O'Rourke v Revenue Commissioners

JurisdictionIreland
JudgeO'Flaherty J.,Mr. Justice Francis D. Murphy,[HAMILTONCJ CONC]
Judgment Date15 May 1996
Neutral Citation1996 WJSC-SC 2124
Date15 May 1996
CourtSupreme Court

1996 WJSC-SC 2124

THE SUPREME COURT

Hamilton C.J.,

O'Flaherty J.,

Murphy J.,

335/95
O'ROURKE v. REVENUE COMMISSIONERS

BETWEEN:

LAURENCE O'ROURKE
Plaintiff

AND

REVENUE COMMISSIONERS
Defendant

Citations:

FINANCE ACT 1976 S30

COURTS OF JUSTICE ACT 1936 S38

DOLAN V CORN EXCHANGE 1975 IR 315

INCOME TAX ACT 1967 SCHED E

INCOME TAX ACT 1967 S126

INCOME TAX (EMPLOYMENT) RULES 1960 SI 28/1960

INCOME TAX ACT 1967 S498

INCOME TAX ACT 1967 S550

INCOME TAX ACT 1967 S30(3)

INCOME TAX ACT 1967 S30(4)

INCOME TAX ACT 1967 S550(1)

Synopsis:

CASE STATED

Question of law

Error - Proceedings - Remittal - Tax - Overpayment - Repayment - Rate of interest payable on amount of income tax overpaid - Whether interest payable pursuant to specified enactment - Specified enactment inapplicable - Proceedings remitted to trial judge - Courts of Justice Act, 1936 (No. 48), s. 38 - Finance Act, 1976 (No. 16), s. 30 - (335/95 - Supreme Court - 15/5/96) [1996] ITR 217

|O'Rourke v. The Revenue Commissioners|

REVENUE

Income tax

Payment - Overpayments - Repayment - Interest - Rate of interest payable on amount of income tax overpaid - Whether interest payable pursuant to specified enactment - Specified enactment inapplicable - Proceedings remitted to trial judge - (335/95 - Supreme Court - 15/5/96) - [1996] ITR 217

|O'Rourke v. The Revenue Commissioners|

1

Judgment of O'Flaherty J.delivered on the 15th day of May, 1996

2

I have had the opportunity of reading in advance the judgment that will be delivered by Murphy J. herein. I am in agreement with his delineation of the background facts, his conclusion on the legal aspects of the case as well as the problems that he has identified and which will fall to be resolved by Keane J. when the case is remitted to him.

3

The question which the trial judge posed was as follows:-

4

Whether having regard to the facts found or admittedbefore me the plaintiff is entitled to a payment of interest on foot of the overpayment of tax for the periods in question pursuant to s. 30 of the Finance Act 1976. (emphasis added)

5

It is agreed on both sides that the strict answer to this question is that interest cannot be paid pursuant to the section.

6

But what counsel for the plaintiff submit is that interest should be payable in analogy with or by reference to s. 30. If the situation of the Revenue Commissioners and the taxpayer were the same I should think that the injunction contained in the authority of the Sermon on the Mount: So whatever you wish that men would do to you, do so to them; for this is the law and the prophets (Mt. 7.7) would be applicable. But the circumstances of the parties are not such as to require this form of equality of treatment. Section 30 was introduced to bring a certain category of tardy taxpayers to book so that they would not enjoy a privilege denied to the bulk of taxpayers, viz. to delay payment of the tax due. So the interest chargeable was a formidable one.Butit was done for the ultimate benefit of all taxpayers: to preserve tax equity. In this case, the Revenue Commissioners came to be in possession of the taxpayer's money by mistakenly assigning him to an incorrect category and of course they were obliged to refund the overpayment of tax that occurred as a result and have done so; in my opinion — but this is for the trial judge - simple justice would seem to require that they should pay interest at a rate to be decided upon by him, but not at the de luxe rate specified in s. 30, on the money that they held on a form of constructive trust for thetaxpayer.

7

While the case will be returned to the trial judge "for the pronouncement of his judgment or order" under s. 38 of the Courts of Justice Act, 1936, he is not required to act as perfunctorily as that phrase suggests but remains an inherent jurisdiction, within the rules of evidence and without unfairly affecting the rights of any party, to take such steps as he considers necessary to ensure that the issues outstanding will be decided according to the true facts and a correct version of the law. In that regard he has jurisdiction to hear furtherevidence or to make further findings of fact ( Dolan .v. CornExchange [1975] IR 315), or, in my view, to amend thepleadings.

8

Judgment 207

9

JO'F - DO'C

10

Judgment of Mr. Justice Francis D. Murphydelivered the 15th day of May 1996. [HAMILTONCJ CONC]

11

By Ordinary Civil Bill dated the 14th day of August 1992 the Plaintiff, Laurence O'Rourke, claimed as against the Defendants, the Revenue Commissioners, the sum of £27,248.48 as interest on overpaid tax alleged to be due by the Defendants to the Plaintiff pursuant to Section 30 of the Finance Act 1976 from the date of payment by the Plaintiff to the date of repayment of such tax. By order made on the 12th of January 1994 Judge Dominic Lynch ordered that the Plaintiff do recover from the Defendants the sum of£13,624.24, that is to say one half of the amount claimed, together with costs when taxed and ascertained. The order provided for a stay in the event of an appeal.

12

The Defendants appealed the order of the Circuit Court Judge and the matter came before Mr. Justice Keane on the 1st of June 1994 pursuant to the provisions of section 38 of the Courts Act 1936. At the conclusion of the evidence and having heard the submissions of the parties the learned trial judge indicated that he was prepared to state a case for the opinion of this court on the question of law raised in the matter. The matter was then adjourned and on the resumed hearing Counsel on behalf of the Revenue Commissioners applied for a case stated and the learned trial judge acceded to that application.

13

The facts proved or admitted before the learned trial judge are set out fully in the case stated by him and may be summarised as follows:-

14

The plaintiff is a social welfare branch manager in Portlaoise in the County of Laois. Throughout the period from 1979-80 to 1987-88 the plaintiff was treated as coming within schedule E of the Income Tax Act 1967 and the Department deducted tax under the P.A.Y.E system in accordance with Section 126 of the Income Tax Act 1967 and the Income Tax (Employment) Regulations 1960 from emoluments paid by the Department to the Plaintiff for those years.

15

On the 21st of April 1988 Mr. Justice Blayney found that a similar relationship which existed between the Minister for Social Welfare and one Thomas B. Mooney, a branch manager at the employment office Tullamore in the County of Offaly was a contract for services and not a contract of service. He went on to hold that the branch manager in that case should have been assessed under Schedule D and not Schedule E as had been the case. A Mr. Baithein Mooney, certified accountant, was the tax consultant, advising Thomas B. Mooney. He became advisor to the plaintiff in the present case in 1987. Mr. Baithein Mooney had a meeting with Mr. William Leahy, Inspector of Taxes, when they discussed the question of repayment of tax overpaid by various branch managers, including the Plaintiff, Originally Mr. Leahy disputed the claim of the branch managers to repayment and contended...

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