McLoughlin v Tuite
| Jurisdiction | Ireland |
| Judge | FINLAY C.J. |
| Judgment Date | 13 June 1989 |
| Neutral Citation | 1989 WJSC-SC 1947 |
| Docket Number | [1985 No. 314] |
| Court | Supreme Court |
| Date | 13 June 1989 |
BETWEEN
and
1989 WJSC-SC 1947
Finlay C.J.
Walsh J.
Griffin J.
Hederman J.
McCarthy J.
THE SUPREME COURT
Synopsis:
WORDS AND PHRASES
"Criminal charge"
Constitution - Trial of offences - Income - Annual returns - Delivery - Failure - Penalties - Imposition - Procedure for recovery of penalties from defaulter - Civil action for payment of liquidated sum - Whether defaulter was tried on a criminal charge - ~See~ Revenue, income tax - (314/85 - Supreme Court - 13/6/89) [1989] IR 82
|McLoughlin v. Tuite|
REVENUE
Income tax
Income - Annual returns - Delivery - Failure - Penalties - Imposition - Procedure for recovery of penalties from defaulter - Civil action for payment of liquidated sum - Whether defaulter was tried on a criminal charge - Indicia of a criminal offence - Validity of enactments imposing penalty and providing procedure for its payment - Held that the proceedings brought against the plaintiff by the first defendant pursuant to the terms of ss. 500 and 508 of the Act of 1967 did not require or cause the plaintiff to be tried on any criminal charge within the meaning of Article 38, s. 1, of the Constitution: ~Melling v. O Mathghamhna~ [1962] I.R. 1 considered - Courts of Justice Act, 1924, s. 94 - Income Tax Act, 1967, ss. 500, 508 - (314/85 - Supreme Court - 13/6/89) [1989] IR 82
|McLoughlin v. Tuite|
CONSTITUTION
Trial of offences
Criminal charge - Meaning - Statute - Duty - Breach - Impositition of penalty for breach - Enactment provided procedure for enforcing payment of penalty - Whether enactment required criminal trial contrary to provisions of Constitution - ~See~ Revenue, income tax - (314/85 - Supreme Court - 13/6/89) 1989 IR 82
|McLoughlin v. Tuite|
Citations:
INCOME TAX ACT 1967 S500
INCOME TAX ACT 1967 S508
CONSTITUTION ART 38.1
INCOME TAX ACT 1967 SCHED 15
INCOME TAX ACT 1967 S503
INCOME TAX ACT 1967 S169(4)
INCOME TAX ACT 1967 S178(1)
INCOME TAX ACT 1967 S508(1)
COURTS OF JUSTICE ACT 1924 S94
O CRONIN & QUINN V BRENNAN 1939 IR 274
MELLING V O MATHGHAMHNA 1962 IR 1, 97 ILTR 60
AG V CASEY 1930 IR 163
MCDONALD V BORD NA gCON 1965 IR 217, 100 ILTR 89
INCOME TAX ACT 1918 S30
INCOME TAX ACT 1967 S515
INCOME TAX ACT 1967 S516
FINANCE ACT 1983 S94(2)(e)(i)
INCOME TAX ACT 1967 S172
AG V SOUTHERN INDUSTRIAL TRUST 94 ILTR 161
CUSTOMS (CONSOLIDATION) ACT 1876 S186
BLACKSTONE COMMENTARIES V4 P5
LEE V DANGAR GRANT & CO 1892 2 QB 337
BAGGE V WHITEHEAD 1892 2 QB 355
INCOME TAX ACT 1967 S500(1)
INCOME TAX ACT 1967 S500(2)
INCOME TAX ACT 1967 S500(3)
INCOME TAX ACT 1967 S504
FINANCE ACT 1983 S94
pronounced pursuant to Article 34.4.5° of the Constitution by FINLAY C.J. on the 13th day of June 1989
This is an appeal brought by the Plaintiff against the Order made in the High Court by Carroll J. on the 4th day of October 1985 dismissing his claim against the Defendants for a declaration that Sections 500 and 508 of the Income Tax Act 1967are invalid having regard to the provisions of the Constitution and, in particular, to Article 38(1) thereof.
The proceedings were instituted by plenary summons and a Statement of Claim was delivered, which by liberty of the Court was amended. Due to an error the amendment superseded some portions of the original Statement of Claim which it was not intended to exclude, and it would not appear that the amended Statement of claim as filed properly reflected the claim being made, which was undoubtedly tried in the High Court. Furthermore, though individual grounds of appeal dealing with the issues arising in this Court were set out in the Notice of Appeal, there was not a direct ground of appeal dealing with the issue of the constitutional validity of the Sections, which was the real issue on this appeal.
By consent, amendments both of the Statement of claim and of the Notice of Appeal were granted at the commencement of the hearing so as properly to bring before this Court the issues arising.
Section 500 of the Income Tax Act 1967provides as follows:
2 "(1) Where any person
(a) has been required, by notice or precept given under or for the purposes of any of the provisions specified in column 1 or 2 of Schedule 15, to deliver any return, statement, declaration, list or other document, to furnish any particulars, to produce any document, or to make anything available for inspection, and he fails to comply with the notice or precept, or
(b) fails to do any act, furnish any particulars or deliver any account in accordance with any of the provisions specified in column 3 of that Schedule,
he shall, subject to subsection (2) and to section 503, be liable to a penalty of £100 and, if the failure continues after judgment has been given by the court before which proceedings for the penalty have been commenced, to a further penalty of £10 for each day on which the failure so continues.
(2) Where the said notice was given under or for the purposes of any of the provisions specified in column 1 of the said Schedule and the failure continues after the end of the year of assessment following that during which the notice was given, the first of the penalties mentioned in subsection (1) shall be £250.
(3) The preceding provisions of this section shall have effect subject to the proviso to section 169(4) and the proviso to section 178(1)."
The proviso contained in Section 169(4) is to the effect that in respect of a failure to make certain returns or to deliver certain statements a person who establishes in the event of the penalty being sought against him that he was not chargeable to tax, cannot suffer a greater penalty than £5. The proviso to Section 178(1) is a proviso that in respect of the obligations imposed by that Section on employers, when required to do so by notice from an inspector of taxes, to deliver a return of the employees employed by them an employer shall not be liable to any penalty for omitting to make such return in respect of any person employed by him and not employed in any other employment, if it appears to the Revenue Commissioners that that person was entitled to total exemption from tax.
Section 508(1) provides as follows:
"(1) Without prejudice to any other mode of recovery of a penalty under the preceding provisions of this Part, or section 238, 240 or 296 an officer of the Revenue Commissioners, authorised by them for the purposes of this subsection may sue in his own name by civil proceedings for the recovery of the penalty in the High Court as a liquidated sum and the provisions of section 94 of the Courts of Justice Act, 1924, shall apply accordingly."
Further subsections of Section 508 provide for procedural matters in connection with the recovery of penalties and whilst they would if subsection (1) of the Section were invalid having regard to the Constitution, fall with that subsection, they are not material to the issues which arose on this appeal.
The effect of Section 94 of the Courts of Justice Act 1924 on subsection (1) of Section 508 is to provide that no party to an action in the High Court for a liquidated sum shall be entitled to a jury unless the judge shall consider a jury to be necessary or desirable for the proper trial of the action and shall of his own motion or on the application of any party so order.
Counsel on behalf of the Plaintiff and of the Defendant in the High Court delivered submissions in writing prior to the hearing and expanded on those submissions at that hearing. These submissions in writing were the basis of the arguments before this Court.
Carroll J. in the course of her careful and detailed judgment summarised the case made on behalf of both the Plaintiff and the Defendant before her in terms which would appear to represent the cases made before this Court as well. They are as follows:
"The Plaintiff submitted"
(1) The penalties imposed in section 500 of the Income Tax Act 1967are punitive and proceedings for their recovery are trials of a criminal nature for the purpose of coming within the provisions of Article 38(1). No person should be tried on any criminal charge save in due course of law.
(2) "Penalty" in this context is not to be confused with the penalty in a contract which is a provision for securing the due performance of a contract. It is to be equated with a fine i.e. a pecuniary punishment for an offence. Civil liability for a breach of statutory duty is different to a penalty for such breach. For civil liability to arise there must be damage. Penalties apply whether damage is caused or not. Their object is to punish in addition to any civil liability there may be.
(3) The reasoning of the courts as to the nature of offences contrary to the customs code are relevant to penalties imposed by the Income Tax Acts. Formerly penalties under the customs code were recovered in civil proceedings (See O Croinin and Quinn v. Brennan 1939 I.R. 274). They are now firmly regarded as criminal offences, whether of a minor or non-minor character (See Melling v. O Mathghamhna & Anor. 1962 I.R. 1.
(4) The case of the Attorney General v. Casey 1930 I.R. 163which supports the view that the recovery of penalties under the Income Tax code are not criminal in character, being a decision of the former Supreme Court, is not binding and has been wrongly decided.
The Defendants submitted
(1) The failure of the Plaintiff to make returns within a given period as required created a non-criminal liability for the payment of a fixed sum to the Exchequer.
(2) While the Oireachtas cannot dress up a criminal charge as a civil procedure, they can create a...
To continue reading
Request your trial
-
Michael Gladney v Thomas Coloe
...to protect the rights of the taxpayer.” 33 . The Chief Justice further observed that in the previous decision of McLoughlin v. Tuite [1989] I.R. 82 the Supreme Court had:- “…indicated the importance within the constitutional framework of the revenues of the State and that has bearing upon t......
-
Murphy v GM
...US V BAGAKAJIAM 524 US 321 REPUBLIC OF INDIA V INDIAN STEAMSHIP CO (NO 2) 1998 AC 878 CLANCY V IRELAND 1988 IR 326 MCLOUGHLIN V TUITE 1989 IR 82 O'KEEFFE V FERRIS 1993 3 IR 165 PROCEEDS OF CRIME ACT 1996 S4(1) CONSTITUTION ART 40.1 PROCEEDS OF CRIME ACT 1996 S8(1)(b) SUNDAY TIMES CASE (......
-
Tomasz Zalewski v The Workplace Relations Commission, an Adjudication Officer [Y], Ireland and the Attorney General
...Justice in Deighan v. Hearne, had perhaps other reasons in mind to explain such cases when he said “this court in McLoughlin v. Tuite [1989] I.R. 82, has already indicated the importance within the constitutional framework of the revenues of the State and that has bearing upon the powers pr......
-
Gilligan v Special Criminal Court, DPP, Ireland and Attorney General
... ... LYNHAM V BUTLER (NO 2) 1933 IR 74 MELLING V O MATHGHAMHNA 1962 IR 1 AG V SOUTHERN INDUSTRIAL TRUST 1994 ILTR 16 MCLOUGHLIN V TUITE 1989 IR 83 O'KEEFFE V FERRIS 1997 3 IR 463 COMPANIES ACT 1963 S297 CONSTITUTION ART 38 PROCEEDS OF CRIME ACT ... ...
-
Theorising Asset Forfeiture in Ireland
...on the grounds that it constituted a criminal procedure withoutthe safeguards of due process. Similarly, in McLoughlin vTuite [1989] IR 82 theSupreme Court held that the penalty imposed for failure to make tax returnsunder the Income Tax Act 1967 was a deterrent or incentive, and not a crim......