The High Court refused to grant an application by Customs for an extension of time to appeal against a decision of the VAT and Duties Tribunal where they did not have proper justification for the delay in bringing an appeal such as would persuade the court to treat them as a sufficiently exceptional case for an extension of time.

Facts

Customs applied for an extension of time to appeal against a decision of the VAT and Duties Tribunal. The relevant time-limit for such an appeal was imposed by CPR r. 52PD, para. 23.8(2)(b) which specified a period of 56 days after the date of the decision or other determination that the appellant wished to appeal.

An issue arose as to the relevant date of the decision which was either 21 July 2006 (as the taxpayer contended) or 13 September 2006 (as Customs contended). The appeal notice was dated 30 March 2007 and so the appeal was brought outside the relevant period of 56 days irrespective of which date was correct. However, Customs contended that the court should look at the history of the case and assess the position on the basis that Customs delayed until 30 March 2007 in appealing a decision of 13 September 2006, rather than a decision of 21 July 2006. A key point on which Customs relied was that the decision of 13 September 2006 was not sent to them on or about that date and that they only became aware of that decision on 2 February 2007.

Customs submitted that, although the tribunal had released a decision on 21 July 2006, they released a further decision on 13 September 1996 which superseded the July decision. Customs said they wished to appeal the September decision for which time began to run from 13 September and, since the September decision had not reached Customs until 2 February 2007 and Customs filed their appellant's notice on 30 March 2007, the fifty-sixth day after 2 February 2007, they should have an extension of time to the date of the appellant's notice. Such an extension was justified because the period of the extension would be equal to the period during which Customs had been unaware of the existence of the September decision which they now wished to appeal.

The taxpayer submitted that the relevant decision was the July decision since the September decision was either a supplementary decision or a correction of the July decision. Customs had given no explanation, supported by evidence, as to why they had not appealed the July decision within 56 days of 21 July 2006. An extension of time was only appropriate in an exceptional case. Under CPR 3.9(2), if Customs were to contend that the present was an exceptional case, which justified an extension of time for appealing, they had to establish by evidence the facts on which they relied.

For the period from 21 July 2006 to 2 February 2007, all that Customs would have been entitled to think would happen was that the tribunal would issue a supplementary decision. They could not have expected that a supplementary decision would start time running afresh for the necessary appeal against the July decision. Even if the September decision, when it came, might have been confusing as to when time started to run, if Customs did not receive that decision until 2 February 2007, Customs could not have been confused by something they had not seen until that time.

Issue

Whether, in all the circumstances, it was appropriate to grant an extension of the time for appealing.

Decision

Morgan J (dismissing the application) said that once the tribunal had released the July decision, it had no power to revoke that decision. As the time for appealing under the Civil Procedure Rules ran from 21 July 2006, the tribunal had no power to extend that time. The substance of what the tribunal did on 13 September 2006 was to correct its decision released in July with the inclusion of an additional paragraph.

The time for appealing the subject matter of the correction, given that it was a distinct topic, might well run from 13 September 2006. However, Customs’ appeal was not in relation to the additional paragraph, but in relation to another paragraph in the form of the original July decision.

As to whether there should be an extension of time, CPR, r. 3.9(1) listed a number of matters which the court would consider individually, including: (a) the interests of the administration of justice; (b) whether the application for relief had been made promptly; (c) whether the failure to comply was intentional; (d) whether there was a good explanation for the failure; (e) the extent to which Customs had complied with other rules, practice directions and court orders; (f) whether the failure to comply was caused by the party or its legal representative; (g) whether the likely trial date could still be met if relief was granted; and (h) the effect which the failure to comply had on each party. The court then had to stand back and consider all the circumstances.

The failure to appeal the July decision was intentional in that it did not come about as a result of an accident or mistake. Although CPR, r. 3.9(2) stated that an application for relief had to be supported by evidence and the grounds had to be strictly proved, there was no evidence offering an explanation as to Customs’ thinking from 21 July 2006 onwards. The absence of a proper explanation or justification for the delay weighed heavily against Customs. The court was entitled to take account of the tribunal's finding that the conduct of the appeals before it was inadequate, if not inept, as one of the factors to be weighed in the balance.

The court had to consider all the circumstances and carry out the required balancing exercise, paying proper respect to the principle in favour of finality, subject to making an exception where facts justifying the exception had been strictly proved. In the present case, bearing in mind the inadequate, possibly non existent, evidence as to how the present state of affairs had come about, Customs did not have proper justification for the delay which would persuade the court to treat them as a sufficiently exceptional case, leading to an extension of time for an appeal. Accordingly, the court would refuse an extension of time for appealing so that the appellants’ notice filed on 30 March 2007 was out of time and the appeal ought to be dismissed.

Chancery Division.
Judgment delivered 8 June 2007.