Brian Murphy v The Revenue Commissioners the DPP

JurisdictionIreland
CourtHigh Court
JudgeMr. Justice Garrett Simons
Judgment Date05 May 2022
Neutral Citation[2022] IEHC 228
Docket Number2016 No. 40 JR

[2022] IEHC 228

THE HIGH COURT

JUDICIAL REVIEW

2016 No. 40 JR

Between
Brian Murphy
Applicant
and
The Revenue Commissioners the Director of Public Prosecutions
Respondents
Appearances

Paul McGarry, SC and David Dodd for the applicant instructed by McMahon O'Brien Tynan

Paul O'Higgins, SC and Alison Keirse for the respondents instructed by the Revenue Solicitor

Judicial review – Prosecution – Legitimate expectation – Applicant seeking judicial review – Whether the applicant had established the preconditions for asserting a breach of legitimate expectation

Facts: The applicant, Mr Murphy, in judicial review proceedings, applied to the High Court seeking to restrain the second respondent, the Director of Public Prosecutions, from prosecuting the applicant for a number of alleged revenue offences. The applicant asserted that the pursuit of the criminal prosecution would contravene the terms of a written settlement agreement entered into between him and the first respondent, the Revenue Commissioners, in the context of certain civil proceedings and would involve a breach of his legitimate expectation that he would not be prosecuted. This assertion was made notwithstanding that the Director of Public Prosecutions was not a party to the settlement agreement, and that the settlement agreement did not purport to preclude criminal prosecution. One of the principal issues for determination in the judicial review proceedings was whether the applicant had established the first of the three preconditions for asserting a breach of legitimate expectation, namely the making of a representation on the part of the relevant public authority. Both sides were agreed that the nature and extent of any representation was to be assessed objectively, i.e. as it would reasonably be understood by a recipient, and not by reference to the subjective intention of the parties.

Held by the Court that the applicant had not established the existence of a representation capable of grounding his claim for breach of legitimate expectation; this was so with respect to both his pleaded case and the unpleaded case advanced at trial. The Court held that the settlement agreement of 31 August 2015 did not amount to a representation that the Director of Public Prosecutions would not pursue criminal proceedings against the applicant, still less does it entailed an unambiguous and unequivocal representation to that effect. The Court held that there was no sensible basis for reading the settlement agreement as involving anything other than the compromise of the extant High Court debt collection proceedings explicitly referenced in the agreement. The Court held that the applicant had failed to establish the existence of the first of the three “positive” preconditions for a claim for legitimate expectation, namely the making of an unambiguous and unequivocal representation by the public authority concerned.

The Court refused the application for judicial review.

Application refused.

JUDGMENT of Mr. Justice Garrett Simons delivered on 5 May 2022

INTRODUCTION
1

These judicial review proceedings seek to restrain the Director of Public Prosecutions from prosecuting the Applicant for a number of alleged revenue offences. The Applicant asserts that the pursuit of the criminal prosecution would contravene the terms of a written settlement agreement entered into between him and the Revenue Commissioners in the context of certain civil proceedings and would involve a breach of his legitimate expectation that he would not be prosecuted. This assertion is made notwithstanding that the Director of Public Prosecutions is not a party to the settlement agreement, and that the settlement agreement does not purport to preclude criminal prosecution.

2

One of the principal issues for determination in these judicial review proceedings is whether the Applicant has established the first of the three preconditions for asserting a breach of legitimate expectation, namely the making of a representation on the part of the relevant public authority. Both sides are agreed that the nature and extent of any representation is to be assessed objectively, i.e. as it would reasonably be understood by a recipient, and not by reference to the subjective intention of the parties.

FACTUAL BACKGROUND
3

The applicant for judicial review, Mr. Brian Murphy, will be referred to hereinafter as “ the Taxpayer” for ease of exposition. The Taxpayer is a qualified accountant and had been a partner in the well-known firm of accountants, Deloitte. The Taxpayer has since resigned from the partnership.

4

These judicial review proceedings concern a settlement agreement entered into between the Taxpayer and the Revenue Commissioners on 31 August 2015. To understand the events leading up to this settlement agreement, it is necessary to commence the narrative in February 2014. The Director of Public Prosecutions caused a criminal summons to be issued against the Taxpayer on 18 February 2014. The alleged offences concern the making of a claim for a refund of value added tax. The claim for a refund had been made on behalf of a company of which the Taxpayer had been a director and, possibly, also a shareholder via a trust.

5

The Taxpayer sought to challenge the issuance of the criminal summons in an earlier set of judicial review proceedings: Murphy v. Revenue Commissioners Record Number 2014 No. 399 JR (“ the first judicial review proceedings”). The first judicial review proceedings had been listed for hearing before the High Court at the start of July 2015.

6

Some weeks before the first judicial review proceedings came on for hearing, the Taxpayer had, on 15 June 2015, put forward a proposal to the Revenue Commissioners to discharge certain other unrelated arrears of tax. The proposal concerned arrears in respect of income tax for the tax year 2013, and value added tax (VAT) for the period January/February 2015. The Taxpayer had sought an assurance from the Revenue Commissioners that there would be no prosecution against him, saying that he had to be in a position to continue to work as an accountant in order to meet the scheduled payments under the proposed repayment agreement.

7

The firm of solicitors acting on behalf of the Revenue Commissioners, Pierse Fitzgibbon Solicitors, indicated, by letter dated 29 June 2015, that the repayment agreement, if entered into, would be without prejudice to any other enforcement action or prosecution action in being or yet to be initiated. The Revenue Commissioners had instructed that this form of wording be used.

8

The Taxpayer replied as follows on the same date:

“[…] As I explained, I cannot commit to a payment plan with Revenue where any prosecution would have a very significant impact on my ability to earn professionally and therefore discharge amounts due. A solution here is a position whereby we draw a line under any judicial review proceedings taken by me, prosecutions in being or yet to be initiated so that I can have the certainty of making full payments to you.

I commit to ensuring that ALL taxes and liabilities are filed and paid on time, and accept that I cannot preclude any action civil or otherwise from any future failings on my part around same. As I explained on the phone to you, I can make every effort to make full payment on this proposal, but not with a prosecution position as this would decimate any ability I have to earn the amounts required as part of this proposal.”

9

Following a further exchange of correspondence, a partner in the firm of solicitors acting for the Revenue Commissioners wrote to the Taxpayer as follows on 6 July 2015:

“We refer to various communications between our respective offices in terms of outstanding taxes and liabilities due and owing to our client the Collector General. We note you have been in extensive communication with Anna Lynch of these offices and we have taken our clients instructions. You will appreciate that our client has an obligation to collect herein and if we cannot agree terms as per previous communication and as clearly laid out by Anna Lynch, we have no option but to continue with legal proceedings.

We reiterate the position as clearly outlined by our client in previous communications that the arrangement relates only to the tax and interest liability for income tax for the year ending 31st December 2013. This agreement if entered into is without prejudice to any other enforcement action or prosecution action [in] being or yet to be initiated.

We trust this clarifies matters and please confirm your agreement to arrangement already outlined.”

10

On 16 July 2015, the solicitors acting for the Revenue Commissioners reiterated their client's position as follows:

“Our client has now issued us with instructions, based on a consultation with senior management and the District, to proceed with enforcement and Revenue cannot agree to the exclusion of the non prosecution clause in the terms and conditions of the instalment arrangement.

We are issuing proceedings today and please take this as formal notification of same.”

11

The Revenue Commissioners issued debt collection proceedings against the Taxpayer out of the Central Office of the High Court on 22 July 2015. The debt collection proceedings are entitled Gladney (Inspector of Taxes) v. Murphy and bear the following High Court record number: 2015 No. 195 R. It was arranged to have the debt collection proceedings served on the Taxpayer by appointment following his return from abroad in mid- August 2015.

12

In the interim, there had been an ongoing exchange of emails between the Taxpayer and the solicitors acting for the Revenue Commissioners in the debt collection proceedings. It is apparent from this exchange that the Taxpayer had resolved to enter into a settlement agreement, notwithstanding the Revenue Commissioners' clearly stated position that any agreement would be...

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