© 2024 by Michael Firth KC, Gray's Inn Tax Chambers
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M12: Witness evidence
The need for witness evidence
“The issue whether there has been non-disclosure is a question of fact which involves an evaluative assessment of the available admissible evidence. Such a question is, of course, common in civil and family litigation, and under our common law system the rule is that it can only be answered by a judge after hearing from live witnesses as well as looking at the documents. The most common exceptions to this rule are (i) cases where the evidence is so clear that there is no need for oral testimony and (ii) cases where neither party wishes, or alternatively is unable, to call any witnesses. Ignoring cases in the second category (which has no application here), attempts to seek summary judgment in relation to such disputed issues often fail even when the evidence appears very strong, because experience shows that a full investigation at a trial with witnesses occasionally undermines what appears pretty clearly to be the truth when relying on the documents alone: see eg per Sir Terence Etherton C in Allied Fort Insurance Services Ltd v Creation Consumer Finance Ltd [2015] EWCA Civ 841, paras 81, 89 and 90 and the cases which he cites. Accordingly, in practice it is only when the documentary evidence is effectively unanswerable that summary judgment can be justified.” (Gohil v. Gohil [2015] UKSC 61, §49).
Should answer factual elements of HMRC's case
"[The taxpayer] submitted that the evidence of Tasca’s witnesses must be tested to establish what exactly they knew at the time the transactions took place and in the light of that knowledge whether there was any other reasonable explanation for the transactions. I disagree. The onus is on Tasca’s witnesses to set out in their witness statements the evidence they intend to give. If witnesses do not take the opportunity to answer HMRC’s case in their witness statements, they cannot simply rely on adducing evidence either by way of supplementary oral evidence given in chief or in the course of cross-examination. It is not for HMRC to draw out Tasca’s case in cross-examination. The purpose of cross-examination is to challenge Tasca’s case on the evidence given in chief." (Tasca Tankers Limited v. HMRC [2023] UKFTT 372 (TC), Judge Cannan)
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FTT power to limit number of witnesses
“(1) Without restriction on the general powers in rule 5(1) and (2) (case management powers), the Tribunal may give directions as to--
[…]
(d) any limit on the number of witnesses whose evidence a party may put forward, whether in relation to a particular issue or generally;” (FTT Rules, r.15(1)(d)).
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Witness statements
“(1) Without restriction on the general powers in rule 5(1) and (2) (case management powers), the Tribunal may give directions as to--
[…]
(e) the manner in which any evidence or submissions are to be provided, which may include a direction for them to be given--
(i) orally at a hearing; or
(ii) by written submissions or witness statement;” (FTT Rules, r.15(1)(e)).
Background
“Historically in civil cases (as it still is today in criminal proceedings) the giving of evidence by witnesses at a trial was an entirely oral process. First, counsel for the party calling the witness would ask questions to elicit evidence from the witness "in chief". Then counsel for the opposing party would cross-examine the witness. Traditionally, the parties to the litigation and their counsel would have no notice of what witnesses of fact called by opposing parties were going to say in evidence until they said it. That began to change after provision for written witness statements was first introduced in certain parts of the High Court, including the Commercial Court, in 1986. Under the modern Civil Procedure Rules parties are required to serve witness statements in advance of a trial. A witness statement is defined in the rules as "a written statement signed by a person which contains the evidence which that person would be allowed to give orally" (see CPR 32.4). The purpose of requiring such statements to be served is twofold. First, it enables parties to prepare for trial with notice of the evidence which the other side may adduce. This avoids unfair surprise and enables rebuttal evidence to be obtained where necessary and cross-examination to be better prepared. It also allows each party to make a fuller assessment of the strength of the other party's case, which may facilitate settlement. The second purpose of witness statements is to make the trial process more efficient by saving the time that would otherwise be taken up by oral evidence given in chief. Instead of such oral evidence, the witness is simply asked to identify their statement and confirm their belief that its contents are true.” (Blue v. Ashley oao Times Newspapers Limited [2017] EWHC 1553 (Comm), §13, Leggatt J).
“Proofing” by lawyers is legitimate
“[245] The following findings of fact are relevant here:
(1) the proofing was carried out by an experienced lawyer;…” (Paya Ltd and Tim Wilcox Ltd v. HMRC [2016] UKFTT 660 (TC), Judge Redston – in the context of a challenge by the BBC, as a non-party, to the impartiality of witness statements produced by HMRC on BBC practices. The challenge was rejected in part in reliance on the quoted fact).
Sequential witness statements
“it is appropriate in this case, where issues of fact arise, for the Appellant to produce its witness statement first, and for HMRC then to consider what witness evidence it requires.” (Green v. HMRC [2015] UKFTT 236 (TC), §13 – quoting direction accepting HMRC’s application for sequential statements).
No property in a witness/no pressure not to speak to other side
“What a solicitor is not entitled to do, or indeed a party, is to order or instruct a witness or a potential witness not to attend an interview with the opposing solicitor or to tell him that he has no real choice in the matter, or to put pressure on him not to comply. Nor must he make it appear that the witness can only be interviewed if the solicitor or his principal consents. Mr Jacobs accepted in the course of argument that any form of, as he put it, ‘strong persuasion’ should be avoided, and in my judgment rightly so, for it is liable to be indistinguishable from improper pressure. Indeed, in determining whether or not there has been improper interference with a witness, the court will look at the reality of what has occurred.” (Versloot Dredging BV v HDI Gerling Industrie Versicherung AG [2013] EWHC 581 (Comm), §22, cited in Paya Ltd and Tim Wilcox Ltd v. HMRC [2016] UKFTT 660 (TC), §300).
Proper function of a witness of fact: facts to which they can speak from their own knowledge
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"[82]...Without attempting to lay down any exhaustive rules, it seems to me that in general the proper function of factual witnesses, even of those involved in a case in a professional capacity such as Officer Bradley, is to give evidence of facts relevant to the issues in the case of which they can speak from their own knowledge (including in appropriate circumstances evidence of hearsay statements). Save insofar as they are able to give relevant evidence of their own, it is not the proper function of a witness’s evidence to comment on documents, or on other witnesses’ evidence, or to speculate on other persons’ motives or intentions; far less is it the proper function of a witness’s evidence to raise points of law, or to argue a party’s case." (Mungavin v. HMRC [2020] UKUT 11 (TCC), Nugee J)
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"[25] Mr Gayton was first appointed as Mr Cattrell's tax advisor in 2008. As such, he cannot give any evidence of his own as to what happened in 2005 and, in fairness to him, does not seek to do so other than to note that Mr Cattrell's previous tax advisors said nothing to Mr Gayton or his firm about the existence of any enquiry." (Cattrell v. HMRC [2024] UKFTT 67 (TC), Judge Chapman KC)
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- Narration of documents by HMRC officer permitted
"[48] As to the purported hearsay evidence. Each of the paragraphs concerned represent a summary of a document exhibited to the statement, i.e. paragraph 43 is a summary of a telephone attendance note. The Appellant contends that the note speaks for itself and the narration of it is thereby hearsay evidence.
[49] HMRC contend that it is convenient for the Tribunal to have a summary of the note in the first instance giving the Tribunal the opportunity to take a high level understanding and then subsequently read the note. They contend that if there is any inaccuracy in the summary then it is a matter on which Officer Moore can be cross examined.
...
[52] Dealing firstly with the alleged narration of documents. This is a question of style. Certainly for the judge preparing for the case with reading time, having all of the evidence broadly summarised in a witness statement is helpful. Of course, the primary evidence will be the document itself. It is notable that the Appellant has not challenged the accuracy of the summaries and as such the relevant paragraphs of the witness statement provide a relevant starting point. The panel hearing the case can then, during the course of the hearing, be taken to the documents and will then form their own view as to the facts proven by that evidence." (4Site Services London Limited v. HMRC [2024] UKFTT 143 (TC), Judge Brown KC)
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"[21] Mr Walker's first dealings in this matter were in August 2020. As such, he does not give first hand evidence as to what happened prior to his involvement, particularly in 2005 at the time that HMRC say the notice of enquiry was issued and served. Instead, I take his evidence as to matters prior to his involvement to be a commentary upon documents and a generic explanation as to HMRC's processes." (Cattrell v. HMRC [2024] UKFTT 67 (TC), Judge Chapman KC)
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- Reciting publicly available information permitted
"[53] As to the other challenges, paragraphs 26 and 30 of the statement are a list of current and historic directorships held by the directors of the Appellant. That information is in the public domain, as is the status of the companies in which those directorships was held. The information is relevant to the experience of the directors and thereby the Appellant in business generally." (4Site Services London Limited v. HMRC [2024] UKFTT 143 (TC), Judge Brown KC)
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Facts only: opinions and inferences are irrelevant
"[108] As can be seen this is not really evidence of which he can speak from his own knowledge. It is a reference to the actions (or failure to act) on the part of the Appellants together with HMRC’s submissions as to why those matters indicated negligence. It was no doubt a helpful exercise for Officer Bradley to set out in this fashion the matters relied on by HMRC, but strictly speaking this was not evidence that he either needed to give, or was in a position himself to prove. He could not prove the primary facts as he had no more knowledge of them than anyone else: either they could be proved from the documents and other matters he referred to (in which case his evidence was not needed) or they could not (in which case his evidence would not assist). And as to what inferences could be drawn from those facts, again his evidence was not strictly evidence of facts he could speak to of his own knowledge, but amounted to a series of submissions. And as to the ultimate question whether the Appellants were negligent, it is well established that a question such as that is not a matter for the witnesses but is a matter for the Court or Tribunal to assess having regard to the facts they have found." (Mungavin v. HMRC [2020] UKUT 11 (TCC), Nugee J)
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“[226] I agree with Ms Pleming that the witnesses’ role is to “set out the facts within their knowledge that are relevant to the issues in the appeals”. Although witnesses need some knowledge of the issues involved in order to give evidence, they do not have to be taken through the legislation and the case law. Their task is to give evidence of facts; it is for the parties’ counsel to put forward the legal arguments.” (Paya Ltd and Tim Wilcox v. HMRC [2016] UKFTT 660 (TC), Judge Redston).
“Tribunals will be astute to the difference between the factual evidence contained in a witness statement and inferences and conclusions that may be contained within it. The latter are not properly part of the evidence of a witness of fact; to the extent they are contained in a witness statement they should be disregarded and it is not necessary for the witness to be cross-examined in those respects.” (CF Booth Ltd v. HMRC [2016] UKFTT 261 (TC), §14)
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- Assertion is not evidence
“Assertions by officers (see for example in other context my observations in Farepak) is not evidence at all.” (HMRC v. Infinity Distribution Ltd [2015] UKUT 219 (TCC), §28, Peter Smith J).
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- Opinion as part of account of admissible factual evidence in order to provide full account
"[40] Nor would Mr Goldberger be permitted to give expert opinion evidence at the trial. A witness of fact may sometimes be able to give opinion evidence as part of his or her account of admissible factual evidence in order to provide a full and coherent explanation and account. That is what, it would appear, Master Bowles recognised when he refused the first Defendant's application to adduce expert evidence on market practice. It is what the first Defendant has done in his witness statements. Mr Goldberger, however, has expressed his opinions on market practice by way of commentary on facts of which he has no direct knowledge and of which he cannot give direct evidence. In that respect he is purporting to act exactly like an expert witness giving opinion evidence. Permission for such expert evidence has, however, been expressly refused." (JD Wetherspoon Plc v. Harris [2013] EWHC 1088 (Ch), Etherton J)
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- Witness of fact with expertise
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"[41] What Mr Wilson does, as explained at paragraph 12, is to describe his investigations and advice in relation to the failures of the tanks at the three sites to which these proceedings relate, and investigating and advising the claimant in relation to those tank failures, and other pluvial cube attenuation tank failures which have occurred after the start of these legal proceedings. In the course of giving evidence as to his investigations into the tank failures, he relates the views and opinions he formed at the time, and the advice he gave to the claimant in that regard.
...
[44] The difference between this case and the Wetherspoon case is the fact that here Mr Wilson, unlike the witness in that case, does have relevant expertise, and is entitled to put that expertise before the court, not as an independent expert, but as a witness of fact. Mr Cook asked rhetorically, if this witness statement were to be admitted, what is the purpose of CPR 35.4? He submitted that it would entirely abrogate the court's power to restrict expert evidence. In reality, Mr Cook submitted, this is a quasi-expert's report which stands outside, and circumvents, the rules.
[45] I do not accept that. I have read, and been taken by both counsel through, the witness statement in detail. As Sir Michael Burton said, at the end of his judgment in MAD Atelier International BV v Manes, having read the passages in question, I am satisfied that they are all admissible and should not be struck out. The weight to be given to them is entirely a matter for the trial judge." (Polypipe Limited v. Davidson [2023] EWHC 1681 (Comm) HHJ Hodge KC)
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"[671] As a matter of practice in the TCC, technical and expert opinions are frequently expressed by factual witnesses in the course of their narrative evidence without objection being taken. Such opinion evidence does not have the same standing as the evidence of independent experts who are called pursuant to CPR rule 35. However, such evidence is usually valuable and it often leads to considerable saving of costs.
[672] Having regard to the guidance of the Court of Appeal and the established practice in TCC cases, I conclude that in construction litigation an engineer who is giving factual evidence may also proffer (a) statements of opinion which are reasonably related to the facts within his knowledge and (b) relevant comments based upon his own experience. For example, an engineer after describing the foundation system which he designed may (and in practice frequently does) go on to explain why he believes that this was appropriate to the known ground conditions. Or an engineer brought in by a claimant to design remedial works (which are subsequently challenged as excessive) may refer to his experience of rectifying comparable building failures in the past. For example, such evidence may be given in cases about concrete failure through ASR (a world wide problem)." (Multiplex Constructions (UK) Limited v. Cleveland Bridge UK Limited [2008] EWHC 2220 (TCC), Jackson J)
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- Inference evidence permitted
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"[43] I refuse GS Application. In this case we have only two witnesses from HMRC. The scope of the evidence each will give is clear and reasonable. HMRC must show that there is a tax loss attributed to the fraudulent evasion of VAT by CMUS and GCorp. They do so by reference to the evidence of Officer Stock and the documents exhibited to his statement. It is reasonable for them to do so. Subject to the position taken by the Appellant when they comply with the Fairford Directions Mr Stock will be available for cross examination and the Appellant can challenge the inferences he has drawn from the basic evidence. Those inferences are not opinions in an evidential sense. The Tribunal hearing the appeal will then find the facts it considers established on the evidence." (4Site Services London Limited v. HMRC [2024] UKFTT 143 (TC), Judge Brown KC)
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- Criticism of including opinion evidence
"[13] Finally, and most regrettably, we find it necessary to mention that the parties have failed to take account of the clear view of the Tribunal, as expressed in many cases eg CF Booth Limited v HMRC [2017] UKFTT 813 (TC) at [10] and Elbrook Cash and Carry Limited v HMRC [2018] UKFTT 252 (TC) at [24] and Vale Europe Limited v HMRC [2018] UKFTT 62 at [23], that observations, expressions of opinion, submissions and comment have no place in the statements of witnesses of fact. It was hoped, perhaps naïvely on our part, that before making their statements the witnesses would have been reminded of this. But, given the sheer quantity of comment, opinion and submission included in the witness statements in the present case - indeed much of HMRC Officer Dean Foster’s second witness statement and the second witness statement of Mr Steven Simmonite who gave evidence for the appellants consist of little else - this was clearly not so.
[14] It is possible, although not apparent to us, that the parties might have had a reason for retaining such content in the witness statements. It also is possible that there is a lack of understanding or a misconception as to what should be included in a witness statement and that it is different to a report, in that a witness statement (with the exception of that of an expert witness) should only include facts and not arguments, expressions of opinion and conclusions.
[15] However, if the submissions, opinions and conclusions were retained in the witness statements in the present case in the misconceived hope that if enough mud was thrown some would stick, it will not. We agree with the Tribunal (Judges Berner and Walters QC) in Megantic Services Ltd v HMRC [2013] UKFTT 492 (TC), at [15] that, at this late stage in the proceedings:
“… we would not see it as necessary, or indeed proportionate, for a forensic exercise to be undertaken, either by the parties or by the tribunal, to identify any such matters in each witness statement and for the tribunal formally to direct that they be excluded. Generally speaking, we think that the parties can rely upon the good sense of the tribunal to disregard purported evidence that represents conclusions that the tribunal itself must reach. That can usually conveniently be the matter of submission at the substantive hearing, rather than a formal application to exclude.”
We have therefore, adopted such an approach in this case and, like Proudman J in HMRC v Sunico A/S [2013] EWHC 941 (Ch) at [29] (and the Tribunal in the cases cited above), ignored each and every expression of opinion, comment and submission by all witnesses of fact.
[16] To paraphrase the Senior President of Tribunals in BPP Holdings v HMRC [2016] STC 841 at [37], it should not need to be said that submissions should be left for counsel and conclusions for the Tribunal. If it needs to be said, we have now said it."(Sintra Global Inc v. HMRC [2022] UKFTT 365 (TC), Judge Brooks)
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- Criticism of including argument
"[84]...My criticism concerns, rather, the content and length of the statements. They were, to a substantial extent, not witness evidence, but argument. The parties have therefore expended the time and effort, at no doubt very considerable cost, to argue the summary judgment application twice over, once in writing through the solicitors' witness statements, then again at the hearing. It is not as if, recognising the extent of coat-trailing, the parties declined to follow the modern habit of lengthy and detailed skeleton arguments. They sought and were granted liberty for their skeleton arguments to be up to 50 pages each. Needless to say, perhaps, they did not restrain themselves from exercising that liberty to the full (although in SKAT's case, the skeleton only just tipped over 49 pages, by a couple of lines and a final footnote). To be clear, I am not suggesting that argumentative witness statements plus short skeleton arguments cross-referring me to them would have been proper procedure, but the latter, having committed to the former, might at least have been more cost-efficient.
[85] I find it impossible to identify what purpose it was thought might be served by arguing the application out through the witness statements like that. Of course these were not trial witness statements – indeed I imagine Ms Simpson, Mr Herring and Mr McNeill are unlikely to be witnesses at a trial – and a limited element of explanation of the perceived relevance to the anticipated summary judgment argument of factual matters dealt with in the statements might not be out of place. But that is not required and should be included, if at all, with real care and an eye on minimality.
[86] To the extent that contemporaneous documents will be relied on, they are naturally and conveniently exhibited and identified through a main witness statement from the legal representatives, where parties are legally represented, or from litigants in person themselves, whether or not they would be witnesses at any trial in due course. But taking a court through the documents, making submissions as to what they show or what inferences are to be or might be drawn from them, is a matter for argument, not for witness evidence. Again, limited indications of the nature of what it will be submitted the court should find in or infer from the documents can have their place. But again, less is more should be the rule if that is to be done at all." (SKAT v. Solo Capital Partners LLP [2020] EWHC 1624 (Comm), Andrew Barker J)
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- Redaction of inadmissible expert evidence from HMRC officer
"[20] We note that the February 2022 Directions also required HMRC to redact parts of Mr Rose's evidence, as well as the removal of an exhibited report referred to as "the Camden Report", as these constituted inadmissible expert evidence. Despite Laurence Supply's objection to the Camden Report in the context of the February 2022 Directions, Mr Laurence Gordon applied at the start of his opening submissions for this report to be adduced in evidence, to which HMRC objected. We refused that application for the reason (amongst others) that Judge Brown KC had already ruled that it was inadmissible. As such, we have only read the redacted witness statement of Mr Rose and have not read the Camden Report. The cross-examination of Mr Rose was relatively short. Again, we have no reason to doubt his credibility. However, we note that Mr Rose's evidence took the form of a commentary on his predecessor's (Mrs Dee Rigling) tariff classification rulings and processes in reaching these rulings, as he had no involvement of his own. We therefore take this into account in assessing the weight of Mr Rose's evidence." (Laurence Supply Co (Leather Goods) Limited v. HMRC [2024] UKFTT 124 (TC), Judge Chapman KC)
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Not unusual that witness statements dealing with facts of transactions identical
"[6] All of the individuals who gave oral evidence had also prepared and submitted witness statements. The statements were, when dealing with the facts of the transaction, identical.
[7] HMRC took issue with parts of the witness statements being identical or extremely similar.
[8] We find it usual that some parts of a witness statement are formulaic, and not unusual that the witnesses would have taken facts from a common source. We do not find that this detracts from the truth of the witness statement or the truthfulness of the individuals in question." (Cooke v. HMRC [2024] UKFTT 272 (TC), Judge Allatt)
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Excluding evidence of witnesses of fact
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Generally rely on the good sense of the Tribunal to differentiate and ignore
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“The Tribunal is well-equipped to differentiate between relevant and irrelevant evidence and evidence of fact and statements of opinion. It does so in almost every appeal and particularly in cases where the parties are not legally represented…I accept that the excision of irrelevant evidence could reduce the time and the cost of the hearing and for that reason should be encouraged.” (Vale Europe Ltd v. HMRC [2014] UKFTT 1042 (TC), §66, Judge Hellier);
“…an expression of a view that certain payments demonstrate circularity is not a matter of fact but a matter of opinion. It is merely a view of a witness on a matter on which the tribunal itself must reach its own conclusion, and as such is of no value as evidence. Such evidence may rightly be excluded on that basis. In most cases, however, we would not see it as necessary, or indeed proportionate, for a forensic exercise to be undertaken, either by the parties or by the tribunal, to identify any such matters in each witness statement and for the tribunal formally to direct that they be excluded. Generally speaking, we think that the parties can rely upon the good sense of the tribunal to disregard purported evidence that represents conclusions that the tribunal itself must reach. That can usually conveniently be the matter of submission at the substantive hearing, rather than a formal application to exclude…This application was not for any “filleting” exercise to be undertaken, as was the case in JDI and Chandanmal. It was for the wholesale exclusion of the FCIB evidence. There is in our view no basis for such an exclusion, either on the grounds of relevance or on the ground that the witnesses are not expert witnesses. We refuse the application on that basis. Having said that, we indicated to the parties that there were in the witness statements clear expressions of view on the conclusions that could be drawn from the analysis presented, and that such expressions of view, on matters which it is for the tribunal to determine, did not amount to evidence to which the tribunal would have regard. We are grateful for the indication from the parties that they will cooperate to agree which elements of the evidence can simply be disregarded, although as we have said, the tribunal itself is quite capable of distinguishing between the evidence on which a conclusion falls to be drawn by the tribunal and an attempt by a witness to draw that conclusion themselves.” (Megantic Services Ltd v. HMRC [2013] UKFTT 492 (TC), §§15…20, followed in Connections GB Ltd v. HMRC [2015] UKFTT 320 (TC), §14 and Elbrook Cash and Carry Ltd v. HMRC [2019] UKUT 182 (TCC)).
No disproportionate filleting exercises
“ In any event I consider such a “filleting” exercise would be a disproportionate use of Tribunal resources.” (Award Drinks Ltd v. HMRC [2017] UKFTT 599 (TC), §22, Judge John Brooks – re a request to remove references to fraud).
Character evidence
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- Good character evidence is inadmissible in civil proceedings before the FTT
“As we have explained earlier in this decision, the legal question for the FTT was whether Mr Surana knew or ought to have known that the transactions were connected to fraud. The legal test does not involve an ingredient of dishonesty and certainly not a requirement to show subjective dishonesty. The proceedings before the FTT were civil proceedings. We consider that the ordinary rules of evidence which apply in civil cases render good character inadmissible in such a case.” (Prizeflex Limited v. HMRC [2016] UKUT 436 (TCC), §116, Morgan J and Judge Sinfield)
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- Usually irrelevant and thus not to be admitted under r.15
“If the FTT had actually decided in this case not to exercise a discretion to admit the evidence of Mr Surana’s good character in this case, that decision would not involve any error of law.” (Prizeflex Limited v. HMRC [2016] UKUT 436 (TCC), §118, Morgan J and Judge Sinfield)
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- Bad character evidence that would be admitted in criminal trial admissible
"[54] The challenges to paragraph 27 (setting out Mr Darmoo's previous involvement in a business which submitted fictitious VAT returns) and paragraph 35 (demonstrating that a substantial number of counterparties with whom the Appellant has traded have been non-compliant failing to render/pay VAT) are challenged on the basis of the perceived prejudice.
[55] It is my view that such evidence it highly relevant in assessing both what the Appellant knew and should have known regarding the any fraudulent evasion (which is yet to be proven) by CMUS and GCorp and as to their credibility vis a vis awareness of VAT fraud/losses.
[56] As I indicated in the hearing a lose analogy to whether it is prejudicial to permit the evidence to be adduced may be drawn to the circumstances in which bad character evidence is adduced in criminal proceedings. Under section 101 Criminal Justice Act 2003 evidence of a defendant's bad character will be admissible only through one of the statutory gateways. Section 101(1)(c) provides for the admission of evidence which is important explanatory evidence; (d) where the evidence is relevant to an important matter in issue between the defendant and prospection, and (e) if it is evidence to correct a false impression given by the defendant. Each gateway is subject to the overriding effect of 101(3) that admission of the evidence would have such an adverse effect of the fairness of the proceedings that the court ought not to admit it. Gateway (d) is also subject to section 103 which provides that a matter in issue between the defendant and the prosecution shall include a propensity to commit offences of the kind with which he is charged (unless that propensity makes it no more likely of guilt of the offence) or a propensity to be untruthful.
[57] It would be highly surprising if when the section 101 Criminal Justice Act gateways are considered that evidence which would be admissible in criminal proceedings were not admissible in civil proceedings, particularly proceedings in which the Tribunal has the power to admit evidence which is excluded in civil proceedings. The evidence in paragraphs 27 and 35 of the statement would, in my view be admissible under gateway (d) by analogy." (4Site Services London Limited v. HMRC [2024] UKFTT 143 (TC), Judge Brown KC)
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Evidence of intention
Less weight to self-interested statements
“We have had regard to those statements of intention, but have given them less weight than evidence of actions since Nicholas Henderson has an obvious self-interest in making them.” (Henderson v. HMRC [2017] UKFTT 556 (TC), §128(3), Judge Jonathan Richards).
Test against actions
“Frequently the subject of a domicile dispute (often referred to in decided cases as the “propositus”) will make statements or declarations as to what he or she intends. Dicey says of such declarations: “Declarations of intention may be given in evidence by way of exception to the hearsay rule. The weight of such evidence will vary from case to case. To say that declarations as to domicile are the ‘lowest species of evidence’ is probably an exaggeration. The present law has been stated as follows: “Declarations as to intention are rightly regarded in determining the question of a change of domicile, but they must be examined by carefully considering the persons to whom, the purposes for which, and the circumstances in which they are made and they must however be fortified and carried into effect by conduct and action consistent with the declared expressions.”…The Tribunal has, under its rules, a general discretion to admit hearsay evidence in any event. I will, therefore, consider evidence in the form of declarations of intent that has been put forward in this appeal, but will apply the approach outlined above in assessing its weight.” (Henderson v. HMRC [2017] UKFTT 556 (TC), §§16…17, Judge Jonathan Richards).
Reliance on witness recollection/effect of lapse of time
Grounds for caution
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"[15] An obvious difficulty which affects allegations and oral evidence based on recollection of events which occurred several years ago is the unreliability of human memory.
[16] While everyone knows that memory is fallible, I do not believe that the legal system has sufficiently absorbed the lessons of a century of psychological research into the nature of memory and the unreliability of eyewitness testimony. One of the most important lessons of such research is that in everyday life we are not aware of the extent to which our own and other people's memories are unreliable and believe our memories to be more faithful than they are. Two common (and related) errors are to suppose: (1) that the stronger and more vivid is our feeling or experience of recollection, the more likely the recollection is to be accurate; and (2) that the more confident another person is in their recollection, the more likely their recollection is to be accurate.
[17] Underlying both these errors is a faulty model of memory as a mental record which is fixed at the time of experience of an event and then fades (more or less slowly) over time. In fact, psychological research has demonstrated that memories are fluid and malleable, being constantly rewritten whenever they are retrieved. This is true even of so-called 'flashbulb' memories, that is memories of experiencing or learning of a particularly shocking or traumatic event. (The very description 'flashbulb' memory is in fact misleading, reflecting as it does the misconception that memory operates like a camera or other device that makes a fixed record of an experience.) External information can intrude into a witness's memory, as can his or her own thoughts and beliefs, and both can cause dramatic changes in recollection. Events can come to be recalled as memories which did not happen at all or which happened to someone else (referred to in the literature as a failure of source memory).
[18] Memory is especially unreliable when it comes to recalling past beliefs. Our memories of past beliefs are revised to make them more consistent with our present beliefs. Studies have also shown that memory is particularly vulnerable to interference and alteration when a person is presented with new information or suggestions about an event in circumstances where his or her memory of it is already weak due to the passage of time.
[19] The process of civil litigation itself subjects the memories of witnesses to powerful biases. The nature of litigation is such that witnesses often have a stake in a particular version of events. This is obvious where the witness is a party or has a tie of loyalty (such as an employment relationship) to a party to the proceedings. Other, more subtle influences include allegiances created by the process of preparing a witness statement and of coming to court to give evidence for one side in the dispute. A desire to assist, or at least not to prejudice, the party who has called the witness or that party's lawyers, as well as a natural desire to give a good impression in a public forum, can be significant motivating forces.
[20] Considerable interference with memory is also introduced in civil litigation by the procedure of preparing for trial. A witness is asked to make a statement, often (as in the present case) when a long time has already elapsed since the relevant events. The statement is usually drafted for the witness by a lawyer who is inevitably conscious of the significance for the issues in the case of what the witness does nor does not say. The statement is made after the witness's memory has been "refreshed" by reading documents. The documents considered often include statements of case and other argumentative material as well as documents which the witness did not see at the time or which came into existence after the events which he or she is being asked to recall. The statement may go through several iterations before it is finalised. Then, usually months later, the witness will be asked to re-read his or her statement and review documents again before giving evidence in court. The effect of this process is to establish in the mind of the witness the matters recorded in his or her own statement and other written material, whether they be true or false, and to cause the witness's memory of events to be based increasingly on this material and later interpretations of it rather than on the original experience of the events.
[21] It is not uncommon (and the present case was no exception) for witnesses to be asked in cross-examination if they understand the difference between recollection and reconstruction or whether their evidence is a genuine recollection or a reconstruction of events. Such questions are misguided in at least two ways. First, they erroneously presuppose that there is a clear distinction between recollection and reconstruction, when all remembering of distant events involves reconstructive processes. Second, such questions disregard the fact that such processes are largely unconscious and that the strength, vividness and apparent authenticity of memories is not a reliable measure of their truth.
[22] In the light of these considerations, the best approach for a judge to adopt in the trial of a commercial case is, in my view, to place little if any reliance at all on witnesses' recollections of what was said in meetings and conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts. This does not mean that oral testimony serves no useful purpose – though its utility is often disproportionate to its length. But its value lies largely, as I see it, in the opportunity which cross-examination affords to subject the documentary record to critical scrutiny and to gauge the personality, motivations and working practices of a witness, rather than in testimony of what the witness recalls of particular conversations and events. Above all, it is important to avoid the fallacy of supposing that, because a witness has confidence in his or her recollection and is honest, evidence based on that recollection provides any reliable guide to the truth." (Gestmin SGPS SA v Credit Suisse (UK) Limited & Anor [2013] EWHC 3560 Leggatt J)
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"[47] Given the time that has elapsed since the transactions with which this appeal is concerned took place, over seven years by the time of the hearing, and this is, in essence, a commercial case, we have adopted such an approach [see Gestmin, above] to the evidence in this appeal placing greater reliance on contemporaneous documents than the recollections of the individuals concerned." (London Luton Hotel BPRA Property Fund LLP v. HMRC [2019] UKFTT 212 (TC), Judge John Brooks)
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“We bear in mind that Mr Brookes took no notes of events at the time and that he is reliant upon his memory of events which occurred a decade ago. With such a long intervening period there is the risk of a person re-writing in his or her own mind how events must have occurred. We also bear in mind that some of what Mr Brookes told us was said for the first time at the hearing before us and had not been mentioned either at the hearing before the first Tribunal panel in 2012, or to the Respondents at any time from 2007 onwards.” (Brookes v. HMRC [2017] UKFTT 671 (TC), §15, Judge Bailey)
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But still for the judge to decide
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"[6] Although mindful of the fallibility of the human memory as outlined by Leggatt J, I found all of the witnesses to be credible and truthful and accept their evidence in full." (Tower Resources Plc v. HMRC [2019] UKFTT 442 (TC), Judge John Brooks)
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Remarkable if a person remembers much about uneventful occurrences
“I should add that I recognise the force of Mr Barlow’s argument, reflected in F-tT 1’s observation to the same effect, that the drivers were giving evidence of events which had taken place four years earlier, and that most had not been asked about the deliveries until two years had gone by. If the journeys were uneventful it would be remarkable if they could remember very much about them, and I have borne that point in mind when examining what they said.” (HMRC v. SDM European Transport Limited [2015] UKUT 625 (TCC), §162, Judge Bishopp (Judge Cannan dissenting at this point))
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Hypothetical evidence (evidence about what a person would have done)
Value depends upon having been in a similar situation or having guidelines to follow
“But it is important to recognise the limitations of that sort of evidence. Where a witness is asked what would he have done in a situation with which he was not in fact confronted, the witness has to hypothesise. The value of his evidence will depend on whether the hypothetical situation is one which he has faced, in fact, on some other occasion. It will depend, as it seems to me, on whether he can identify policy or guidelines which he would have been required to follow at the relevant times if he had been faced with that situation. In a case where the hypothetical situation falls plainly within guidelines which have been laid down, or is a situation with which the witness was familiar in principle, the witness may be able to say, with conviction: “I would have declined this loan because I could not have approved it consistently with the guidelines within which I was working”, or “I would have declined this loan because it would have presented to me the same factors as other loans which I did decline at that time.”…However if, as was the present case, a witness is asked to consider a situation which was not covered by any policy or guidelines and which had not previously arisen in his experience, his evidence as to what he would have done in that situation may properly be regarded as speculative. He can do no more than speculate as to what he would have done in circumstances which he had never previously met.” (Alliance & Leicester Building Society v. Robinson 2000 WL 774991, §§30…31, Chadwick LJ)
“What the above cases show is that is that an opinion on what a decision would have been, even by the person who would have made the decision, may not be enough. But where there are established guidelines or framework for the decision, there may be enough evidence for a Tribunal to decide what the decision was likely to be.” (Anglian Water Services Ltd v. HMRC [2017] UKFTT 386 (TC), §113, Judge Mosedale).
Can be rejected without finding the witness to be dishonest
“In reaching that view the judge is not suggesting that Mr Cramp or Mr Tew are giving dishonest evidence. Rather, he is saying that he does not accept their assessment of how they would have reacted to a situation with which they were not in fact confronted. That is, to my mind, a conclusion which a judge who has seen and heard the witnesses is entitled to reach. He is not bound to accept that the witnesses would have done what they now say they would have done. He can test that against the circumstances as they actually were. And he can make his own assessment of what the person who he has seen and heard in the witness box would have been likely to do in those circumstances.” (Alliance & Leicester Building Society v. Robinson 2000 WL 774991, §33, Chadwick LJ)
Generic evidence
Excluded where witness does not state sources
“We had a number of concerns about Mr Delnon’s witness statement: (1) Although he had stated that some of the facts were “derived from my examination of documents relevant to the Appellant’s claim”, that was clearly incorrect: as Ms Hanif had confirmed, Mr Delnon had no knowledge of Mr Halfaoui’s appeal. Although the generic nature of Mr Delnon’s evidence does not of itself prevent it being admissible (see the citations from Nugee J’s judgment in the ICS case), his inclusion of an untrue statement affects his credibility. (2) He only took charge of “the self-assessment Live Services Team” on 8 May 2017; previously he was a “technical and policy adviser”. It seemed to us, and Ms Hanif agreed, that a person in that role was unlikely to have first-hand experience of the detailed operational procedures used to send out letters four years previously, despite his evidence on that issue at [16] of his witness statement. Although Mr Delnon also stated that “where facts are not within my direct knowledge, they are derived from the source which I indicate”, no source is given for that evidence.” (Halfaoui v. HMRC [2018] UKFTT 13 (TC), §46, Judge Redston).
Supplementing witness statement at hearing
Question is whether other side ambushed
“The FTT had made directions requiring witness evidence to be set out in written witness statements and for witnesses to attend the hearing for cross-examination. Mr Weissbraun was not seeking to give his oral evidence as a response to HMRC’s belated articulation of a case on the penalties. If Mr Weissbraun had given his evidence orally for the first time at the hearing when witness statements made no mention whatsoever of an oral declaration of trust, the Appellants would have circumvented the requirements of the FTT’s directions and exposed HMRC to a risk of “ambush”.” (Weisenfeld v. HMRC [2019] UKUT 301 (TCC), §65, Judge Jonathan Richards and Judge Greenbank).
Non-impeachment principle
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Party calling witness entitled to suggest mistaken by reference to other evidence, but not allowed to generally undermine credibility unless declared hostile
"[103] The principle applies in civil as well as criminal cases. In Greenough v Eccles (1859) 141 ER 315, a judgment of the Court of Common Pleas, Williams J said: “… it is impossible to suppose the legislature could have really intended to impose any fetter whatever on the right of a party to contradict his own witness by other evidence relevant to the issue,—a right not only fully established by authority, but founded on the plainest good sense. The other is, that the section requires the judge to form an opinion that the witness is adverse, before the right to contradict, or prove that he has made inconsistent statements, is to be allowed to operate.”
[104] All three judges in that case agreed that “adverse” in this context meant “hostile”, and Willes J contrasted a hostile witness with one who merely “gives evidence opposed to the interest of the party who calls him”.
[105] As Mr Strong observed, the principles applicable in criminal cases are derived from Greenough v Eccles and were summarised by Leggatt LJ in R v Smith (Jordan) [2019] EWCA Crim 1151 at [28]:
(1) Subject to the overall control of the court, the prosecution has a discretion as to what witnesses to call at a trial, but that discretion must be exercised in accordance with the interests of justice and the general duty of the prosecution to put all evidence which it considers relevant and capable of belief before the jury.
(2) It is open to the prosecution - and indeed the interests of justice may require it - to call a witness to give evidence only part of which the prosecution considers to be worthy of belief.
(3) In such circumstances the prosecution is in principle entitled to adduce other evidence to contradict that part of the witness's evidence which the prosecution considers to be inaccurate or false, and to invite the jury to reject that part of the witness's evidence.
(4) That may be done without applying to treat the witness as hostile. However, unless the witness is declared hostile, evidence adduced to contradict the witness may not include a previous inconsistent statement of that witness, nor is the prosecution, as the party calling the witness, entitled to cross-examine the witness.
[106] I see no reason why these principles should not apply in relation to regulatory proceedings such as those in this case." (Banque Havilland SA v. FCA [2024] UKUT 115 (TCC), Judge Herrington)
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Failure to call a relevant witness
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- Not open to a party to call a witness to accuse them of dishonesty
"[91] As the respondents rightly point out, it is not open to HMRC to call the relevant witnesses. This is the principle illustrated in Kagazy, where Picken J stated at [57]: ‘it is not open to a party to call a witness to give evidence which that party will say is not only wrong but deliberately so’, and went on to say:
‘… where a party wishes to assert that the evidence given in chief by a witness whom he has called is not only wrong, but is wrong on purpose. The most obvious instance is one where the witness has turned coat and has deliberately failed to come up to proof. Here the position seems clear. The party cannot cross-examine his own witness by reference to his proof of evidence or other previous statement unless and until the court has ruled that he is hostile. Nor may he call evidence to establish the general bad character of his witness.’" (Everyday Wholesale Limited v. HMRC [2023] UKFTT 78 (TC), Judge Poon)
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- Relevance of calling a witness
“It is, however, important to notice that, it is only when a witness is called to give oral evidence in court that their statement becomes evidence in the case (see CPR 32.5). Until then, its status is merely that of a statement of the evidence which the witness may be asked to give. Thus, it quite often happens that a party serves a witness statement from a person who is not in the event called to give oral evidence at the trial. In that event the person's statement may be admissible as hearsay evidence and may then be admitted in written form; or the statement may not be put in evidence at all – in which case it never becomes part of the material on which the case is decided.” (Blue v. Ashley oao Times Newspapers Limited [2017] EWHC 1553 (Comm), §14, Leggatt J).
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Failure may lead to court refusing equitable relief
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"[34] The third aspect comes into play in a case, such as the present, where there is a claim (or, as here, a counterclaim) for rectification, whether the correction of an alleged mistake in the relevant document is sought to be achieved through a process of construction or by way of recourse to the court's equitable jurisdiction. In the former case, it must be clear, from the rest of the document, construed in the light of its admissible background and context, both that something has gone wrong with the language of the document and precisely what correction needs to be made in order to cure that mistake. In a case where the equitable jurisdiction is invoked, the court requires the relevant mistake to be proved to a high degree of conviction because rectification is a discretionary remedy which must be cautiously watched and jealously exercised. Although the standard of proof is the ordinary civil standard of the balance of probabilities, a party seeking rectification may find itself unable to discharge the evidential burden of proof in a case where its evidence lacks the support of a non-party witness who clearly could have given evidence material to that issue and who might have, but has not, been called by that party." (Ahuja Investments Limited v. Victorygame Limited [2021] EWHC 2382 (Ch), HHJ Hodge QC)
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Failure means court will decide on the basis of evidence available
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"[18] HWL’s failure to call Mr Street meant that there was no direct evidence of any agreement between HWL and Shakthi, but only Mr Hare’s hearsay evidence. I have therefore made my findings of fact on the basis of the inherent probabilities presented by that evidence, see §82ff. The absence of Mr Patel and Mr Kulwant Hare was less fundamental, but nonetheless significant, and I consider it at §85(2) and §107 below." (Hare Wines Limited v. HMRC [2023] UKFTT 25 (TC), Judge Redston)
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- Silence may convert the other side’s evidence into facts
“In our legal system generally, the silence of one party in face of the other party’s evidence may convert that evidence into proof in relation to matters which are, or are likely to be, within the knowledge of the silent party and about which that party could be expected to give evidence. Thus, depending on the circumstances, a prima facie case may become a strong or even an overwhelming case…” (R v. IRC ex p. TC Coombs & Co [1991] 2 AC 283 at 300, Lord Lowry and Prest v. Petrodel Resources Ltd [2013] UKSC 34, §44).
- Reasonable adverse inferences as to the facts the party has chosen to withhold
“[Failure to call] is a legitimate tactical move under our adversarial system of litigation. But a defendant who adopts it cannot complain if the court draws from the facts which have been disclosed all reasonable inferences as to what are the facts which the defendant has chosen to withhold…As the appellants elected to call none of the persons who patrolled the line there is nothing to rebut the inference that they did not lack the common sense to realise the danger…” (British Railways Board v. Herrington [1972] AC 877 at 930, Lord Diplock).
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“The courts have tended to recoil from some of the fiercer parts of [Lord Diplock in Herrington, supra], which appear to convert open-ended speculation into findings of fact. There must be some reasonable basis for some hypothesis in the evidence or the inherent probabilities, before a court can draw useful inferences from a party’s failure to rebut it.” (Prest v. Petrodel Resources Ltd [2013] UKSC 34, §44, Lord Sumption).
“From this line of authority I derive the following principles in the context of the present case:
(1) In certain circumstances a court may be entitled to draw adverse inferences from the absence or silence of a witness who might be expected to have material evidence to give on an issue in an action.
(2) If a court is willing to draw such inferences, they may go to strengthen the evidence adduced on that issue by the other party or to weaken the evidence, if any, adduced by the party who might reasonably have been expected to call the witness.
(3) There must, however, have been some evidence, however weak, adduced by the former on the matter in question before the court is entitled to draw the desired inference: in other words, there must be a case to answer on that issue.
(4) If the reason for the witness's absence or silence satisfies the court, then no such adverse inference may be drawn. If, on the other hand, there is some credible explanation given, even if it is not wholly satisfactory, the potentially detrimental effect of his/her absence or silence may be reduced or nullified.” (Wisniewski v. Central Manchester Health Authority [1998] PIQR 324 at 340, per Brooke LJ – referred to as the “leading case in this area” in HMRC v. CCA Distribution Ltd (in administration) [2015] UKUT 513, §65, Morgan J and Judge Herrington).
“This summary does identify some essential requirements before a court or tribunal may draw an adverse inference. Thus: (1) the party seeking the benefit of the inference must have adduced some evidence which shows there is a case for the other party to answer; (2) there must be a reason to expect that material evidence exists; (3) it is open to the party who resists the adverse inference to give a credible explanation, even a not wholly satisfactory explanation, as to why the evidence was not given.” (HMRC v. CCA Distribution Ltd (in administration) [2015] UKUT 513, §66, Morgan J and Judge Herrington).
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“Where a party elects not to call available witnesses to give evidence on a relevant matter, the court may draw inferences of fact against that party: Wisniewski v Central Manchester Health Authority [1998] Lloyds Rep Med 223, 240; Herrington v British Railways Board [1972] AC 877, 930G-H (Lord Diplock). Armory v Delamirie supports such an approach where evidence is available to be produced by a party, but he does not produce it. In that case, the defendant goldsmith had retained a jewel given to him by the claimant (a chimney-sweeper's boy who had found the jewel and had taken it to the defendant to find out what it was worth) and would not produce it for it to be valued for the purposes of the damages claim brought against him in trover; the Chief Justice's direction to the jury was that "unless the defendant produce the jewel and show it not to be of the finest water, they should presume the strongest against him, and make the value of the best jewels the measure of their damages".” (Law Debenture Trust Corp Plc v. Elektrim SA [2009] EWHC 1801 (Ch), §176).
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"[34] I considered the list in British Airways in the context of this case. In relation to points 2 and 3 of that list, no reason was given for GBT’s decision that Mr Sotiris Kyriacou and Mrs Kyriacou would not attend the hearing. In relation to points 1 and 4:
(1) the effect of not calling Mr Sotiris Kyriacou was that the Tribunal was unable to hear from him as to the operating procedures in the premises, or his account of the Visit. As result, only Mr Kyriacou gave evidence on those matters on behalf of GBT. Given his lack of credibility, the effect of his father’s absence was further to weaken GBT’s position in relation to those disputed factual matters (on which it had the burden of proof). I decided that there was no need for me to make a specific adverse inference.
(2) The position was different in relation to Mrs Kyriacou. It was GBT’s case that Mrs Kyriacou adjusted the Z readings at the end of each day, and the reasons for those adjustments lay at the heart of this appeal. There was plainly evidence to support an adverse inference in relation to Mrs Kyriacou and I decided it was appropriate to draw that inference because GBT had failed to call as a witness the one person who could give first-hand evidence about this key issue." (The Great British Takeaway v. HMRC [2022] UKFTT 315 (TC), Judge Redston)
“Therefore, and insofar as we need to do so, we draw the inference, which is adverse to her, and accordingly to GRCS, that Mrs Mullan did not give any evidence since she was reluctant to associate herself with this appeal, did not wish to subscribe to any Statement of Truth, and did not wish to come to the Tribunal to be exposed to cross-examination.” (Grange Road Car Sales v. HMRC [2017] UKFTT 205 (TC), §90, Judge McNall – HMRC established a prima facie case on fraud and witness who was also a party had relevant evidence).
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- Does not apply to privileged information
“This principle does not apply in relation to the question of the legal advice actually available to Elektrim in July 2006 in respect of the PTC shares, because Elektrim would have a good justification (legal professional privilege) to decline to disclose the content of any legal advice it had in fact obtained.” (Law Debenture Trust Corp Plc v. Elektrim SA [2009] EWHC 1801 (Ch), §177).
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- Not a set of legal rules
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"[41] The question whether an adverse inference may be drawn from the absence of a witness is sometimes treated as a matter governed by legal criteria, for which the decision of the Court of Appeal in Wisniewski v Central Manchester Health Authority [1998] PIQR P324 is often cited as authority. Without intending to disparage the sensible statements made in that case, I think there is a risk of making overly legal and technical what really is or ought to be just a matter of ordinary rationality. So far as possible, tribunals should be free to draw, or to decline to draw, inferences from the facts of the case before them using their common sense without the need to consult law books when doing so. Whether any positive significance should be attached to the fact that a person has not given evidence depends entirely on the context and particular circumstances. Relevant considerations will naturally include such matters as whether the witness was available to give evidence, what relevant evidence it is reasonable to expect that the witness would have been able to give, what other relevant evidence there was bearing on the point(s) on which the witness could potentially have given relevant evidence, and the significance of those points in the context of the case as a whole. All these matters are inter-related and how these and any other relevant considerations should be assessed cannot be encapsulated in a set of legal rules.
...
[44] There can be no reasonable expectation that a respondent will call someone as a witness in case that person is able to recall information that could potentially advance the claimant’s case; and I can see no reason why the tribunal should have inferred that, by not calling as witnesses any of the numerous individuals involved in making the various recruitment decisions, the respondent was seeking to withhold information about the race of successful candidates." (Royal Mail Group Ltd v. Efobi [2021] UKSC 33)
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- Suggested inference must relate to a specific matter
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“We also agree with the general comment of Proudman J in Commissioners for Her Majesty’s Revenue and Customs v Sunico A/S [2013] EWHC 941 (Ch) at [98] that where a court or tribunal is asked to draw an adverse inference, the suggested inference ought to relate to a specific matter.” (HMRC v. CCA Distribution Ltd (in administration) [2015] UKUT 513, §65, Morgan J and Judge Herrington).
“What is true, however, is that the question of whether there is a case to answer does depend on the individual case and the allegations in question. If the Court is to draw adverse inferences, they cannot simply be of a general nature; they must be specific inferences in relation to specific pleaded issues. I am mindful that this is a case where very serious allegations of fraud have been made against the Defendants and, whilst this does not affect the standard of proof, it does have some bearing on my approach to the evidence and the burden on HMRC to prove its claim.” (HMRC v. Sunico A/S [2013] EWHC 941 (Ch), §98).
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- There must be a case to answer on the specific matter
“In Benham [Limited v. Kythira Investments Ltd [2003] EWCA Civ 1794] at [28] Brown LJ emphasises that in order for an adverse inference to be capable of being drawn, the party seeking to draw the inference must have adduced some evidence which "establishes a case to answer". This of course ties in with the third principle in Wisniewski, which indicates that this evidence need only be "some evidence, however weak" (Wisniewski at 340).” (HMRC v. Sunico A/S [2013] EWHC 941 (Ch), §96).
The evidence need only be weak
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“These last two words – "however weak" – indicate that the evidence need only be minimal. Indeed Brown LJ in Benham at [28] adopting the dictum of May LJ in Hughes v. Liverpool City Council, emphasised that all that is required to give rise to an adverse inference is a "scintilla of evidence". Mr Lakha attempted to put a gloss on this conclusion, suggesting that Brown LJ was not in any way displacing the test set out in the third principle of Wisniewski, and that the Wisniewski test – i.e. that there is a prima facie case to answer – was a higher test. I am not persuaded, however, that there is a distinction to be drawn here. I accept Mr Chivers's submission that the expression "scintilla of evidence" is of equal standing with the test of "some evidence, however weak" in Wisniewski.” (HMRC v. Sunico A/S [2013] EWHC 941 (Ch), §97).
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- Weak prime facie evidence plus adverse inference can discharge burden of proof
"The point is worth making too even in those cases where the defendant elects to call no evidence. True, as Mance LJ made plain in [Miller (t/a Waterloo Plant) v Margaret Cawley [2002] EWCA Civ 1100], the only issue then is whether the claimant has established his claim on the balance of probabilities. But it must be recognised that he may have done so by establishing no more than a weak prima facie case which has then been strengthened to the necessary standard of proof by the adverse inferences to be drawn from the defendant's election. Such adverse inferences can in other words tip the balance of probability in the claimant's favour". (Benham Limited v. Kythira Investments Ltd [2003] EWCA Civ 1794, §30).
- Credible explanation may reduce or nullify inference
"In our legal system generally, the silence of one party in face of the other party's evidence may convert that evidence into proof in relation to matters which are, or are likely to be, within the knowledge of the silent party and about which that party could be expected to give evidence. Thus, depending on the circumstances, a prima facie case may become a strong or even an overwhelming case. But, if the silent party's failure to give evidence (or to give the necessary evidence) can be credibly explained, even if not entirely justified, the effect of his silence in favour of the other party may be either reduced or nullified." (TC Coombs v. IRC [1991] 2 AC 283 at 300, Lord Lowry and Prest v. Petrodel Resources Ltd [2013] UKSC 34, §44).
"[32] At one end of the spectrum is where a party has been unable to call a witness (or one who would give an open and honest account) for reasons outside its control, where it would plainly be wrong for the court to hold that against the party, whether by drawing an adverse inference against that party on a particular issue or by taking the absence of oral evidence from that witness into account more generally (e.g. by finding for the other party on an issue on the basis that there was no oral evidence to contradict what the witness called by the other had said). In such a case that party would need to adduce proof either that it had made reasonable efforts to trace and call the witness but had been reasonably unable to do so, or that the witness was so obviously hostile to that party that it would have been pointless even to try to do so." (Thomas Barnes & Sons Plc v. Blackburn [2022] EWHC 2598 (TCC), HHJ Stephen Davies)
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"Mr Love is over 80 and is undergoing medical treatment. He has acknowledged receipt of the notice of the hearing and has requested that it should go ahead in his absence. He is satisfied that the evidence he has already submitted is sufficient to support his appeal and for the Tribunal to make a decision…Although there are aspects of the evidence on which it might have been helpful to hear oral evidence from Mr Love, we believe that we have sufficient information before us in order to reach a decision and, bearing in mind Mr Love’s request that we should proceed in his absence, we find that it is in the interests of justice to proceed with the hearing without the appellant being in attendance.” (David Love Marketing Ltd v. HMRC [2015] UKFTT 506 (TC), §§8 – 9).
Old age/infirmity may be a good explanation
“Most of the relevant evidence would have come from Ian Henderson. However, we do not regard his absence as “unexplained”. He is 87 years old and has had heart bypass surgery. The fact that he is well enough to travel to Brazil on holiday or to help his wife in her business does not demonstrate to us that he is well enough to cope with cross-examination.” (Henderson v. HMRC [2017] UKFTT 556 (TC), §112, Judge Jonathan Richards).
Absence of legal representation not a good explanation
“The overriding objective requires us to be fair and just to both parties. In our view the circumstances did not justify the appellant failing to tender Mr Lewis for cross-exmination, even though such cross-examination would have been in the absence of any legal representative. We should also say that during the hearing we made the appellant aware through counsel that it may be prejudiced if it did not call Mr Lewis to give evidence.” (Outkey Trading Ltd v. HMRC [2014] UKFTT 156 (TC), §104, Judge Cannan)
- Ultimately for the FTT to make an appropriate finding
"The weight to be attached to a defendant's failure to testify varies with the circumstances of the case. It is plain that in this case the Chief Justice and the Court of Appeal attached a good deal of weight to Mr Crawford's silence, and their Lordships are satisfied that they were right to do so. Mr Crawford was the chairman and chief executive of the Bank, the Building Society and the Merchant Bank. It is an irresistible inference that he was the directing mind behind Regardless, Holdings and the rest of the group. The consolidated proceedings raised many grave issues as to his stewardship of the whole group of companies. His failure to testify was a strong indication that he had no satisfactory answer to what was alleged against him." (Crawford v. Financial Institutions Services Limited [2005] UKPC 40, §12).
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“Apart from these basic requirements, there is much in the above summary of principle which is left open ended. We refer to the references to the court (or tribunal) being entitled to draw inferences “in some circumstances” and the court’s power to be influenced by an explanation which is not wholly satisfactory. These indicate that 40 there is much about this approach which is not rigid and prescriptive. This reflects the circumstance that it is ultimately for the fact finding tribunal to make what it regards as appropriate findings of fact having regard to all the circumstances of the case including the fact, if this is established, that a party has not called an available witness and has not given a satisfactory explanation for not calling the witness.” (HMRC v. CCA Distribution Ltd (in administration) [2015] UKUT 513, §65, Morgan J and Judge Herrington).
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"In British Airways PLC v Airways Pension Scheme Trustee Ltd [2017] EWHC 1191 (Ch) (“British Airways”) at [141-143], Morgan J summarised the relevant case law and then said that a court or tribunal should ask itself the following questions:
“1. Is there some evidence, however weak, to support the suggested inference or finding on the matter in issue?
2. Has the Defendant given a reason for the witness’s absence from the hearing?
3. If a reason for the absence is given but it is not wholly satisfactory, is that reason ‘some credible explanation’ so that the potentially detrimental effect of the absence of the witness is reduced or nullified?
4. Am I willing to draw an adverse inference in relation to the absent witness?”
[32] He added at [146]:
“even if I eventually conclude that I have not been given a good reason or a credible explanation for the [party] not calling these three witnesses, it does not follow that I will automatically draw [an adverse] inference...In deciding what inferences to draw, I need to take into account not only the fact that [the individuals] were not called, when they could have been, but also other matters such as what I consider to be the most probable finding to make on the basis of all the evidence which I have received.”
[33] Although the overall conclusions reached by Morgan J in British Airways were subsequently overturned by the Court of Appeal (see [2018] EWCA Civ 1533), that Court made no criticism of his approach to dealing with adverse inferences." (The Great British Takeaway v. HMRC [2022] UKFTT 315 (TC), Judge Redston)
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- FTT accepting evidence of witness not called
"We have found helpful and persuasive the letter from the Company’s former finance director (see [12] above). Mr Butlin was not called as a witness in person by the Appellant and thus HMRC did not have the opportunity to put questions to him (nor did the Tribunal) or challenge his evidence. We have borne that limitation in mind and have not adopted an uncritical attitude to Mr Butlin’s explanation. But the fact that the availability or otherwise of ER to Mrs Corbett is of no financial concern to the Company does, we consider, make Mr Butlin an independent witness, and one whose explanation fully supports the evidence of Mrs Corbett and her husband.” (Corbett v. HMRC [2014] UKFTT 298 (TC), §34, Judge Kempster).
Evidence from person who is not the obvious witness for that matter treated with caution
"[8] Mr Shah is a chartered accountant with Elliotts Shah, advisers to Mr Niasse. Mr Shah has advised Mr Niasse since February 2019. Mr Shah gave evidence and was cross-examined on his statement.
[9] Mr Shah's witness statement contained statements of opinion on matters of law which are for the Tribunal. It also contained various statements of facts to which Mr Shah would not have been the most obvious witness. For example, the witness statement gave details of Mr Niasse's career, on which this Tribunal may have expected to have heard evidence from Mr Niasse himself.
[10] In examination in chief, Mr Blades sought to introduce evidence in support of an argument that it was necessary in order to obtain employment with a Premier League football club and particularly with Everton, for a player to engage an agent. Once again, with the greatest of respect to Mr Shah, the Tribunal might have expected to hear evidence on this issue from those more closely connected with the industry. In particular, the Tribunal heard no evidence from Mr Rita, any representative of Everton, or indeed Mr Niasse himself. We have taken these factors into account in determining the weight that we should give to Mr Shah's evidence.
...
[171] ... (1) The only evidence that we have of Mr Niasse's lack of understanding of UK tax law and his belief that he did not have to file a tax return because his only source of income was his employment with Everton, is a statement in Mr Shah's witness statement. We do not regard that a particularly strong evidence. We would have preferred to hear evidence of Mr Niasse's belief from Mr Niasse himself." (Niasse v. HMRC [2024] UKFTT 179 (TC), Judge Greenbank)
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Procedural aspects of inviting adverse inference
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- Burden on party inviting court to draw inference
"[23] It is well-known that, in certain circumstances, the court may be justified in drawing adverse inferences from the absence of a witness who might have been called, and who might be expected to have material evidence to give; but the burden is on the party who invites the court to draw an adverse inference from the failure to call such a witness clearly to identify the nature of the evidence which the court is invited to infer, and to explain why the absence of evidence on the point from that witness is material to that issue." (Ahuja Investments Limited v. Victorygame Limited [2021] EWHC 2382 (Ch), HHJ Hodge QC)
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- Establish that the party could and should have called a witness and what the inference is
"[24] At [150] of Magdeev, Cockerill J observed that "the tendency to rely on this principle in increasing numbers of cases is to be deprecated. It is one which is likely to genuinely arise in relatively small numbers of cases; and even within those cases the number of times when it will be appropriate to exercise the discretion is likely to be still smaller." Cockerill J proceeded to deal with the point relatively briefly at [154] thus:
(1) This evidential 'rule' is a fairly narrow one. The drawing of such inferences is not something to be lightly undertaken.
(2) Where a party relies on it, it is necessary for it to set out clearly (a) the point on which the inference is sought, (b) the reason why it is said that the 'missing' witness would have material evidence to give on that issue, and (c) why it is said that the party seeking to have the inference drawn has itself adduced relevant evidence on that issue.
(3) The court then has a discretion, and will exercise it not just in the light of those principles, but also in the light of: (i) the overriding objective, and (ii) an understanding that it arises against the background of an evidential world which shifts - both as to burden and as to the development of the case – during the trial.
In my judgment, before the discretion to draw an adverse inference or inferences can arise at all, the party inviting the court to exercise that discretion must first:
(1) establish (a) that the counter-party might have called a particular person as a witness and (b) that that person had material evidence to give on that issue;
(2) identify the particular inference which the court is invited to draw; and
(3) explain why such inference is justified on the basis of other evidence that is before the court.
Where those pre-conditions are satisfied, a party who has failed to call a witness whom it might reasonably have called, and who clearly has material evidence to give, may have no good reason to complain if the court decides to exercise its discretion to draw appropriate adverse inferences from such failure. A good illustration of this, in the context of the present case, may be afforded by what passed between Mr Singh and Mr Jandu over the phone in the few minutes before exchange of contracts for the sale of the property at 15.11 (GMT) on 1 March 2016." (Ahuja Investments Limited v. Victorygame Limited [2021] EWHC 2382 (Ch), HHJ Hodge QC)
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- Inference may be refused if point raised late
​
[35] In my judgment this is not a case where the claimant has identified, let alone established, that there are specific factual issues where a positive adverse inference should be drawn in relation to a failure to call a particular witness. This is another case in my view where these arguments are raised far too late in the day, so that the other party has not even been informed in advance that this was a point to be taken which would have allowed it the opportunity to adduce evidence as to the steps taken to trace and call the witness or, possibly, to obtain such evidence and apply for permission to adduce it late. These arguments are also often raised as a generalised scattergun approach, rather than identifying the specific issue(s) which it is said the other party must have known, well in advance of the time for exchange of witness statements, it needed to have covered by oral evidence and the specific witness(es) who needed to be called to cover it.
[36] In my judgment this is an intermediate type case. There has indeed been an almost wholesale failure by the defendant to call any relevant witnesses in relation to most of the contested issues in the case, whether their own employees or former employees or whether Capita existing or former employees. Little if any hard explanation has been given for that failure. In the case of at least one witness (Mr Laher, an in-house solicitor involved in the service of the termination notice) it was established that the potential witness was still employed by the defendant. However, it must also be borne in mind that the case was brought late in the day by the claimant and now concerns events 7 or 8 years ago, so that the contemporaneous documentary evidence was always likely to be given greater significance than oral evidence of the detail of such events. The defendant could not have compelled its own former employees to give evidence nor Capita’s existing or former employees. In my judgment it follows that it is only insofar as the claimant has adduced specific oral evidence from a reliable witness of fact on a point which is not adequately covered by the reliable contemporaneous documentary evidence in any event that the claimant’s failure to call its own witness on that point could and should be taken into account when making my decision." (Thomas Barnes & Sons Plc v. Blackburn [2022] EWHC 2598 (TCC), HHJ Stephen Davies)
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Requiring the taxpayer to give evidence
Doubts as to whether the FTT can/will compel an appellant to give evidence if HMRC have burden of proof
“Further, in considering a submission of no case to answer, the FTT could take account of the documents before it, whether formally produced by witnesses or not, and require witnesses to give evidence about such documents. It follows that we reject this ground of appeal.” (Massey and Massey t/a Hilden Park Partnership v. HMRC [2015] UKUT 405 (TC), §62, Rose J and Judge Sinfield)
“There are no allegations of criminal conduct and the right not to self-incriminate is inapplicable. But the appellants have been assessed and have the right to appeal that assessment. Being required, even summonsed, to give evidence in favour of HMRC’s case may well adversely affect their ability to pursue their appeal. So if the Upper Tribunal actually meant that, where the burden of proof was on HMRC, and the appellant made a submission of no case to answer, it would be appropriate to require the appellant partners to give evidence, then I do, respectfully, find what the Upper Tribunal said very difficult to understand…I don’t think the appellant partners ought to be compelled to give evidence to support HMRC’s case.” (Hilden Park LLP v. HMRC [2017] UKFTT 217 (TC), §§45…46, Judge Mosedale).
Taxpayer has privilege against self-incrimination
“Section 29 does not impose criminal liability. On the appeal under section 29 TMA Mr Hargreaves will have the privilege against self-incrimination but a wider right to silence does not arise as he is not subject to any criminal charge.” (Hargreaves v. HMRC [2016] EWCA Civ 174, §57, Arden LJ).
​
Summonsing a witness
(1) On the application of a party or on its own initiative, the Tribunal may--
(a) by summons (or, in Scotland, citation) require any person to attend as a witness at a hearing at the time and place specified in the summons or citation;
(b) order any person to answer any questions or produce any documents in that person's possession or control which relate to any issue in the proceedings.
(2) A summons or citation under paragraph (1)(a) must--
(a) give the person required to attend at least 14 days' notice of the hearing, or such shorter period as the Tribunal may direct; and
(b) where the person is not a party, make provision for the person's necessary expenses of attendance to be paid, and state who is to pay them.
(3) No person may be compelled to give any evidence or produce any document that the person could not be compelled to give or produce on a trial of an action in a court of law in the part of the United Kingdom where the proceedings are due to be determined.
(4) A person who receives a summons, citation or order may apply to the Tribunal for it to be varied or set aside if they did not have an opportunity to object to it before it was made or issued.
(5) A person making an application under paragraph (4) must do so as soon as reasonably practicable after receiving notice of the summons, citation or order.
(6) A summons, citation or order under this rule must--
(a) state that the person on whom the requirement is imposed may apply to the Tribunal to vary or set aside the summons, citation or order, if they did not have an opportunity to object to it before it was made or issued; and
(b) state the consequences of failure to comply with the summons, citation or order.” (FTT Rules, r.16).
Must be a real likelihood of the evidence materially assisting the Tribunal
“The test is not whether the party making the application hopes that the evidence sought will assist its case. That would be in the nature of speculation or, as it is put, a “fishing expedition”. The test is whether the Tribunal considers that there is a real likelihood that its determination will be assisted. That may be the case where the Tribunal considers that additional evidence would be reasonably likely, one way or another, to resolve an area of uncertainty.” (Ford v. FCA [2017] UKUT 147 (TCC), §12, Judge Berner citing Jeffery v. FCA).
“In the case of an application for a witness summons or for an order for the production of documents, the guiding principle is that the Tribunal may issue such a summons or order where it considers that there is a real likelihood that the evidence of the person summonsed (or of the documents to be produced) will materially assist the Tribunal in its determination of an issue or issues in the proceedings. The test is not whether the party making the application hopes that the evidence will assist its case. The test is whether the Tribunal considers that there is a real likelihood that its determination will be assisted. That may be the case where the Tribunal considers that the evidence would be reasonably likely, one way or another, to resolve an area of uncertainty.” (Mehta v. HMRC [2015] UKFTT 396 (TC), §16).
Test by reference to stated cases
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"In order for a witness summons to be issued, the Tribunal must be satisfied that the evidence sought to be obtained is relevant to the issues in the proceedings. Relevance is to be tested by reference to the stated cases of the parties." (FTT Practice Statement on Witness Summonses)
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Ex parte applications permitted
“…Rule 16(4) [provides] that a person summonsed must have the opportunity to object to the summons after it was made if they did not have the opportunity to object to it before, thereby making it clear that summons can be issued without notice to the recipient (‘ex parte’). And indeed it is the normal, if not invariable, course of the Tribunal so far to issue summons without asking for the proposed witness’ representations in advance.” (Clavis Liberty Fund 1 LP [2014] UKFTT 1077 (TC), §6).
Applicant must take reasonable steps to secure voluntary attendance of its witnesses
“The appellant should have pursued agreement to provide evidence; only if the applicants had been provided with answers and still refused to give evidence should the Tribunal have been approached to issue a summons.” (Clavis Liberty Fund 1 LP [2014] UKFTT 1077 (TC), §81).
​
"In a normal case, no application for a witness summons should be made by a party unless that party has first requested the witness to attend, and any of the following apply:
(i) the witness has refused to attend;
(ii) the witness has not indicated willingness to attend, despite being requested to do so;
(iii) the witness has agreed to attend, but the applicant has reason to believe that the witness will not do so; or
(iv) the witness has agreed to attend, but only on condition that a summons is issued. This latter situation may arise, for example, if a witness needs to produce evidence, such as to an employer, of the requirement to attend the Tribunal, or if confidentiality obligations would otherwise prevent the witness from agreeing to give evidence.
If, exceptionally, a party has a reason for not making a prior request for the witness to attend voluntarily, the application must set out that reason." (FTT Practice Statement on Witness Summonses)
Summonsed witness: prior hearing for examination in chief if he/she will not provide witness statement
“I dealt with HMRC’s concerns on procedural fairness…by a direction that there would be a hearing on 14 November 2013 for examination in chief of the summonsed witnesses. This would serve instead of a witness statement; the witnesses were to be told that if they served witness statements, they would no longer be required to attend this hearing.” (Clavis Liberty Fund 1 LP [2014] UKFTT 1077 (TC), §8).
Serving a witness summons
“…great care must be taken in interpreting the TPR requirements about sending and delivery of documents by reference to the CPR provisions, in particular Part 6, relating to service…[In relation to an example of a document accidentally sent to a neighbour but passed on:] Although it has not been served in the sense of service under the CPR, it has in fact been received by the intended recipient. He knows that he has been required to attend. Further, he has actually received the witness summons itself; this is not a case where has knowledge of the summons and its contents but has not actually received the summons itself. Assuming that the envelope was received more than 14 days before the hearing, there is no point open to him to take about the validity of the summons as giving insufficient notice. Accordingly, I think it is probably correct to say – although I do not need to decide and do not do so – that he has received the witness summons for the purpose of the Tax Chamber Rules…” (Clavis Liberty Fund LP1 v. HMRC [2015] UKUT 72 (TCC) §§18…24, Warren J)
- Cannot cross-examine witness you summonsed, but can contradict with other evidence
"[126] Thirdly, as the authorities cited above indicate, there is no bar, in civil or criminal litigation, to a party submitting that part of what its own witness says should not be accepted in the light of evidence from another witness, even if the party concerned cannot cross-examine its own witness. There will be plenty of evidence, including evidence given by the Applicants and the relevant documentation which will give the Authority ample opportunity to make submissions on that basis." (Banque Havilland SA v. FCA [2024] UKUT 115 (TCC), Judge Herrington)
​
- Territorial limitations and witness summonses
The Tribunal has no jurisdiction over persons with no presence
“In a situation similar to that in City and County Properties the sending of a witness summons to the prospective witness’s residence will doubtless be effective if it is actually received (whether received when he returns home or is forward to him abroad). If it is not received, he can apply to have it set aside. But where, as in the present case, the prospective witnesses have no presence in the UK, the Tribunal does not have jurisdiction over them.” (Clavis Liberty Fund LP1 v. HMRC [2015] UKUT 72 (TCC) §40, Warren J followed in Ford v. FCA [2017] UKUT 147 (TCC), §8, Judge Berner).
​
"The Tribunal cannot issue a witness summons to an individual unless that individual is in the UK or otherwise has a presence in the UK, such as a residential address or place of business. The Tribunal may issue a summons to an individual who lives outside the UK but who is temporarily in the UK, but will exercise caution before doing so. The Tribunal will take account of the requirement for the efficient conduct of the proceedings." (FTT Practice Statement on Witness Summonses)
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But note pragmatic approach to service out of jurisdiction
“It should no longer be necessary to resort to the kind of muscular presumptions against service out [of the jurisdiction] which are implicit in adjectives like ‘exhorbitant’. The decision [to serve outside the jurisdiction] is generally a pragmatic one in the interests of the efficient conduct of litigation in an appropriate forum.” (Abela v. Baadarani [2013] UKSC 44, §53, Lord Sumption, cited in Clavis Liberty Fund 1 LP [2014] UKFTT 1077 (TC), §26).
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Non-resident, temporary visitors: Tribunal may decline to exercise jurisdiction
“A witness summons may be served on a person during a temporary visit to the United Kingdom, and it is open to the court to set aside the summons if it considers that it would be unduly burdensome to require the individual to return to the United Kingdom for the trial. Other than in exception circumstances, the court should not require a non-resident, who is not a party to the proceedings but who happens to have been served during a temporary visit to the United Kingdom, to produce documents held outside the jurisdiction relating to business conduct outside the jurisdiction, because the summons would be an infringement of the local sovereignty.” (Clavis Liberty Fund LP1 v. HMRC [2015] UKUT 72 (TCC) §41, Warren J citing Phipson on Evidence, §8-32)
“That fact puts limits, explained in Phipson [§8-32], upon the extent to which a summons against a non-resident temporarily within the jurisdiction may be subject to, where the opportunity afforded by such temporary presence might give rise to possible trespass upon exorbitant activity.” (Kuwait Airways Corp v. Iraqi Airways Co [2010] EWCA Civ 741, §10, Rix LJ);
​
Summons issued in anticipation of temporary visit
“It may be that there are cases where that course [issuing in anticipation of a visit to the UK] could properly be taken in relation to a witness summons. But in such a case, the tribunal ought, in my view, at the very least direct, pursuant to a combination of its case management powers under Rule 5 and its powers under Rule 13(1)(b) that the witness summons may be brought to the attention of the prospective witness by delivery by hand and that it is not to be treated as delivered or received in any other way, notwithstanding that the prospective witness has received it, or a copy, in some other way.” (Clavis Liberty Fund LP1 v. HMRC [2015] UKUT 72 (TCC) §43, Warren J)
Letters of request procedure should be used where available in respect of non-residents (even with branches in the UK)
“In MacKinnon v. Donaldson…the plaintiff had obtained ex parte an order from the Master to inspect documents in New York of Citibank and other banks which had branches in London. Hoffmann J concluded that the order should be discharged. The general principle was that the court did not have jurisdiction to issue such orders to non-residents save in exceptional circumstances on the basis that, where sovereign states have agreed alternative procedures for obtaining evidence, those procedures create a rebuttable presumption that they are the appropriate ones to utilise and that it would thereby subvert the sovereignty of the state for the court to circumvent the procedures…I see no reason why the same should not apply to an individual. Further, I see no reason why a similar approach should not apply in relation to the obtaining of evidence from a prospective witness, that is to say by invoking the letters of request to the Jersey court, Jersey being a party to the Hague convention.” (Clavis Liberty Fund LP1 v. HMRC [2015] UKUT 72 (TCC) §§34…35, Warren J)
- Procedure for application for summons
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In writing, sent to Tribunal, all parties and proposed witness
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"An application for a witness summons must be in writing. It must be delivered to the Tribunal and, unless the Tribunal otherwise directs, served on all parties to the proceedings and, in normal circumstances, on the proposed witness." (FTT Practice Statement on Witness Summonses)
Dispensing with service on proposed witness
​
"In normal circumstances a copy of the application should be served on the proposed witness. That will enable the witness to have the opportunity to object to the summons before it is issued. If, because of urgency or other circumstances, it is not considered appropriate for the application to be served on the proposed witness, the Tribunal may issue the summons without requiring such service. In such a case, under Rule 16(4) and (5), the person who receives the summons may apply to the Tribunal for the summons to be varied or set aside." (FTT Practice Statement on Witness Summonses)
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Content of application
​
"The application must include:
(a) the name and UK address of the proposed witness;
(b) where the proposed witness lives outside the UK, but is temporarily in the UK, evidence of the connection of the proposed witness in the UK;
(c) the nature and relevance of the evidence which the proposed witness is expected to be able to give. Relevance must be shown by reference to the
stated cases of the parties;
(d) the reasons why the Tribunal should consider that there is a real likelihood that the evidence will materially assist the Tribunal in its determination of an
issue or issues in the proceedings;
(e) in the case of an application for an order for production of documents (whether alone or in conjunction with the issue of a witness summons), the
specific documents or class of documents sought to be produced, and why it is considered that those documents are in the possession or control of the person concerned;
(f) in the case of an application for a separate order that a person answer questions, the precise questions that are sought to be put;
(g) either evidence of a prior request to the witness to attend voluntarily and of the reason why the applicant considers the witness will not attend voluntarily or, exceptionally, the reason why no prior request has been made;
(h) the reasons why the application has been made at the time it is made;
(i) if it is not intended to serve the application on the proposed witness, the reasons for not doing so;
(j) a statement setting out why the applicant considers the issue of a summons would not cause unfair prejudice to any other party, and why it would be in the interests of justice for the Tribunal to issue the summons; and
(k) a statement setting out what provision is to be made in respect of payment of the necessary expenses of the witness in attending the tribunal hearing, and who is to pay those expenses.
An application may be rejected if it does not comply with these requirements." (FTT Practice Statement on Witness Summonses)
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Provision for necessary expenses of attendance
​
"The following are regarded as falling within the scope of “necessary expenses of attendance” of a witness, which must be provided for:
(a) out-of-pocket expenses, including travelling, accommodation and subsistence expenses (as relevant); and
(b) financial loss incurred by the witness as a direct consequence of appearing as a witness.
In relation to the category of financial loss at (b) above, the amount to be provided for is limited to the amounts payable to witnesses in High Court proceedings in respect of loss of earnings. The current limits are set out in the Guide to Allowances under Part V of the Costs in Criminal Cases (General) Regulations 1986, published by the Ministry of Justice, Criminal Remuneration Branch in June 2007." (FTT Practice Statement on Witness Summonses)
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Determination without a hearing if no objections received within 14 days
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"If no objection, from another party or from the proposed witness, is received within 14 days after service of the application on them, the Tribunal will normally determine the application without a hearing." (FTT Practice Statement on Witness Summonses)
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Otherwise FTT to determine if hearing required
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"If an objection is made, the Tribunal will consider whether it is able to determine the application without a hearing. If so it will determine the application on the papers. Otherwise, the Tribunal will list a hearing of the application at which the applicant, the other party to the proceedings and the proposed witness (if served with the application), will be entitled to attend and be represented." (FTT Practice Statement on Witness Summonses)
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- Form of witness summons
​
"If the Tribunal determines that a summons or order should be issued, it will prepare and issue the summons or order in accordance with Rule 16. A witness summons will include:
(a) a requirement that the named witness attend a hearing of the Tribunal. The requirement may be in respect of a hearing on a specific date, and at a specific time, or a future hearing the date of which is to be notified to the witness. In either case, unless the Tribunal directs (which it will only do in exceptional cases) a shorter period, at least 14 days’ notice of the hearing will be given;
(b) where known, the date, time and place where the witness is required to attend;
(c) the nature of the evidence the witness will be asked to give;
(d) the documents, or class of documents, required to be produced;
(e) what provision is made for the witness’ necessary expenses of attendance, and who is to pay them;
(f) a statement of the right of a witness who did not have the opportunity to object to the issue of the summons before it was made to apply for it to be varied or set aside; and
(g) a statement of the consequences of failure to comply with the summons." (FTT Practice Statement on Witness Summonses)​
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- Parties may approach summonsed witness
"Any party to the proceedings may properly approach the summoned witness, and produce for that witness any documents that have been disclosed for the purpose of the proceedings, provided that:
(a) in doing so there is no breach, or contemplated breach, of an obligation of confidentiality;
(b) that party discloses to the witness their interest in the proceedings; and
(c) all correspondence and documents passing between that party and the witness is disclosed to the other parties, and any conversations are recorded in writing and the written note is disclosed to the other parties." (FTT Practice Statement on Witness Summonses)​
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- Witness statement by summonsed witness
No power to require witness statement
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"The Tribunal has no jurisdiction to require a summoned witness to prepare and serve a witness statement, although it would be helpful if such a witness were to do so. If a witness statement is prepared, it should be served on all parties to the proceedings, together with copies of all exhibits." (FTT Practice Statement on Witness Summonses)​
Power to require answers to questions before main hearing
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“I dealt with HMRC’s concerns on procedural fairness…by a direction that there would be a hearing on 14 November 2013 for examination in chief of the summonsed witnesses. This would serve instead of a witness statement; the witnesses were to be told that if they served witness statements, they would no longer be required to attend this hearing.” (Clavis Liberty Fund 1 LP [2014] UKFTT 1077 (TC), §8).
​
"If the summoned witness does not serve a witness statement, the Tribunal may:
(a) exercise its power under Rule 16 to require the summonsed witness, as a separate matter, to answer questions; and/or
(b) direct a preliminary hearing (to which the witness would also be summoned to attend) for the purpose of examination-in-chief of the witness." (FTT Practice Statement on Witness Summonses)​
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- Serving a witness summons
Sufficient that it is actually received at least 14 days before the hearing
​
“…great care must be taken in interpreting the TPR requirements about sending and delivery of documents by reference to the CPR provisions, in particular Part 6, relating to service…[In relation to an example of a document accidentally sent to a neighbour but passed on:] Although it has not been served in the sense of service under the CPR, it has in fact been received by the intended recipient. He knows that he has been required to attend. Further, he has actually received the witness summons itself; this is not a case where has knowledge of the summons and its contents but has not actually received the summons itself. Assuming that the envelope was received more than 14 days before the hearing, there is no point open to him to take about the validity of the summons as giving insufficient notice. Accordingly, I think it is probably correct to say – although I do not need to decide and do not do so – that he has received the witness summons for the purpose of the Tax Chamber Rules…” (Clavis Liberty Fund LP1 v. HMRC [2015] UKUT 72 (TCC) §§18…24, Warren J)
- Application to vary or set aside summons
Normally determined at a hearing
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"On an application by a proposed witness for a summons to be varied or set aside, the Tribunal will normally list a hearing." (FTT Practice Statement on Witness Summonses)
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- Punishing non-compliance with summons
FTT may refer non-compliance to Upper Tribunal
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"If a summoned witness fails to comply with a summons, or there is a failure to comply with an order for production of documents or to answer questions, under Rule 7(3) of the Tax Chamber Rules the Tribunal may refer the matter to the Upper Tribunal and ask the Upper Tribunal to exercise its powers under section 25 of the Tribunals, Courts and Enforcement Act 2007 (“the 2007 Act”).
Under section 25 of the 2007 Act, the Upper Tribunal has, in England and Wales, the same powers in this respect as the High Court, and in Scotland of the Court of Session. If it finds the summoned witness, or other relevant person, in contempt of court, it may impose a penalty up to a maximum of two years’ imprisonment and an unlimited fine." (FTT Practice Statement on Witness Summonses)
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Tribunal summonsing person as neutral witness
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- May be appropriate where Tribunal adopts more inquisitorial approach
"[122] In my view, the existence of the power of the Tribunal to call a witness on its own initiative reflects the fact that bearing in mind the desire to avoid formality in proceedings and the fact that in many cases parties come to a tribunal without legal representation, it will from time to time be necessary for the Tribunal to adopt a more inquisitorial approach. That is clear from the observations of the Court of Appeal in Kesse, referred to above. In this case all the parties are well represented and the issues which the Tribunal will have to determine have been clearly identified. There may also be cases where the Tribunal has questions of its own which it would like to put to a potential witness who was not present. There will also be cases where the Tribunal can indicate to the Authority that it would be preferable if certain individuals were available to give evidence, as it did in Seiler where the Authority was criticised for not addressing the issues satisfactorily before the trial." (Banque Havilland SA v. FCA [2024] UKUT 115 (TCC), Judge Herrington)
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- Practical difficulties (no witness statement and Tribunal has to formulate questions)
"[121] First, it seems to me that the Authority’s proposal gives rise to formidable practical difficulties. In my view, the Rules do not give the Tribunal power to order a witness who is summonsed to prepare a witness statement. Mr Weller has made it clear that he would not wish to prepare a statement voluntarily and Mr Strong indicated that Mr Weller did not have the financial resources to instruct lawyers to assist him with that process. In the circumstances, he would need to be examined in chief orally and, since he would be the Tribunal’s witness, the burden would lie on the Tribunal to formulate the questions to be asked and carry out the examination in chief. In my view, that would bring the Tribunal into the arena inappropriately and would impose a considerable burden on the Tribunal." (Banque Havilland SA v. FCA [2024] UKUT 115 (TCC), Judge Herrington)
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- Not appropriate at the request of a party to avoid the non-impeachment rule
"[123] However, this is not a case where the Tribunal is truly acting on its own initiative, as envisaged by the Rules. In reality, as Mr Strong submitted, this is an application by the Authority for the Tribunal to summons a witness who the Authority believes can assist its case in some respects, but who it also believes will give evidence that might undermine the Authority’s case. If I were to grant the application, then in effect the Authority would be able to circumvent the “non-impeachment principle”.
[124] In those circumstances, as Mr Strong submitted, where the Authority believes that Mr Weller has relevant evidence to give on the issues that are before the Tribunal, then it should seek to call him as its witness. " (Banque Havilland SA v. FCA [2024] UKUT 115 (TCC), Judge Herrington)
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Letters of request (persons not present in UK)
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What Letters of Request are
“Letters of Request require a foreign court to take a deposition from a person within its jurisdiction for use in proceedings in front of the requesting court. It is a procedure only available where there are international treaties between the two countries concerned. The UK and Jersey are both signatories to the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial matters 1970 and the parties were agreed that this would allow an English Court to issue Letters of Request to a Jersey Court.” (Clavis Liberty Fund 1 LP [2014] UKFTT 1077 (TC), §35).
Only civil and commercial matters
Query whether tax falls within the scope.
Whether FTT can make use of them
“Neither under the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 or any other legislation does this Tribunal have power to issue Letters of Request to a foreign court…I am satisfied that there is no proper means by which a hearing in this Tribunal could benefit from the Upper Tribunal’s powers (assuming it has them) to issue Letters of Request.” (Clavis Liberty Fund 1 LP [2014] UKFTT 1077 (TC), §36..46).
But UT did not deal with this point
“I see no reason why a similar approach should not apply in relation to the obtaining of evidence from a prospective witness, that is to say by invoking the letters of request to the Jersey court, Jersey being a party to the Hague convention. It may be possible to apply directly to the Jersey court for assistance, but I do not know if that is so.” (Clavis Liberty Fund LP1 v. HMRC [2015] UKUT 72 (TCC) §35, Warren J)
And: see UT in Clavis Liberty Fund LP1 v. HMRC [2015] UKUT 72 (TCC) appeared to indicate that Letters of Request should generally be used for non-residents (§35).
UT can make use of them
“But s 25 of the Tribunals, Courts and Enforcement Act 2007 does provide that, as respects the attendance and examination of witnesses in particular, and more generally other 30 matters incidental to the Upper Tribunal’s functions, the Tribunal has “the same powers, rights and privileges as the High Court”. It seems to me, although in the event it is not something that I have to decide, that this would suffice to give this Tribunal the same power to make a request under the Taking of Evidence Regulation as exists in the High Court.” (Ford v. FCA [2017] UKUT 147 (TCC), §10, Judge Berner).
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Evidence by video link
Because the witness may be arrested if he/she comes to the UK
“The general rule applies as much to a fugitive from English justice as it does to a fugitive from justice of another country to which a fugitive can be extradited from the United Kingdom. I therefore have a discretion. In the exercise of my discretion, I propose, subject to one matter, to allow evidence to be given by Sunil and Mangharam by video link. In the present case, their concerns about arrest are sufficient reason for granting the order. If it is correct, as I believe to be the case, that HMRC can bring them to the UK by a use of the European arrest warrant if it is considered that criminal charges should be brought against them, then it lies in HMRC's own hands to bring them here. If I am wrong in that belief, then they cannot be brought here against their will; their position is no different from that of Mr Polanski…The matter to which this decision is subject is this: if HMRC consider that the presentation of their case will suffer if Sunil and Mangharam are not physically present to be cross-examined, I will decline to make a video link order if HMRC are willing and able to give satisfactory effective undertakings which will ensure that they will not be arrested for offences in relation to any MTIC fraud, whether or not the transaction chains which are the subject matter of this litigation, until seven days after the earlier of the end of the trial and the completion of their respective evidence.” (HMRC v. Sunico A/S [2012] EWHC 4156 (Ch) §§112…113).
Defamatory assertions in witness statements
Immunity for evidence given at trial
"The reasons why immunity is traditionally (and for this purpose I accept the tradition) conferred upon witnesses in respect of evidence given in court, are in order that they may give their evidence fearlessly and to avoid a multiplicity of actions in which the value or truth of their evidence would be tried over again. Moreover, the trial process contains in itself, in the subjection to cross-examination and confrontation with other evidence, some safeguard against careless, malicious or untruthful evidence." (Roy v. Prior [1971] AC 470 at 480, Lord Wilberforce).
“A witness statement may contain assertions which are defamatory of another party and the truth of which is disputed. When such assertions are made by a witness in evidence given in court, the witness is protected by immunity from suit.” (Blue v. Ashley oao Times Newspapers Limited [2017] EWHC 1553 (Comm), §16, Leggatt J).