ON APPEAL FROM THE HIGH COURT OF JUSTICE QUEEN'S BENCH DIVISION ADMINISTRATIVE COURT
THE HON. MRS JUSTICE WHIPPLE
Strand, London, WC2A 2LL
B e f o r e :
LORD JUSTICE HENDERSON
LORD JUSTICE HOLROYDE
| (1) CITY SHOES (WHOLESALE) LIMITED
(2) JATO DYNAMICS LIMITED
(3) SHU & COMPANY LIMITED
(4) DANIEL KATZ LIMITED
- and –
|THE COMMISSIONERS FOR HER MAJESTY'S REVENUE AND CUSTOMS
Mr Timothy Brennan QC & Mr Akash Nawbatt QC (instructed by the General Counsel and Solicitor to HM Revenue and Customs) for the Respondents
Hearing date: 5 December 2017
Crown Copyright ©
Lord Justice Henderson:
"That review has now been completed. As no changes have been made to criteria for entering the LDF your client will be allowed to register if they choose to proceed with their application. However, all of the changes that are being made to the criteria for being eligible for the LDF's full favourable terms will apply to your client.
In relation to your client, there was at the time that they applied to enter the LDF an ongoing enquiry into their EBT arrangements which began more than 3 months earlier. It therefore follows that they will not be able to access the full favourable terms offered by the LDF in relation to their EBT arrangements. To be clear, the full favourable terms that will not be available are those that can lead to a reduction to the amount paid to HMRC. These are:
- A 10 per cent fixed penalty on the underpaid liabilities (for periods to 5 April 2009)
- Assessment period limited to accounting periods/tax years commencing on or after 1 April 1999
- The option to choose whether to use a single composite rate of 40 per cent or to calculate actual liability on an annual basis (or for some years after 2008/09, a Single Charge Rate)
There will be no restrictions on access to the limited favourable terms:
- assurance about criminal prosecution
- single point of contact for disclosures
I appreciate that you and your client may be disappointed with this news. I am willing to meet with you to discuss this matter and clarify any issues…"
"where the issue being disclosed has already been subject to an intervention that started more than three months before the date of application"
The Declaration went on to say that, in such cases, "the person making the disclosure will not be eligible for the shorter limitation period, the fixed penalty or the composite rate option under the LDF." The effect of the Decisions was thus to preclude the claimants from relying on the principal benefits of the LDF in relation to their EBT arrangements.
The LDF and the EBT Settlement Opportunity
"D. HMRC will make available a special disclosure facility to each person who notifies HMRC pursuant to the taxpayer assistance and compliance programme. Where it is determined that the person is liable to taxation in the United Kingdom, the basis for assessment will be on the terms of the special disclosure facility limiting the penalty and the applicable period of assessment and offering a composite rate in certain defined circumstances.
E. The special disclosure facility will be available to all persons with new or existing fiduciary, company or other holding structures or financial accounts in Liechtenstein during the five-year period subject to the following:-
(a) any person already under investigation by HMRC as of the date of signing of this MOU cannot participate in the disclosure facility;
G. It is the parties' intention that by the conclusion of the five-year taxpayer assistance and compliance programme under this MOU, there will, as a result of the procedures contemplated by this MOU, be no relevant persons with a beneficial interest in relevant property who are liable to taxation in one party but are using the laws of the other party to disguise such liability without paying appropriate tax in the manner contemplated by this MOU. The measures which the parties intend to take and which are described in this MOU are intended to achieve that objective."
"the purpose of the LDF, at the outset at least, was to bring into tax in the UK liabilities which were "disguised" by the laws of Liechtenstein. These would, by their nature, be liabilities of which [HMRC] were not aware, unless and until they were disclosed under the LDF."
The EBT Settlement Opportunity
"The EBTSO did not offer any shortened limitation period, fixed penalty or composite rate option as an incentive to settle, and was very different in character from the LDF."
"1.10 I want to use the Liechtenstein Disclosure Facility (LDF) to settle my EBT liabilities – what should I do?
If you think your case meets the criteria you should contact the LDF Helpdesk in the normal way and they can discuss the appropriate terms of settlement with you."
A link to the Helpdesk was then provided.
(a) Christopher Barlow, an officer of HMRC and Co-ordinator of the LDF up to November 2013;
(b) Geoffrey McDonald Lewis, an officer of HMRC who took over from Mr Barlow in that role from December 2013 and was the author of the Decisions; and
(c) Edward (now Sir Edward) Troup, who was then a Commissioner of HMRC with specific responsibilities as Tax Assurance Commissioner and Second Permanent Secretary.
"In this case, by contrast, the Commissioners provided a full and frank account of their internal discussion leading up to the change of policy in 2014, on which revised policy they relied in making the Decisions under challenge, and so I had a clear view of the underlying policy and the reasons for changing it. This evidence was important to both parties' arguments, and to my overall evaluation of the merits of the case. Where comparative unfairness is alleged, the Court is likely to be heavily dependent on the evidence provided by the Commissioners. The evidence provided in this case provides the better working model."
I respectfully agree with that observation.
Discussions between BDO and HMRC
(2) Following a meeting on 7 December 2011, and correspondence on a technical tax issue concerning the allowance of a tax credit if the option structure within the EBTs was unwound, the then head of the unit dealing with the LDF, Steve Symonds, sent an email on 5 April 2012 to BDO which was framed in encouraging terms and recommended taking full advantage of the LDF bespoke service.
(3) In June 2012, BDO submitted a first sample report on a "no-names basis" to Mr Symonds, with a view to arranging a meeting to discuss whether this was the correct way of approaching the "test cases". The foreshadowed meeting took place on 2 July 2012, when there was a wide-ranging discussion of the composite rate option, interest and penalties.
(4) On 18 July 2012, a telephone conference call took place between representatives of BDO and HMRC, at which it was noted that BDO's clients had three options open to them: settlement under the LDF, settlement under the EBTSO, or litigation. It was noted that there was some difference of view within HMRC as to whether the LDF could be used to settle tax liabilities for EBTs.
(5) Later in July 2012, BDO sent HMRC details of two more cases on a no-names basis, with commentary on the application of the LDF to them. At a further telephone conference call on 26 July 2012, those cases were discussed, and Mr Symonds is recorded as having said:
"Lobby in HMRC keen to develop enquiries through EBT process & aghast that LDF available. But it is available. Entirely possible that could be changed in the future …"
(6) Following the submission of four further cases on a no-names basis, and further discussions, agreement was reached in November 2012 that BDO could now proceed to submit clients' reports on an agreed basis. Later in her judgment, at , the judge referred to this as "the November 2012 green light". BDO then submitted reports for five of its clients on a "named" basis, all of whom were subsequently registered within the LDF and received registration certificates from HMRC by the end of 2012.
(7) Early in 2013, HMRC raised certain problems with the LDF applications submitted by BDO. Many of these concerns were resolved quite quickly, and the outstanding points were dealt with by the beginning of July. This was confirmed in an email from Joseph Cavanagh of HMRC on 4 July 2013, at the end of which he expressed the hope that "it brings all issues up to date". It is clear, however, that some issues must have remained outstanding, because on 29 July 2013 Mr Cavanagh emailed BDO with a further update on what the judge called "certain outstanding issues": see the judgment at . This email was not included in our bundles, but this did not deter counsel for the appellants from describing the position thus reached, in their written and oral submissions, as "the formal green light". It should be noted that this was not the same as the November 2012 green light identified by the judge.
(8) Two days later, on 31 July 2013, Ms Pearson of BDO received a telephone call from Mr Cavanagh, informing her that the availability of the composite rate option under the LDF and other issues were "under review". According to an internal email sent by Mr Cavanagh to colleagues on 2 August 2013, the wording which he had used to inform BDO of the ongoing discussions was:
"We are currently reviewing if the CRO [composite rate option] is allowable as a CT [corporation tax] deduction within the LDF terms. Other issues are also under review. In view of this we are not in a position to advise on these issues or further cases registering in LDF."
The judge did not quote this email, but she was clearly correct to say at  that the suggestion of a review "marked a shift in [HMRC's] approach".
(9) As I have already said (at  above) the claimants then submitted their applications for registration under the LDF on various dates between 30 August and 18 November 2013. These applications were then put "on hold" pending completion of HMRC's review. None of the claimants received a registration certificate within 60 days, or at any time before the Decisions were issued, without any prior warning, on 14 August 2014.
HMRC's internal discussions
"What concerns me most is the possibility of having to back track on the BDO cases, although I remain hopeful we won't have to do that."
(2) When the first two of the claimants' applications were submitted by BDO on 30 August 2013, Mr Barlow gave this advice to the relevant team leader:
"Hold fire please. This is tricky. I imagine BDO are looking to come in because of the treatment we have previously indicated they would get in the cases that are already in. I thought they were aware that recent developments have thrown that treatment into doubt but by the sound of it we need to have another conversation with them…"
(3) It was then decided that the matter should be considered at a meeting of the Business Tax Contentious Issues Panel and the Personal Tax Contentious Issues Panel. Mr Barlow prepared a paper for the meeting, which took place on 6 November 2013, in which he maintained his recommendation that the full benefits under the LDF should be available for EBT users. The judge (at ) quoted this extract from his paper:
"… the fact is that since the LDF commenced in September 2009 we have accepted that when an existing enquiry case enters the LDF, all open issues can be settled via the LDF disclosure and our internal guidance and procedures have been predicated on that basis. If we seek to treat EBT cases differently we will be open to challenge."
At the meeting, however, reservations were expressed about Mr Barlow's views, and the decision was taken to refer to the Commissioners the question whether users of EBT avoidance schemes should be allowed to register and settle their outstanding tax liabilities under the LDF.
(4) The question was first considered by a panel of three Commissioners (Mr Troup, Jim Harra and Jennie Granger) at a meeting on 3 February 2014. They had before them various papers, including one on the tax implications of collecting the tax considered to be due from EBT users via the LDF, as opposed to the EBTSO, and a cost analysis of the yield implications of various options available to HMRC. This estimated a loss for 2014/15 of £85 million if EBT users were able to settle via the LDF instead of the EBTSO, and indicated that the impact in terms of tax loss for all years would be between £214 and £256 million. As Mr Troup records in his statement, specific concerns were expressed at the meeting: (i) that the LDF was being used as a means of reducing or minimising tax due from EBT users, but it was not leading to disclosure of any tax liabilities which HMRC did not already know about, contrary to the original purpose of the LDF; and (ii) that there was a potential unfairness to other EBT users whose circumstances were identical except that they had no offshore assets in 2009, which was a precondition to the application of the LDF.
(5) As the judge records, at :
"Mr Troup and his colleagues decided that the tax liabilities of EBTs should not be settled under the LDF and that no further EBT users should be permitted to register. The Commissioners were aware that this represented a change in practice, and they identified four categories of EBT users requiring consideration in the face of such changed practice:
(1) EBT users who had registered under the LDF and whose liabilities had been finalised. It was agreed that no change would apply retrospectively, and that therefore any EBT user in this category would be permitted to retain the full benefits of the LDF. (As it turned out, there were no taxpayers in this category.)
(2) EBT users who had already registered to use the LDF but whose affairs were not yet settled. The Commissioners were aware at the time that there were 13 such taxpayers.
(3) EBT users who had applied for registration but whose applications were currently "stockpiled". The Commissioners were aware that there were 11 such taxpayers. This category included all of the Claimants.
(4) EBT users who had not yet made any application to register under the LDF. There were likely to be many taxpayers in this category. The Commissioners decided that taxpayers in Category 4 were not to be permitted to benefit from the full terms of the LDF. Categories (2) and (3) were identified as "transitional categories", requiring careful consideration because the Commissioners' practice on LDF was now set to alter whilst those taxpayers had LDF applications outstanding."
(6) The panel then sought further information and legal advice on the transitional categories, and discussed them at a meeting on 29 April 2014. At this meeting, the Commissioners confirmed their previous view on Categories 1 and 4. In relation to Category 2 taxpayers, it was decided that they too should be permitted to settle on the favourable LDF terms, because their LDF registrations had already been accepted and, as Mr Troup put it in his evidence, "they had been given assurances from which HMRC could not withdraw…". In relation to Category 3 taxpayers, the panel decided that it needed more detailed information and further legal advice on legitimate expectation before coming to a final conclusion.
(7) Further documents were then provided to the panel, including a paper setting out detailed information about the Category 3 cases, and outlining the three options open to HMRC in handling them. The first option was to treat all Category 3 cases in the same way as Category 2; the second was to accord such treatment to taxpayers who could demonstrate detrimental reliance, but otherwise restrict access to the full favourable terms of the LDF; while the third was to reject Category 3 applications for favourable treatment under the LDF, on the basis that their applications had not yet been accepted, they could have no legitimate expectation that they would be, and HMRC were at liberty to change their policy in the meantime. Further legal advice was also provided, in respect of which privilege has not been waived. On 28 May 2014, having reviewed the legal advice and considered the matter further, Mr Troup emailed his two colleagues explaining that he did not consider it consistent with their agreed policy or even-handed in the treatment of the taxpayer population as a whole to allow settlement on favourable terms to Category 3 taxpayers. Mr Harra and Ms Granger agreed with that view, so the third option was adopted in relation to Category 3. This decision was subsequently implemented by the Fourth Joint Declaration on 14 August 2014, after agreement to the necessary changes had been obtained from the Government of Liechtenstein.
(8) In his written evidence, Mr Troup addressed the issue of unfairness in relation to the transitional categories as follows:
"22. I understand it to have been suggested, and it now to be the claimants' case, that it was unfair for HMRC to have withdrawn the LDF from EBT scheme users without warning or notice. It was, and is, my view that it was inappropriate for taxpayers in the position of the claimants to be given access to the LDF. Having formed that view, I do not consider that fairness dictated that those taxpayers should be given a further period in which to avail themselves of an unjustified benefit, to the detriment of the general body of taxpayers. On the contrary, HMRC's duty to the general body of taxpayers meant that the availability of the LDF to these taxpayers in these circumstances should be curtailed immediately.
23. We recognised that, in some circumstances, it could be unfair for HMRC to act in such a way as to defeat a legitimate expectation. It was for that reason, as explained above, that we decided not to reverse the settlements of those users of marketed avoidance schemes who had already settled through LDF or to alter the position of those EBT users who had had their applications for registration in the LDF accepted. However, it was our view and conclusion that the present claimants (who had their applications for registration put on hold pending our consideration of the availability of the LDF for EBT users) were in a materially different position and that it would not be unfair or improper, nor would it defeat any legitimate expectation, to refuse their applications to register for the favourable terms of the LDF. Like all other EBT users they would, of course, still be able to avail themselves of the settlement opportunity under the EBTSO, or to litigate their positions before the Tax Chamber of the First-tier Tribunal in the ordinary way."
I emphasise that in this passage Mr Troup dealt with the wider issue of unfairness, viewed in the context of HMRC's duty to the general body of taxpayers, as well as with the specific issue of legitimate expectation.
"The courts have not previously had occasion to consider facts analogous to those here. The categories of unfairness are not closed, and precedent should act as a guide not as a cage. Each case must be judged on its own facts, bearing in mind the Revenue's unqualified acceptance of a duty to act fairly and in accordance with the highest public standards."
"The threshold of public law irrationality is notoriously high. It is to be remembered that what may seem fair treatment of one taxpayer may be unfair if other taxpayers similarly placed have been treated differently. And in all save exceptional circumstances the Revenue is the best judge of what is fair. It has not, however, been suggested that the detailed history described above has any parallel. The circumstances are, literally, exceptional. I cannot conceive that any decision-maker fully and fairly applying his mind to this history…could have concluded that the legitimate interests of the public were advanced, or that the Revenue's acknowledged duty to act fairly and in accordance with the highest public standards was vindicated, by a refusal to exercise discretion in favour of Unilever. I share the Judge's conclusion that this refusal, if fully informed, was so unreasonable as to be in public law terms irrational."
" "unfairness amounting to an abuse of power" as envisaged in Preston and the other Revenue cases is unlawful not because it involves conduct such as would offend some equivalent private law principle, not principally indeed because it breaches a legitimate expectation that some different substantive decision will be taken, but rather because either it is illogical or immoral or both for a public authority to act with conspicuous unfairness and in that sense abuse its power. As Lord Donaldson M.R., said in Regina v Independent Television Commission ex parte TSW Broadcasting Ltd: "The test in public law is fairness, not an adaptation of the law of contract or estoppel". In short, I regard the MFK category of legitimate expectation as essentially but a head of Wednesbury unreasonableness, not necessarily exhaustive of the grounds upon which a successful substantive unfairness challenge may be based. "
"the border between on the one hand mere unfairness - conduct which may be characterised as "a bit rich" but nevertheless understandable - and on the other hand a decision so outrageously unfair that it should not be allowed to stand."
"But I do not believe that Unilever has formulated a fresh head of review conferring on the court a wide discretion to substitute its view of the substantive merits for the decision-maker. In order to constitute conspicuous unfairness, the decision must be immoral or illogical or attract similar opprobrium, and it necessarily follows that it will be irrational. I would treat this concept of conspicuous unfairness as a particular and distinct form of irrationality, which in essence is how it was viewed by Sir Thomas Bingham in Unilever. There are no doubt cases, of which Unilever is one, where the concept of fairness, and an allegation of conspicuous unfairness, better captures the particular nuance of the complaint being advanced than the concept of irrationality. Indeed, I think that is typically so in any case where the alleged unreasonable behaviour involves a sudden change of policy or inconsistent treatment. It is more natural and appropriate to describe such conduct as unfair rather than unreasonable. But in my view it is only if a reasonable body could not fairly have acted as the defendants have that their conduct trespasses into the area of conspicuous unfairness amounting to abuse of power. The court's role remains supervisory."
Comparative unfairness in tax cases
(a) comparative unfairness may only be found to exist where parties are materially identically placed, and taxpayers with open claims are in a materially different position from those with claims made in closed years;
(b) the judge had wrongly concluded that the question of comparative unfairness was to be determined as at the time of the 2003 guidance, and not when it was withdrawn; and
(c) the judge failed to direct herself correctly about the exception to the normal requirements for decision-makers to act consistently where they had previously acted under a mistake as to the law.
In support of the third submission, Mr Nawbatt had referred to the conclusion of Elias J in the AQA case at  that:
"there is nothing inherently unfair in putting right earlier errors rather than compounding them, even if this involves creating a disparity between similarly placed individuals."
"I consider that on principle it is not enough to say that the persons to be treated in the same way were in the same cohort originally. It is necessary to look at the time when the decision is made, that is, when the decision-maker is called upon to assess whether they should be treated as being in the same position. In the present case taxpayers with Mansworth v Jelley losses were not in the same position if they were in open years as opposed to closed years. For the latter group, HMRC had no power to reopen their affairs and to remove the ability to utilise the Mansworth v Jelley loss. The position was entirely different for those whose years were open, including the respondent. Therefore this ground of unfairness was not available to the judge,"
The judge's decision
"…the LDF is an invitation to taxpayers to apply for registration; it offers no promise that the application will be accepted. It is only if the relevant taxpayer is granted a registration certificate by [HMRC] that the taxpayer might have any expectation of entitlement to the benefits described within the LDF. This has two consequences, which are important for the determination of this case: first, a taxpayer who does not have a registration certificate does not have any legitimate - or other - expectation of any benefits at all under the LDF; this is so whether the taxpayer has applied for a registration certificate (but not heard back from [HMRC]) or has not yet made an application. Secondly, there is a material difference between taxpayers who have been registered under the LDF, who have applied and who have had their applications accepted-they do (at least arguably) have a legitimate expectation that the substantive benefits of the LDF will be extended to them-and those who have not been registered, who have no such expectation at all."
"The failure to respond within the promised time is, at its highest, an administrative default by [HMRC], which does not have any consequence which is relevant to this claim for [judicial review]."
"But the abandonment of legitimate expectation gives rise to a problem for the Claimants: the doctrine of legitimate expectation has developed to address complaints of unfairness in the State's refusal to confer promised benefits… Once the Claimants have accepted, as they must, that they had no legitimate expectation arising out of the LDF, they will inevitably struggle to show conspicuous unfairness in the refusal to bestow the LDF benefits, because they had no expectation (of a "legitimate" sort, giving rise to a right protected in law) that they would get those benefits in the first place. "
"Although BDO were encouraged to think that the LDF would be available to their clients, no guarantee or promise to that effect was given, at any time, to BDO or to any named Claimant. There was not even any guarantee that the terms of the LDF would remain unaltered, or would remain available to the BDO clients. [HMRC] were at liberty to withdraw the benefits at any time, because the Claimants had no legitimate expectation of any substantive benefit under the LDF (see above)."
"Perhaps the real complaint which underpins the second and third arguments is not so much that [HMRC] refused to confer the full benefits of the LDF on the Claimants (who were unregistered at the time), but rather that [HMRC] failed to process the applications for registration more quickly, so as to secure the full LDF benefits for the Claimants before the August 2014 changes. But for reasons set out above, this complaint, if this is how the Claimants' case is put, is not a valid basis on which to challenge the Decisions. The 60 day promised turnaround time was a procedural or administrative matter; failure to comply with it does not result in the Claimants being able to claim a substantive benefit (or otherwise to complain of conspicuous unfairness)."
"…the Category 2 taxpayers were, in fact and law, in a different position, not because of the timing of their applications, but because [HMRC] had accepted their applications and issued registration certificates to them. It was not the date of application which divided them, but the fact of registration within the LDF. This was a difference of fact, certainly. But it was more: it meant that Category 2 taxpayers did have a legitimate expectation of receiving the full benefits set out in the LDF in its unaltered state, because their applications had been accepted and their eligibility for those benefits had been confirmed. "
"88. …Amongst the many factors considered by Mr Troup and his colleagues, were:
(i) the significant adverse tax yield implications of permitting any of the EBT users to settle by means of the LDF;
(ii) the interests of taxpayers generally, that tax will be collected in accordance with the statute, noting that if tax is not collected, then the burden of making up any deficit in collection will rest on the shoulders of other taxpayers;
(iii) the purpose of the LDF, which was to enable [HMRC] to reach settlements and realise tax from taxpayers whose liabilities had previously been unknown to [HMRC], noting that [HMRC] were already well aware of the EBT liabilities of the Claimants and other EBT users;
(iv) the possible reputational damage to [HMRC], and the possibility of legal action, if [they] permitted the LDF to be used for EBT settlements;
(v) [HMRC's] litigation and settlement strategy, which set out [their] policy on reaching settlements with taxpayers, amongst other things;
(vi) the comparatively less advantageous terms of the EBTSO, through which many EBT users had already settled;
(vii) the non-availability of the LDF to those EBT users who did not have any foreign assets at the relevant date.
These were powerful factors in favour of limiting the LDF benefits to the Claimants and other registered EBT users. [HMRC] were well aware of the overtures which had been made by the LDF unit to BDO, and that any refusal to confer the full LDF terms would constitute a change in policy: these were factors taken into account which tended in the opposite direction.
89. In light of the full analysis undertaken by [HMRC] and evidenced in this case, I am unable to conclude that any material consideration was left out or given any inappropriate weight. This was a difficult decision for [HMRC]. They undertook a careful review of the many public interest and private interest factors engaged. I cannot identify any fault in their approach or evaluation."
The grounds of appeal
(1) The court failed to take into account all relevant considerations.
(2) Other factual conclusions reached were inconsistent with the evidence before the court.
(3) The court misdirected itself as to the law governing challenges on grounds of conspicuous unfairness.
(4) The court's analysis of HMRC's decision-making process is flawed because, contrary to the decision of the judge:
(i) it focused solely on the risk of a legitimate expectation-based challenge;
(ii) it did not consider HMRC's duty to act fairly; and
(iii) material considerations were disregarded.
HMRC's preliminary objection
"If that is the argument advanced: (a) it is a new argument – or at least not the way the case was put before me; and, anyway, (b) it surely fails for the same reasons as apply in the context of comparison with category 2 taxpayers…, namely that non-EBT taxpayers are in a materially different position from EBT taxpayers."
"being arbitrarily treated more harshly than comparable taxpayers and more harshly than those whose conduct (marketed avoidance schemes and evasion) is more worthy of opprobrium."
It appears to be implicit in this formulation that only EBT taxpayers who had made their applications before 1 August 2013 were regarded as "comparable taxpayers", while there was also a third category of taxpayers whose conduct was worse than that of the claimants (although it should be pointed out that there is a clear distinction between marketed avoidance schemes, which are normally lawful, and tax evasion, which by definition is not). This supposed distinction was then reflected in later paragraphs of the skeleton argument, where it was said that after 1 August 2013 taxpayers with other marketed avoidance schemes and tax evaders continued to be registered with the LDF with a normal turnaround period of about two days from application to registration.
"I think you are going to have to tread very carefully, Mr Gordon, because that's not….I require things to be properly pleaded before me and at the moment your claim is not pleaded on the basis that there was a legitimate expectation arising out of the published policy. You, on the basis of what Collins J said, stepped back from that and deliberately amended your case into a case of Unilever unfairness and certainly you are perfectly entitled to run that argument, but on the basis that the unfairness was not in the form of legitimate expectation based on the published policy, but on other circumstances and factors, for instance the unfairness by comparison with others. That is how your case is currently pleaded."
Ground 3: did the judge misdirect herself as to the law governing challenges on grounds of conspicuous unfairness?
"74. But Mr Gordon argues that conspicuous unfairness can be found even where there is no legitimate expectation (Unilever being just such a case). He is right, at least in principle, so I move on to address his arguments."
Ground 1: did the judge fail to take relevant circumstances into account?
"Whatever decision is taken by the Commissioners, do the Commissioners want it applied to all Marketed Avoidance Scheme cases or restricted to EBT cases or would they want to consider each scheme separately?"
Appendix 2 to the paper dealt with the "Non-yield implications of allowing EBT Users to continue to settle their liabilities via the LDF". The discussion in this appendix expressly envisaged the possibility that users of marketed avoidance schemes ("MAS") might wish to access the favourable terms offered via the LDF, but indicated that no such cases were then known to be in the pipeline. As the writer said, at paragraph 22:
"Logically whatever decision is taken on this issue by the Commissioners should be applied across all MAS cases. At present the interest in settling MAS liabilities via the LDF is restricted to EBT cases and the central LDF team are not aware of any attempt to settle any other such liabilities via the LDF. Notwithstanding this, the potential remains and should users of other MAS seek to enter the LDF the potential impacts are increased."
This would also appear to tally with the answer given by Mr Brennan on instructions to the judge during his oral submissions: see  above.
Ground 2: did the judge come to factual conclusions which were inconsistent with the evidence before the court?
Ground 4: was the judge's analysis of HMRC's decision-making process flawed?