NCM 2000 Ltd, R (on the application of) v HM Revenue & Customs

Judicial review claims must be brought promptly and, in any event, within the applicable statutory period. Continued correspondence or a party’s hope that the decision-maker will change its mind does not postpone the date on which grounds for review arise. An extension requires a good reason or adequate explanation and consideration of prejudice and good administration.

Judicial review is ordinarily a remedy of last resort. Permission may be refused where an adequate alternative complaint or ombudsman procedure can address the substance of the dispute and provide the outcome sought, even if it cannot formally declare the public body’s conduct unlawful.

NCM 2000 Ltd sought permission to challenge HM Revenue & Customs’ refusal to compensate it for alleged economic loss arising from incorrect advice that VAT was payable on stall hire. The claim concerned VAT accounting periods between 1997 and 2006.

The claimant relied on a decision communicated in April 2013. HMRC contended that the relevant decision had been made no later than May 2012, and that the claimant also had adequate alternative remedies through the Adjudicator and the Parliamentary and Health Service Ombudsman. The central issues were whether the claim was out of time and whether judicial review should be refused for that reason or because of an alternative remedy.

1. Delay. Under CPR 54.5(1), a judicial review claim must be filed promptly and in any event within three months after the grounds arose. The court may extend time under CPR 3.1(2)(a), but there must be a good reason or adequate explanation, and the extension must not cause substantial hardship, substantial prejudice or detriment to good administration.
2. HMRC’s letter of 2 August 2010 contained a clear decision rejecting the claim as a misdirection claim and as out of time. After HMRC raised the possibility of ex gratia compensation, its letter of 17 May 2012 clearly and finally refused that claim. Later correspondence and further representations did not create a new decision. The claimant’s continuing hope that HMRC would change its mind was not an adequate explanation for the 14-month delay. No extension was therefore justified.
3. Alternative remedy. Judicial review is a remedy of last resort. The Adjudicator and the Parliamentary and Health Service Ombudsman could examine whether HMRC had applied its decision-making system fairly and properly, whether the claimant had suffered actual economic loss, and whether HMRC was solely responsible. Those factual matters were more appropriately investigated by those bodies.
4. The absence of power to make a binding declaration of unlawfulness did not make the alternative remedies inadequate, since the claimant principally sought compensation and the bodies could recommend payment. The Article 1 of the ECHR argument did not alter that conclusion. Permission was refused. The claimant was ordered to pay HMRC’s costs, summarily assessed at £2,522.