The First Tier Tribunal (Tax Chamber) has held that a party waived privilege in certain communications with its lawyers by relying on the absence of relevant advice from those lawyers in order to support its application to lodge an appeal out of time. The waiver extended to other privileged communications concerning the need for an appeal and the procedure and time-limits for such an appeal: ‘D’ Cash & Carry Limited v HMRC [2017] UKFTT 0732 (TC).

The decision illustrates the dangers of relying on the content of privileged discussions, whether that is to support a party’s claim or defence on the merits or its position in a procedural application. It also shows that a waiver may result even where it is an absence of advice on a particular issue, rather than any positive advice given, that is relied on.

As ever, where a party waives privilege in some of its privileged material, a court or tribunal may find that the effect is to waive privilege more broadly, so that other privileged communications on the same “transaction” or “issue” must be disclosed to avoid unfairness and ensure the court has the full picture. This is known as the principle of collateral waiver, or the cherry-picking rule. A decision to rely on privileged material should never be taken lightly. There may, however, be little choice, if a party’s only excuse for a failure to take some essential step comes down to the content of its legal advice or the conduct of its lawyers.


The appellant (C&C) applied to lodge an appeal out of time against HMRC’s decision refusing its application under the Alcohol Wholesaler Registration Scheme. The notice of appeal stated that its previous solicitors (Altion Law Ltd) were not acting on its behalf at the time it was notified of HMRC’s decision, and that C&C did not appreciate the deadline or its implications. C&C relied on a witness statement to that effect from one of its directors.

C&C later applied to amend its notice of appeal, and a further witness statement from the relevant director, to “clarify” that C&C had contacted Altion following receipt of HMRC’s decision and was not advised in relation to appealing the decision or any timeframes for doing so.

HMRC contacted Altion seeking confirmation as to the position regarding advice to C&C, but Altion felt unable to assist in light of C&C’s position that it was not waiving privilege.

HMRC applied to the tribunal for confirmation that privilege had been waived and for an order requiring Altion to provide certain information and documentation concerning advice to C&C relating to the need to appeal HMRC’s decision and the time limit for doing so.


The tribunal granted the application, finding that privilege had been waived and disclosure should be ordered.

In the amended grounds of appeal and the further witness statement, C&C had not simply referred to the interaction with Altion; they had described the nature of the discussion and the absence of advice. Their whole case for an out of time appeal was predicated on that lack of advice so as to excuse their failure to launch an appeal within the statutory time limits.

Given the contradictory evidence as between the initial notice of appeal and the amended grounds, the court had to scrutinise the basis of the application. For the application to be fairly and justly considered, the role played by Altion and the true reasons for delay had to be established, and that could be achieved only through information and documentation held by Altion.