Veolia ES Landfill Ltd & Ors, R (on the application of) v HM Revenue and Customs

Parties may pursue statutory tax appeals and judicial review in parallel where they are separate claims, even if the relief overlaps. A stay requires strong reasons. The risk that different tribunals will decide the same facts inconsistently is ordinarily a strong reason because it wastes resources and undermines the interests of justice. A specialist tax tribunal does not itself justify a stay where it cannot determine the public-law issues. The court assessing a stay must have a clear account of the proposed issues and factual overlap. A party cannot rely on uncertainty caused by its own late change of case or lack of resources. On this appeal, the overlap remained unclear, so the refusal of a stay was not shown to be wrong.

Landfill operators claimed repayment of landfill tax after HMRC issued guidance following [2009] STC 200. HMRC later rejected the claims under revised guidance, prompting judicial review proceedings alleging breach of legitimate expectations. The respondents were also appealing tax assessments in the First-tier Tribunal. Thirlwall J granted permission for judicial review but refused HMRC’s application to stay those proceedings pending determination of the tax appeals. HMRC appealed, relying on the FTT’s specialist jurisdiction, possible duplication of factual findings and inconsistent outcomes, and a late change to its case. The central issue was whether the judicial review proceedings should be stayed while the separate tax appeals proceeded.

Arden LJ gave the leading judgment. Black LJ and Floyd LJ agreed. The appeal was dismissed. The court admitted HMRC’s new witness statement and allowed its amended grounds of appeal, but did not determine the merits of the underlying tax liability or HMRC’s technical allegations.

1. The tax appeals and judicial review claims were separate claims, notwithstanding that the respondents sought effectively similar relief. The respondents were entitled to pursue either or both remedies and to choose which proceedings to prioritise. Strong reasons were required before that right could be restricted.
2. Significant duplication of factual issues, with a resulting risk of inconsistent findings by different tribunals in disputes between the same parties, would ordinarily constitute a strong reason for a stay. Such duplication wastes time and costs, undermines confidence in the justice system and may prolong the dispute.
3. The specialist nature of the FTT was not decisive. The judicial review claims raised issues which the FTT could not determine, including legitimate expectation, the meaning of the guidance to the taxpayers concerned, subsequent dealings, unfairness and abuse of power. The alternative-remedy reasoning in R (o/a Willford) v Financial Services Authority, [2013] EWCA Civ 677, had little relevance because the alternative remedy was profoundly different.
4. For fresh evidence on appeal, the ordinary considerations were those in Ladd v Marshall, [1954] 1 WLR 1489. The court could adopt a more flexible approach on an appeal from an interim order, as explained in Warner Lambert v Actavis, [2015] EWCA Civ 556 at [155]. The new witness statement was therefore admitted.
5. HMRC had not explained sufficiently what its case in the judicial review proceedings would be, or how far it would enter into technical issues concerning the waste material. Its late change of case created a possible factual overlap but did not enable the court to conclude that the refusal of a stay was wrong. HMRC could not rely on the existing stay or resource difficulties to excuse its failure to clarify its case.
6. The court did not exclude a later, properly prepared application for a stay if a significant risk of inconsistent findings could be demonstrated. Any such application would need to be made promptly and sufficiently before trial.

• Court of Appeal (Civil Division) — [2015] EWCA Civ 747: HMRC’s appeal against the refusal of a stay was dismissed.
• High Court, Administrative Court: Thirlwall J granted permission for judicial review proceedings but refused to stay them pending the respondents’ tax appeals.