Gladney v Ugbawa
| Jurisdiction | Ireland |
| Judge | Ms. Justice Faherty |
| Judgment Date | 10 October 2017 |
| Neutral Citation | [2017] IEHC 631 |
| Docket Number | [2016 No. 17 R] |
| Court | High Court |
| Date | 10 October 2017 |
[2017] IEHC 631
THE HIGH COURT
REVENUE
Faherty J.
[2016 No. 17 R]
Revenue – Practice & Procedure – O.63, r.9 of the Rules of the Superior Courts – Summary summons – Amended assessment – Legal advice – Plenary hearing
Facts: The defendant filed the present application by a notice of motion and sought an order pursuant to o.63, r.9 of the Rules of the Superior Courts ('RSC') to discharge the order of the Master of the High Court that gave liberty to the plaintiff to enter the final judgment. The defendant argued that he could not file a reply before the Master of the High Court as he was out of town.
Ms. Justice Faherty partly granted the relief sought. The Court held that there was only one aspect where there existed factual disputes namely, the existence of an oral agreement between the parties, which should have been settled only by way of plenary hearing. The Court noted that otherwise, the defendant could not object to the subject assessments as the defendant had failed to appeal the said assessments within the stipulated time period. The Court also held that the defendant was given enough opportunities to represent his case before the Revenue Commissioners but he had failed to do so.
In the within application brought by notice of motion dated 14th July, 2016 the defendant seeks the following:
1. An order pursuant to O. 63 r. 9 of the Rules of the Superior Courts ('RSC') to discharge the order of the Master of the High Court made 7th July, 2016, giving liberty to enter final judgment in the herein proceedings;
2. An order striking out the proceedings herein, as a special endorsement of claim on the summary summons does not sufficiently comply with O. 4 r. 4 RSC, in that it does not specifically and with all necessary particulars state the relief claimed and the grounds thereof;
3. An order pursuant to O. 37 r. 9 granting the defendant leave to defend as the defendant has a good defence;
4. An order pursuant to O. 40 r. 19, granting leave to the defendant to file a replying affidavit out of time to the summary summons herein;
5. An order of discovery for copies of the returns of income and expenditure made by the defendant to the plaintiff for the income tax periods 1st January, 2010 to 31st December, 2010 and 1st January, 2011 to 31st December 2011, and used for the purposes of calculating any income tax due;
6. An order of discovery for copies of income tax computations and copies of the computations of any statutory interest charged and copies of the computation of any penalties charged;
7. An order of discovery for copies of any agreement entered into as a result of any revenue audit or audits conducted for the income tax periods 1st January, 2010 to 31st December 2010 and 1st January, 2011 to 31st December, 2011.
In the course of the hearing of the within application counsel for the defendant did not pursue with any degree of vigour the order claimed at para. 2 of the notice of motion, arguments made with regard to certain sums of interest and penalties variously claimed by the plaintiff from the defendant. This issue is addressed later in this judgment. By and large, the focus of the within application centred on whether the Court should set aside the order of the Master giving liberty to enter final judgment and adjourn the matter to plenary hearing.
While at paras. 5 to 7 inclusive of the notice of motion the defendant has sought discovery of various matters, the Court does not propose to deal with such application as the orders sought are not appropriate orders where the essential relief being sought is the setting aside the order of the Master of 7th July, 2016, and where the question of orders for Discovery would only arise consequent on an order of this Court adjourning the matter for plenary hearing.
The background to the present application is as follows: on 2nd February, 2016, the Revenue Commissioners through their nominee, Mr. Gladney, commenced proceedings by way of summary summons seeking to recover from the defendant a sum of €1,063,228.86 by way of arrears of income tax and interest. An appearance was entered by the defendant on 15th March, 2016. By notice of motion dated 15th April, 2016, the plaintiff sought, inter alia, liberty to enter final judgment in the said sum. The application was grounded on the affidavit of Silvia Connolly of the Revenue Commissioners in which it was deposed that the plaintiff's claim was for arrears of €908,327.08 in respect of tax and a sum of €154,901.78 in respect of interest, as set out in the special endorsement of claim on the summary summons. Ms. Connolly averred that the defendant had no defence to the plaintiff's claim. By order of the Master of the High Court dated 7th July, 2016, the plaintiff was given liberty to enter final judgment for the sum of €1,063,228.86 with costs measured in the sum of €1,750.00.
For the purposes of the present application, and to put the arguments of both parties into context, it is necessary to set out in some detail the course of dealing between the plaintiff and the defendant which led ultimately to the institution of the within proceedings. This course of dealing is set out variously in the defendant's affidavit grounding the within application and in the replying affidavit of Bernard Torsney, Officer of the Revenue Commissioners. While there are a number of matters of contention between the parties which will be addressed later in this judgment, the following matters appear not to be in dispute.
The defendant is a medical doctor and he received his medical degree from the medical school of the University of Benin Edo State in Nigeria. He came to Ireland in 2002. He is resident in the State. His medical specialty is in General Practice and emergency medicine. It was the defendant's intention to set up as a GP in Ireland. He was registered with the General Medical Council in the United Kingdom as a fully registered doctor in 2007 and he began to practice medicine as a locum doctor in Ireland in July 2009. The defendant next applied for a licence to practice as a GP in Ireland but found that the Medical Council were unable to provide him with the requisite training to obtain such licence. Accordingly, he obtained a place in the West of Scotland Deanery to require such training. He took up this place in August 2011.
The defendant's income as a doctor was received by way of self employment earnings and PAYE earnings from a company, O.H. Ugbawa Ltd, established by the defendant.
In March, 2012, the plaintiff selected the defendant for a Revenue audit. The defendant and his tax agents, JC Walsh & Co., were duly notified that an audit would take place on 29th March, 2012 to deal with the tax period 1st January, 2008 to 29th February, 2012. On 20th March, 2012, JC Walsh & Co. wrote to the plaintiff outlining that the defendant would make a voluntary disclosure and for that reason a postponement of the audit was requested. The request was acceded to. By letter dated 21st March, 2012, the plaintiff advised the defendant and his tax agent that the audit would take place on 23rd May, 2012.
The defendant avers that following the communication from the plaintiff in March, 2012, his tax agents advised him that they required details of all his receipts and vouched expenditure so that the paperwork could be inspected by the Revenue officer who would conduct the audit. According to the defendant, he forwarded copies of his personal bank statements for the period of the audit to his tax agents by end March, 2012. The defendant avers that following the transmission of this documentation his tax agents telephoned him and enquired as to large transfers of moneys into his personal account and requesting explanations as to the nature of the transfers.
In his affidavit, the defendant accounts for the transfer of these monies as follows: in February 2010 he was contacted by an old school friend, Mr. Osborne Iweka, who advised him that he was a real estate investment agent in Africa and that he had instructions from a named client to advise on suitable real estate investments and to invest in excess of 1 million US dollars in suitable real estate investments. The defendant was asked by Mr. Iweka to become a commission agent for the latter's company 'Fimco'. The defendant agreed to do so. According to the defendant, he was offered a rate of 15% commission on 'a particular real estate investment deal', with the15% to be divided between himself and Mr. Iweka at a ratio of 8% and 7% respectively. The defendant was advised that his work as a commission agent was to receive transfers of money from Mr. Iweka's client in the US and to pay local expenses in Europe and to then transfer the balance of the money receipts to a bank account in Africa. The defendant avers that the series of transactions amounted to a gross receipt in excess of €1,395,000 into his personal current account for the period 28th May, 2010 to 18th October, 2011. According to the defendant, following his tax agent's query regarding the transactions, he explained to them the nature of and the reasons for the money transfers into his personal bank account and that he had paid over the 7% commission into Mr. Iweka in the same month as the receipt of the money from Mr. Iweka's client into his bank account.
At para. 39, the defendant avers that his tax agents advised him that he would need documents to show that the gross receipts into his personal bank account as commission agent were not another source of income that he had apart from his self employment earnings as a doctor and his PAYE earnings from his locum company.
The Revenue audit of the defendant (and the defendant's company)...
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