© 2025 by Michael Firth KC, Gray's Inn Tax Chambers
Contact: michael.firth@taxbar.com
E3. Obiter
- Obiter dicta of higher court should normally be followed
“As what the Upper Tribunal said in Hilden Park 1 on burden of proof was only obiter, I must decide whether or not I should follow it. I consider that dicta from a superior court that was given after full argument should be followed unless it is obviously wrong.” (Hilden Park LLP v. HMRC [2017] UKFTT 217 (TC), §20, Judge Mosedale).
NON-BINDING OBITER
- "Technically obiter" indicates possible grounds for distinction but not a distinction the lower court would be justified in drawing
"[67] References in these cases to "the technical position", or to statements of the law being "technically obiter", should, I think, be understood as indicating that there was a difference between the facts of the precedent case and the facts of the case before the court which could in theory or in other circumstances have provided a ground for distinguishing the earlier decision, but that the distinction was not one which in the actual circumstances any lower court would be justified in drawing. Similarly, I read the statement of Lady Hale in Whiston's case that the views expressed in Lord Neuberger's judgment "are, strictly speaking, obiter dicta" as signifying only that it would be open to the Supreme Court in future to revisit the question and explain the result of that case on the narrower basis that she favoured, and not as seeking to suggest that it would be permissible for a lower court to decline to accept and apply the principle articulated by Lord Neuberger." (R (oao Youngsam) v. Parole Board [2019] EWCA Civ 229, Leggatt LJ)
- FTT would follow UT obiter unless convinced it was plainly wrong
"[382] If the FTT should be slow to depart from a non-binding decision of an earlier FTT, the FTT should clearly be equally slow (if not slower) to depart from a non-binding decision of the UT reached after consideration on a matter arising out of a complicated and difficult enactment.
[383] Our starting point, therefore, is that we should not depart from Zeman, even if we would have reached a different conclusion ourselves, unless we are convinced that it was wrong. Just as the UT in Suterwalla regarded "convinced" and "satisfied" as effectively the same test, we regard both of those as equating with whether we regard Zeman as "plainly" wrong. We can only be "convinced" that Zeman is wrong if we are so sure of that that we are prepared to say that it is "plainly" wrong." (WM Morrison Supermarkets Ltd v. HMRC [2025] UKFTT 1542 (TC), Judge Baldwin)
- CoA not following HoL obiter after thorough review and analysis
"[133] Like the Court of Appeal in the Daventry case, we recognise the immense respect due to an opinion expressed by Lord Hoffmann on a point of law which commanded the unanimous agreement of the House of Lords. Nevertheless, Lord Hoffmann's observations in the Chartbrook case were expressly acknowledged to be obiter dicta and are therefore not binding authority. In circumstances where Lord Hoffmann's opinion that a purely objective approach should be adopted in determining whether the parties had a 'common continuing intention' has been disputed by the Parent on this appeal, we think it necessary to decide whether it is correct in law.
[134] We are satisfied that we are not prevented from doing so by this court's decision in the Daventry case because in that case the Court of Appeal proceeded on the basis that Lord Hoffmann's analysis was correct in circumstances where the parties argued the case on that assumption. Moreover, two members of the court expressed concerns about the reasoning in the Chartbrook case, suggesting that it may have to be reconsidered in a future case." (FSHC Group Holdings Limited v. GLAS Trust Corporation Limited [2019] EWCA Civ 1361, Leggatt, Rose, Flaux LJJJ)
BINDING OBITER
- Supreme court unanimously directs that an otherwise binding decision of the Court of Appeal should no longer be followed
"[104] We conclude that where the Supreme Court itself directs that an otherwise binding decision of the Court of Appeal should no longer be followed and proposes an alternative test that it says must be adopted, the Court of Appeal is bound to follow what amounts to a direction from the Supreme Court even though it is strictly obiter. To that limited extent the ordinary rules of precedent (or stare decisis) have been modified. We emphasise that this limited modification is confined to cases in which all the judges in the appeal in question in the Supreme Court agree that to be the effect of the decision. Such was a necessary condition before adjusting the rules of precedent accepted by this court in James in relation to the Privy Council. Had the minority of the Privy Council in Holley not agreed that the effect of the judgment was to state definitively the law in England, it would not have been accepted as such by this court. The same approach is necessary here because it forms the foundation for the conclusion that the result is considered by the Supreme Court to be definitive, with the consequence that a further appeal would be a foregone conclusion, and binding on lower courts." (R v. Barton [2020] EWCA Crim 575)
- Applies in civil proceedings
"[63] While it is the case that the criminal courts have been more ready to modify the strict application of stare decisis, as discussed at [96] of Barton, and while Barton concerned the test applicable in criminal cases, the Court of Appeal in Barton did not indicate that the limited modification could apply only in criminal cases9. In the recent case of Ideal Shopping Direct Ltd v Mastercard Inc and others [2022] EWCA Civ 14, one issue considered by the Court of Appeal (at [112]-[113] of the decision) was whether the Barton modification applied in relation to the law on service of claims, and there was no indication in that discussion that it did not apply in a civil context. Indeed, at [112] it was stated: R v Barton makes clear that, if the House of Lords or Supreme Court has directed that an otherwise binding decision of the Court of Appeal should no longer be followed, then this court must follow the direction even if it is strictly obiter, but only if all the judges in the Supreme Court agree that to be the effect of the decision. To that extent only, the doctrine of precedent is modified.
[64] We consider that applying the modification is appropriate and justified in this case.
[65] In relation to whether the terms of the modification are satisfied in respect of Tooth SC, we consider that they are." (Harrison v. HMRC [2023] UKUT 38 (TCC), Judge Thomas Scott and Judge Greenbank)
- A limited exception
"[64] It is clear to us that if the dicta of Lady Hale in Clyde & Co as to the meaning and effect of s 4(4) LLPA 2000 were not part of the reasoning of the Supreme Court then those dicta would not fall within the limited exception to the rule of precedent described by Burnett CJ. The FTT was therefore wrong to treat the dicta as overruling Tiffin in the way it did." (Wilson v. HMRC [2021] UKUT 239 (TCC), Adam Johnson J and Judge Cannan)