Eclipse Film Partners No. 35 LLP v Revenue & Customs
2014
COURT OF APPEAL (CRIMINAL DIVISION)
United Kingdom
CORAM
- LORD JUSTICE MOSES
- LORD JUSTICE KITCHIN
Areas of Law
- Civil Procedure
- Tax Law
2014
COURT OF APPEAL (CRIMINAL DIVISION)
United Kingdom
CORAM
AI Generated Summary
This case concerns the jurisdiction of the First-Tier Tribunal (Tax Chamber) to order shared costs for preparing hearing bundles between the taxpayer Eclipse 35 and the HMRC. The FTT initially allowed the order, but the HMRC contested it post-appeal, leading to differential rulings by the FTT and the Upper Tribunal. The Court of Appeal held that Rule 10 restricts the Tribunal from making such cost orders, affirming the Upper Tribunal's decision and dismissing Eclipse 35's appeal.
Judgment
Lord Justice Moses:
The issue in this appeal is whether the First-Tier Tribunal (Tax Chamber) (“FTT”) has jurisdiction to make an order that the costs of preparing hearing bundles for a substantive appeal by the appellant taxpayer, Eclipse 35, should be shared equally between the taxpayer and the Commissioners for Her Majesty’s Revenue and Customs. That order had been made on 1 June 2011 on the application of Eclipse 35, despite the opposition of the Revenue. But the Revenue at that stage did not question the jurisdiction of the FTT to make that order. Following rejection of the taxpayer’s appeal, its solicitors, Freshfields Brookhaus Deringer Llp, sent the Revenue a schedule of its own costs in preparing the bundles, seeking the Revenue’s contribution of £108,395.48, inclusive of VAT. It was only then that the Revenue applied to set aside the order, leading to the decision of the First-Tier Tribunal of 31 May 2012, ruling that it did have jurisdiction. Upper Tribunal Judge Berner, in the Upper Tribunal (Tax and Chancery Chamber) ruled that the FTT had no jurisdiction to make that order. Eclipse 35 now appeals.
The issue turns on the proper construction of the Tribunal Procedure Rules governing the practice and procedure to be followed in the FTT. Section 29 of the Tribunals, Courts and Enforcement Act 2007 provides:-
“ Costs or Expenses
(1) The costs of and incidental to –
(a) all proceedings in the First-tier Tribunal…
shall be in the discretion of the Tribunal in which the proceedings take place.
(2) The relevant Tribunal shall have full power to determine by whom and to what extent the costs are to be paid.
(3) Subsections (1) and (2) have effect subject to Tribunal Procedure Rules.
(4) In any proceedings mentioned in subsection (1), the relevant Tribunal may –
(a) disallow, or
(b) (as the case may be) order the legal or other representative concerned to meet, the whole of any wasted costs or such part of them as may be determined in accordance with Tribunal Procedure Rules.”
The Tribunal Procedure Rules are made under s.22 of the 2007 Act and their content is described in broad terms in paragraph 12 of Schedule 5.
Three Rules are relevant to the issue in the instant appeal. The overriding objective and the parties’ obligation to co-operate with the Tribunal is identified in Rule 2:-
“(1) The overriding objective of these Rules is to enable the Tribunal to deal with cases fairly and justly.
(2) Dealing with a case fairly and ju