No removal of right of appeal without clear and express wording
1 November 2012
The Queen on the application of Totel Ltd v The First-Tier Tribunal (Tax Chamber) and The Commissioners for Her Majesty’s Revenue and Customs  EWCA Civ 1401 – read judgment
Tax litigation is not the most obvious hunting ground for human rights points but if claimants feel sufficiently pinched by what they perceive as unfair rules, there is nothing to stop them appealing to the courts’ scrutiny of the lawfulness of those rules.
Human rights were not raised per se in this appeal but constitutional principles which arguably play the same role made all the difference to the outcome.
This case concerned the removal of a right of appeal by an Order in Parliament that stopped the appellant company (T) in its tracks, so naturally it turned to judicial review to find a remedy that the tax tribunal was not prepared to grant. T prayed in aid a fundamental principle of our unwritten constitution set out in R (Spath Holme Ltd) v Secretary of State for Transport, the Environment and Regions
Parliament does not lightly take the exceptional course of delegating to the executive the power to amend primary legislation. When it does so the enabling power should be scrutinised, should not receive anything but a narrow and strict construction and any doubts about its scope should be resolved by a restrictive approach.
Parliament should be told, in clear terms, if the executive intends to amend primary legislation. As Lord Hoffmann observed, in the context of the purported removal of a fundamental right, if clear words are not used, the full implication and width of the power may pass unnoticed in the democratic process (R v Home Secretary, ex parte Simms  2 AC 115, 131E-F ).
The details of the case can be stated very shortly, since the interlocking tax and finance laws and subordinate legislation need not concern us here (they are set out in full in an annexe to the judgment). T company had sought a decision from the VAT and Duties Tribunal that it would suffer hardship if it had to fulfil an assessment to VAT. In the normal run of things, T would have had a right of appeal to the Upper Tribunal under section 11 of the Tribunals, Courts and Enforcement Act 2007 . But a statutory order had been introduced in 2009 purported to remove that right. As this was delegated legislation, T challenged its lawfulness. The question turned on whether the words conferring the power to revoke the right of appeal from the decision of the First-tier Tribunal to the Upper Tribunal in relation to a hardship decision were sufficiently clear.
The Court upheld the appeal.
The Court of Appeal’s reasoning
The 2008 Finance Act did not give a power to revoke the right of appeal in relation to hardship decisions conferred by s.11 of the 2007 Act; the insertion of the statutory order purporting to do so was outside the power conferred by that Act.
There was no reason in principle why The true principle is that expressed in Bennion on Statutory Construction (5th Edn. Section 81 p.293-4):
An Act may confer power for the amendment of itself or another Act by delegated legislation. An amendment made by the use of such a power is as effective as if made directly by an Act.
Had the words in the 2008 Act been sufficiently clear, the rules in the 2009 Order could have achieved their purpose.
The Court rejected T’s further argument, that it had been deprived of a fundamental right to appeal. T sought ex p. Simms that clear words would be needed to remove a fundamental right. Moses LJ took a robust approach to this argument. There was no “fundamental right” in play here.
Lady Justice Arden made a further point, obiter as it was not raised in the parties’ submissions, that there is a presumption that Parliament did not intend to enact retrospective legislation, as Lord Rodger explained in Wilson v First County Trust  1 AC 816. Viewed from
To bring to an end a right of appeal in existing proceedings had been held to constitute such retrospective legislation even though the decision sought to be appealed had not been made. Accordingly, clear wording in s.124 would be necessary to confer the power to remove a right of appeal in existing proceedings.
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