DECISION
1. These
are applications in the appeals of Mr and Mrs Foulser (“the Appellants”) which
give rise to important issues concerning the jurisdiction and powers of the
Tribunal in case of an alleged abuse of process.
2. The
application of the Appellants is that, on the basis of the conduct of HMRC, the
Tribunal should hear no submissions or evidence from HMRC for the purpose of
obtaining further monies as claimed by HMRC in these appeal proceedings.
Essentially, and as accepted by Mr Jones for the Appellants, this application
amounts to one that the Tribunal debar HMRC from taking further part in the
proceedings, with the result that the appeal would fall to be allowed.
3. The
facts on which the Appellants rest their application are largely undisputed.
What are, however, disputed are the inferences which the Appellants draw from
those facts as to the motives or purposes to be ascribed to HMRC. Each of the
parties prepared statements of witnesses to provide the Tribunal with the
opportunity of making findings in this respect. But the parties agreed that I
should first make a determination on an application by HMRC that the
Appellants’ application should either be struck out or summarily dismissed,
without proceeding to hear live evidence on the merits, on the basis that:
(1)
this Tribunal has no jurisdiction to make the order sought by the Appellants;
and/or
(2)
the application is in any event bound to fail as the evidence in support
fails to raise a prima facie case and the allegations (even if true) would not
justify the sanction sought.
Background
4. This
case has a long history. As far back as November 1997 the Appellants, advised
by their tax adviser, Mr Edward Gittins, made gifts of shares in a company, BG
Foods Limited, on which they claimed holdover relief from capital gains tax.
HMRC refused those claims, and the Appellants’ appeals to the then special
commissioners, and on appeal to both the High Court and Court of Appeal, were
dismissed in principle. That left the amount of the CGT assessment to be
determined, which depended on the open market value of the shares. That fell
to be determined by this tribunal (as successor of the special commissioners),
and a hearing before Judge Avery Jones commenced on 27 September 2010.
5. The
first day of the hearing was a reading day. The Appellants’ case commenced on
28 September 2010, during which certain evidence of fact was given. On the
following day the events took place which have given rise to these
applications. I set out the following brief description merely to provide
context for the discussion of the issues raised on HMRC’s application. In the
absence of having heard the evidence, nothing in this description amounts to a
finding of fact.
6. According
to Mr Gittins’ witness statement he left the house in Montpelier Street, London, where he had been staying since arriving on the previous Sunday, at around
7.30am. He was due to meet counsel for the Appellants in those proceedings at
8am. He was at that stage arrested on suspicion of cheating the Revenue and
false accounting. He was told that HMRC had a warrant to search the premises.
7. Despite
informing the HMRC officers that he was on his way to a conference and then to
the tax tribunal for the hearing, Mr Gittins was escorted back into the house
and when inside asked to hand over his briefcase. He was then taken to Notting
Hill police station where he was processed, spent time in a cell, and was
questioned before being released on bail that evening. The Montpelier Street
premises and other premises at Cockspur Street were searched under the warrant.
8. In
the meantime the tribunal, through the clerk assisting Judge Avery Jones on
that day, had been informed of Mr Gittins’ arrest. There is some dispute about
the circumstances of the calls made, and the instructions given to the clerk
with regard to information about the arrest being passed to the judge, but in
any event, by agreement between counsel for the Appellants and counsel for
HMRC, the judge was not informed of this. Instead, counsel met with the judge
in chambers and a short adjournment was directed, without any of the detailed
reasons having to be disclosed. The judge was subsequently given details of
the arrest, and of the Appellants’ consideration of making an application in
respect of abuse of process, and he granted a further stay.
The Appellants’ claim
9. In
support of their application the Appellants claim that the warrants to enter,
search and make seizures from the Montpelier Street and Cockspur Street
premises occupied by their adviser, Mr Gittins, Montpelier Tax Consultants (Isle
of Man) Limited and associated companies, and the arrest and detention of Mr
Gittins, were arranged by officers and agents of HMRC to take place on 29
September 2010 with the purposes, among other purposes, of:
(1)
obtaining sight of legally privileged and confidential material held by
Mr Gittins or associated companies relevant to the hearing of their tax appeal
held in the week of 27 September 2010;
(2)
alerting the tribunal hearing their tax appeal on that day to the arrest
and detention;
(3)
causing the postponement of the hearing;
(4)
causing publicity to the arrest of Mr Gittins and thus embarrassing the
Appellants in the preparation and conduct of their appeal;
(5)
placing pressure oppressively on the Appellants to settle the subject
matter of the appeal.
10. Although
correspondence, and references in Mr Foulser’s witness statement refer to the
Appellants’ complaint being that they cannot have a fair hearing before the
Tribunal, in argument Mr Jones did not rely upon any submission that the
proceedings could not be fairly conducted. Instead he submitted that HMRC had
been guilty of such serious misbehaviour that they should not be allowed to
benefit to the detriment of the Appellants, and accordingly should not be
permitted to take further part in the proceedings.
11. The distinction
between these two approaches can be seen from the case of R (Ebrahim) v
Feltham Magistrates Court; Mouat v DPP [2001] 2 Cr App R 23 in the Divisional Court. There, in cases concerning applications to stay criminal proceedings
against a defendant on the ground that videotape evidence had been obliterated,
the court reviewed the principles underlying the jurisdiction to order a stay.
It stated (at [18]) that the two categories of case in which the power to stay
proceedings for abuse of process may be invoked in this area of the court’s
jurisdiction are (i) cases where the court concludes that the defendant cannot
receive a fair trial, and (ii) cases where it concludes that it would be unfair
to the defendant to be tried. In relation to this second category, the court
said:
“[19] We are not at present concerned with the
second of these categories (which we will call ‘Category 2’ cases), in which a
court is not prepared to allow a prosecution to proceed because it is not being
pursued in good faith, or because the prosecutors have been guilty of such
serious misbehaviour that they should not be allowed to benefit from it to the
defendant’s detriment. In some of those cases it is this court, rather than
any lower court, which possesses the requisite jurisdiction (see ex p Watts, per Buxton LJ at p 195B-D).
[20] In these cases the question is not so much
whether the defendant can be fairly tried, but rather whether for some reason
connected with the prosecutors’ conduct it would be unfair to him if the court
were to permit them to proceed at all. The court’s enquiry is directed more to
the prosecutors’ behaviour than to the fairness of the eventual trial.
Although it may well be possible for the defendant to have a fair trial
eventually, the court may be satisfied that it is not fair that he should be
put to the trouble and inconvenience of being tried at all.”
12. The argument of
the Appellants accordingly is that HMRC’s conduct is such that it would be
unfair to the Appellants if the tribunal were to permit HMRC to proceed with
their case. Having regard to HMRC’s behaviour, it is said that, although there
is no argument that the Appellants cannot have a fair hearing of the share
valuation issue, this tribunal should be satisfied that it is not fair that the
appellants should be put to the trouble and inconvenience of these proceedings.
Jurisdiction
13. With that
context, I turn to address the submissions on jurisdiction. The issue here is
whether, as Mr Jones submits, this tribunal has an inherent jurisdiction to
debar a party from proceedings on the basis of abuse of process of the second
category referred to in Ebrahim, or whether, as argued by Ms Dewar, the
tribunal does not have any such power, its procedural powers being limited to
those expressly or impliedly set out in the Tribunal Procedure (First-tier
Tribunal) (Tax Chamber) Rules 2009 (“the Rules”).
14. There was no
dispute between the parties on the inherent power of the superior courts to
step in to prevent their processes being abused for the purposes of injustice,
or in order to maintain their character as a court of justice. That power is
inherent in the courts’ jurisdiction and allows them to enforce their rules of
practice and to suppress any abuse of their process and to defeat any attempted
thwarting of their process (see Connelly v Director of Public Prosecutions
[1964] 2 All ER 401 at 409).
15. Ms Dewar
submitted that these historical inherent powers are exercisable by superior
courts of record as a result of their unique constitutional position as the
successors of earlier courts and thereby endowed from their inception with the
powers previously exercisable by the superior courts since the earliest days of
the common law. She invited me to contrast that with the position of the
First-tier Tribunal as purely a creature of statute, deriving its limited
jurisdiction exclusively from the statutes creating it. The tribunal, argues
Ms Dewar, can only have the powers given to it by the statutes and rules that
govern its jurisdiction and procedure. No First-tier Tribunal enjoys the same
kind of general inherent powers – such as the power to prevent abuse of process
– as the superior courts.
16. In support of
this submission Ms Dewar referred me to R on the application of V v Asylum
and Immigration Tribunal [2009] EWHC 1902 (Admin) where (at [24])
Hickinbottom J refers to the AIT as purely a creature of statute which cannot
have any inherent powers on the same basis as the High Court. After referring
to certain cases that appeared to suggest a wider inherent general power for
every court or tribunal to regulate its own procedure, the learned judge went
on to say, in a passage that is worth setting out in full:
26. Later cases do not go so far. For example, in
the face of a submission by Mr Robertson himself that a magistrates' court as
the creature of statute had no inherent jurisdiction, in R v Malvern
Justices ex p Evans [1988] 1 QB 540 at pages 550H-551A, Watkins LJ, whilst
confirming that “justices have an inherent power to regulate the procedure in
their own court”, questioned whether that went so far as to warrant an
assumption that that enabled justices to sit in camera “casting aside… the hallowed
notion of open justice”. Before me, Mr Robertson relied upon that passage as
confirming the principle that inferior tribunals have inherent powers in
relation to their own procedure: as he did the judgment of Scott Baker J (as he
then was) in R (The Secretary of State for the Home Department) v
Immigration Appeal Tribunal [2001] EWHC 261 (Admin), [2001] QB 1224 , where
he said, of the AIT's predecessor (the Immigration Appeal Tribunal):
“The tribunal, in my judgment quite correctly,
pointed out that it has only those powers that are given to it by the statutes
and rules that govern its jurisdiction and procedure. It has no inherent powers
save those which enable it to prevent its processes being abused.
Without these it could not function properly as a tribunal. What it does not
have is power to deal with appeals in a way which is not permitted by the
governing statutes or rules”. (emphasis added).
27. However, those cases represent a retreat from
the proposition that all courts and tribunals have an inherent power generally
to regulate their own procedure. They display a far more restricted approach to
the so-called “inherent powers” of tribunals, namely a restriction to powers
that are necessary for the proper functioning of the tribunal. That approach is
generally reflected in the more recent cases, which make clear that inferior
courts and tribunals do not have an open-ended general power to regulate their
own procedure (see, e.g., Akewushola v The Secretary of State for the Home
Department [2000] 1 WLR 2295 at 2301E-H per Sedley LJ, and The Secretary
of State for Defence v The President of the Pensions Appeal Tribunal [2004]
EWCA 141 (Admin) at [25] and following per Newman J).
28 The use of the term “inherent powers” as applying
to inferior tribunals in these cases must mean something different from the
term as used of the High Court: and it seems to me that the references are not
to the historical powers of the superior courts inherent in the High Court, but
to powers that can properly be implied into the statutory scheme on the usual
principles of statutory interpretation. It is well-settled law that it is
justifiable to imply words into legislative provisions where there is an
ambiguity or an omission and the implied words are necessary to remedy such
defect (see, e.g., Elloy De Freitas v Permanent Secretary of Ministry of
Agriculture, Fisheries, Lands and Housing [1999] AC 69 at page 77H).
17. In reliance on
the V case Ms Dewar submits that tribunals do not have the kind of
open-ended inherent power to regulate their own processes enjoyed by superior
courts of record. Unless it is possible to interpret the relevant rules to
include a particular power, a tribunal will not have it, no matter how useful
or desirable it might be. In particular, if specific provision is made in the
relevant procedural rules for the use of a certain power, it will not usually
be appropriate to imply that the power can in fact be used more widely. Nor
will it be appropriate to use another broader provision to achieve the same
effect. Such specific provisions will be presumed to be exhaustive of the
circumstances in which that power may be used: if the draftsman had intended
the specific power to be used more widely, he would have said so.
18. Ms Dewar also
referred to Khan v Heywood and Middleton Primary Care Trust [2006] EWCA Civ 1087 where the Court of Appeal held that an employment tribunal had no
inherent jurisdiction to reinstate proceedings that had been withdrawn,
notwithstanding that it might have been desirable for statute to confer on it
such a power. Similar conclusions were reached as regards powers to review or
rescind decisions in Akewushola v Secretary of State for the Home Department
[2000] All ER 148 (pensions tribunal) and R (on the application of the Secretary
of State for the Home Department) v Immigration Appeal Tribunal [2001] EWHC 261 Admin
19. Ms Dewar drew my
attention to a number of cases involving tribunals where it has been held that
the tribunal has no inherent power to strike out. In Kelly v Ingersoll-Rand
Ltd [1982] ICR 476, described by Brown-Wilkinson J in the employment appeal
tribunal as “an unusual and unhappy case”, an industrial tribunal had dismissed
an employee’s claim not on its merits but for want of prosecution by the
employee. The question arose whether the industrial tribunal had the power to
do so. The EAT held that the industrial tribunal had no inherent jurisdiction.
It was a matter of interpretation of the rules governing the tribunal’s
procedure.
20. On the question
of the interpretation of the rules applicable in Kelly, it was argued on
behalf of the employee that the necessary power could be found in Rule 12(1).
This provided: “Subject to the provisions of these rules, a tribunal may
regulate its own procedure”. Rule 12 then went on to provide a particular
power for the tribunal to order an application to be struck out for want of
prosecution, subject to certain safeguards. The EAT expressed the view that,
but for the introductory words to Rule 12(1), the tribunal might have had power
to strike out for want of prosecution. But the fact that striking out for want
of prosecution was expressly dealt with by the rules made it impossible to hold
that there was a right to make such an order otherwise than in accordance with
the requirements and safeguards contained in those rules.
21. The same rules
were in issue in O’Keefe v Southampton City Council [1988] ICR 419,
where the EAT agreed that there was no inherent jurisdiction. In that case,
which concerned a strike out where the claimant was guilty of abusive conduct
during the hearing, the EAT reluctantly concluded that the strike out powers in
the then applicable rules could not extend to the conduct of a party before the
tribunal.
22. In Care First
Partnership Ltd v Roffey and Others [2001] ICR 87, the Court of Appeal
considered arguments that an employment tribunal had the power, either under
its powers to regulate its own procedure or under powers to conduct a hearing,
to dismiss the complaints as having no reasonable prospect of success. The
Court of Appeal made clear that, as the tribunal was a creature of statute, the
answer depended upon the terms of the rules governing the tribunal’s
jurisdiction. As in Kelly and O’Keefe, the court refused to
infer any jurisdiction other than that expressed by the applicable rules.
23. The cases just
referred to are all in the sphere of the industrial and employment tribunals.
In the tax field, in a case, Deborah Smith v HMRC [2005] UKVAT (Excise) E00896, concerning the power of the VAT and Duties Tribunal to dismiss an
appeal against seizure of goods for failure to pay excise duties for abuse of
process without a hearing on the merits, the chairman (Mr Theodore Wallace)
accepted (at para 31) that the “Tribunal unlike the High Court is a statutory
body with no inherent powers”.
24. Mr Jones
accepted that the rules which govern this tribunal (the Tribunal Procedure
(First-tier Tribunal) (Tax Chamber) Rules 2009) do not confer the power that he
submitted it should exercise in this case. Instead he argued that the tribunal
did indeed have an inherent power to do so. He submitted that it would be
astonishing if the tribunal did not have the power to cure abuse.
25. Mr Jones took me
again to Connelly, to which I have already referred. That case was
concerned with the discretion of a court (outside the strict pleas of autrefois
acquit or autrefois convict) to stay a subsequent indictment
containing charges founded on the same facts as those on which a previous
indictment is based or forming or being part of a series of offences based on
one incident. Mr Jones first directed me to the speech of Lord Reid where, at
p 406G he said “…I think that there must always be a residual discretion to
prevent anything which savours of abuse of process”. He then referred to the
speech of Lord Morris of Borth-y-Guest (at p 409H) where his lordship referred
to the policy and tradition inherent in the criminal administration that, even
in the case of wrongdoers, there must be an avoidance of anything that savours
of oppression. Lord Devlin (at p 442H) also makes clear that the courts have
the power to see that the process of law is not abused (rather than permit the
executive to have that responsibility), and at p 443G, citing Lord Blackburn in
Metropolitan Bank Ltd v Pooley [1881-85] All ER Rep 949 at p 954), that
in criminal as well as civil proceedings the court has inherently in its power the
right to see that its processes are not abused by a proceeding without
reasonable grounds so as to be vexatious or harassing.
26. Mr Jones referred
me to Hunter v Chief Constable of the West Midlands Police and Others
[1982] AC 529, which concerned the question of abuse of process in the case of
a civil action to initiate a collateral attack on a decision of a criminal
court, and in particular to the beginning of the speech of Lord Diplock (at p
536):
“… this is a case about abuse of the process of the
High Court. It concerns the inherent power which any court of justice must
possess to prevent misuse of its procedure in a way which, although not inconsistent
with the literal application of its procedural rules, would nevertheless be
manifestly unfair to a party to litigation before it, or would otherwise bring
the administration of justice into disrepute among right-thinking people. The
circumstances in which abuse of process can arise are very varied; those which
give rise to the instant appeal must surely be unique. It would, in my view, be
most unwise if this House were to use this occasion to say anything that might
be taken as limiting to fixed categories the kinds of circumstances in which
the court has a duty (I disavow the word discretion) to exercise this salutary
power.”
He submitted that although this case concerned the powers
of the High Court, Lord Diplock was referring to the inherent power of any
court (and, he argued, therefore any tribunal), and that this power should not
be defined by reference to fixed categories, such as the powers of this
tribunal to strike out under rule 8 of the Rules.
27. Mr Jones argued
that the fact that the tribunal is a creature of statute does not prevent it
from having an inherent jurisdiction to prevent abuse. He referred me in this
respect to cases in the magistrates’ court, itself a creature of statute. In Mills
v Cooper [1967] 2 QB 459, the divisional court held that every court had
discretion to decline to hear proceedings on the ground that they were
oppressive and an abuse of the process of the court.
28. In Atkinson v
United States of America Government [1971] AC 197, Lord Reid referred back
to what he had said in Connelly about the residual discretion to prevent
abuses of process, but stated (at p 232) that whatever had been said in Connelly
with regard to the extent of the power of a trial judge to stop a case, that
could not be regarded as any authority for the proposition that magistrates had
power to refuse to commit an accused for trial on the ground that it would be
unjust or oppressive to require him to be tried. The statutory powers in
question in that case were those in the Extradition Act 1870 and Lord Reid
considered that, absent the safeguards in that Act, and the intention of
Parliament as regards the use of those safeguards, it would have been necessary
to infer that the magistrate had power to refuse to commit in order to prevent
an infringement of natural justice.
29. Mr Jones urged
me not to place significant weight on the cases concerning the powers of
tribunals which, he submitted, were cases on their own narrow principles, and
could have no wider application. He argued that cases concerning procedural
issues such as the setting aside of a withdrawal of a claim (Khan), or
review or rescission of a decision (Akewushola) were not relevant to
questions of abuse of process. Kelly is a case on striking out for want
of prosecution where the process was already covered by the rules. Mr Jones
submitted that none of the cases could be regarded as establishing any wider
principle concerning abuse of process.
30. In the V case,
the submission of the claimant was that the Secretary of State was being
abusive of the Asylum and Immigration Tribunal, and that the AIT had erred in
failing to use its inherent powers to prevent such an abuse. Mr Jones argued
in this respect that what was said was that the tribunal did not have an
inherent power to regulate its own procedure. The question here was whether
the tribunal had an inherent power to prevent an abuse of its own procedure.
Discussion
31. On the
authorities it is clear to me that this tribunal does not have any inherent
powers. In my judgment the position is clear from the judgment of Hickinbottom
J in the V case: the tribunal does not have any inherent powers on the
same basis as the High Court. The only powers that the tribunal has are those
that are necessary for the proper functioning of the tribunal, and those are
restricted to powers that are expressly conferred on the tribunal through the Rules
or statutory framework, or which can properly be implied into the statutory
scheme through construction of the Rules.
32. The authorities
on which Mr Jones places reliance do not, in my view, show that this tribunal
can have any inherent powers beyond those that may be inferred into the
statutory scheme and the tribunal’s Rules. The explanation given by
Hickinbottom J in the V case could not have been given if Mr Jones was
right that the power to prevent abuse was an inherent jurisdiction of the
tribunals as well as the courts. As the cases which relate to tribunals
specifically make clear, there is no such inherent power in the tribunals. The
question, therefore, is whether the power which the Appellants ask the tribunal
to exercise in their favour can be implied.
33. Mr Jones submitted
that this tribunal has a power effectively to strike out a party’s case on the
ground that the conduct of that party is such that it would be unfair to the
other party for the case to be heard on its merits. Mr Jones relied solely on
the second category of cases for which a stay for abuse of process may be
ordered, as described in Ebrahim. He did not argue that these appeals
themselves could not fairly be determined (the first category).
34. Ms Dewar argued
that by virtue of the terms of the Rules themselves this tribunal is empowered
to deal with many of the kinds of abuse or unfairness that could impinge on
proceedings before it. Principally those powers are derived from rule 8, but
the tribunal also has power, for example under rule 5(3)(d), to prevent a party
relying on documents that had been illegally obtained or to prevent a party
making submissions where doing so would amount to a collateral attack on a
previous final judgment.
35. I turn therefore
to the relevant Rules. I start with rule 2, which sets out the overriding
objective of the Rules, namely to enable the tribunal to deal with cases fairly
and justly. By rule 2(3) the tribunal must seek to give effect to the
overriding objective both when it exercises any power under the Rules and when
it interprets any rule.
36. The tribunal has
wide case management powers, as described in rule 5(1), which provides:
“Subject to the provisions of the [Tribunals, Courts
and Enforcement Act 2007] and any other enactment, the Tribunal may regulate
its own procedure.”
A number of powers to make directions are set out by rule
5(3), but these are described expressly as not restricting the general powers.
37. The powers to
strike out a party’s case or, in the case of a respondent, to bar the
respondent from taking further part in proceedings, are set out in rule 8:
“(1) The proceedings, or the appropriate part of
them, will automatically be struck out if the appellant has failed to comply
with a direction that stated that failure by a party to comply with the
direction would lead to the striking out of the proceedings or that part of
them.
(2) The Tribunal must strike out the whole or a part
of the proceedings if the Tribunal—
(a) does not have
jurisdiction in relation to the proceedings or that part of them; and
(b) does not exercise
its power under rule 5(3)(k)(i) (transfer to another court or tribunal) in
relation to the proceedings or that part of them.
(3) The Tribunal may strike out the whole or a part
of the proceedings if—
(a) the appellant has
failed to comply with a direction which stated that failure by the appellant to
comply with the direction could lead to the striking out of the proceedings or
part of them;
(b) the appellant has
failed to co-operate with the Tribunal to such an extent that the Tribunal
cannot deal with the proceedings fairly and justly; or
(c) the Tribunal
considers there is no reasonable prospect of the appellant’s case, or part of
it, succeeding.
(4) The Tribunal may not strike out the whole or a
part of the proceedings under paragraphs (2) or (3)(b) or (c) without first
giving the appellant an opportunity to make representations in relation to the
proposed striking out.
(5) If the proceedings, or part of them, have been
struck out under paragraphs (1) or (3)(a), the appellant may apply for the
proceedings, or part of them, to be reinstated.
(6) An application under paragraph (5) must be made
in writing and received by the Tribunal within 28 days after the date that the
Tribunal sent notification of the striking out to the appellant.
(7) This rule applies to a respondent as it applies
to an appellant except that—
(a) a reference to the
striking out of the proceedings must be read as a reference to the barring of
the respondent from taking further part in the proceedings; and
(b) a reference to an
application for the reinstatement of proceedings which have been struck out
must be read as a reference to an application for the lifting of the bar on the
respondent taking further part in the proceedings.
(8) If a respondent has been barred from taking
further part in proceedings under this rule and that bar has not been lifted,
the Tribunal need not consider any response or other submissions made by that
respondent, and may summarily determine any or all issues against that
respondent.”
38. Rule 15, which
is described as not restricting the general powers in rule 5(1) and (2),
empowers the Tribunal to give directions as to the nature of the evidence or
submissions it requires.
39. Ms Dewar
submitted that rule 8 provides a clear and exhaustive scheme for limiting a
party’s participation in proceedings. It includes in sub-paragraphs (4) to (6)
a measure of protection for parties faced with exercise of this sanction in the
form of a right to make representations to the tribunal before the order is
made and a right to apply to have the sanction lifted. She submitted that
there is no room in this statutory scheme for some free-standing or overarching
power to limit a party’s participation by reference to conduct outside the
confines of rule 8, nor for the use of the broad powers in rule 5 or rule 15 to
achieve the same effect.
40. Ms Dewar argued
that to find an additional unfettered power to limit participation in addition
to rule 8 or to use rules 5 or 15 to achieve the same effect would be wholly
inconsistent with the express specific provisions of rule 8, render that rule
entirely otiose and strip away the statutory protections in rule 8. She submitted
that if the draftsman had intended this tribunal to have power to limit a
party’s participation by reference to broad concepts of abuse or fairness or by
reference to the propriety of the way that it had conducted these or other
proceedings, he would have included them as criteria for the tribunal’s
exercise in rule 8.
41. I do not
consider that rule 8 can be said as a general matter to be exhaustive of all
possible circumstances where the tribunal might have the power to strike out a
case, or prevent a respondent from proceeding. Each case where a strike out
power is asserted will fall to be determined, in the light of the authorities,
on its own merits. Although in the case of the tribunal a power can exist only
if it can properly be implied into the statutory scheme, it seems to me that
the remarks of Lord Diplock in Hunter in relation to the court’s
inherent powers, and the undesirability of confining those powers to fixed
categories, are equally apt to the construction of the Rules. Without therefore
pre-judging any other circumstances that might arise, it is necessary for me to
decide whether the particular power which the Appellants here seek to be
exercised can be implied into the tribunal’s jurisdiction under the Rules.
42. Were such a
power to be implied, it could in my view only be so implied by a construction
of the provision for the tribunal to regulate its own procedure as set out in
rule 5, construed of course to give effect to the overriding objective to deal
with cases fairly and justly. In this respect I should note that rule 5(1)
does not contain the “subject to the provisions of these rules” language
without which the EAT in Kelly thought it may well have been that the
industrial tribunal might have had the power to strike out for want of
prosecution in the course of the hearing, and without the safeguards provided
in the express provision in that respect. In an appropriate case, therefore,
it seems to me that, if fairness and justice demand, this tribunal may well
have power under rule 5 to make directions in circumstances outwith express
provision elsewhere in the Rules.
43. Having said
that, I have concluded that no such power as the Appellants assert in their
application can or should be implied. I have reached this conclusion, not on the
basis of a construction of the Rules themselves, but on the basis of the nature
of the power which the Appellants assert. As appears from Ebrahim (at
para 19 of the judgment of the court), in some of the second category of cases,
those where a prosecution should not be allowed to proceed because it is not
being pursued in good faith, or where the prosecutors have been guilty of such
serious misbehaviour that they ought not to be allowed to benefit to the
defendant’s detriment, it is the High Court or the Divisional Court (and not
the lower court) which will possess the requisite jurisdiction, and not any
lower court.
44. In making this
observation the court in Ebrahim referred to the judgment of the Divisional
Court delivered by Buxton LJ in R v Belmarsh Magistrates’ Court ex p Watts
[1999] 2 Cr App R 188. That case concerned the jurisdiction of the magistrates’
court to entertain a complaint of abuse of process on the ground that summonses
were intended to be and were a collateral attack on a person’s criminal
conviction. The court there cited R v Horseferry Road Magistrates Court ex
p Bennett [1994] 1 AC 42, HL and the distinction to be drawn between
unfairness within the proceedings on the one hand, and on the other misconduct
or law-breaking by public authorities in bringing a defendant within the
jurisdiction at all. Holding that the Divisional Court and the magistrates’
court in principle have concurrent jurisdiction in cases of allegations of
abuse in magistrates’ court cases, the court went on to say (at p 195):
“Within the general jurisdiction … there is a
limited category of cases, involving infractions of the rule of law outside the
narrow confines of the actual trial or court process, where the magistrates do
not have jurisdiction, or alternatively as a matter of law should not exercise
such jurisdiction as they may have. So much is clear from Lord Griffiths's
speech in Bennett, though the exact reach of this category remains to be
determined. Such cases should, as in Bennett, be addressed by the wider
supervisory jurisdiction of the Divisional Court. That category is however a
narrow one. It excludes every complaint that is directed at the fairness or
propriety of the trial process itself.”
45. In my judgment
this indicates that questions of a stay of proceedings, or an effective
striking out of a party’s case, which do not specifically involve issues of
unfairness within the proceedings themselves, are appropriate for the
jurisdiction of the Divisional Court, and not that of the lower courts. In
argument Mr Jones posed the question as to where a remedy might be obtained if
this tribunal did not have jurisdiction. It is not for me to answer that
question, and the answer would not in any event affect my conclusion. If it
were the case (which I doubt) that the Divisional Court did not have
jurisdiction over cases of abuse such as that alleged by the Appellants, that could
not constitute a reason for implying such a jurisdiction in the tribunal.
46. It follows that
I dismiss the Appellants’ application. Accordingly, as I have found that the
tribunal does not have jurisdiction to make the order which the Appellants have
applied for, I need not express a view on HMRC’s alternative applications, and
it would not be appropriate for me to do so, as I would potentially be
trespassing on another court’s jurisdiction.
Application for permission to appeal
This document contains full findings of fact and reasons
for the decision. Any party dissatisfied with this decision has a right to
apply for permission to appeal against it pursuant to Rule 39 of the Tribunal
Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The application
must be received by this Tribunal not later than 56 days after this decision is
sent to that party. The parties are referred to “Guidance to accompany a
Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and
forms part of this decision notice.
ROGER BERNER
TRIBUNAL JUDGE
RELEASE DATE: 4 October 2011
