C.A.B. -v- Hunt & Anor, [2003] IESC 20 (2003)

Docket Number:173 & 174/01
Party Name:C.A.B., Hunt & Anor
Judge:Keane C.J.
 
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THE SUPREME COURTKeane C.J.Murray J.McGuinness J.Fennelly J.McCracken J.173 & 174/01BETWEENCRIMINAL ASSETS BUREAUPLAINTIFF/RESPONDENTANDSEAN HUNT AND ROSALEEN HUNT (NEE MAHER) ALSO KNOWN AS JEAN HUNT AND JEAN MAHER DEFENDANTS /APPELLANTSAND SEAN HUNT APPLICANT/APPELLANTAND ANONOMOUS REVENUE OFFICIAL RESPONDENTJUDGMENT delivered the 19th day of March, 2003, by Keane C.J. IntroductionIn November 1998, the plaintiff in the first proceedings (hereafter "the Bureau") began inquiries into the affairs of the first named defendant (hereafter "Mr. Hunt"), one of their officers having received information to the effect that he was involved in the illegal importation of tobacco products and fireworks and the subsequent sale on the streets of these products. It transpired that Mr. Hunt had not made any tax returns for at least 10 years and that the second named defendant, who is married to Mr. Hunt (hereafter "Mrs. Hunt") had been claiming Social Welfare payments from 1990 until 1995 with Mr. Hunt named as a dependant. Mrs. Hunt made tax returns for the years 1996 and 1997 disclosing relatively small profits of the order of £10,000 to £15,000. Thereafter, an officer of the Bureau obtained orders pursuant to S.63 of the Criminal Justice Act 1994 enabling him to obtain documents and materials from a number of financial institutions relating to accounts in those institutions in the names of Mr. Hunt and/or Mrs. Hunt. These accounts allegedly disclosed that in a 10 year period between 1988 and 1998 a sum in excess of £3 million had passed through the various bank accounts.On the 16th June 1999, assessments were raised on Mr. Hunt for income tax in the sum of £1,296,859.76 in respect of the 10 year period beginning with the year 1988/1989 and ending with the year 1998. An assessment was also raised on the first named defendant in the sum of £481,484 in respect of value added tax for approximately the same period. The first proceedings were then commenced by the issue of a plenary summons on the following day.The plenary summons claimed the following relief:(1) An interim, and thereafter an interlocutory, injunction restraining Mr. Hunt and Mrs. Hunt and any person having notice of the making of the order from selling, transferring, mortgaging or in any way dealing with their interests in the properties described in the schedule, i.e., a house in their joint names in Ballyfermot, a number of bank accounts and a life insurance investment policy; (2) An interim, and thereafter interlocutory, injunction restraining Mr. Hunt or any person having notice of the making of the order, from reducing his assets wherever situated to a sum less than £1,778,343.76;(3) Declarations that Mr. Hunt was obliged to discharge income tax on his earnings and value added tax on the supply of taxable goods and services for the periods already mentioned and that he had failed to pay the tax due for those periods;(4) An inquiry in respect of all taxes due for each of the periods and payment of such sums as were found due upon such inquiry;(5) In the alternative, judgment for the sum of £1,778,343.76;(6) A declaration that Mr. Hunt was the beneficial owner of the amounts standing to the credit of Mrs. Hunt in the financial institutions specified in the Schedule and the life insurance policy in the names of Mr. & Mrs. Hunt and;(7) Damages for conspiracy to defraud against both Mr. Hunt and Mrs. Hunt in the amount of £1,778,343.76 or such sum as the court might decide.On the same day, the High Court (O'Higgins J) made an interim order on the ex parte application of the Bureau in the terms of paragraphs (1) and (2) above. A notice of motion was then brought on behalf of the Bureau seeking an interlocutory injunction in the same terms which was granted by O'Higgins J on the 17th July, 1999 (hereafter the "Mareva injunction. Pleadings having been delivered in the action in the form of a statement of claim, defence and reply, it came on for hearing before Smyth J on the 14th November 2000. In the meantime, Mr. Hunt had been given leave to institute the second proceedings by way of judicial review claiming inter alia:-(1) An order of certiorari quashing the assessments made on the 16th June 1999 in respect of income tax and value added tax;(2) A declaration that the refusal to entertain appeals in respect of those assessments or to extend the time for appealing them was unlawful;(3) A declaration that s.933(9)(a) of the Taxes Consolidation Act 1997 was unconstitutional and invalid;(4) An order of certiorari quashing notices of attachment served on three of the banks named in the proceedings on the 28th July 1999. The second and third reliefs were claimed because of developments which had occurred in relation to appeals purportedly brought by Mr. Hunt to the Appeals Commissioners in respect of the assessments in question.A statement of opposition having been filed on behalf of the respondent in the judicial review proceedings, they were listed for hearing before Smyth J on the same day as the first proceedings.Following a hearing lasting 12 days, the learned trial judge reserved his judgment which he delivered on the 27th June 2001. He granted a declaration that Mr. Hunt was obliged to discharge income tax and value added tax in respect of the named period and had failed to pay the taxes in question. He found Mr. Hunt liable to the plaintiff, in its capacity as an officer of the Revenue Commissioners, in the sum of £1,778,343.76 and also granted a declaration that Mr. Hunt was the beneficial owner of the bank accounts and life assurance policies set out it the schedule to the statement of claim. He refused the claim for an inquiry and also refused to grant any relief in respect of the claim for damages for conspiracy against the defendants. It should be pointed out that, at the time the court delivered its reserved judgment, it was informed by counsel for the Bureau that, because, as they claimed, no valid appeal had been brought by Mr. Hunt in respect of the assessments raised on 26th June 2001, they had now become final and conclusive and that the Bureau, in the result, no longer required any inquiry to be conducted in relation to the amount of the tax actually due and owing by Mr. Hunt in respect of the periods in question.The issues on the appealA number of issues arose in the High Court which were also the subject of the appeal to this court.The first issue was as to whether the Bureau were entitled to maintain the proceedings in the form which they took. It was submitted on behalf of Mr. Hunt and Mrs. Hunt that, at the time the proceedings were issued, his tax liability, if any, had not been established or, at the least, quantified. It was a necessary precondition to the Bureau's right to sue, they said, that the assessments raised on Mr. Hunt had become "final and conclusive" under the relevant legislation, either because of a failure to bring an appeal within the statutory time limits or the determination of the appeal. On behalf of the Bureau, it was submitted that within the meaning of the relevant legislation, the taxes in respect of which assessments had been raised were "due" by Mr. Hunt and that, accordingly, the Bureau were entitled to maintain the proceedings in their present form. While it was conceded on their behalf that Mr. Hunt in those proceedings would be entitled to dispute the assessments raised by the Bureau, the High Court, in the exercise of its inherent jurisdiction, could determine the amount of the tax admittedly due by Mr. Hunt in the light of the evidence adduced by the Bureau and, assuming evidence was adduced on his behalf, by Mr. Hunt.The second issue was as to whether, assuming the proceedings could be maintained before the assessments became final and conclusive, they could be brought in plenary form. It was submitted on behalf of Mr. Hunt and Mrs. Hunt that, in any event, proceedings under the relevant provisions of the legislation could only be brought by summary summons. It was submitted on behalf of the Bureau that, while the provisions in question enabled the proceedings to be brought in that form, they did not exclude the right of the Revenue Commissioners or their authorised officers to institute proceedings, where appropriate, in plenary form.It was further submitted that on behalf of Mr. Hunt and Mrs. Hunt that the proceedings were in any event premature, not merely because the assessments never became final and conclusive, but also because no prior demand for payment of the tax alleged to be due was made by the Bureau. It was submitted on behalf of the Bureau that the terms of the legislation made it clear that no prior demand was necessary.The next issue that arose was as to whether the proceedings were ultra vires the Bureau. It was submitted on behalf of Mr. Hunt and Mrs. Hunt that the relevant legislation made it clear that the objective for which the Bureau was established was the recovery of the proceeds of crime and that there was no evidence in this case that any of the sums in question had been the proceeds of crime. It was submitted on behalf of the Bureau that the Bureau were entitled to exercise their statutory powers in circumstances where they suspected particular assets to represent the proceeds of crime and that this was what had happened in the present case.It was further submitted on behalf of Mr. Hunt that the assessments were so patently arbitrary that they should be quashed as being unreasonable. It was submitted on behalf of the Bureau that, in the light of the evidence as to the sums in the relevant bank accounts, they were entitled to raise the assessments in question and it was a matter for Mr. Hunt to demonstrate in what respect they were excessive, which he had wholly failed to do.The next issue was as to the admissibility of evidence relied on by the Bureau for the purpose of establishing Mr. Hunt's liability to tax. It was submitted on behalf of Mr. Hunt and Mrs. Hunt that the Bureau...

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