual claimant, was insufficient. The case did not meet the high threshold described in Cart and PR (Sri Lanka) v Secretary of State for the Home Department [2011] EWCA Civ 988.
4. Under Edwards v Bairstow [1956] AC 14, factual findings may disclose an error of law where no properly directed tribunal could have reached them, or where the findings could not support the determination. Materiality is essential. The challenge must identify the finding, show its significance, identify the relevant evidence, and demonstrate that the tribunal was not entitled to make the finding.
5. The alleged errors concerning companies, dates, name changes and the treatment of the HMRC settlement were immaterial. The decisive finding was the absence of evidence that the claimant had transferred the business to, or that the companies had traded through, the relevant periods. Given the burden of proof, the First-tier Tribunal was entitled to reach its conclusion. The judicial review claim therefore disclosed neither irrationality nor an error of law in the Upper Tribunal’s refusal of permission.
6. No order was made as to costs.

• First-tier Tribunal: dismissed the claimant’s VAT appeals by a written decision dated 10 June 2010.
• Upper Tribunal: refused permission to appeal, first on the papers and subsequently after an oral renewal hearing; the written decision was dated 14 July 2011 and issued on 15 July 2011.
• High Court (Administrative Court): dismissed the judicial review claim challenging the refusal of permission. No order as to costs.