Hidenda Tax Ltd, R (on the application of) v The Commissioners for HMRC

A judicial review claim becomes academic where no live dispute remains capable of directly affecting the parties’ rights and obligations. The court may nevertheless continue an academic claim only where there is a good reason in the public interest, such as a genuinely recurring issue that is not fact-sensitive. Where the defendant has subsequently provided the practical relief sought, including through an undertaking given in open court, the claim will ordinarily be dismissed. Declaratory relief is not required merely to mark alleged past unlawfulness, particularly where the challenged decision arose in highly particular circumstances and raises no issue of wider application.

Hidenda Tax Ltd challenged HMRC’s refusal to process Marriage Allowance repayment claims submitted before 15 March 2023 using an assignment form. Permission was granted only on the ground that HMRC had acted unlawfully by failing to mitigate potential losses to affected taxpayers. Before the substantive hearing, HMRC introduced a process for addressing the paused claims and undertook in open court to review Hidenda’s spreadsheet, process qualifying claims and inform Hidenda of the outcomes.

The issue was whether the judicial review remained a live dispute, or whether it should proceed despite being academic in the public interest.

1. The claim was dismissed as academic. A claim is academic where there is no longer a lis to be decided which will directly affect the parties’ rights and obligations. Academic disputes should be heard only where there is good reason in the public interest: R v Secretary of State for the Home Department, ex parte Salem [1999] 1 AC 450.
2. The principle applies to judicial review claims at first instance as well as to appeals: R (Zoolife International Ltd) v Secretary of State for the Environment, Food and Rural Affairs [2007] EWHC 2995 (Admin). Exceptional circumstances may justify continuing an academic claim where numerous similar cases exist or are anticipated and the decision will not be fact-sensitive.
3. Hidenda’s permitted ground concerned HMRC’s alleged failure to mitigate losses caused by the refusal to process the claims. HMRC had subsequently taken steps addressing that complaint. Its witness evidence stated that the relevant claims had been dealt with, and counsel gave an open undertaking that HMRC would review the spreadsheet supplied by Hidenda, process claims submitted before 15 March 2023 which remained unprocessed, and work with Hidenda to communicate the outcomes.
4. Taking the undertaking at face value, Hidenda had obtained the practical relief sought. No live issue remained capable of directly affecting the parties’ rights and obligations.
5. There were no exceptional public-interest circumstances requiring continuation. The case raised no statutory construction issue with wider implications, and HMRC’s decision concerning the particular assignment arrangements had no broader application. Declaratory relief was unnecessary. The declaration sought concerned the legitimate-expectation ground, on which permission had been refused, and in any event would serve no proper purpose after HMRC’s remedial steps and undertaking.