England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
IN THE MATTER OF AN APPEAL FROM THE VAT AND DUTIES TRIBUNAL

		Royal Courts of Justice Strand, London, WC2A 2LL
		08/06/2007

Mr Justice Morgan :

Introduction

1. This judgment concerns an application by The Commissioners for HM Revenue & Customs ("HMRC") for an extension of time to appeal against a decision of the VAT and Duties Tribunal ("the Tribunal"). The relevant time limit for this appeal is imposed by CPR 52PD para 23.8 (2) (b) which specifies a period of: "56 days after the date of the decision or other determination that the appellant wishes to appeal". There is an issue, which I need to resolve, as to the relevant date of decision. The relevant date of decision is either 21^st July 2006 (as The Church of Scientology Religious Education College Inc. ("The College") contends) or is the 13^th September 2006 (as HMRC contends). The Appellant's Notice in this case is dated 30^th March 2007 and, accordingly, the Appeal is brought outside the relevant period of 56 days irrespective of which date is the correct date of decision. However, HMRC contends that I should look at the history of this case and assess the position on the basis that HMRC delayed until 30^th March 2007 in appealing a decision of 13^th September 2006, rather than HMRC delayed until 30^th March 2007 in appealing a decision of 21^st July 2006. A key matter on which HMRC rely is that, as they contend, the decision of 13^th September 2006 was not sent to them on or about the 13^th September 2006 and, indeed, they only became aware of that decision on 2^nd February 2007.

A summary of the case for HMRC

2. HMRC submitted that although the Tribunal had released a decision on the 21^st July 2006 ("the July decision"), they released a further decision on the 13^th September 2006 ("the September decision"). It was submitted that the September decision superseded the July decision. It is the September decision and not the July decision which HMRC now wish to appeal. The time for appealing the September decision ran from 13^th September 2006 and not from 21^st July 2006. As the September decision did not reach HMRC until 2^nd February 2007, and HMRC filed its Appellant's Notice on 30^th March 2007, the 56^th day after 2^nd February 2007, they should have an extension of time to the date of the Appellant's Notice. Such an extension was justified because the period of the extension would be equal to the period during which HMRC was not aware of the existence of the September decision which they now wish to appeal.

A summary of the case for the College

3. The College submitted that the relevant decision was the July decision. That was the decision that HMRC needed to appeal. The September decision did not supersede the July decision so as to start the time for appeal running afresh from 13^th September 2006. The September decision was either a supplementary decision or a correction of the July decision. HMRC had given no explanation, supported by evidence, as to why they had not appealed the July decision within 56 days of the 21^st July 2006. An extension of time was only appropriate in an exceptional case. Under CPR 3.9(2), if HMRC were to contend that the present was an exceptional case, which justified an extension of time for appealing, they had to establish by evidence the facts on which they relied. In relation to the period from 21^st July 2006 to 2^nd February 2007, all that HMRC would have been entitled to think would happen was that the Tribunal would issue a supplementary decision. They could not have expected that a supplementary decision would start time running afresh for the necessary appeal against the July decision. Even if the September decision, when it came, might have been confusing as to when time started to run, if HMRC did not receive that decision until 2^nd February 2007, then HMRC could not have been confused by something they had not seen until that time.

The issues before the Tribunal

4. It is necessary to refer, by way of background, to the nature of the issues before the Tribunal. The College contended that the services it provided to individuals should have been exempt from VAT throughout the periods relevant to the present dispute. The College had, indeed, for some years considered that its services were exempt services for the purpose of VAT and that it did not make those supplies as a taxable person. HMRC (and their predecessors in law) consistently denied that contention and required the College to account for VAT on its supplies. The College did so. In 2000, following a ruling in another case, HMRC informed the College that HMRC now agreed that the College was an eligible body within the meaning of Note 1(e) of Group 6 of Schedule 9 to the Value Added Tax Act 1994 (a not for profit body applying any profits to future supplies). HMRC also accepted that the services that the College provided were exempt under Item 1 of Group 6 (provision of education, research and vocational training). This ruling confirmed that the main supplies by the College were, and are, exempt from VAT.
5. The ruling referred to in paragraph 4 above meant that the College had overpaid VAT for a number of years. I understand that the total overpayment was something in excess of £10 million. Mr Prosser QC (who appears with Mr Baldry for the College) has informed me that the burden of the overpaid VAT fell upon the College rather than upon third parties to whom services were provided by the College. HMRC agreed to repay part only of the £10 million overpaid. I understand that they have repaid some £2 million to the College. The College has sought to recover a further sum which has subsequently been quantified in the amount £8,016,122 together with interest. HMRC has resisted repaying this sum. In particular, HMRC has applied a repayment "cap" to refuse repayments of VAT made more than three years before a claim for repayment. The dispute between the College and HMRC resulted in appeals to the Tribunal.
6. The Tribunal held a hearing in relation to the College's appeal on 2^nd May 2006. Before that date (on 15^th February 2006), the Court of Appeal gave judgment in Fleming v Customs & Excise Commissioners 2006 STC 864. I was told that the Court of Appeal gave the Customs & Excise Commissioners leave to appeal to the House of Lords. It was common ground before the Tribunal, and still is common ground before me, that the decision in Fleming means that HMRC is obliged to pay the agreed figure, in excess of £8 million, to the College.
7. The Fleming point was not the only point raised in the appeals to the Tribunal. The College argued before the Tribunal that even if the decision of the Court of Appeal in Fleming were to be reversed by the House of Lords, the College would still be entitled to repayment of the agreed sum in excess of £8 million on wholly separate grounds. I will refer to these other matters as "the additional point". Although the Fleming point and the additional point constituted the main appeal before the Tribunal, there was also another appeal which was earlier in time and was called the "first appeal" which raised a discrete issue as to the date on which the College had made a claim for repayment. It was agreed that the first appeal was subsumed into the main appeal (concerning the Fleming point and the additional point) although, as will be seen, the matter was in due course decided by the Tribunal.
8. Following the hearing before the Tribunal on 2^nd May 2006, the tribunal released its written decision dated 21^st July 2006. In paragraph 23 of the July decision, the Tribunal referred to the Fleming point and held that the Tribunal was bound to decide this point in favour of the College. It was stated that the point required no further discussion as there was no issue of fact in contention on the matter of principle, although the detailed figures had not then been worked out and the Tribunal referred to what should happen in this respect. It had been accepted at the hearing on 2^nd May 2006 that the Tribunal was bound by the Fleming decision and accordingly, the Tribunal's decision in paragraph 23 was entirely as would have been predicted.
9. The July decision did not deal with the additional point put forward by the College in relation to the main appeal. Indeed, the next paragraph in the July decision after paragraph 23 was numbered paragraph 25 and in paragraphs 25 -28, the Tribunal dealt with the issue raised by the first appeal as to the effective date of the claim by the College for repayment.
10. Much of the July decision was taken up with other applications which had been made at the hearing on 2^nd May 2006. The College had applied to the Tribunal under rule 19 (4) of the Value Added Tax Tribunal Rules 1986 which, in some circumstances, allows the Tribunal to allow or dismiss an appeal by reason of a party's failure to comply with a direction of the Tribunal. The Tribunal considered that matter in paragraphs 10-15 of its decision. The Tribunal was highly critical of HMRC's conduct in relation to the appeals. It said that HMRC's conduct "was frankly inadequate if not inept" although it excepted HMRC's counsel from that remark. The Tribunal referred to the fact that HMRC had failed to put in place appropriate systems notwithstanding earlier warnings in previous decisions of the Tribunal. The Tribunal also referred to the fact that the entire set of papers had been lost by HMRC. Mr Collins, who appeared for HMRC before me, referred to this loss being attributable to a major move of offices on the part of HMRC.
11. Another matter dealt with by the Tribunal was an application by HMRC, made at the last moment, to stay the hearing of the appeal pending the decision of the House of Lords in Fleming. The Tribunal rejected this application by HMRC referring to its lateness and also referring to the very considerable delay which had already occurred in relation to the listing of the appeals in this case.
12. The upshot of the July decision was that the College succeeded, and HMRC failed, on the Fleming point, as had been conceded would be the only possible determination by the Tribunal on that point. The decision did not, however, deal with the additional point put forward by the College.
13. On 26^th July 2006, Hodkin & Co, solicitors for the College wrote to the Tribunal referring to the July decision. This letter referred to the fact that publication of the decision had been deferred by seven days to give the parties the opportunity of pointing out any typing mistakes and any obvious factual errors. It was accepted by Counsel for both sides before me that this was a reference to the July decision being made public to persons other than the parties and, in particular, being made public on the Tribunal's web site. It was accepted that this seven day period was not material so far as the release date of any decision was concerned.
14. Hodkin & Co's letter of 26^th July 2006 pointed out that the main appeal had been argued on two alternate grounds, the first being the Fleming point and the second being the additional point. The solicitors pointed out that it would be in the interests of justice and in the interests of saving considerable costs for the Tribunal to say whether or not the College would succeed on the additional point. Indeed, the solicitors said, it was precisely for that reason that the College put forward this additional point. The College was explaining that if it succeeded on the additional point then the Fleming point would be academic and so the College's success on the additional point would not be thrown into question by whatever the House of Lords did in the Fleming case. The letter then included this paragraph:

"We have discussed this matter with our clients' counsel, and he informs us that the Tribunal does have the power to supplement its decision to add an item that may have been overlooked."

Finally, the College's solicitors stated that they had sent a copy of the letter of 26^th July 2006 to HMRC.

15. The solicitor acting for HMRC in relation to the Tribunal appeal was a Ms Ottley. She prepared a witness statement in support of the Appellant's Notice. In paragraph 10 of that statement, she states that on 10^th August 2006, she spoke with the College's solicitor who confirmed that the Tribunal had agreed to remove the July decision from its web site "pending further review" on the basis that the decision had been placed on the web site in error. Mr Hodkin in due course prepared a witness statement and he did not join issue with Ms Ottley's description on what was said on 10^th August 2006. Of course, the "review" which was apparently contemplated in August 2006 was a review in accordance with the letter of 26^th July 2006 which asked the Tribunal to "supplement its decision" so as to deal with the additional point.
16. On 13^th September 2006, Ms Ottley telephoned the Tribunal to enquire whether any progress had been made in relation to the College's request in its letter of 26^th July 2006. Ms Ottley recalls that a member of the Tribunal staff informed her that the staff were awaiting approval by the Chairman of the "decision".
17. Ms Ottley does not appear to have done anything further in relation to the supplemental decision requested of the Tribunal pursuant to the letter of 26^th July 2006 until 2^nd February 2007 when she telephoned the Tribunal to enquire whether a supplemental decision was available. No one else on behalf of HMRC did anything else in the period from 13^th September 2006 to 2^nd February 2007 to enquire as to progress from the Tribunal.
18. In fact, on the very day Ms Ottley telephoned the Tribunal, 13^th September 2006, the Tribunal released a further document in the form of a decision in relation to the College's appeals. This document was signed by the Chairman and was stated to be "released" on 13^th September 2006. Underneath the date was added the words:

"[Paragraph 24 of this decision was omitted from the decision when first released. It is added under the authority of rule 30 (6) of the Value Added Tax Tribunal Rules 1986.]"

19. The document released on 13^th September 2006, which I have called "the September decision", without prejudice to its legal character, did include a paragraph 24 which did deal with the additional point. Paragraph 24 identified the submissions made in relation to the additional point and determined them in favour of HMRC.
20. The result of the September decision was therefore that the College had succeeded in its appeals against HMRC on the Fleming point but had failed on the additional point. In order therefore for HMRC to succeed overall, it had to win the Fleming appeal in the House of Lords and appeal the decision of the Tribunal in this case. It may have been open to the College to cross appeal or serve a Respondent's Notice in relation to the additional point. Mr Prosser told me that the College had indeed intended to take that action if there had been an appeal by HMRC. Quite properly, at the hearing before me, Counsel did not attempt to go into the detail of such a cross appeal on the additional point and I do not therefore know whether a cross appeal by the College on that point would have had good or poor prospects of success.
21. The September decision was undoubtedly sent to the solicitors for the College. The covering letter was dated 13th September 2006 and the only addressee was Hodkin & Co. The letter reads:

"Following the discovery of missing paragraph 24, the Tribunal has now issued an amended Decision which is enclosed herewith for substitution. I apologise for any inconvenience caused."

22. The Tribunal has said various things as to whether a copy of the September decision was sent to HMRC. In paragraph 16 of her witness statement, Ms Ottley refers to a conversation her colleague had with a member of the Tribunal staff on 23^rd March 2007 and that member of staff said that, according to the records he had in front of him, the September decision was sent to HMRC on 13^th September 2006. Mr Hodkin says that on 4^th April 2007 he telephoned the Tribunal office and the officer he spoke to located the file and confirmed that a copy of the September decision had been sent to HMRC on 13^th September 2006. However, another colleague of Ms Ottley spoke to a Ms Saunders, a member of the Tribunal staff on 1^st March 2007 and Ms Saunders is said to have confirmed that the Tribunal had not notified HMRC of the September decision. Mr Hodkin says that the Tribunal's web site, has had for some time an entry relating to this case and the entry gives the date of decision as 13^th September 2006. However, it was not clearly established when that entry was first put on the Tribunal's web site.
23. HMRC say that they did not receive, before 2^nd February 2007, the September decision. Ms Ottley's colleague checked with the member of HMRC staff responsible for logging the date that Tribunal decisions are received by the solicitor's office and it was confirmed that the September decision had not been received before 2^nd February 2007. If this evidence is correct then either the tribunal did not send the September decision to HMRC in September 2006 or the Tribunal did send it but it was not received by HMRC.
24. There was a meeting for one and a half days on 13^th and 14^th November 2006 between Mr Hodkin and the College on the one side and representatives of HMRC on the other side to discuss the detailed calculation of the repayment. At this meeting, Mr Hodkin had the September decision. He believed that HMRC also had the September decision and in his witness statement he suggested that this was indeed the case (and not just his belief). However, one of the HMRC officers present on 13^th and 14^th November 2006 has prepared a witness statement making it clear that the copy of the decision which HMRC was using at that meeting was the July decision.
25. Before continuing the history, I can make my finding as to whether HMRC received a copy of this September decision before 2^nd February 2007. Mr Prosser submits that the correct finding is that HMRC had received the September 2006 decision on or about the 13^th September 2006 and they had simply lost it. Whilst that is possible, I find, having recited the relevant evidence above, on the balance of probabilities, that the September 2006 decision was not received by HMRC until it was faxed to them on 2^nd February 2007.
26. It is also convenient at this stage to consider what evidence exists as to the reasons that HMRC did not appeal the July decision within the 56 day time limit which expired on 15^th September 2006. Ms Ottley's witness statement does not refer to that subject at all. The skeleton argument lodged in support of the Appellant's Notice does not refer to that subject either. The two witness statements of Ms Mullen (on behalf of HMRC) do not deal with that question. The supplementary skeleton argument dated two days before the hearing of this application on behalf of HMRC states at paragraph 5:

"It was necessary for the Commissioners to await the new decision before appealing. If they had lost on the facts ( … [on the additional point]…, contrary to the Tribunal's findings at paragraph 24 of the new decision), there would have been no purpose in the Commissioners' appealing on the Fleming issue."

27. The statement in the supplementary skeleton argument is not the subject of any evidence on behalf of HMRC. The result is that there is no evidence as to why HMRC did not appeal the July decision before 15^th September 2006. I can understand the submission made by Mr Collins on their behalf that the future of an appeal against the July decision could be affected to an important extent by the Tribunal's decision on the additional point, which decision had been requested by the College (rather than by HMRC) on 26^th July 2006. If the College had won on the additional point and if their success on the additional point was not open to challenge by way of an appeal by HMRC, then HMRC may have had reluctantly to conclude that there was no point in challenging the Fleming decision in this particular case. However, I do not agree with the submission that it was "necessary" for HMRC to await the further decision of the Tribunal. The July decision was a decision on the Fleming point. The Tribunal was not asked to re-visit its decision on the Fleming point. The Tribunal was asked to give a supplemental decision on the additional point.
28. If HMRC wished to challenge the Tribunal's decision on the Fleming point in the July decision, then the relevant time limit for such a challenge was 56 days from 21^st July 2006, expiring on 15^th September 2006. If HMRC was in two minds about whether to appeal the Tribunal's decision on the Fleming point because of the possible outcomes in relation to the additional point, then it was open to HMRC to put in an Appellant's Notice on the Fleming point within the 56 day time limit and then to reconsider the position when the Tribunal's decision on the additional point was available. If HMRC was concerned that the 56 day time limit would expire before it received the Tribunal's decision on the additional point, then it could have written to the Tribunal encouraging the Tribunal to give its decision on the additional point well before 15^th September 2006. It could have applied to the High Court for an extension of time such application being made before 15^th September 2006 and being justified on the basis that HMRC wanted to know the Tribunal's answer on the additional point before it committed itself to an appeal on the Fleming point. I suspect that as between serving an Appellant's Notice in time and serving an Appellant's Notice requesting an extension of time, it would have been far simpler to issue an Appellant's Notice within time. As the Appellant's Notice issued on 30^th March 2007 indicates, completing an Appellant's Notice in this case would have been a straight forward matter. If HMRC were concerned about time for appeal running out on 15^th September 2006, they could have contacted the College's solicitors to discuss the way forward. They could have asked the College's solicitors to agree that the College would not take any point about the lapse of time on 15^th September 2006. Such an agreement between the parties would not bind the Court but it would affect the Court's attitude to an appeal which was out of time under the rules but was not out of time if one had regard to the agreement between the parties. However, HMRC did none of the things referred to above and the date of 15^th September 2006 came and went without any Appellant's Notice from HMRC.
29. Meanwhile, on the other side, the College was in possession of the September decision. Mr Hodkin in his witness statement referred to "the final date for appealing" expiring on 8^th November 2006; that date is 56 days from 13^th September 2006, the date of release of the September decision. After 8^th November 2006, Mr Hodkin reassured his client that it was satisfactory to discuss figures with Mr Jemson, the Customs officer because "there was no appeal and the appeal deadline had expired". It seems that the College was concerned about the possibility of meeting Mr Jemson if the litigation was on going because Mr Jemson had provided a witness statement in connection with the appeal to the Tribunal. I do not quite understand what the problem in meeting Mr Jemson might have been but it seemed to matter to the College and its solicitor. Indeed, seemingly in relation to this point, a representative of the College came to the Appeals Office of the High Court on 10^th November 2006 and verified that no appeal had been made by HMRC. Accordingly, from 10^th November 2006, the College knew that no appeal had been made by HMRC and believed that the time for appeal had passed. The evidence is silent as to whether the College was advised by its solicitor of the possibility of an extension of the time for appealing.
30. As already explained, in November 2006, the parties met to discuss figures for the repayment. On 27^th November 2006, HMRC wrote to the College asking for an undertaking that the repayment to the College would be paid back to HMRC if HMRC succeeded in the Fleming case. On 7^th December 2006, the College's solicitors stated that there was no requirement for the College to sign an undertaking although this statement was not further explained. On 12^th February 2007, HMRC wrote again to the College's solicitor stating that the finding in favour of the College at paragraph 23 of the Tribunal decision was "Fleming dependant". Even by this date, HMRC had not said anything following 21^st July 2006 to indicate that it was proposing to appeal the Tribunal's decision. On 16^th February 2007, the College's solicitors wrote to HMRC stating: "this litigation is at an end ….". On 22^nd February 2007, HMRC wrote to the College's solicitors referring to the litigation by which they meant the appeal to the House of Lords in the Fleming case.
31. As indicated earlier, HMRC became aware of the September decision on 2^nd February 2007. This was initiated "as a result of a telephone call received from a colleague": see paragraph 12 of Ms Ottley's witness statement. It was not explained precisely what information had reached HMRC at that point. On 2^nd February 2007, Ms Ottley telephoned the Tribunal and became aware of the September decision and in the afternoon of 2^nd February 2007 received a faxed copy of the decision. Ms Ottley was away from the office from 26^th February 2007 to 16^th March 2007. There appears to have been an investigation in her absence as to how and why HMRC had not earlier received the September decision.
32. On 20^th March 2007, HMRC wrote to the College's solicitors referring to an earlier telephone conversation and stating that HMRC were appealing the Tribunal's decision. The letter went on to refer to an undertaking from the College as to repayment. On 23^rd March 2007, the College's solicitor wrote a detailed letter stating that the time for appealing expired "almost five months ago". They referred to the decision of the Court of Appeal in Smith v Brough [2005] EWCA CIV 261. The solicitor stated that given that the original ruling was issued on 21^st July 2006 and was re-released on 13^th September 2006, HMRC had "an additional 54 days on top of the statutory 56 day period to formulate their appeal". The solicitors referred to the fact that the meeting with Mr Jemson had only taken place when the College was reassured by its solicitor that the time for appealing had expired. The solicitors stated that they had "continually" pointed out that the litigation had ended although, so far as the correspondence shows, the only statements which could come within this description were the statement in the letter of 7^th December 2006 that there was no requirement for an undertaking and the statement in the letter of 16^th February 2007 that the litigation was at an end.
33. On 30^th March 2007, HMRC issued their Appellant's Notice. In the Appellant's Notice, they seek to appeal the September decision and do not refer to the July decision. HMRC seek an extension of time for filing the Appellant's Notice and the reason they give is that they were not formally notified of the Tribunal's "supplementary decision" until 2^nd February 2007. As I indicated earlier, even including an application for an extension of time, the Appellant's Notice is a document which it was straightforward to complete.
34. There is one final point on the facts that I ought to deal with. In his witness statement, Mr Hodkin states:

"The Church knew that the litigation was ended and they borrowed monies to acquire two new Church properties, in Windmill Hills, Gateshead and Chester Road, Manchester at a combined cost of more than £5,000,000 million. Contracts were exchanged on 2^nd and 9^th March 2007 respectively. Mr Angius [of the College] informs me that they were able to borrow this money because they knew that HMRC had not appealed the decision, and that therefore they were assured to receive the repayment in the near future. He informs me that these properties would not have been acquired if HMRC had appealed the decision."

35. Mr Angius of the College prepared a short witness statement confirming the facts stated in Mr Hodkin's witness statement. On the day before the hearing before me, Mr Angius prepared a second witness statement. He stated that the repayment of the money from HMRC to the College was an unprecedented opportunity to improve the College's services in a significant way by acquiring new properties. He stated that by February 2007 he was aware that the time for HMRC to appeal the Tribunal's decision had long since passed and that within a very short period of time the College would receive a sum of over £8 million. He says that the College was therefore confident that it could afford to borrow the money and buy two properties that became available in Gateshead and Manchester. To purchase those properties Mr Angius arranged for the College to borrow the sum of £5,434,425.00 from a Trust within the Worldwide Church of Scientology. The monies lent are repayable within a maximum of 10 years although his intention was to repay the debt as soon as possible. Contracts were exchanged for the properties on 2^nd and 9^th March 2007 and the purchases have now been completed. The combined purchase price was £5,050,000.00. The purchase costs, including stamp duty land tax, amounted to a further sum exceeding £200,000.00. In respect of one of the properties, the College paid a further £100,000.00 to secure the release of a restrictive covenant which prevented the property being used for religious purposes. Both properties are in need of considerable repair and refurbishment before the College will be able to use them. Work has started but will have to await receipt of the VAT repayment before it can be completed. Mr Angius states that if HMRC were given an extension of time and ultimately succeeded in its appeal it would cause great hardship for the College as the College has a binding liability to repay a loan of nearly £5.5 million and has two large but presently useless Grade 2 listed buildings. He states that the College's funds have to be strictly earmarked to cover their operational needs and that if the College does not now get the VAT repayment it will have to raise a large sum of money over and above its normal activities to deal with the debt and the question of the two buildings and this would cause major problems for the College.

Which is the relevant decision?

36. Before considering whether to extend time for appealing in this case, it is relevant to consider the status of the July decision and the September decision for the purposes of the Value Added Tax Tribunals Rules 1986 and for the Civil Procedure Rules.
37. The relevant Tribunal rule is rule 30. By rule 30 (1), the chairman of the Tribunal may announce the decision of the Tribunal at the conclusion of the hearing of an appeal but, subject to a matter which is not material, rule 30 (1) provides that the decision of the Tribunal shall be recorded in a written document containing findings of fact by the Tribunal and its reasons for the decision which shall be signed by the chairman. By rule 30 (3), a proper officer of the Tribunal is to send a copy of the decision and of any direction in an appeal to each party to the appeal. By rule 30 (4), every decision in an appeal shall bear the date when the copies of it were released to be sent to the parties and such copies and any directions and all copies of any directions recording the outcome of the appeal shall state that date.
38. Rule 30 (6) provides: "a chairman or the Registrar may correct any clerical mistake or other error in expressing his manifest intention in a decision or direction signed by him but if a chairman or the Registrar corrects any such document after a copy thereof has been sent to a party, a proper officer shall as soon as practicable thereafter send a copy of the corrected document, or the page or pages which have been corrected, to that party."
39. The time limit for an appeal from the Tribunal to the High Court is provided by CPR 52 PD para 23.8(2) (b) which states that the appellant must file the Appellant's Notice "within 56 days after the date of the decision or determination that the appellant wishes to appeal". It is clear that an appeal against the July decision had to be brought by 15^th September 2006. If the July decision remains the relevant decision then HMRC has not adduced any evidence as to why they did not appeal that decision by 15^th September 2006. So far as HMRC were concerned, in view of my finding, that they did not receive the September decision until 2^nd February 2007, what was happening was that the College (not HMRC) had asked the Tribunal to "supplement its decision" and on 13^th September 2006 Ms Ottley was given reason to believe by the Tribunal that a supplemental decision was imminent but, as far as she was concerned, no such decision was received by HMRC on or shortly after 13^th September 2006 and she did not follow up the matter until 2^nd February 2007.
40. On 26^th July 2006, the College's solicitors had asked the Tribunal to "supplement its decision". The College stated that it had been advised that the Tribunal had power to do so. The Tribunal appears to have agreed that it had power to do so and in the September decision it identified the source of such powers being rule 30 (6). It stated that paragraph 24 of the September decision was added under the authority of rule 30 (6). Rule 30 (6) allows the Tribunal to correct a clerical mistake or other error in expressing the Tribunal's manifest intention in an earlier decision. If a decision is corrected in this way then the corrected document or the relevant page or pages which have been corrected should be sent to the parties. No one before me challenged the Tribunal's jurisdiction to add paragraph 24 to the decision. It might have been better if the Tribunal had made a supplemental decision (as requested in the letter of 24^th July 2006) dealing with the point they had not dealt with in the decision of 21^st July 2006. If that had happened there would then have been two decisions, the first being released on 21^st July 2006 and the supplemental decision on the paragraph 24 point being released on the 13^th September 2006. The Tribunal may have been influenced in taking the course which it did because there seems to have been a missing paragraph 24 in the first instance. I have drawn attention to the July decision having paragraph 25 immediately following paragraph 23. That may have persuaded the Tribunal that what it was doing was sending out a corrected document. If that is what the Tribunal was doing then the status of the September decision was that it was a correction to a decision released on 21^st July 2006. The most accurate way to describe that would be for the September decision to say "released on 21^st July 2006 and corrected under rule 30 (6) on 13^th September 2006".
41. In my judgment, the Tribunal having released the July decision, it did not have power to revoke that decision. As the time for appealing under the Civil Procedure Rules ran from 21^st July 2006, the Tribunal did not have power to extend that time. The substance of what the Tribunal did on 13^th September 2006 was that it corrected its decision released on 21^st July 2006 with a correction released on 13^th September 2006. The time for appealing the subject matter of the correction, given that it was a distinct subject matter in the present case, might well run from 13^th September 2006. However, HMRC's appeal is not in relation to paragraph 24, the subject matter of the correction, but is in relation to paragraph 23, which was in the form of the original decision released on 21^st July 2006.

Should there be an extension of time?

42. In all the circumstances, a party may have been confused by the issue of the September decision stating that it was released on 13^th September 2006. A party might have thought that the time for appealing any part of the September decision (including paragraph 23) therefore ran from 13^th September 2006 and, whatever the powers of the Tribunal, might have thought that the Tribunal appeared to be saying that the 56 day period, which had been running from 21^st July 2006, started running again from 13^th September 2006. However, in view of my finding that HMRC did not receive the September decision until 2^nd February 2007, there was no question of any confusion of that kind caused to HMRC by the September decision until, at the earliest, 2^nd February 2007. Accordingly, until at least 2^nd February 2007, HMRC continued to have failed to appeal the decision of 21^st July 2006 without being able to put their failure down to confusion caused by the form of the September 2006 decision.
43. The College accepts that the Court has power to extend the 56 day time limit for an appeal from the Tribunal to the High Court. This power is conferred by CPR 52.6 and CPR 52 PD para 5.2 and para 20.2 (extending the provisions of part 52 to a case like the present).
44. In Sayers v Clarke Walker [2002] 1 WLR 3095, the Court of Appeal considered the approach to be adopted to an application for an extension of time under CPR rule 52.6. It was said that an appeal court considering such an application in a case of any complexity should, in deciding whether to exercise its general discretion to extend time, take into account not only the overriding objective in CPR rule 1.1 but also the checklist in CPR rule 3.9 (1) and that judge-made check lists were to be avoided where ever possible. That was a case in which the Court of Appeal thought it appropriate to extend time and went on to consider whether to give permission to appeal (which was required in that case).
45. The College relied on the later decision of the Court of Appeal in Smith v Brough [2005] EWCA Civ 261. In that case, the delay in filing the Appellants Notice was some 39 months so that case, is of course, a much worse case than the present as regards the period of delay. At paragraph 34 of her judgment, Arden LJ summarised the general approach as to the public interest in the closure of litigation. At paragraph 35 she said:

"Interest in the closure of litigation is not only the interest of the public. Successful claimants also have an interest in finality and they are entitled to expect that if they have won at trial, and the time for appeal has passed, that that is the end of the matter. It is now well established that in considering whether to extend time in any case of any complexity the Court should have regard to the overriding objective in CPR 1.1 and also to the checklist in CPR 3.9…."

46. At paragraph 41 of her judgment, she dealt with the point which had been strongly relied upon by the appellants in that case that they could not know whether a retrial, which might have been obtained as a result of a successful appeal, would be worth having until they had made further enquiries. Arden LJ stated that there was no reason why the appellant should not have filed an Appellant's Notice and later withdrawn the appeal if they had realised, as a result of further enquiries, that any retrial would be unsuccessful. At paragraph 52, Arden LJ said:

"This case is, if I may say so, an object lesson in the need for prospective appellants to bear in mind that (a) an extension of time for permission to appeal is discretionary and (b) that the court in granting an extension has to balance the interests of the appellants against the interests of the other parties and the interest of the public."

47. At paragraph 54 in Smith v Brough, Brooke LJ stressed three matters, as follows:

"(1) that it is a fundamental principle of our common law that the outcome of litigation should be final;

(2) that the law exceptionally allows appeals out of time;

(3) that this, and the other exception mentioned in that passage, are the exception to a general rule of high public importance and reserved for rare and limited cases where the facts justifying the exception can be strictly proved".

He added at paragraph 55:

"…… in interpreting CPR 3.9 in any case where an extension of time for appealing in excess of say of two months is being sought, the Court will bear in mind the matters to which I have referred ….. in determining where the interests of the administration of justice truly lie".

48. Brooke LJ's reference to "strictly proved" picks up the terms of CPR rule 3.9 (2) which provides:

"an application for relief must be supported by evidence".

49. I will now consider the matters listed in CPR rule 3.9 on the basis that the relevant decision is the July decision and the date of the Appellant's notice is 30^th March 2007 and on the basis of the findings of fact I have already made.
50. Rules 3.9 (1) refers to "all the circumstances". Rule 3.9 (1) then lists a number of matters which I will consider individually and then stand back and consider "all the circumstances".
51. Paragraph (a) of rule 3.9 refers to "the interests of the administration of justice". If one considers "justice" on its own, HMRC can say that they have an arguable appeal on the Fleming point and the sum of money at stake is very substantial. They can also say that the money is public money. If one concentrates on the word "administration", the College can say that the administration of justice involves a public interest in the closure of litigation, even litigation between HMRC and a tax payer.
52. Paragraph (b) in rule 3.9 (1) asks:

"whether the application for relief has been made promptly".

In my judgment, an Appellant's Notice filed on 30^th March 2007 in relation to a decision of 21^st July 2006 was not prompt. Further, even when HMRC became aware of the September decision on 2^nd February 2007, they took the full 56 days before filing a very straight forward Appellant's Notice taking the Fleming point, which is a point that had been identified for a considerable period as the point they would wish to take, if they appealed. The period between 2^nd February 2007 and 30^th March 2007 itself meant that the application was not made promptly.

53. Paragraph (c) in rule 3.9 (1) asks:

"whether the failure to comply was intentional".

And paragraph (d) asks:

"whether there is a good explanation for the failure".

I will take these two paragraphs together. The failure to appeal the July decision was intentional in that it did not come about as a result of an accident or a mistake. As I have already indicated, although rule 3.9 (2) states that an application for relief must be supported by evidence and Brooke LJ in Smith v Brough referred to the grounds being "strictly proved", there is no evidence offering an explanation as to HMRC's thinking from 21^st July 2006 onwards. If, as Mr Collins suggests on their behalf, they were waiting to see what the Tribunal said on the additional point, they had no reason to think that they were entitled to disregard the 56 day time limit on that account. They do not appear to have made any effort to comply with the 56 day time limit. They cannot say that the terms of the September 2006 decision confused them because, on their evidence, they did not see that decision until the 2^nd February 2007. Even if they were confused on the 2^nd February 2007 and even if they thought that Mr Hodkin was right when he wrote on 23^rd March 2007 that they had further time for appeal from the date of the September decision, Mr Hodkin did not make that comment until 23^rd March 2007 by which time there had been very significant delay following 21^st July 2006. In this way, in my judgment, the absence of a proper explanation or justification for the delay weighs heavily against HMRC on this application.

54. Paragraph (e) in rule 3.9 refers to the extent to which HMRC has complied with other rules, practice directions and court orders. Apart from the failure to comply with the 56 day time limit, there is no relevant failure in relation to these High Court proceedings. However, the Tribunal held that the conduct of the appeals before it was inadequate, if not inept. In my judgment, I can take this into account as one of the factors to be weighed in the balance.
55. Paragraph (f) in rule 3.9 asks: "whether the failure to comply was caused by the party or its legal representative"? That is not a relevant distinction in the present case as the solicitors were in-house.
56. Paragraph (g) in rule 3.9 asks: "whether the trial date or the likely date can still be met if relief is granted". One may need to adapt that paragraph to the case of an appeal like the present. It can be said on behalf of HMRC that if they had appealed the July 2006 decision within the time limit, the probability is that the appeal would have been stayed pending the decision of the House of Lords in Fleming. Thus, if an extension of time is granted at the present time and the appeal is stayed, there is no real change in the position as a result of the lateness of filing the Appellant's Notice. In my judgment, that is probably correct although the College has a tenable argument that if the appeal had been brought by September 2006 and if the College had cross appealed on the additional point, the College might have persuaded the Court to hear the cross appeal on the other ground which cross appeal could have been determined by today's date.
57. Paragraph (h) in rule 3.9 refers to "the effect which the failure to comply had on each party" and paragraph (i) refers to "the effect which the granting of relief would have on each party". I will consider these together. The effect so far as HMRC is concerned is that if I refuse an extension of time, they lose their opportunity to challenge the repayment to the College, if and in the event of HMRC succeeding in the Fleming case. I do not know what HMRC's prospects of succeeding in Fleming might be but I must approach the present application on the basis that HMRC will lose something of value if I decline to extend time for appealing.
58. The effect of delay so far as the College is concerned is said to be based on two considerations. The first is that the College believed that there would not be an appeal and so agreed to talk to Mr Jemson as to the detailed figures for repayment. Although that may have weighed heavily with the College, I do not give it any real weight as I do not see the ground for objecting to discussions with Mr Jemson.
59. The real point made by the College is that it has changed its position in the belief that the decision of the Tribunal was not being challenged. I have recounted the evidence given by the College on that topic. If I accept that evidence at face value then the College has relied on a belief that there would not be an appeal and an extension of time for appealing at this stage would prejudice the College in a way in which it would not have been prejudiced if the appeal had been brought in time and the College had known its position from an earlier date. It would be wrong to say that I am sceptical about the evidence on this point. However, the evidence is very concise and I can well see that the College's attitude to acquiring the two properties it acquired with money borrowed from the Church is likely to have been a much more complicated matter. I do not have any picture of how long the process of acquiring those properties took nor do I have a full picture of everything that went into the decision making process. I certainly do not have complete confidence in making a finding that the College would have acted in a different way if an appeal had been brought by September 2006. Nonetheless, I am not in a position to reject wholesale the evidence put forward on behalf of the College and I am minded to accept it with caution to the extent that I can well believe that the absence of an appeal will have had some influence on the College's behaviour. Beyond that I do not have the confidence to go.
60. I now stand back and consider "all the circumstances". The circumstances specifically listed in rule 3.9 (1) are all potentially relevant circumstances. The only other circumstances identified by HMRC, and these circumstances may already be specifically included, are the circumstances that the money potentially at stake in this appeal is public money and the public interest is engaged in that way.
61. The required exercise is a balancing exercise. I have attempted to list the considerations to be taken into account. I have had regard to the approach of the Court of Appeal in Smith v Brough. I ought to pay proper respect to the principle in favour of finality, subject to making an exception where facts justifying the exception have been strictly proved. I have already commented upon the quite inadequate, possibly non existent, evidence as to how the present state of affairs has come about. In my judgment, HMRC do not have proper justification for the delay in this case which would persuade me to treat them as a sufficiently exceptional case, leading to an extension of time for an appeal.
62. Conclusion
63. In conclusion, I decline to grant HMRC an extension of time for appealing with the result that the Appellant's Notice filed on 30^th March 2007 is out of time and that appeal ought to be dismissed.