A party’s representative in a tax dispute who returned documents to the taxman because they were sent a few days late would have faced a wasted costs order, had HM Revenue and Customs (HMRC) sought one, the First-tier Tribunal has ruled.
It said such behaviour was not proportionate and led to an unnecessary adjournment of the case.
Joyce Whitfield v Revenue and Customs Commissioners  UKFTT 685 (TC) saw the tribunal’s tax chamber allow, in part, the taxpayer’s appeal against a ‘best judgement’ assessment to VAT.
Earlier in the case, the tribunal ordered certain documents to be sent to Mrs Whitfield’s representative, Mike Jones Ltd, but they arrived three days later than the deadline set by the court.
The tribunal recorded: “Because of this, on receiving the letter Mr Jones opened the envelope, saw what the documents were but did not read them. Instead he returned them to HMRC ‘because they were late’… As it was necessary for Mr Jones to read them to be able to present Mrs Whitfield’s case, we granted an adjournment to enable him to do so.”
The tribunal noted that, in granting the adjournment, it had regard to the overriding objective of the Tribunal Procedure (First-tier Tribunal)(Tax Chamber) Rules 2009; to deal with case fairly and justly. Further, under rule 2(4), the parties have an obligation to help the tribunal to further the overriding objective, while rule 2(2) explains that dealing with a case “fairly and justly” includes dealing with the case in ways which are proportionate to the importance of the case and avoiding unnecessary formality and seeking flexibility in the proceedings.
It continued: “We did not consider it to be proportionate to open an envelope, see what it contains and return it to the sender unread just because it was a few days late. Such action is hardly flexible and does not avoid unnecessary formality. In the circumstances, as the adjournment would not have been necessary had Mr Jones taken a different approach, we considered it appropriate that he should pay HMRC’s wasted costs of the adjourned hearing.
“We therefore directed HMRC to produce a schedule of these costs and that Mr Jones be given an opportunity at the commencement of the relisted hearing to make representations as to why he should not be ordered to pay HMRC’s wasted costs. However, Mrs Jane Ashworth, for HMRC, explained that, despite the direction, because of a lack of time and in view of the small amount of costs involved a schedule was not prepared. In the circumstances, we did not seek submissions from Mr Jones or make any wasted costs direction.”
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