Playing with the facts - Murray Group again

Earlier this year, Lord Carnwath, sitting in the Supreme Court, discussed the jurisdiction of the Upper Tribunal when examining the findings of First Tier Tribunals ( HMRC -v- Pendragon plc [2015] UK SC37 (Pendragon)). While these comments were made in obiter, they are importantly comments with which the other four judges sitting in Pendragon agreed. Numerous Upper Tier Tribunal decisions since Pendragon have broached this topic and we have now received the decision in Murray Group from the Court of Session which also addressed this topic.

What does an appellate Court have jurisdiction to comment on?

The underlying principle of Edwards -v- Bairstow [1956] AC 14 is that a finding of fact by a lower Court cannot be disturbed unless the lower Court has either erred in law or interpreted the evidence so badly that their findings were perverse.

Lord Carnwath in Pendragon reiterated that there had to be a finding of an error of "law" for the Upper Tribunal to be able to intervene with a decision of the First Tier, but was more focused on the difficult issue of the jurisdiction of the Upper Tribunal when an appeal arises which is grounded in a matter of principle rather than the black letter law itself.

Pendragon

From paragraphs 44 to 57 of the judgment in Pendragon, Lord Carnwath set out his views as to the jurisdiction of the Upper Tribunal. He stated that the Upper Tribunal is a "specialist tribunal" with an extended jurisdiction conferred upon it as compared to the jurisdiction of the High Court, and that part of its role is to ensure that the First Tier Tribunals adopt a consistent approach to the law. The meaning of "law" in this context includes issues of general principle and therefore the Upper Tribunal is also responsible for developing structured guidance on the use of expressions in order to reduce the risk of inconsistent results being made at the level of the First Tier. Because "law" in this context also includes matters of general principle, this means that when a case is appealed which is concerned with a "general principle", such as Pendragon, the appeal may not be purely confined to matters of law, and in such a case the Upper Tribunal may also be required to make such factual judgments as are necessary in remaking the decision.

Murray Group

In Murray Group, Lord Young considered the powers of an appellate court on a statutory appeal but in the context of the Murray Group appeal and thus the Court of Session being able to overturn the decision of a lower court. Lord Young, therefore, did not comment on the jurisdiction of the Upper Tier and that is perhaps why he did not reference Lord Carnwath's comments in Pendragon. What Lord Young did discuss, however, was how controversial a "point of law" can be and, as part of the discussion, he set out four different categories of case upon which an appeal may be made on the basis of a "point of law".³ Within these four categories he included appeals on the general law: the content of its rules and explained that this category included non-statutory rules and principles such as the Ramsay principle.

Broader jurisdiction for the Upper Tribunal?

It could be inferred from Lord Carnwath's comments that the Upper Tribunal has a broader jurisdiction than the higher appellate Courts. This is not something which Murray Group touched on, as it was concerned with the jurisdiction of the Court of Session. However, what did emerge from both Pendragon and Murray Group is that matters of principle can amount to matters of law and that the distinction between fact and law which the Courts face can be a difficult one.

Please click on the links below for the other articles in the November 2015 tax newsletter:

• Outsourcing in the insurance industry
• Unexpected twist to employee benefit trusts?

_{Notes:
³ The four categories of case which fall within the remit of an appeal of a point of law are:
(a) appeals on the general law: the content of its rules;
(b) appeals on the application of law to the facts;
(c) where the Tribunal has made a finding for which there is no evidence or which is inconsistent with the evidence and contradictory of it; and
(d) where the First Tier Tribunal has made a fundamental error in its approach to the case.}