Criminal Assets Bureau v J.McN.

• Jurisdiction: Ireland
• Judge: Mr. Justice Clarke
• Judgment Date: 25 May 2017
• Neutral Citation: [2017] IESC 30
• Docket Number: [Appeal No: 34/2010]
• Court: Supreme Court
• Date: 25 May 2017

[2017] IESC 30

THE SUPREME COURT

Clarke J.

Clarke J.

Laffoy J.

O'Malley J.

[Appeal No: 34/2010]

Between/

Criminal Assets Bureau

Plaintiff/Respondent

and

J.McN.

Defendant/Appellant

Capacity to sue – Liability to tax – Bona fide defence – Appellant seeking to appeal against High Court decision – Whether respondent had established an entitlement to maintain the proceedings in his own name

Facts: Summary proceedings were brought against the defendant/appellant claiming sums said to be due on foot of a liability to tax which was argued to have become final. The claim was for €3,313,990.15 representing tax and interest being €1,791,168.75 for tax together with interest up to the 27th September, 2007 in the sum of €1,522,821.40. Continuing interest was also claimed. Liberty to enter final judgment was initially given by the Master but the appellant appealed to the High Court. A range of issues were pursued before the High Court on that appeal. However, the High Court (Feeney J) ultimately concluded, in a judgment of the 14th September, 2009 (Criminal Assets Bureau v McN [2009] IEHC 414), that it had “been proved in evidence and/or admitted facts the necessary proofs to result in judgment being granted in favour of the plaintiff …”. Likewise, it was said that the appellant had failed to identify any bona fide defence. Therefore, the High Court dismissed the appellant’s appeal and affirmed the order of the Master. The appellant appealed to the Supreme Court against that decision.

Held by Clarke J that one of the grounds put forward on behalf of the appellant (the capacity to sue argument) provided an appropriate basis for disposing of this appeal. Clarke J held that the evidence before the Master and before the High Court was not sufficient to establish that Revenue Bureau Officer 32 (quite properly using the title CAB) could bring these proceedings in his own name. Clarke J was not satisfied that a certificate under s. 966(3) of the Taxes Consolidation Act 1997 is the only means by which such an entitlement could be established. However, Clarke J was not satisfied that the entitlement to sue in his own name had, in all the circumstances of this case, been established by any other means either. In Clarke J’s view, the proceedings should have been dismissed by the High Court on the basis that the plaintiff/respondent, Criminal Assets Bureau (CAB), had failed to establish an entitlement to maintain the proceedings in his own name.

Clarke J held that he would allow the appeal and substitute an order dismissing the proceedings.

Appeal allowed.

Judgment of Mr. Justice Clarke delivered the 25th May, 2017.

1. Introduction

1.1 This appeal is concerned with a potential liability for tax. While it is brought using the title of the plaintiff/respondent (‘CAB’), it in fact involves, for reasons which I will shortly address, a claim actually brought by an individual officer of that body.

1.2 A range of issues were canvassed on the appeal. Questions concerning the statutory regime by which assessments to tax may become conclusive and incapable of being reopened were addressed together with issues concerning the appropriate proof which must be tendered to a court in order to establish a liability for tax on an application for summary judgment.

1.3 However, a further point, which logically arises first, was argued which concerned the question of whether it had been established that the relevant officer of the CAB was entitled to bring these proceedings at all. If the Court were persuaded that there was a lack of sufficient proof in that regard then it would follow that the proceedings should have been dismissed. It would also follow that none of the other issues would require to be decided.

1.4 In any event these summary proceedings were brought against the defendant/appellant (‘Mr. McN’) claiming sums said to be due on foot of a liability to tax which was argued to have become final. The claim was for €3,313,990.15 representing tax and interest being €1,791,168.75 for tax together with interest up to the 27th September, 2007 in the sum of €1,522,821.40. Continuing interest was also claimed.

1.5 Liberty to enter final judgment was initially given by the Master but Mr. McN appealed to the High Court. A range of issues were pursued before the High Court on that appeal. However, the High Court (Feeney J.) ultimately concluded, in a judgment of the 14th September, 2009 ( Criminal Assets Bureau v. McN [2009] IEHC 414), that it had ‘been proved in evidence and/or admitted facts the necessary proofs to result in judgment being granted in favour of the plaintiff …’. Likewise, it was said that Mr. McN had failed to identify any bona fide defence. Therefore, the High Court dismissed Mr. McN's appeal and affirmed the order of the Master.

1.6 Mr. McN appealed to this Court. I have ultimately concluded that this appeal should be allowed. I have come to that view because I consider that one of the grounds put forward on behalf of Mr. McN (the capacity to sue argument) provides an appropriate basis for disposing of this appeal. In those circumstances I do not find it necessary to deal with the remainder of the grounds relied on. I, therefore, propose addressing the facts and argument relevant to the ground concerned.

2. The Facts

2.1 The case made on behalf of CAB was that Mr. McN had not made tax returns in respect of the tax year 2000/1 and each of the tax years (which had by then undergone a calendar change) between 2001 and 2005. On that basis it is said that assessments were raised in respect of each of those tax years on 17th July, 2007.

2.2 Next it is said that no appeal was lodged in respect of those assessments within the time limit provided for in law. Furthermore, it is said that no application for late appeal was brought prior to the commencement of these proceedings. While it will be necessary briefly to turn to certain aspects of the legislative scheme in due course, it is clear that it is possible to seek an extension of time to file a late appeal against assessments but that there are significant limitations on that entitlement most particularly where proceedings have been commenced. In those circumstances it is said that the relevant assessments had become final and conclusive and that it is no longer possible to seek an extension of time to appeal against them because no such application had been made prior to the commencement of these proceedings. It would appear that Mr. McN wishes to say that the amounts of the assessments raised were very significantly greater than the true amount of tax due.

2.3 However, when the matter was before the High Court on appeal from the Master, a separate and specific legal issue was raised on behalf of Mr. McN concerning the capacity of the relevant officer to sue. That issue was also the subject of the appeal to this Court. In order to understand that legal issue it is necessary first to say something about the legislation governing the CAB being the Criminal Assets Bureau Act, 1996 (‘the 1996 Act’).

3. The 1996 Act

3.1 While the plaintiff is described as the CAB in reality the plaintiff is a bureau officer of CAB (described for the purposes of anonymity as ‘Revenue Bureau Officer 32’). The special endorsement of claim pleads that ‘The plaintiff brings these proceedings in the name of the Criminal Assets Bureau pursuant to the provision of s.10 of the Criminal Assets Bureau Act, 1996’.

3.2 In material part, s.10(4) of the 1996 Act provides that a bureau officer who is an officer of the Revenue Commissioners and who exercises powers or duties under revenue law must exercise such powers ‘in the name of the Bureau and not in the name of the individual bureau officer involved, notwithstanding any provision to the contrary in any relevant enactment’.

3.3 There was not any dispute, therefore, that an anonymous bureau officer, such as Revenue Bureau Officer 32, was entitled to maintain these proceedings using the name of the CAB. However, it follows that what needs to be considered is the legal basis on which Revenue Bureau Officer 32 brought these proceedings and tendered the proof necessary to establish the claim.

3.4 That leads to a consideration of s.966 of the Taxes Consolidation Act, 1997 (‘the 1997 Act’).

4. Section 966

4.1 Section 966(1) provides that, without prejudice to any other means by which payment 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’ can sue in his or her own name in the High Court for recovery of sums due and the same subsection also provides that the relevant proceedings can, as here, be commenced by summary summons. It follows that, provided that Revenue Bureau Officer 32 was authorised for the purposes of s.966(1), he could bring proceedings for tax due in his own name and could, by virtue of the 1996 Act, do so using the name CAB.

4.2 Next it is necessary to turn to s.966(3) which provides that, for the purposes of proceedings under s.966, a certificate signed by a Revenue Commissioner, certifying that a person is an officer of the Revenue Commissioners and is authorised in accordance with the section, is to be prima facie proof of those matters.

4.3 No certificate as contemplated by s.966(3) was produced in evidence. One of the legal issues which arose for debate was to whether it was possible to establish the entitlement of Revenue Bureau Officer 32 (using the name CAB) to bring these proceedings in any other way. A second issue was as to whether, even if it is possible in theory so to do, such authority has, in fact, been proved in the circumstances of this case.

4.4 In that context reference is made by CAB to para. 2 of the special indorsement of claim which reads as follows:-

‘The plaintiff is a bureau officer appointed...