[2010] UKFTT 488 (TC)

TC00748

Appeal number TC/2009/16898

Application for leave to appeal out of time – VAT assessment made in 1980 – no reasonable grounds offered for late appeal and no reasonable prospect of appeal succeeding – Rule 5(3)(a) – no extension of time granted.

FIRST-TIER TRIBUNAL

TAX 

MR DENNIS ALBERT GARDNER

	T/A GARDNERS TRANSPORT CO	Appellant

	- and -

	THE COMMISSIONERS FOR HER MAJESTY’S
	REVENUE AND CUSTOMS	Respondents

TRIBUNAL: 	Mr Michael S Connell (Tribunal Judge)
		Mr Tim Ratcliffe (Member)

Sitting in public at Leeds on 16 August 2010                        
 
Mr Dennis Albert Gardner in person 
Mr Chapman, Counsel, for the Respondents :

© CROWN COPYRIGHT 2010

DECISION

1.	This is an application notice to the Tribunal for an extension of time pursuant to Rule 5(3)(a) of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 within which to bring an appeal against a VAT assessment made in 1980.  

2.	The background to this case is that Mr Gardner filed a notice of appeal with the Tribunal on 10 December 2009 requesting an extension of time under Rule 5(3)(a) within which to bring his appeal.  On 28 January 2010 HMRC gave notice that they objected to the appeal being brought out of time.

3.	Mr Gardner’s appeal is against an estimated assessment for VAT raised against him on 01 July 1980 by HM Customs & Excise for the period 01 January 1978 to 31 March 1978 in the sum of £4,804.53.

4.	The grounds of Mr Gardner’s appeal are set out in a note dated 03 March 2010.  The note to the Tribunal contains 39 numbered paragraphs and was considered and summarised by Judge Barbara Mosedale on a previous application for appeal to leave out of time as follows:

(1)	HMRC have not stated when the assessment was made so he does not consider that the Tribunal can find the appeal against it is out of time (paragraphs 2-5);

	(2)	The assessment appealed against was out of time when issued (paragraph 6-9);

(3)	The assessment appealed against was not served on the Appellant (paragraph 10-12);

(4)	The writ should not have been dealt with in the Queen’s Bench Division as it did not have jurisdiction (paragraph 13);

(5)	HMRC should not have summarily entered judgement against the Appellant (paragraph 13);

(6)	HMRC should not have filed a bankruptcy petition against the Appellant as they had entered into a time to pay arrangement with the Appellant which the Appellant had kept to (paragraph 14-26 and 31);

(7)	HMRC should not have filed a bankruptcy petition against the Appellant as their affidavit in support was perjured as the Appellant had paid all the VAT due (paragraph 27);

	(8)	The Appellant has paid all the VAT due (paragraph 28, 33-34);

	(9)	The bankruptcy petition was heard in his absence (paragraph 29);

(10)	The affidavit in support of the petition sworn by an HMRC officer was perjured (paragraph 30);

(11)	The Appellant has a claim for damages because in breaching the time to pay arrangement HMRC frustrated his legitimate expectations (paragraph 32);

(12)	HMRC should not have issued an estimated assessment (paragraph 35-36) for 1/1/78-31/3/78.  The grounds for saying this seem to be that the Appellant’s case is that he had filed a VAT return for that period (paragraph 34);

(13)	The Appellant has not acted with undue delay because HMRC obtained a Grepe v Loam restriction order dated 14 July 1984 against the Appellant.  In 2009 the Appellant approached the High Court who ruled on 24 November 2009 that the Order did not prevent the Appellant filing proceedings in the Tax Tribunal (paragraphs 37-39).

5.	During the course of the appeal hearing Mr Gardner reiterated the above grounds, and other grounds which I refer to below.

6.	On the previous application to seek leave to appeal out of time, Judge Mosedale concluded that ground (2) – whether the assessment was out of time when issued – out of time is a question of fact in respect of which Mr Gardner had produced no evidence in support of his contention and which related to matters which occurred more than 30 years ago.  Judge Mosedale arrived at a conclusion with which I concur, particularly in the absence of any further evidence produced by Mr Gardner and, in dealing with the case fairly unjustly, that it would not be possible to determine that the assessment was out of time when issued.  This in any event was a matter which should have been argued at the time and before the relevant court prior to the bankruptcy proceedings.  Similarly, grounds (3) and (12) were substantive issues as to whether or not the assessment had been properly made, and were matters of fact, which for the same reasons could not now be questioned after such a significant passage of time.

7.	Judge Mosedale also concluded that grounds (4), (5), (6), (7), (8), (9), (10) and (11) all related to matters which fell outside the jurisdiction of the Tribunal, on the basis that the Tribunal has jurisdiction to decide whether tax has been correctly assessed but no jurisdiction with regard to matters arising in proceedings in the courts or with regard to enforcement or collection of tax.

8.	With regard to ground (1) of Mr Gardner’s appeal, it is self-evident when the VAT assessment was made and that the appeal is out of time, otherwise Mr Gardner would not be making an application for an extension of time within which to lodge notice of his application.  It is clear that Mr Gardner knew of the assessment at the commencement of recovery proceedings against him in June 1982 and there has been no explanation as to why he did not then apply to the VAT Tribunal for leave to appeal the assessment out of time.

9.	With regard to ground (13), Mr Gardner was not constrained from lodging his appeal because of the Grepe v Loam order made against him because the order only constrained a person from bringing actions in the courts and did not prevent him from lodging an appeal with the VAT Tribunal.  In any event, Mr Gardner has not explained why no appeal was brought against the assessment in the period from the date of the assessment in 1980 to 1994 when the order was made.  In other words, Mr Gardner had 14 years within which to lodge an appeal or seek an extension of time within which to lodge an appeal but appears to have waited a further 15 years before doing so.

10.	The reason proffered by Mr Gardner to the Tribunal for having left matters so late was that he believed he was under a ‘disability’ having been divested of his estate (assets and liabilities) following the bankruptcy order.  He said he did not know that he had a right to appeal to the Tax Tribunal and had understood that he was ‘disabled’ from appealing the VAT assessment.  He also said that his wife had become very ill shortly after the bankruptcy proceedings in 1982 and that he was preoccupied with looking after her.

11.	Mr Chapman on behalf of HMRC said that plainly Mr Gardner had left matters far too late without offering any satisfactory explanation for the delay in lodging an appeal.  It was not true for Mr Gardner to say that the Grepe v Loam order constrained him from lodging an appeal and that in any event there had been an unconscionable delay in lodging an appeal prior to 1994.  

12.	Mr Chapman agreed that Mr Gardner had been under a ‘disability’ in the sense that, pending Mr Gardner’s discharge from bankruptcy, his estate remained vested in his Trustee in Bankruptcy pursuant to the Receiving Order.  He was therefore prevented from raising the issue of liability under the VAT assessment without the consent of the Trustee in Bankruptcy and an assignment of the right to bring an appeal, which in any event would have been deemed settled (under s.54 of the Taxes Management Act 1970) on settlement of the debt in favour of HMRC (whether by payment or otherwise) by the Trustee in Bankruptcy.

13.	Mr Chapman argued that the potential prejudice to HMRC, given the passage of 30 years since the VAT assessment, was irreparable given that neither HMRC nor Mr Gardner could produce any additional evidence to contradict the facts as found and conclusion of proceedings at the time.  The burden of proof was on Mr Gardner to prove his case and properly explain why the Tribunal should allow an extension of time within which to bring an appeal and which in any event, if the substantive case was heard, was in all probability likely to be struck out on the basis that it was unlikely to succeed.

14.	Under Rule 21(3)(a), any application notice for an extension of time under Rule 5(3)(a) must specify reasons why the notice was not provided in time and, under paragraph 21(3)(b), unless the Tribunal extends time for the application notice under Rule 5(3)(a), the Tribunal must not admit the application notice. Taking all the circumstances into account, the Tribunal was not satisfied that Mr Gardner had provided sufficient reasons why his application notice for leave to appeal out of time should be allowed.

15.	This decision notice 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 Proceedings (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.

          
          MICHAEL S CONNELL
TRIBUNAL JUDGE 

RELEASE DATE: 14 October 2010