Andrew Howard Parnham & Anor v The Commissioners for HMRC

A tribunal may assess for itself whether delay has made a fair hearing impossible. The parties’ agreement on that question is relevant but not conclusive. Long delay and impaired recollection do not necessarily prevent a fair hearing, particularly where oral evidence may still be tested against contemporaneous documents.

A party cannot ordinarily be barred from tribunal proceedings without fault justifying that course. Where an earlier final determination in the same proceedings resolved whether findings in related litigation were determinative, a later strike-out application seeking to reopen that identical issue is an abuse of process. The later application must be refused, even if the tribunal below gave an incorrect reason for refusing it.

The appellants were road hauliers assessed jointly and severally for excise duty on duty-suspended spirits said not to have arrived at an Aldi warehouse in Belgium. Their appeals had been stayed behind the appeal of the principal haulier, SDM European Transport Ltd.

The First-tier Tribunal’s preliminary decision, [2021] UKFTT 34 (TC), refused the hauliers’ application to bar HMRC from further participation and refused HMRC’s application to strike out the appeals. The hauliers appealed the first refusal. HMRC cross-appealed the second.

The central issues were whether delay made a fair hearing impossible, requiring a stay or debarment, and whether findings in SDM’s appeal prevented the hauliers from litigating whether their loads had been delivered.

1. Both the appeal and cross-appeal were dismissed. The First-tier Tribunal had been entitled to leave the substantive appeals to proceed.

2. The First-tier Tribunal’s decision, read fairly and as a whole, rejected the proposition that a fair hearing was impossible. Its refusal both to bar HMRC and to strike out the hauliers’ appeals was incompatible with any contrary conclusion. The Tribunal had adequately addressed the parties’ respective positions.

3. The parties’ shared view that delay made a hearing unfair did not bind the Tribunal. Although the delay was exceptional and recollection would be difficult, the drivers’ evidence already concerned routine events several years old when first given. Its value was not confined to recalled detail. Cross-examination could test the documentary record and the witnesses’ motivations and working practices. The hauliers had also had opportunities during the stay to seek evidence needed for their own appeals. The First-tier Tribunal was therefore entitled to find that a fair hearing remained possible.

4. Foulser v HMRC did not establish a general basis for an indefinite stay where delay was not attributable to either party. On the facts, the First-tier Tribunal did not need to decide the scope of any power to order such a stay. It was entitled to reject the applications to bar HMRC or stay the proceedings.

5. HMRC’s second strike-out application should nevertheless have been rejected for a different reason. The 2018 First-tier Tribunal decision had finally determined, in the same proceedings, that the findings in SDM’s appeal were not determinative of the hauliers’ appeals. HMRC’s renewed application sought to relitigate that identical issue. It was consequently an abuse of process, whether analysed through the finality principle associated with Henderson v Henderson or issue estoppel.

6. The First-tier Tribunal had erred in treating HMRC’s case as necessarily alleging dishonesty, but that error did not affect the result. The hauliers’ appeals must proceed before the First-tier Tribunal, which should give further directions for a prompt substantive hearing.

• Upper Tribunal (Tax and Chancery Chamber): Appeal and cross-appeal dismissed. The Tribunal upheld the First-tier Tribunal’s refusal of both applications, while holding that HMRC’s strike-out application should have been refused because it attempted to relitigate an issue finally determined in 2018.
• First-tier Tribunal: In [2021] UKFTT 34 (TC), refused to bar HMRC from further participation and refused HMRC’s strike-out application. The substantive excise-duty appeals remained to be determined.