Niall Glynn, Colm McDonnell and Kevin Sheehan v The Revenue Commissioners
| Jurisdiction | Ireland |
| Judge | Ms. Justice Stack |
| Judgment Date | 14 December 2021 |
| Neutral Citation | [2021] IEHC 780 |
| Docket Number | [Record No. 2020/93R] |
| Year | 2021 |
| Court | High Court |
In the Matter of a Case Stated Pursuant to Section 949AQ of the Taxes Consolidation Act 1997, as Amended
[2021] IEHC 780
[Record No. 2020/93R]
THE HIGH COURT
JUDGMENT of Ms. Justice Stack delivered on the 14th day of December, 2021.
This is an application by the Revenue Commissioners (“Revenue”) in an appeal by way of case stated pursuant to s. 949AP of the Taxes Consolidation Act, 1997, as amended, (“ TCA”) against a determination of the Appeal Commissioners dated 21 May 2020. Revenue were respondents to the appeal before the Appeal Commissioners and are appellants to this Court, and they now apply to admit the transcript of the evidence given to the Appeal Commissioners before this Court when hearing the case stated.
The three appellants to the Appeal Commissioners are the respondents to the appeal by way of case stated to this Court and are partners in Deloitte. Their appeals to the Appeal Commissioners were designated precedent appeals for 59 other individuals who are partners in Deloitte for some or all of the years of assessment from 2007 to 2015, and I will therefore refer to them as “Deloitte”.
The case stated concerns voluntary partner retirement payments (“VPR payments”) made by Deloitte to certain retired partners, and in particular whether a deduction can be claimed in respect of those payments in computing the Schedule D Case II profits of Deloitte. Deloitte claimed before the Appeal Commissioners that the VPR payments were deductible pursuant to s. 81 (2) TCA as a normal trading expense incurred wholly and exclusively for the purposes of the partnership's business.
By contrast, Revenue contend that the VPR payments were not a business expense as the justification for the payments was based on the relationship between the continuing partners and the retiring partner. As such, Revenue says that the payments were, in reality, an allocation or appropriation to the retiring partners out of the profits of the partnership, and as such were not deductible as a business expense.
The issue of the admission of the transcript was first raised by Revenue in correspondence in November 2021, many months after submissions had been filed, and then only when the court booklets for the case stated were being prepared. Deloitte objected to the production of the transcript in the booklets for the hearing of the case stated and therefore the admissibility of the transcript now falls for determination before the case stated can be heard.
As a preliminary matter, I entirely agree with Deloitte that this issue should have been canvassed by a notice of motion, grounded on affidavit. However, the parties are aware of the issues, and the papers which would otherwise have been exhibited in a grounding affidavit are before me by way of agreed booklet. Furthermore, Deloitte indicated to me at the sitting of the court that they were in a position to deal with the question of whether the transcript was admissible in the case stated.
While, therefore, I think the correct practice is to issue a notice of motion, grounded on affidavit, I thought it was appropriate to determine the matter. In the absence of any formal application, I asked counsel for Revenue to set out precisely what was sought and indicated that the orders sought were, in order of preference:
It was indicated by counsel that it would not be in anyone's interests to remit the matter to the Appeal Commissioners, I presume because the case stated has been ready for hearing since the filing of submissions earlier this year. In any event, I will deal with the three applications in turn.
-
a. an order admitting the transcript of the evidence before the Appeal Commissioners for the purposes of the hearing of the case stated;
-
b. alternatively, an order amending the case stated so as to append the transcript to the case stated;
-
c. if necessary, an order remitting the matter to the Appeal Commissioners for the purpose of appending the transcript to the case stated.
Counsel for Deloitte submits that a case stated should form a single composite document from which this Court can determine the issues of law set out in the case stated, and I agree with this submission. I think this follows from the seminal decision of Blayney J. in Mitchelstown Co-Op Society. v. Comr. for Valuation [1989] I.R. 210, at 212–213, where, after setting out the text of s. 5 of the Valuation Act 1988, pursuant to which certain decisions of the Valuation Tribunal could be appealed to this Court by way of case stated, and after stressing the importance of the Tribunal making the necessary findings of fact, Blayney J. stated:
“This court should not be required to go outside the case stated to some other document in order to discover [the findings of fact of the Tribunal]. The same principle applies to the contentions of the parties; the inferences to be drawn from the primary facts, and the Tribunal's determination. All these must be found within the case, not in documents annexed. In the same way, the fact that the judgment of the Tribunal is annexed to the case does not dispense the Tribunal from setting out its determination in the case. This is a specific requirement of s. 5 of the Act of 1988.”
Section 5 of the Valuation Act 1988 requires a case stated to set for the “ the facts and the determination of the Tribunal”. Section 949AQ (1)(a) TCA, which sets out what is required to be included in every case stated under that section is more expansive, and provides that a case stated shall contain:
-
(i) the Appeal Commissioners' material findings of fact,
-
(ii) an outline of the arguments made by the parties,
-
(iii) the case law relied on by the parties,
-
(iv) the Appeal Commissioners' determination and the reason for the determination, and
-
(v) the point of law as set out in the notice referred to in s. 949AP (2) on which the opinion of the High Court is sought.
It can immediately be seen that the transcript or any other note of the evidence is not required to be included in a case stated, which suggests that it is not generally necessary or appropriate to include those in a case stated, albeit that s. 949AQ (1) (a) does not seem to preclude their inclusion in a particular case, if it is necessary and appropriate to do so.
Furthermore s. 949AQ (7A), (inserted by s. 13 of the Finance (Tax Appeals and Prospectus Regulation) Act 2019, which was commenced on 18 December 2019) now provides that the case stated may specify exhibits, which are included with the case stated when it is sent to the High Court.
Subsection (7A) is a provision which relieves the Appeal Commissioners of inserting lengthy documents into the case stated and allows them to be exhibited, which no doubt will be more convenient in many cases. However, it does not touch on the appropriateness or necessity of whether any particular document (such as a transcript or a portion of it) should be before the High Court. It seems that the effect of subs. (7A) is merely to provide a convenient mechanism for the Appeal Commissioners in setting out the documents for this Court rather than to affect in any material way the circumstances in which those documents should be before this Court on a case stated in the first place.
I pause here to point out that the amendments effected by the 2019 Act, and therefore subs. (7A) were not referred to in argument and the submissions of the parties referred to the provisions of ss. 949AP and 949AQ as they stood prior to those amendments. However, as the amendments are of a kind which do not affect the substantive arguments of the parties, I do not think it is necessary to reconvene the hearing, although my judgment will refer to the law as it now stands.
Notwithstanding the insertion of subs. (7A), the absence of any reference in s. 949AQ (1)(a) TCA to the transcript or to any documents which were before the Appeal Commissioners suggests that, in general, it will not always be necessary to include these in the case stated itself. Section 949AQ (1)(a) sets out what will always be required, but does not provide guidance on when it will be necessary or appropriate to include other documents.
The classic statement of what should be included in a case stated appears to be that of Murphy L.J. in the Court of Appeal in Northern Ireland in Emerson v. Hearty and Morgan [1946] N.I. 35, at 36:
“We have thought that this may be a convenient opportunity to call attention to the principles which ought to be observed in drafting cases stated.
The case should be stated in consecutively numbered paragraphs, each paragraph being confined, as far as possible, to a separate portion of the subject matter. After the paragraphs setting out the facts of the case there should follow separate paragraphs setting out the contentions of the parties and the findings of the judge.
The case should set out clearly the judge's findings of fact, and should also set out any inferences or conclusions of fact which he drew from those findings. The task of finding the facts and of drawing the proper inferences and conclusions of fact from the facts so found is the task of the judge. It does not fall within the province of this court. Accordingly, it is not legitimate by setting out the evidence in the case stated and omitting any findings of fact to attempt to pass the task of finding the facts onto the Court of Appeal. What is required in the case stated is a finding by the judge of the facts, and not a recital of the evidence. Except for the purpose of elucidating the findings of fact it will rarely be necessary to set out any...
To continue reading
Request your trial
-
Thomas McNamara v The Revenue Commissioners
...correct statement of the law. The principles set down in the Byrne case were reiterated by Stack J in Glynn v. The Revenue Commissioners [2021] IEHC 780. 46 In relation to the onus of proof at an appeal hearing before the TAC, case law makes it clear that the onus of proof rests on the taxp......
-
Revenue Commissioners v Covidien Ltd
...to see if the TAC erred in law. 81 . In this regard, I take into consideration the views of Stack J in Glynn v Revenue Commissioners [2021] IEHC 780 in relation to the drafting of the notice pursuant to Section 949AP TCA 1997, where she pointed out that alleged errors of law should be plead......