Michael Gladney v Thomas Coloe

• Jurisdiction: Ireland
• Judge: Ms. Justice Máire Whelan
• Judgment Date: 23 April 2021
• Neutral Citation: [2021] IECA 115
• Court: Court of Appeal (Ireland)
• Docket Number: Appeal Number: 2019/369
• Date: 23 April 2021

Between/

Michael Gladney

Respondent

and

Thomas Coloe

Appellant

[2021] IECA 115

Whelan J.

Ní Raifeartaigh J.

Power J.

Appeal Number: 2019/369

THE COURT OF APPEAL

Summary judgment – Capital gains tax – Value-added tax – Appellant appealing from the ex tempore decision and consequent order of the High Court granting summary judgment against the appellant – Whether there had been non-compliance by the respondent with High Court Practice Direction HC54

Facts: The appellant, Mr Coloe, appealed to the Court of Appeal from the ex tempore decision and consequent order of Cross J made in the High Court on 8 July 2019 granting summary judgment against the appellant in the sum of €104,147.82 (in respect of outstanding capital gains tax, income tax and VAT together with interest). The said order was perfected on 8 July 2019. The key grounds of appeal argued by the appellant were the following: (i) the respondent, Mr Gladney, was the incorrect plaintiff since he ceased to be the Collector General after the institution of the proceedings and prior to the hearing; (ii) it was denied that the appellant was “a self-employed person” from 27 January 2004 to 19 January 2019; (iii) it was contended that the appellant “did de-register as a self-employed taxpayer effective from 1 January 2004 to 31 December 2018; (iv) it was argued that a Revenue audit was still ongoing and had not concluded such that judgment against the appellant was precluded; that “[w]here conclusions are determined by the Revenue Commissioners, the applicant has a legal right of appeal against the conclusions reached or parts of such conclusions as the applicant so determines”; and (v) it was contended that there had been non-compliance by the respondent with High Court Practice Direction HC54.

Held by Whelan J that this was a case where the High Court was entirely correct in deciding to grant judgment. She found that no arguable grounds of appeal had been raised.

Whelan J held that she would dismiss the appeal and affirm the decision of the High Court. As the respondent had been entirely successful in the appeal, it was Whelan J’s provisional view that he was entitled to the costs thereof against the appellant.

Appeal dismissed.

UNAPPROVED

NO REDACTION NEEDED

JUDGMENT of Ms. Justice Máire Whelan delivered on the 23rd day of April 2021

Introduction

1 . This is an appeal from the ex tempore decision and consequent order of Cross J. made in the High Court on 8 July 2019 granting summary judgment against the appellant in the sum of €104,147.82 (in respect of outstanding capital gains tax (“CGT”), income tax and VAT together with interest). The said order was perfected on 8 July 2019.

Background

2 . The summary summons issued on 24 June 2016 – over three years prior to the hearing. It sought payment of sums totalling over €105,000. It was pleaded that full particulars of the sums claimed had already been furnished to the appellant in writing and that the said sums had been duly demanded prior to the institution of the proceedings. The particulars pleaded included a CGT return for the year 2013 totalling, with interest, over €26,000. Two income tax returns were referred to for the years 2012 and 2013, amounting, with interest, to over €44,000. The balance of the claim pertained to VAT returns for the period from 1 January 2012 to 30 April 2015, inclusive. It is apparent that following the raising of the said assessments the appellant never sought to appeal any of them within the time allowed by the relevant tax statutes. As of the date of institution of the summary proceedings the appellant had taken no step to appeal any of the estimates in the assessments and he was clearly out of time for doing so pursuant to the relevant tax statutes.

3 . The notice of motion seeking summary judgment issued on 19 July 2016 and was grounded on the affidavit of James Deery of the Office of the Revenue Commissioners. This affidavit deposed that the sum claimed was less than the sum originally claimed by reason of payments which had been credited to the appellant since the institution of the proceedings. The deponent set out the sums then due and his belief that there was no defence to the claim.

4 . In his replying affidavit, sworn on 17 October 2016, the appellant deposed at para. 3, “I would like to appeal many of the factors of the final estimate and bill forwarded to me recently under the following listed categories” and he outlined details in regard to the CGT assessment, income tax assessments and VAT assessments. At para. 4 he deposed, “I say that this audit is not treating me fairly and I need time to appeal.”

5 . With regard to the CGT assessment, the appellant asserted that same related to a property in Dublin which he was legally advised to sign over to a relative in the context of other legal proceedings. He claimed that the said property was valued at £29,000 when he purchased it in 1990 and that he made no profit in relation to same. He asserted that the only profit that will be made was when it would be sold in the future and he would not gain financially from such a sale. He claimed not to have resided in the property since 1996 and that a third party had a right of residence for life over same.

6 . He deposed that, in the context of a Revenue audit, almost 90% of the expenses he submitted on the advice of his accountant had been disallowed. He asserted that the expenses claimed were legitimate and directly connected with his business:-

“I am a self-employed man with legitimate expenses to trade and the fact that I am being denied the right [ sic] enter these expenses is being appealed”.

He looked for time to have this independently audited at his own expense.

7 . Regarding the claim for unpaid VAT in the period 2012/2013, he deposed that Revenue had failed to take payments he had made to the County Sheriff's Office during these periods into consideration and withdrew many legitimate expenses used to conduct his business at the time. Again he wished to have this looked at independently by an accountant. He referred to himself as “a self-employed business man”.

8 . He also referred to having suffered a brain injury consequent upon a fall since the audit and having gone deaf in one ear with substantial deafness in the other ear.

9 . An affidavit was sworn on 12 December 2016 by Conor Robinson, solicitor with CB Robinson & Co. Solicitors, who was then on record for the appellant. He had examined the appellant's books and a report which had been obtained from Doyle Murtagh & Co. Chartered Certified Accountants and Registered Auditors for the benefit of the appellant. He exhibited the report of the auditors.

10 . Mr. Robinson averred that it was accepted that the appellant failed to return any self-assessment CGT for the disposal of his home. This failure was characterised as arising in consequence of his misunderstanding about the availability to him of statutory exemptions. The appellant had been informed that he was required to make a self-assessment return and made a return showing the value of the property as €138,000. Revenue appears to have initially raised an assessment based on this market value with 42 months of occupation as a principal private residence attributed to the appellant. Revenue corresponded further on 11 July 2016, setting out a revised computation showing a market value of €170,000 less €17,000 attributable to a right of residence for life, with allowance for 72 months of occupation by the appellant as his principal private residence. The revised CGT liability was for €26,002.68. Mr. Robinson deposed that the revised market value appears to have been taken from a valuation arranged for certain court proceedings and not for the purposes of CGT. It was contended that if Revenue intended to rely on this increased valuation, there could be no finality to the proceedings as it would likely later issue another summons for the additional liability due on the increased revised computation of CGT. Revenue had only provided for 42 months of occupation in the summary summons and not 72 months which is shown on its revised computation, it was contended.

11 . At para. 9 Mr. Robinson contended that the appellant was:-

“…a self-employed contractor providing music/DJ services to the entertainment industry in Dublin and around the country. As part of his trade [he] incurs expenses which he states are commonly allowed to other contractors such as him as deductible expenses against profits.”

It was contended that Revenue had not informed the appellant or his agent “as to what expenses were disallowed and why.” It was asserted that the appellant had informed the relevant Revenue inspector that he wanted to appeal and he was advised not to and that as a consequence of this he failed to lodge his appeal within 30 days of the assessment. He exhibited in this regard an email dated 23 September 2016 from Brian Bradshaw of Salus Financial (the appellant's agent at the time) summarising what a Revenue officer had apparently said to him concerning an appeal, namely “[h]e maintains that there are no grounds for an appeal, as to put in an appeal you would have to be arguing on a point of law and the law is very much with him in relation to the taxes” and that “[a]ll he needs to do is put forward that you were paying estimates and that ‘nil’ returns were submitted, and you would be shot down from the start”.

12 . In my view that comment is nothing more than an expression by the Revenue official in question to the appellant's financial adviser of a point of view as to the prospects of such an appeal succeeding. There is absolutely no basis for asserting that the comment (assuming that it was correctly recalled and related accurately in the email) could be fairly characterised as advice not to appeal. No official of the Revenue Commissioners was engaged in providing advice to the...