O Srianain v Lakeview

• Jurisdiction: Ireland
• Judge: Mr. Justice Murphy
• Judgment Date: 08 October 1984
• Neutral Citation: 1984 WJSC-HC 2656
• Docket Number: Reference 560R/1982
• Court: High Court
• Date: 08 October 1984

1984 WJSC-HC 2656

Reference 560R/1982

O SRIANAIN v LAKEVIEW

S. O'SRIANAIN

APPELLANT

and

LAKEVIEW LIMITED

RESPONDENT

Synopsis:

CASE STATED

Question of Law

Findings of fact - Inferences drawn - Whether judge of Circuit Court entitled to find facts as expressed in Case Stated-Whether correct inferences drawn Role of High Court at hearing of Case-(1982 No. 560R-Murphy J. -8/10/84).

O'Srianain v. Lakeview Ltd.

1 Judgment of Mr. Justice Murphy delivered the 8th day of October 1984.

2 When this matter came before the learned President of the Circuit Court the question on which his decision was sought was whether Lakeview Limited, the Respondent company, was entitled to claim 100% wear and tear allowance in respect of an expenditure of £45,935.00 on the provision of what was described as "a deep pit poultry-house and equipment" for the purpose of carrying on its business as egg producers. The learned trial Judge having decided that question in favour of the Respondent was required to state a case for the opinion of the High Court pursuant to Section 430 of the Income Tax Act 1967and in that case having set out the various facts which were proved or admitted before him and the contentions of the respective parties arising therefrom together with his conclusion aforesaid expressed the question of law for the opinion of this Court in the following terms:-

3 "Whether on the facts as found by me and as set forth in this case stated, there was evidence upon which I could properly decide that "the said house was an item of plant and that the company was entitled to claim the 100% wear and tear allowance on it as provided for by the Sections referred to in paragraph one hereof".

4 Of this question two things may be said. First it correctly recognises that provided that the decision is supported by evidence and not based on a mistaken view of the law that this Court will not intervene. Indeed it is well recognised that tax cases frequently involve matters of degree rather than matters of distinction and that conclusions based on matters of degree should not be disturbed even if the Court to which the case is stated did not agree with such conclusions unless it should be the case that the conclusions were such that no reasonable Judge could draw them or that they were based on a mistaken view of the law (see Mara and Hummingbird Limited 1982 I.L.R.M. 425).

5 Secondly, it may be said of the question posed for the opinion of this Court that it is expressed in a form which has become standardised in recent years. The Judge or tribunal stating the case expresses his ultimate conclusion as to the rights of the parties leaving room for some doubt as to what legal propositions he accepted or rejected with the result that there is frequently difficulty, as Lord Hailsham complained in Cole Brothers and Phillips 1982 STC 307 at 312, in identifying the particular question of law on which the guidance of this Court is sought. I infer that the learned Judge accepted the legal proposition implicit in the contention made on behalf of the Respondent in the following terms:-

6 "That the house in its entirety was an item of plant and was an apparatus or device designed specifically for the purpose of egg production with a view to enabling the trade of egg production to be carried on: the house was as much necessary for the purposes of the egg production as was the equipment (such as the cages) in the house, that one could not exist or be effective without the other: and that accordingly the 1O0% Capital Allowance claimed was properly allowable to the company".

7 However the task is approached it is a daunting one. The relevant legislation discloses the unwillingness of the Oireachtas to attempt a definition of the crucial word "plant" and that the innumerable authorities to which reference has been made disclose a regrettable inability on the part of the judiciary in several jurisdictions to provide one.

8 The crucial question is posed and the difficulty in answering it explained in the judgment of Stephenson L.J. in the Court of Appeal in Cole Brothers Limited and Phillips 1981 STC. 671 at page 683 in the following terms:-

9 "What is plant? that is the question that an Inspector of Taxes has had to answer, not for the first time, and that a dissatisfied "taxpayer has asked the Special Commissioners of Income Tax and more than one Court, again not for the first time, to reconsider in order to answer the question whether this or that or the other is plant.

10 Parliament has not attempted to put an end, or a limit, to such litigation by defining plant. Many Judges have made the attempt. The more definitions multiply, the less enviable grows the task of Her Majesty's Inspectors of Taxes. If they traverse the whole gamut of reported cases crossing the border into Scotland and the sea to Australia in their search for guidance, they find plant in the most unlikely objects, from a horse to a swimming pool, from a dry dock to a mural decoration. Faced with such applications of the word, all supported by cogent reasoning, they may be pardoned for finding anything or almost anything, to be or not to be plant and may be justified in making any number or almost any number of inconsistent concessions and illogical distinctions. It all depends on the circumstances, especially the work of the particular taxpayer, and (I feel bound to add) on how it strikes the particular Judges of the question, whether in tax administration or on the judicial bench.---- The philosopher statesman, Balfour, is reported to have said it was unnecessary to define a great power because, like an elephant, you recognise it when you meet it. Unhappily plant in taxing and other "statutes is no elephant (though I suppose an elephant might be plant). It has lost what resemblance to machinery it may once have had and any contrast with buildings or structure is now misleading, however strong the temptation to go back to those simple similarities and differences which the word might have suggested before repeated difficulties of application drove Judges to gloss then over".

11 It has been said (see Benson Inspector of Taxes .v. Yard Arms Club Limited 1979 STC 268 at 269) that the expression "plant" in the relevant tax code is to be interpreted:-

12 "As a man who speaks English and understands English accurately but not pedantically would interpret it in (the) context applying it to the particular subject-matter in question in the circumstances of the particular case".

13 However having quoted that guidance from the decision of Buckley Lord Justice, Lord Hailsham in Cole and Phillips (above) went on to quote from a judgment of the Court of Appeal in that case in the following terms (at page 309):-

14 "To this admirable precept however Oliver L.J. in delivering the judgment of the Court of Appeal in the instant case warily and perhaps wearily, added the cautionary rider that "the English speaker must, I think, be assumed to have studied the authorities". These "however, as he cautiously admitted in an earlier passage at page 676, cannot be pretended to be at all easy to reconcile and, as he said in a still earlier passage at page 675, "it is now beyond doubt that the word "plant" is used in the relevant section in an artificial and largely judge-made sense".

15 Indeed if these warnings were not enough, it may be noted that a simple but dramatic revolution took place when section 45 of the...