Gladney v D.H.
| Jurisdiction | Ireland |
| Judge | Mr. Justice MacGrath |
| Judgment Date | 06 June 2019 |
| Neutral Citation | [2019] IEHC 437 |
| Docket Number | [2017 No. 154R] |
| Court | High Court |
| Date | 06 June 2019 |
[2019] IEHC 437
THE HIGH COURT
MacGrath J.
[2017 No. 154R]
AND
Costs – Mootness – External factors – Second defendant seeking an order discharging the order of the Master of the High Court joining her to the proceedings – Whether the plaintiff had established that the proceedings had become moot because of external factors
Facts: The plaintiff, Mr Gladney, was the Collector General and an officer of the Revenue Commissioners duly authorised to collect tax and interest. The first defendant submitted a return in respect of a liability for capital gains tax based on self-assessment. The liability to tax was stated to have arisen from gains made on the sale of stocks and shares. The entitlement to the shares formed part of a dispute in family law proceedings between the first defendant, and his ex-wife, the second defendant. An order for judicial separation was made on consent on 21st June, 2016. It was part of the first defendant’s case, that in implementation of the settlement of the family law proceedings that a portfolio of securities would be sold and capital gains tax paid. The shares were sold on 31st August, 2016 and a calculation was made in respect of the tax payable on the gain. A self-assessment form, CG1, was completed by the first defendant on 29th March, 2017. The return was duly assessed and on 12th May, 2017 the plaintiff sought payment. The first defendant believed that any liability should be equally borne with the second defendant from funds which were the subject matter of the settlement in the family law proceedings. The tax was not paid. Correspondence was entered into between the plaintiff and the first defendant and by letter of 3rd July, 2017, the plaintiff made it clear to the first defendant that his liability arose by virtue of the fact that he had made the return and that it was not open to the plaintiff to sue multiple third parties in respect of the liability. On 5th July, 2017 a summary summons issued the amount claimed being based on the assessment together with interest. The summons was served on 10th November, 2017 and an appearance was entered by the first defendant on 15th November, 2017. The first defendant then brought an application to join his wife from whom he had separated, as a co-defendant to the proceedings. The application came before the Master of the High Court on 20th December, 2017. He also sought to have her solicitors joined, on the basis that they held funds from which the tax should be paid. The plaintiff opposed the application but the Master acceded to it in respect of the second defendant but not in respect of her solicitor. The summons was amended and was served by the plaintiff on the second defendant. On 26th February, 2018, solicitors representing the second defendant wrote to the plaintiff seeking confirmation of the plaintiff’s attitude to the application at the time it was made. They also sought confirmation of whether the plaintiff intended to proceed against the second defendant and if not, they invited the service of the notice of discontinuance. A reply by letter of 28th February, 2018 stated that it was the court who joined the second defendant as a co-defendant and that the plaintiff was a stranger to the facts asserted by the first defendant. The second defendant applied to the High Court for an order pursuant to O. 63, r. 9 of the Rules of the Superior Courts discharging the order of the Master of the High Court made on the 20th December, 2017 joining her to the proceedings, or in the alternative an order pursuant to O. 19, r. 28 or the inherent jurisdiction of the court striking out the proceedings against her. It was contended that the proceedings were unsustainable and were bound to fail. Reliefs were also sought in respect of an alleged breach of the in camera rule because the first defendant, in affidavits sworn in the proceedings, referred to matters which were alleged to be subject to that rule without seeking an appropriate order to lift its operation in the circumstances.
Held by MacGrath J that, on the evidence, the plaintiff had not established that the proceedings had become moot because of external factors. In principle, therefore, it seemed to MacGrath J that the second defendant was entitled to an order for costs.
MacGrath J held that the order should be restricted to recovery of 60% of such costs when taxed and ascertained.
Order granted.
This is an application by the second defendant for an order pursuant to O. 63, r. 9 of the Rules of the Superior Courts discharging the order of the Master of the High Court made on the 20th December, 2017 joining her to the proceedings, or in the alternative an order pursuant to O. 19, r. 28 or the inherent jurisdiction of the court striking out the proceedings against her.
The plaintiff is the Collector General and an officer of the Revenue Commissioners duly authorised to collect tax and interest. The first defendant submitted a return in respect of a liability for capital gains tax based on self-assessment. The liability to tax is stated to have arisen from gains made on the sale of stocks and shares. The entitlement to the shares formed part of a dispute in family law proceedings between the first defendant, and his ex-wife, the second defendant. An order for judicial separation was made on consent on 21st June, 2016. It is part of the first defendants case, that in implementation of the settlement of the family law proceedings that a portfolio of securities would be sold and capital gains tax paid. The shares were sold on 31st August, 2016 and a calculation was made in respect of the tax payable on the gain. A self-assessment form, CG1, was completed by the first defendant on 29th March, 2017. The return was duly assessed and on 12th May, 2017 and the plaintiff sought payment. The first defendant believes that any liability should be equally borne with the second defendant from funds which were the subject matter of the settlement in the family law proceedings. The tax was not paid. Correspondence was entered into between the plaintiff and the first defendant and by letter of 3rd July, 2017, the plaintiff made it clear to the first defendant that his liability arose by virtue of the fact that he had made the return and that it was not open to the plaintiff to sue multiple third parties in respect of the liability. The letter stated:-
‘… This liability arises on foot of a return made by you. It is not open to Revenue to sue multiple third parties in respect of it. If you believe that third parties are liable in some way, it is up to you to pursue whatever legal redress is open to you against them separately. Please note we are now instructed to pursue this debt through the Courts. I strongly recommend you obtain legal advice.’
On 5th July, 2017 a summary summons issued the amount claimed being based on the assessment together with interest. The summons was served on 10th November, 2017 and an appearance was entered by the first defendant on 15th November, 2017.
The first defendant then brought an application to join his wife from whom he had separated, as a co-defendant to the proceedings. The application came before the Master of the High Court on 20th December, 2017. He also sought to have her solicitors joined, on the basis that they held funds from which the tax should be paid. The plaintiff opposed the application but the Master acceded to it in respect of the second defendant but not in respect of her solicitor. The summons was amended and was served by the plaintiff on the second defendant.
On 26th February, 2018, solicitors representing the second defendant wrote to the plaintiff seeking confirmation of the plaintiff's attitude to the application at the time it was made. They also sought confirmation of whether the plaintiff intended to proceed against the second defendant and if not, they invited the service of the notice of discontinuance. The letter concluded ‘ obviously no cost will arise on foot of this action’. A reply by letter of 28th February, 2018 stated that it was the court who joined the second defendant as a co-defendant and that the plaintiff was a stranger to the facts asserted by the first defendant:-
‘… and awaits your clients replying affidavit to the matters as set out to date. As you know, if your client does not rebut matters set out on affidavit, they will stand as uncontested evidence. If it is the case that your client does not believe she should be joined it is up to your client to bring the appropriate application to court to set aside the order’.
By notice of motion dated 23rd April, 2018 the second defendant made application for the order now sought. It is contended that the proceedings are unsustainable and are bound to fail. Reliefs are also sought in respect of an alleged breach of the in camera rule because the first defendant, in affidavits sworn in these proceedings referred to matters which are alleged to be subject to that rule without seeking an appropriate order to lift its operation in the circumstances.
In support of this application, the second defendant in an affidavit sworn on 23rd April, 2018, complains that she should not have been joined as a co-defendant and that she was not put on notice of the application. She further complains that the application was irregular and was brought in a ‘ haphazard and reckless manner’ and that the first defendant ‘… appears intent on placing the responsibility for the present proceedings on anybody but himself’. It is alleged that the first defendant's affidavit is scandalous as it is replete with references to orders, evidence and documents generated within family law proceedings in breach of the in camera rule. By letter...
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