Dickinson & Ors, R (on the application of) v HM Revenue & Customs

Permission to introduce a very late, fundamentally new ground of judicial review should generally be refused unless the applicant shows both a sufficient case on the merits and a satisfactory explanation for the delay. Mere arguability is insufficient. Where the applicant cannot demonstrate realistic prospects of success, an explanation for lateness becomes especially important. Even where permission would otherwise be justified, the court may refuse an amendment if the delay would require an adjournment and the interests of justice do not favour disrupting the substantive hearing.

The claimants sought judicial review of accelerated payment notices issued by HMRC in connection with a tax avoidance scheme. Permission had previously been granted on a limited legitimate-expectation ground. They applied shortly before the substantive hearing to re-amend their grounds by adding an independent challenge that the scheme had not been notifiable under the Tax Avoidance Schemes (Prescribed Descriptions of Arrangements) Regulations 2004.

The issue was whether the claimants had shown sufficient merit in the proposed ground and provided an adequate explanation for raising it late.

1. The application to re-amend was refused. The proposed ground was entirely new and independent of the grounds for which permission had already been granted.

2. For a very late application to add a fundamentally different ground of judicial review, the applicant should first provide material showing a sufficient case for permission on the new ground. Exceptionally, the applicant may instead provide compelling evidence explaining both the lateness and why the material needed to establish realistic prospects of success is not yet available.

3. Even where a sufficient case for permission is shown, the court may refuse the amendment if the explanation for delay is absent or unimpressive. The court must balance the apparent strength of the proposed ground against the procedural consequences, including any necessary adjournment.

4. The claimants had not shown realistic prospects of success. The September 2006 letter from Tenon stated unequivocally that the premium fee condition in paragraph 5A of Schedule 1 to the 2004 Regulations had not been met. The disclosed meeting note did not create a serious arguable doubt about that information, and the later solicitor’s letter was too general and insufficiently verified.

5. There was also no adequate evidential explanation for the delay. The notifiability issue had been identified at an early stage, yet the claimants had not shown that they lacked the relevant information, had made reasonable efforts to obtain it, or had made an informed decision to defer the point. The application was therefore refused. HMRC was awarded its costs of the application, subject to detailed assessment.

Permission for the existing judicial review claim had been granted by King J on 5 July 2016 on a limited legitimate-expectation ground. This judgment determined the later application to re-amend the claim before the substantive hearing; the application was refused.