Criminal Assets Bureau (Cab) v McSweeney

• Jurisdiction: Ireland
• Judge: O'Sullivan J
• Judgment Date: 11 April 2000
• Neutral Citation: [2000] IEHC 44
• Court: High Court
• Docket Number: No. 38 R/1997
• Date: 11 April 2000

[2000] IEHC 44

THE HIGH COURT

REVENUE

No. 38 R/1997

CRIMINAL ASSETS BUREAU (CAB) v. MCSWEENEY

BETWEEN

THE CRIMINAL ASSETS BUREAU

PLAINTIFF

AND

PATRICK A. McSWEENEY

DEFENDANT

Citations:

TAXES CONSOLIDATION ACT 1997 S966(1)

TAXES CONSOLIDATION ACT 1997 S966(5)

TAXES CONSOLIDATION ACT 1997 S966(8)

INCOME TAX ACT 1967 S488

FINANCE ACT 1958 S54

FINANCE ACT 1958 S54(1)

TAXES CONSOLIDATION ACT 1997 S998

TAXES CONSOLIDATION ACT 1997 S1002(8)

RSC O.69 r3

FINANCE ACT 1958 S54(11)

O'MAHONY V HORGAN 1995 2 IR 411 1996 1 ILRM 161

FLEMING V RANKS (IRL) LTD 1983 ILRM 541

BARCLAY-JOHNSON V YUILL 1980 1 WLR 1259

LISTER & CO V STUBBS 1890 45 CH D 1

POLLYPECK INTERNATIONAL PLC V NADIR (NO 2) 1992 4 AER 769

DEUTSCHE BANK AKTIENGESELLSCHAFT V MURTAGH 1995 1 ILRM 381

INTERNAL REVENUE CODE TITLE 26 S7402 (US)

TAXES CONSOLIDATION ACT 1997 S849(3)

KELLY ON THE CONSTITUTION 3ED 408–409

O'DOHERTY V AG 1941 IR 569

R V R 1984 IR 296

INCORPORATED LAW SOCIETY OF IRELAND V CARROLL 1995 3 IR 145

MAHON V BUTLER 1997 3 IR 169

Synopsis

Injunction

Interim mareva injunctions; proceedings had been commenced by plenary summons against defendant seeking in excess of £ 1.6 million in income tax plus interest thereon; defendant seeks an order setting aside an ex parte interim mareva injunction made against him and continued thereafter from time to time; whether substantive proceedings were required to be brought by way of summary summons; whether defendant's constitutional rights had been breached by continuing interim order for such a long period without having an opportunity to put his case forward in the course of an interlocutory motion; whether Irish Courts have jurisdiction to grant mareva injunctions in cases brought by the Revenue Commissioners or at all; Taxes Consolidation Act, 1997.

Held: Application refused. Substantive proceedings can be brought not only by summary summons but also by plenary summons; delay not such as to infringe defendant's constitutional rights; jurisdiction of High Court includes a jurisdiction where appropriate to grant a mareva injunction.

Criminal Assets Bureau v. McSweeney - High Court: O'Sullivan J. - 11/04/2000 - [2001] 2 ILRM 81

A mareva injunction had been granted restraining the defendant and his wife from dealing with certain assets. The injunction had been granted on an ex parte basis. The applicant argued that the proceedings in question should only have been initiated by summary summons. O'Sullivan J rejected this submission and held that section 966 of the Taxes Consolidation Act, 1997 authorised the bringing of such proceedings by plenary as well as by summary summons. Although there had been adjournments of the proceedings much of these had been at the request of the defendant. Accordingly the delay involved in having an interlocutory hearing did not amount to an infringement of the defendant's constitutional rights. The jurisdiction of the High Court invoked by the plaintiff included the jurisdiction to grant mareva injunctions. Despite the submissions of counsel there was no reason to discharge the mareva injunction against the defendant's wife who was a notice party in the present application.

1 O'Sullivan J delivered on the 11th day of April, 2000.

2 The Defendant seeks an Order setting aside an ex parte interim mareva injunction made on the 15th of April, 1997 and continued thereafter from time to time on three different grounds, namely:-

3 (a) The Plaintiff has no locus standi to bring the proceedings which are, accordingly, an abuse of process;

4 (b) The Plaintiff has not attempted to bring on an interlocutory application and the consequent unconstitutional delay entitles the Defendant to have the Order discharged;

5 (c) The Court lacks jurisdiction generally to make asset freezing mareva injunctions, and secondly, in particular lacks such jurisdiction in proceedings of this kind.

BACKGROUND

6 The proceedings were commenced by plenary summons dated 14th April, 1997 in which the Plaintiffs claim in excess of £1.6 million for income tax and interest thereon. Whilst the sum claimed is a specific sum alleged due and payable and accordingly capable of being claimed on foot of a summary summons, the Plaintiff elected to issue a plenary summons, the thinking being that a mareva injunction might not be available in summary proceedings.

7 By Order of 15th April, 1997 the Defendant, together with his wife who is a represented Notice Party in the proceedings before me, was restrained from disposing of the proceeds of sale of three properties in Co. Cork until 21st April. That Order has been continued from time to time thereafter and remains in effect until the determination of the case before me. I will return to a more detailed history of the case when dealing with the Defendant's submission in relation to allegedly unconstitutional delay.

LOCUS STANDI

8 The Defendant makes the simple point that this type of proceeding can only be brought on a summary summons. He says that the Plaintiff has no locus standi to bring the claim on foot of a plenary summons.

9 This submission is grounded, primarily, on the wording of Section 996 of the Taxes Consolidation Act, 1997which where relevant provides as follows:-

"966(1) Without prejudice to any other means by which payments of sums due in respect of income tax may be enforced, an officer of the Revenue Commissioners authorised by them for the purposes of this subsection may sue... in the High Court for the recovery of any sum due in respect of that tax, as a debt due to the Minister for Finance for the benefit of the central fund... and the proceedings may be commenced by summary summons... [emphasis added]"

10 (5) In proceedings pursuant to this section -

11 (a) a certificate signed by an inspector certifying the fact that before the institution of the proceedings a stated sum for income tax became due and payable by the Defendant -

12 (i) under an assessment which had become final and conclusive...

13 i shall be evidence until the contrary is proved of those facts....

14 a (8) Subject to this section, the rules of the High Court for the time being applicable to civil proceedings commenced by summary summons shall apply to proceedings pursuant to this section."

15 Dr. Forde, S.C, on behalf of the Defendant submits that the word "may" in subsection (1) means "shall". He submits that the 1997 Act is a consolidating Act and that the shoulder note to Section 966(1) indicates, inter alia, a reference to Section 488 of the 1967 Income Tax Act which in turn ( viaits own shoulder note) alludes to Section 54 of the Finance Act, 1958. This section and the section referred to in the Income Tax Act, 1967contain identical wording so far as relevant, to Section 966(1) of the Taxes Consolidation Act, 1997.

16 Whilst these two antecedent subsections both admittedly contain the word "may", Dr. Forde submits that because prior to the 1958 Act tax inspectors had power to sue only for recovering certain fines, penalties or forfeitures that therefore the intention of the legislature in enacting Section 54(1) of the Finance Act, 1958was to enable them so to recover on foot of a summary summons and not otherwise. Both antecedent subsections apply the Rules of the High Court applicable to proceedings commenced by summary summons " subject to this section".

17 Secondly it is submitted that this interpretation is re-enforced by comparison with Section 998 and Section 1002(8) of the same Act of 1997. Section 998 where relevant provides:-

" Every sum due in respect of income tax... shall be deemed to be a debt due to the Minister for Finance for the benefit of the central fund, and shall be payable to the Revenue Commissioners and may (without prejudice to any other mode of recovery of such sum... be sued for and recovered by action, or other appropriate proceedings, at the suit of the Attorney General in any Court of competent jurisdiction."

18 Section 1002(8) where relevant provides:-

"1002(8) Where a relevant person to whom a notice of attachment in respect of a tax payer has been given ... the amount specified ...may...be sued for and recovered by action or other appropriate proceedings at the suit of an officer of the Revenue Commissioners in any Court of competent jurisdiction."

19 These latter two subsections do indeed, it is submitted, make it clear that the Attorney General in the first case and the relevant person in the second has explicit authority to bring an action in a Court of competent jurisdiction for the recovery of the relevant money. The language is plain and explicit. When one turns, therefore, to construe Section 966, it is submitted, that in the absence of plain and explicit reference to the bringing of proceedings by way of plenary summons, the section should be construed as authorising only the institution of proceedings by way of summary summons.

20 In response, Mr. Nesbitt, S.C., for the Plaintiff submitted that the word "may" should mean what it says, namely, that there is permissive jurisdiction to commence the relevant proceedings by summary summons but that this word should not be construed as "shall" or "may only" as contended for by Dr. Forde. There is no ambiguity about the wording of the section and therefore the rule that the tax code should be construed strictly and in favour of the tax payer does not apply. He further submits that subsection (5) seems to comtemplate the possibility that proceedings would be instituted for a sum assessed prior to a point in time when such assessment would have become final and conclusive. If this is correct then such proceedings could only be commenced by way of plenary summons. Furthermore, Order 69, Rule 3 of the Rules of the Superior Courts (dealing with the recovery of taxes and duties) makes it clear that proceedings for the recovery, inter alia, of any tax...