London Fluid System Technologies Ltd & Ors v His Majesty's Commissioners for Revenue and Customs

Electronic service of a judicial-review claim form must comply with the Civil Procedure Rules 1998 and Practice Direction 6A. A government guidance document may be ambiguous, but ambiguity does not itself make non-compliant service valid.

Under CPR 6.15, the court may retrospectively validate service where, considering all the circumstances, there is good reason to do so. Relevant considerations include the claimant’s reasonable steps, the defendant’s knowledge of the claim form before expiry, prejudice arising from loss of limitation, and any impediment caused by the defendant. Knowledge of the claim form alone is insufficient.

The claimants sought judicial review of HMRC’s refusal to make repayments under the Disguised Remuneration Repayment Scheme 2020. They also sought declarations concerning service of the claim forms, which had been emailed to the HMRC solicitor allocated to the pre-action correspondence and uploaded through HMRC’s SDES system.

HMRC contended that service was required at the designated new-proceedings email address and that the claims were therefore out of time. The individual claimants withdrew, leaving the two companies’ claims. The court had to decide whether service was valid, whether CPR 6.15 should be used retrospectively, and whether the substantive challenges to the Scheme were arguable.

1. Service. The claim forms were not properly served under CPR 6.10, CPR 6.3 and Practice Direction 6A. The Press Release had an available reading under which all new proceedings served electronically had to be sent first to the designated new-proceedings email address. Service on the allocated HMRC solicitor and through SDES did not comply with the rules.
2. Ambiguity and estoppel. The Press Release was materially ambiguous and the claimant solicitor’s interpretation was understandable, particularly in light of his prior dealings with HMRC solicitors. However, the evidence did not establish the necessary shared assumption or responsibility for an estoppel by convention. The circumstances were relevant to the CPR 6.15 evaluation.
3. Retrospective validation. Applying CPR 6.15(2), and the framework in Barton v Wright Hassall LLP and Good Law Project, there was good reason to validate the steps taken as good service. The solicitor had taken reasonable steps and had not acted carelessly. HMRC had overwhelming knowledge of the claim forms before expiry and had acted as if the proceedings were properly brought. Although HMRC would lose a limitation defence, there was no further material detriment. HMRC’s unclear guidance had impeded compliance.
4. Good service was treated as having occurred on 9 March 2022 and 17 March 2022. The service application was granted.
5. Permission. The substantive claims were arguable. The issues included whether HMRC had power to recover tax and national insurance contributions, and, for loans made after 9 December 2010, whether the relevant returns contained reasonable disclosure. Permission to apply for judicial review was granted.