The trustee in bankruptcy carried out extensive investigations and obtained a number of documents in relation to the estate of the bankrupt. The commissioners applied under paragraphs 2 and 3 of Schedule 36 to the Finance Act 2008 to the First-tier Tribunal for approval to give the trustee a third party notice in relation to all of the documents he held. The First-tier Tribunal adjourned the application pending an application by the trustee to the bankruptcy court, under section 303 of the Insolvency Act 1986, for directions as to which documents should be disclosed to the commissioners. The registrar, assuming that the First-tier Tribunal would approve the giving of a third party notice, proposed very significant restraints on the operation of the notice. The commissioners appealed on the ground that the registrar had had no power to give the directions she did, or all but one of them, and that the trustee’s application to her should not have been made.
On the appeal—
Held Appeal allowed. Assuming that a third party notice had been issued by the revenue and approved by the First-tier Tribunal, on an application by a trustee for directions under section 303 of the Insolvency Act 1986 as to whether and how to comply with a notice, a registrar could not make an order that the trustee should not comply with an obligation imposed by another statute. The 1986 Act provisions were, by and large, provisions which were within the supervisory control of the registrar so far as applied to the trustee. The taxing statute provisions were not and a registrar should not make an order which was inconsistent with those provisions. The only guidance a registrar could give was to tell the trustee to do what the third party notice said. The notice in question had not been approved by the Third-tier Tribunal at the time of the trustee’s application and the registrar erred in finding that that made a difference. The registrar had power to give directions or guidance to the trustee, she did not have jurisdiction to give advice to the First-tier Tribunal as to how it should exercise its powers, or to provide some sort of bankruptcy court perspective on the sort of matters which the trustee might seek to raise in relation to the making of the notice. All those matters were for First-tier Tribunal to consider on the basis of representations made by the trustee, as a third party, and conveyed to the tribunal pursuant to the statutory mechanism. The only thing the registrar could theoretically have done was to direct the trustee as to whether he should seek to make representations on any particular documents if he was in doubt as to whether to do so. Once the representations were made, it was then for the First-tier Tribunal to perform its function of deciding whether or not to approve the notice. To hold otherwise would undermine the basis on which Parliament had given powers to the revenue and the First-tier Tribunal. Accordingly the trustee’s application to the bankruptcy court for directions had not been appropriate and the registrar had erred in making the order she did (paras 53–61, 76).
R (Derrin Bros Properties Ltd) v First-tier Tribunal (Tax Chamber) [2014] EWHC 1152 (Admin); [2016] EWCA Civ 15; [2016] 1 WLR 2423, CA applied.
Julie Anderson (instructed by Solicitor, Revenue and Customs Comrs) for the commissioners.
Tom Shepherd (instructed by Taylor Wessing LLP) for the trustee.