Gladney v Forte; Gladney v Forte

• Jurisdiction: Ireland
• Judge: the President
• Judgment Date: 31 July 2019
• Neutral Citation: [2019] IECA 228
• Court: Court of Appeal (Ireland)
• Date: 31 July 2019
• Docket Number: [2017 No. 444]

BETWEEN

MICHAEL GLADNEY

RESPONDENT

AND

ANNINO FORTE

APPELLANT

AND

MICHAEL GLADNEY

RESPONDENT

AND

CORRADO FORTE

APPELLANT

[2019] IECA 228

The President

McGovern J.

Baker J.

[2017 No. 444]

[2017 No. 445]

THE COURT OF APPEAL

CIVIL

Summary judgment – Locus standi – Notice of Assessment – Appellants seeking to appeal from a decision of the High Court granting the respondent summary judgment against them – Whether the respondent had the right to prosecute proceedings for the recovery of the sums claimed

Facts: The defendants/appellants, Mr A Forte and Mr C Forte, appealed to the Court of Appeal from a decision of the High Court (Barrett J) of 28th July 2017 which granted the plaintiff/respondent, Mr Gladney, the then Collector General of the Revenue Commissioners, summary judgment against both defendants, in the case of Mr C Forte in the sum of €2,513,383.17 and in the case of Mr A Forte in the sum of €2,723,238.17. The appellants formulated some 35 individual grounds of appeal. In the course of written submissions, the respondent sought to distil the multiple grounds of appeal into manageable shape. He grouped the issues as follows: (i) the validity of the estimated notice of assessment/statutory mechanism governing such notices and appeals therefrom; (ii) the issue of locus standi i.e. whether the respondent has the right to prosecute proceedings for the recovery of the sums claimed; (iii) the question of a s. 58 lacuna (the appellants contended that notices of assessment raised under this section cannot be appealed; (iv) the fact that the Revenue Commissioners raised Notices of Assessment while the investigation was still ongoing; (v) the failure of the Revenue Commissioners to respond to correspondence from the appellant which post-dated the Notice of Assessment and failed to expressly advise him of his rights in relation to an appeal; and (vi) the High Court’s refusal to consider a motion from the appellant in relation to discovery, estoppel, and other miscellaneous reliefs.

Held by Birmingham P that this was a case where the High Court was entirely correct in deciding to grant judgment and deciding to decline to refer the matter for plenary hearing. Birmingham P held that no arguable grounds of appeal had been raised.

Birmingham P held that the appeals would be dismissed and the decision of the High Court affirmed.

Appeals dismissed.

JUDGMENT of the President delivered on the 31st day of July 2019

1 These appeals were heard together, as indeed the underlying proceedings had been, in the High Court. The case involves an appeal from a decision of the High Court (Barrett J.) of 28th July 2017 which granted the plaintiff, the then Collector General of the Revenue Commissioners, summary judgment against both defendants, in the case of Corrado Forte in the sum of €2,513,383.17 and the case of Annino Forte in the sum of €2,723,238.17.

2 As pointed out by Barrett J, the background to the proceedings is to be found in a Revenue audit, on foot of which the Revenue Commissioners made a demand for estimated unpaid taxes by way of Notice of Assessment. The now appellants, who are father and son, did not participate in the assessment in the Revenue audit, with the assessment, and nor, despite being advised of their entitlement to do so, did they appeal the assessments to the Appeal Commissioners. Instead, they have sought to resist judgment on foot of the Summary Summons and Notice of Motion. However, they have found themselves frustrated by the fact that their failure to appeal the assessments has significantly disadvantaged them as the estimates have become final and conclusive.

The Statutory Architecture

3 Under s. 58(1) of the Taxes Consolidation Act 1997:

“(1) Profits or gains shall be chargeable to tax notwithstanding that at the time an assessment to tax in respect of those profits or gains was made

(a) the source from which those profits or gains arose was not known to the inspector,

(b) the profits or gains were not known to the inspector to have arisen wholly or partly from a lawful source or activity, or

(c) the profits or gains arose and were known to the inspector to have arisen from an unlawful source or activity,

and any question whether those profits or gains arose wholly or partly from an unknown or unlawful source or activity shall be disregarded in determining the chargeability to tax of those profits or gains.”

Under s. 933(1) of the Act of 1997:

“(a) A person aggrieved by any assessment to income tax or corporation tax made on that person by the inspector or such other officer as the Revenue Commissioners shall appoint in that behalf (in this section referred to as ‘other officer’) shall be entitled to appeal to the Appeal Commissioners on giving, within 30 days after the date of the notice of assessment, notice in writing to the inspector or other officer.”

Critically, under s. 933(6)(a):

“(a) In default of notice of appeal by a person to whom notice of assessment has been given, the assessment made on that person shall be final and conclusive.”

4 It is clear that the High Court Judge did not view this statutory architecture with any enthusiasm. In particular, the High Court Judge was uneasy about the extent to which any judicial discretion was constrained. In those circumstances, the High Court delivered what was described as an interim judgment on 16th March 2017. In the course of the body of that interim judgment, the High Court indicated that it would be grateful if counsel for the Revenue Commissioners would seek instructions as to whether they would consider undertaking a further special audit in the light of the professionalism that the Revenue Commissioners customarily bring to bear on their actions and the genuine confusion that he felt existed on the part of the Fortes, who appeared unrepresented in Court, as to the availability of a remedy through the Courts in the event that they elected not to proceed with an appeal to the Appeals Commissioners. Alternatively, he wondered whether the Revenue Commissioners would be satisfied for the Court to remit the matter to the Appeals Commissioners for a fresh determination as to the liability, or, in the further alternative, if the Revenue Commissioners would suggest some other means of advancing matters in light of the concerns expressed by the Court.

5 The response of the Revenue Commissioners was to assert that they were entitled by statute to the orders sought and to request the Court to make those orders. The plaintiff drew the attention of the High Court to the decision of the Supreme Court in ...