English v O'Driscoll
| Jurisdiction | Ireland |
| Judge | MR. JUSTICE MICHAEL PEART |
| Judgment Date | 29 May 2019 |
| Neutral Citation | [2019] IECA 153 |
| Date | 29 May 2019 |
| Court | Court of Appeal (Ireland) |
| Docket Number | Neutral Citation Number: [2019] IECA 153 Appeal Number: 2017/59 |
[2019] IECA 153
THE COURT OF APPEAL
Peart J.
Peart J.
Whelan J.
Baker J.
Neutral Citation Number: [2019] IECA 153
Appeal Number: 2017/59
AND
AND
Professional negligence – Want of fair procedures – Findings of fact – Appellant seeking to appeal from the judgment and order of the High Court – Whether the appellant was afforded a fair opportunity to address an issue raised by the trial judge
Facts: The plaintiff/appellant, Mr English, appealed to the Court of Appeal from the judgment and order of the High Court dated 25th October 2016 ([2016] IEHC 584). The appeal raised a fundamental question as to whether the plaintiff was afforded a fair opportunity to address an issue raised, not by the defendant/respondent, Niall and Gearoid O’Driscoll and Company, but by the trial judge himself, after the evidence in the case had concluded, and which the trial judge in his judgment described as “a key question for the consideration of the court”. The trial judge’s consideration of that “key question” led him to conclude that the professional negligence proceedings against the defendant accountancy firm should be dismissed on the basis that the investment scheme at the heart of the dealings between the plaintiff and the defendant firm was one designed to perpetrate a fraud upon the Revenue by facilitating a scheme to incorrectly claim capital allowances, and that the Court as a matter of public policy should refuse assistance to either party since to do so “would be to implicitly approve of the unlawful scheme in which the parties were engaged”.
Held by Peart J that, in so far as the trial judge concluded that the appellant was a knowing party to an investment scheme designed to defraud Revenue of certain capital tax allowances, such conclusions were reached without those pertinent matters being put to the appellant. In Peart J’s view, the request for submissions from the parties on that question was not sufficient in circumstances where the trial judge in his judgment made adverse findings of fact against the appellant which were not based on evidence given at trial, and were never put to him. Peart J held that there was a want of fair procedures in the manner in which this occurred.
Peart J held that he would set aside the order dismissing the proceedings, and remit the case to the High Court for rehearing before a different judge.
Appeal allowed.
This is an appeal from the judgment and order of the High Court dated 25th October 2016 [2016] IEHC 584. It raises an unusual yet fundamental question as to whether the plaintiff/appellant was afforded a fair opportunity to address an issue raised, not by the defendant but by the trial judge himself, after the evidence in the case had concluded, and which the trial judge in his judgment described as ‘a key question for the consideration of the court’. The trial judge's consideration of that ‘key question’ led him to conclude that these professional negligence proceedings against the defendant accountancy firm should be dismissed on the basis that the investment scheme at the heart of the dealings between the plaintiff and the defendant firm was one designed to perpetrate a fraud upon the Revenue by facilitating a scheme to incorrectly claim capital allowances, and that the Court as a matter of public policy should refuse assistance to either party since to do so ‘would be to implicitly approve of the unlawful scheme in which the parties were engaged’.
Since for the reasons that will appear, I am of the view that the order dismissing the proceedings cannot stand, and that constitutional fair procedures dictate that the proceedings must be remitted to the High Court for a fresh hearing before a different High Court judge, it is desirable that I say little about the nature of the investment scheme in question or express any view whatsoever as to whether the scheme does or does not amount to one which is tainted by the kind of illegality found by the trial judge. As I have said, such an allegation was not made by the defendants as part of their defence to the proceedings. A question may arise in the future as to whether on any rehearing of the case in the High Court the Revenue Commissioners should be joined to the proceedings given these developments. But that is not a question upon which this Court is called upon to express a particular view, and I do not do so.
Before addressing the question of whether fair procedures were not afforded to the appellant, it is helpful to set out a passage from the trial judge's judgment in which he refers to the fact that the appellant commenced his proceedings against the defendant firm on the very last day prior to the expiry of the applicable limitation period under the Statute of Limitations, 1957, as amended, namely the 30th May 2007, and even though in the trial judge's view the appellant had sufficient details about his claim from May 2008 to have been in a position to proceed to a hearing of his claim, he did not serve notice of trial until July 2015, resulting in a trial occurring in March 2016. The following passage gives a flavour of the view formed by the trial judge during the trial, but in respect of which the appellant argues that he was given no opportunity to respond in any way during the course of his evidence or the hearing at all, because the trial judge kept these concerns to himself until he gave his judgment. Commenting on the delay in getting the case to trial, the trial judge stated the following:
‘113. One possible explanation for all of this [delay] is Mr English's desire to ensure that his claims for capital allowances in the five years beginning in 2001 are not re-opened by the Revenue. If this case had been heard in the period 2007 – 2010, the fact that these allowances had been incorrectly claimed is likely to have led to the recovery of all or substantially all of those allowances by the Revenue, without the Revenue having to establish fraud on the part of Mr English.
114. However, in the absence of the Revenue being able to prove fraud on the part of a taxpayer, there are time limits regarding the re-opening of capital allowances claimed in previous years. Since 15 years since the investment and almost 10 years since the last of the capital allowances were claimed, and even though Mr English accepts that they were claimed based on a “sham and a fraud”, it may now be too late for the Revenue to recover these capital allowances, in the absence of fraud on the part of Mr English.
115. It is this Court's view that a likely reason for the delay in Mr English first instituting proceedings and secondly in prosecuting its claim, was his desire to ensure that the Revenue were not in a position to recover capital allowances from him, since he knew that his proceedings were going to disclose that he had incorrectly claimed capital allowances. Mr English had an incentive to claim the full extent of the capital allowances, based on the valuations which she has sworn where an “obvious fraud”, but by delaying making his claim against Mr Murphy, it would seem to this Court that he has reduced the chance of those capital allowances being clawed back by Revenue.
116. If Mr English was a genuinely innocent participant in this investment scheme (and there was absolutely no risk of his being implicated in an attempt to defraud the Revenue) this Court could see no reason why the proceedings were not instituted...
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Michael Begley v Damesfield Ltd
...in controversy between the parties.” 10 . The MacDonncha decision was relied on by the Court of Appeal in English v. O'Driscoll & Ors. [2019] IECA 153, when allowing an appeal against the finding of a trial judge based on an issue not pleaded and raised only after the evidence in the case h......