Gladney v Grehan

• Jurisdiction: Ireland
• Judge: Mr. Justice Hunt
• Judgment Date: 03 October 2016
• Neutral Citation: [2016] IEHC 561
• Docket Number: Record No. 2014 No. 156 R.
• Court: High Court
• Date: 03 October 2016

[2016] IEHC 561

THE HIGH COURT

REVENUE

Hunt J.

Record No. 2014 No. 156 R.

BETWEEN

MICHAEL GLADNEY

PLAINTIFF

AND

MALACHY GREHAN

RESPONDENT

Revenue – Practice & Procedures – Amendment to the pleadings – O. 52, r. 3 of the Rules of the Superior Courts – Prejudice – Delay – S. 933 of the Taxes Consolidation Act 2007 – Filing of appeal – Special endorsement claim – Recovery of tax charged by an assessment

Facts: The defendant applied under the provisions of o. 52, r. 3 of the Rules of the Superior Courts, or alternatively pursuant to the inherent jurisdiction of the Court to set aside an earlier order of the High Court, whereby the plaintiff was granted liberty to amend his pleadings to amend the summons by replacing the word “return” with the word “assessment” under the heading “charge” in the particulars on the special endorsement of claim. The plaintiff contended that there was compliance of s. 993(9)(a) of the Taxes Consolidation Act 2007, as the plaintiff took an action for the recovery of income tax charged by assessment. The plaintiff claimed that the defendant was not prejudiced by the amendment to the pleadings because even if the amendment was set aside, the proceedings still fell within the scope of s. 993(9)(a), so as to preclude the defendant from filing late appeal. The defendant argued that the proceedings could not be properly characterised as an action for the recovery of tax charged by an assessment and the defendant was entitled to late appeal.

Mr. Justice Hunt granted an order to set aside the amendment of the pleadings. The Court held that the proceedings must demonstrate compliance with the simple statutory prerequisite that they were an action for the recovery of taxes ‘charged by an assessment’ to operate as a bar to late appeal. The Court found that the original proceedings instituted by the plaintiff could not be said to be the proceedings for the recovery of taxes ‘charged by assessment’ in either substance or form. The Court observed that the main purpose of the amendment of the pleadings was to enable the plaintiff by the action to recover taxes charged by an assessment.

JUDGMENT of Mr. Justice Hunt delivered on the 3rd day of October, 2016

Mr. Justice Hunt

1 The plaintiff's claim against the defendant in this case is for various sums due by way of outstanding taxes and interest thereon, as set out in the special indorsement of claim on the summary summons issued by the plaintiff on 21st March, 2014. The particulars set out therein assert that each individual component of the total sum claimed by the plaintiff is based on returns made by the defendant in respect of income tax for the years 2005 to 2010 inclusive. This assertion is factually incorrect, as the defendant did not lodge such returns with the Revenue Commissioners, and the sole basis of any claim that the plaintiff has against the defendant is the assessments raised against him by his Inspector of Taxes in November 2012 in respect of income tax assessed as due in respect of the years in question.

2 Peter H. Jones & Co. entered an appearance on behalf of the defendant on 12th May, 2014. This was followed by the plaintiff's motion for liberty to enter final judgment against the defendant, notwithstanding the appearance so filed. This was first listed before the Master of the High Court on 10th July, 2014, followed by an exchange of affidavits and various adjournments. At some point, probably in November 2014, when the matter was pointed out by the defendant in an affidavit, the error in the special indorsement of claim become apparent to the plaintiff's legal advisers. This caused the plaintiff to move anex parte application before this Court on 8th June, 2015, as a result of which Noonan J. ordered that the plaintiff be at liberty to amend the summary summons herein by replacing the word ‘return’ with the word ‘assessment’ where it appears in six places under the heading ‘Charge’ in the particulars on the special indorsement of claim.

3 The defendant now applies pursuant to the provisions of O. 52, r. 3 of the Rules of the Superior Courts, or alternatively pursuant to the inherent jurisdiction of the Court, to set aside the order of 8th June, 2015. The defendant complains that the plaintiff did not disclose all material facts concerning the proceedings and associated correspondence to Noonan J. in the course of theex parte application, and asserts that he is significantly prejudiced by the amendment to the proceedings. The defendant also complains of delay by the plaintiff prior to moving for the amendment. The plaintiff does not accept that there was material non-disclosure and asserts that there is no prejudice to the defendant by reason of the amendment to the pleadings. The plaintiff also points to delays on the part of the defendant in dealing with his tax affairs and with these proceedings.

4 The main issue in this case is whether the defendant is or would be prejudiced by the amendment made to the pleadings. It appears to be common case that the existence of such prejudice is dependent on the interpretation and application of the wording of s. 933 of the Taxes Consolidation Act 2007. In essence, this section provides a statutory scheme of appeals against assessments to income tax by disgruntled recipients. However, that appeal system,...