Joseph Howley v Cecelia Onyenemezu

• Jurisdiction: Ireland
• Court: Court of Appeal (Ireland)
• Judge: Mr Justice MacGrath
• Judgment Date: 27 November 2024
• Neutral Citation: [2024] IECA 288
• Docket Number: Court of Appeal Record Number: 2024/83

Between:

Joseph Howley

Plaintiff/Respondent

and

Cecelia Onyenemezu

Defendant/Appellant

[2024] IECA 288

Woulfe J.

Binchy J.

MacGrath J.

Court of Appeal Record Number: 2024/83

Court of Appeal Record Number: 2024/84

THE COURT OF APPEAL

Summary judgment – Tax liabilities – Admissibility of evidence – Appellant appealing against summary judgment – Whether fresh evidence should be admitted on appeal

Facts: Barr J, on the 12th February 2024, granted summary judgment in favour of the respondent, Mr Howley (the Collector General), in two related proceedings concerning the tax liabilities of the appellant, Ms Onyenemezu, for the years ending December 2015 and December 2016. The first proceedings concerned a claim for arrears of PAYE/PRSI, in which the trial judge gave judgment in favour of the plaintiff for €225,401.42 plus costs. In the second proceedings, judgment was entered in the sum of €150,790.27 plus costs, relating to a claim for income tax arrears for the same years. Proceedings in both cases were instituted by way of summary summons following the earlier service of Notices of Estimation of Amounts Due. The main ground of appeal in both cases was that the claims were confused and not properly pleaded in accordance with the requirements of the Rules of the Superior Courts (RSC), O. 4, r. 4, as discussed in Bank of Ireland Mortgage Bank v O’Malley [2019] IESC 84. The appellant contended that there were discrepancies between the amounts contained in the Notices of Estimation of Tax Due and the amounts claimed in the summary summons in each case. In the PAYE/PRSI proceedings the total amount claimed in the summons for the years 2015 and 2016 was €225,401.42. For 2015 the amount claimed was €108,112.86, being principal of €98,307.93 and interest of €9,804.36; and for 2016 the amount was €117,288.56, inclusive of interest. In a Notice of Estimation of Income Tax issued on the 28th November 2017, the amount due for 2015 was stated to be €109,333 before interest. In respect of the year ending 2016, the amount in the relevant notice was €106,625. Thus, a discrepancy of €11,025.07 arose in respect of the year 2015. The basis for the appeal was that the trial judge erred in rejecting the appellant’s submission that the respondent was not entitled to judgment where no explanations had been given for the discrepancies.

Held by the Court of Appeal (MacGrath J) that, taking into consideration the nature of the proceedings before the court, the nature and extent of the defence advanced, the absence of other grounds of defence, the applications to admit fresh evidence on the appeals came within those few situations where special grounds exist justifying the admission of fresh evidence on appeal. MacGrath J held that while nothing in the judgment should be taken as detracting from the importance of compliance with the provisions of O. 4, r. 4 RSC, nevertheless, he was satisfied that in accordance with the interests of justice, good administration, the proper and efficient use of court resources, and the absence of irremediable prejudice, the applications to admit the new evidence in each case, being the affidavits of Mr Cross, ought to be acceded to.

MacGrath J held that, pursuant to O. 86, r. 4 RSC, leave would be granted in both proceedings to the respondent to admit into evidence on appeal the affidavits of Mr Cross sworn on the 14th May 2024. MacGrath J held that Mr Cross’ affidavits explained any deficiency in the particularisation of the respondent’s claim. That being so, and there being no other defence advanced or available, MacGrath J dismissed the appeals.

Appeals dismissed.

UNAPPROVED

NO REDACTION NEEDED

Judgment of MacGrath J. delivered on the 27 ^th day of November 2024

1 . On the 12 ^th February 2024, Barr J. granted summary judgment in favour of the respondent, the Collector General, in two related proceedings concerning the tax liabilities of the appellant for the years ending December 2015 and December 2016. The first, which is the subject of appeal no. 2024/83, concerns a claim for arrears of PAYE/PRSI (the “PAYE/PRSI proceedings”), in which the trial judge gave judgment in favour of the plaintiff for €225,401.42 plus costs. In the second proceedings, appeal no. 2024/84, judgment was entered in the sum of €150,790.27 plus costs, relating to a claim for income tax arrears for the same years (“the income tax proceedings”). Proceedings in both cases were instituted by way of summary summons following the earlier service of Notices of Estimation of Amounts Due.

2 . The main ground of appeal in both cases is that the claims were confused and not properly pleaded in accordance with the requirements of the Rules of the Superior Courts, O. 4, r. 4, as discussed in Bank of Ireland Mortgage Bank v O'Malley [2019] IESC 84. The contention of the appellant may be summarised as follows. There are discrepancies between the amounts contained in the Notices of Estimation of Tax Due and the amounts claimed in the summary summons in each case. In the PAYE/PRSI proceedings the total amount claimed in the summons for the years 2015 and 2016 is €225,401.42. For 2015 the amount claimed is €108,112.86, being principal of €98,307.93 and interest of €9,804.36; and for 2016 the amount is €117,288.56, inclusive of interest. In a Notice of Estimation of Income Tax issued on the 28 ^th November 2017, the amount due for 2015 is stated to be €109,333 before interest. In respect of the year ending 2016, the amount in the relevant notice is €106,625. Thus, a discrepancy of €11,025.07 arises in respect of the year 2015. The basis for the appeal is that the trial judge erred in rejecting the appellant's submission that the respondent was not entitled to judgment where no explanations had been given for the discrepancies.

3 . The PAYE/PRSI proceedings were grounded on the affidavit of Ms Carmel Wright, an officer with the Revenue Commissioner, and supported by an affidavit sworn on the 8 ^th September 2022 by Ms Fiona O'Carroll, also an officer with the Revenue Commissioner. She avers that, following her review of the relevant books and records, the breakdown in respect of the total due and owing by the plaintiff for PAYE/PRSI and the interest outstanding in respect of each of tax amount was as per the amount claimed in the summary summons. Ms O'Carroll also avers that a letter of demand was issued on the 7 ^th August 2019 in the amount of €98,307.93, and that no payment had been received. The appellant points out that insofar as this might be said to constitute a letter of demand, the description provided in that letter was “ Tax Type” “ P 35 Inspector”. On the 12 ^th May 2022, the respondent issued a Notice of Estimates of Income Tax which included a sum for the year 2015 of €52,404.47, whereas the amount subsequently claimed was €52,393.47, a discrepancy of €11. Barr J. noted the discrepancy and observed in his ruling:

“One has to live with these things with a degree of reality, rather than coming at it and it's trying to avoid a liability to pay tax or to suffer summary judgment on the basis of a tiny discrepancy which is actually in favour of the taxpayer, of €11.”

Noting that once the assessment had been raised the appellant had a right of appeal which was the time to raise issues of accuracy or miscalculation, Barr J. found that blame fell upon the appellant for not being proactive in making proper returns within the designated period, or in appealing the estimate when furnished. He was not satisfied that the discrepancies provided a basis on which to resist the claim.

4 . The appellant relies on the provisions of O. 4, r. 4 RSC and dicta in Bank of Ireland v O'Malley [2019] IESC 115. She contends:-

“[T]he requirement to calculate, with sufficient particularity, the amount said to be due is fundamental in proceedings brought by the Revenue, given that the proofs required to be exhibited in such proceedings are minimal, as compared to summary proceedings brought by financial institutions. For the present case, the Revenue was required only to exhibit the assessment and the letter of demand.

Despite that, the Revenue failed to explain the discrepancy in the amount sought for 2015 in the assessment and in the summons and as a result, the appellant was not in a position to know specifically the claim being made against her.” (paras. 11–12 of written submissions)

5 . It is accepted by the respondent that discrepancies exist between the amount claimed in the summary summons and that which had been previously notified to the appellant. The amount claimed in the summons is less than had been previously notified to the appellant. If necessary, the respondent wishes to adduce additional evidence on the appeal to explain this discrepancy. Leave is sought pursuant to the provisions of O. 86A, r.4 RSC to admit fresh evidence to explain the discrepancy, if necessary. The respondent submits as follows:

• (i) By virtue of s. 959AF (3) of the Taxes Consolidation Act 1997 (as amended), the Collector General's tax liability determinations are deemed to be final and conclusive where they are not appealed. These assessments were not appealed. In Gladney v Coloe [2021] IECA 115, this Court recognised the established position that the entire structure of the tax system has evolved on the basis of self-assessment. A court challenge to a revenue assessment is generally only available in a constitutional action or by way of judicial review: “…issues of fact arising between a taxpayer and the Revenue Commissioners are decided in accordance with the framework and appeals process established under the statutory scheme” (para. 77 of Coloe). It is well recognised that a taxpayer cannot raise issues concerning the correctness of the tax liability determination in enforcement proceedings. This is reflected in Coloe at paras. 79 – 80:

  “It is clear it...