Revenue Commissioners v Donnelly

• Jurisdiction: Ireland
• Judge: O'HIGGINS C.J.
• Judgment Date: 24 February 1983
• Neutral Citation: 1983 WJSC-SC 1008
• Docket Number: (164/81)
• Court: Supreme Court
• Date: 24 February 1983

1983 WJSC-SC 1008

THE SUPREME COURT

O'Higgins C.J.

Henchy J.

Hederman J.

(164/81)

REVENUE COMMRS. v. DONNELLY

THE REVENUE COMMISSIONERS

SEE IN RE. VAN MOOL McARDLE LTD.

HIGH 1978/1351P - CARROLL - 21.5.81.

Appellants

and

JOHN DONNELLY

Respondent

Subject Headings:

WINDING UP: assets

REVENUE: corporation tax

1 JUDGMENT delivered the 24th day of February 1983by O'HIGGINS C.J. [NEM DISS]

2 The Respondent in this appeal is the Official Liquidator of Van Hool McArdle Limited. In the course of the liquidation he sold certain properties which were subject to incumbrances. A liability was thereby incurred for corporation tax on chargeable gains accrued on that sale under the Capital Gains Tax Act 1976. The Respondent thereupon brought a Motion in the High Court before Miss Justice Carroll, seeking certain directions which included the following.

3 (1) Whether or not capital gains tax payable in relation to the sale is an "expense" incurred in the realisation of an asset within the meaning Rule 129of Order 77 of the Rules of the Superior Courts which relate towinding-up.

4 (2) If it is, can it be deducted from the proceeds of sale payable to the mortgagees?

5 (3) Is the tax "a necessary disbursement" of the liquidator under the third heading listed in Rule 129?

6 Rule 129 of Order 77 appears under the heading:

"XXII

Costs and expenses payable out of the assets of the Company"

7 The Rule is in the following terms:

"129. (1) The assets of a company in a winding-up by the Court remaining after payment of the fees and expenses properly incurred in preserving, realising or getting in the assets, including where the company has previously commenced to be wound up voluntarily, such remuneration, costs and expenses as the Court may allow to a liquidator appointed in such voluntary winding-up, shall, subject to any order of the Court, be liable to the following payments which shall be made in the following order of priority, namely;"

8 First, the costs of the Petition, including the costs of any person appearing on the Petition whose costs are allowed by the Court. Next, the costs and expenses of any person who makes or concurs in making the company's Statement of Affairs.

9 Next, the necessary disbursements of the Official Liquidator, other than expenes properly incurred in preserving, realising, or getting in the assets hereinbefore provided for.

10 Next, the costs payable to the solicitor for the OfficialLiquidator.

11 Next, the remuneration of the Official Liquidator.

12 Next, the out-of-pocket expenses necessarily incurred by the committee of inspection, if any.

13 (2) No payments in respect of...