Legal Principles and Key Points
- In the case of Pendragon plc v Revenue and Customs Commissioners  UKSC 37, useful guidance is provided on how the analysis approach of courts towards a scheme.
- It was found that the Upper Tribunal is authorised to step in and remake a decision from the First Tier Tribunal where that First Tier Tribunal has made a mistake of law
Facts of the Case
- The Upper Tribunal (UT) intervened in a decision made by the First Tier Tribunal (FTT) on the justification that the FTT had erred in law.
- Section 12(2)(b)(ii) of The Tribunal, Courts and Enforcement Act 2007 authorises the UT to remake the FTT’s decision if the FTT make a mistake of law.
- The Court of Appeal found that the UT overreached its role by stepping in and re-doing the decision reached by the FTT.
- Did the UT transcend its appellate role by changing and replacing the FTT’s decision with its own?
Held by the Supreme Court
- The Supreme Court allowed the appeal and found that the UT were perfectly entitled to interject the decision of the FTT where the FTT made a mistake of law.
- Lord Carnwath recognised the errors made by the FTT in reaching their decision and, as such, it was deemed necessary for the UT to involve themselves to correct this.
- “Having found errors of approach in the consideration by the First Tier Tribunal, appropriate for them (the UT) to exercise their power to remake the decision, making such factual and legal judgements as were necessary for the purpose thereby giving full scope for detailed discussion of the principle and its practical application.” 
- “Against this background, it was unhelpful, in my view for the Court of Appeal to identify the main issue as to whether the Upper Tribunal went beyond its proper appellate role. The appeal to the Court of Appeal (under section 13) was from the decision of the Upper Tribunal, not from the First Tier, and their function was to determine whether the Upper Tribunal had erred in law. That was best approached by looking primarily at the merits of the Upper Tribunal’s reasoning in its own terms, rather than by reference to their evaluation of the First Tier’s decision.” 
- This case signifies the discretion attributed to the UT in being authorised to step in and re-do decisions that are decided/in the process of being decided by the FTT which involve a mistake of law.