Used Car Importers of Ireland Ltd v The Minister for Finance and Others

• Jurisdiction: Ireland
• Judge: Miss Justice Laffoy
• Judgment Date: 01 March 2006
• Neutral Citation: [2006] IEHC 90
• Court: High Court
• Date: 01 March 2006

[2006] IEHC 90

THE HIGH COURT

No. 1988 P/1995

USED CAR IMPORTERS OF IRELAND LTD v MIN FOR FINANCE & ORS

BETWEEN/

USED CAR IMPORTERS OF IRELAND LIMITED

PLAINTIFF

AND

THE MINISTER FOR FINANCE, THE REVENUE COMMISSIONERS, IRELAND AND THE ATTORNEY GENERAL

DEFENDANTS

FINANCE ACT 1992 S133

CONSTITUTION

EEC DIR 77/388

RSC O.31 r12(4)

RYANAIR PLC v AER RIANTA CPT 2003 4 IR 264 2004 1 ILRM 241

RSC O.31 r12

PRACTICE AND PROCEDURE

Discovery

Further and better discovery - Whether court has jurisdiction where requirements of O.31, r. 12 of Rules of the Superior Courts not complied with - Whether discovery necessary for disposing fairly of cause or matter - Whether calculation of vehicle registration tax in issue - Whether data sought relevant to issues - Limited discovery ordered - (1995/1988P - Laffoy J - 1/3/2006) [2006] IEHC 90Used Car Importers of Ireland Ltd v Minister for Finance

Facts: The plaintiff who instituted proceedings challenging the manner in which and the extent to which the second defendant assesses Vehicle Registration Tax (VRT) on used motor vehicles imported by the plaintiff, appealed against an order of the Master refusing to order further and better discovery of three categories of documents.

Held by Laffoy J. in allowing the appeal in relation to one category: That discovery of the documents sought in category (c), namely all data in relation to each vehicle registered by the plaintiff was necessary to determine the issue between the parties, which was the calculation of VRT due and paid by the plaintiff on used vehicles imported by it.

Reporter: L.O'S.

1 Judgment of Miss Justice Laffoy delivered on 1st March, 2006.

The proceedings

2 In these proceedings the plaintiff, which carries on the business of importation and sale of used motor vehicles, particularly from Japan, but also from Member States of the European Union, challenges the manner in which and the extent to which the second defendant assesses Vehicle Registration Tax (VRT) on used motor vehicles imported by the plaintiff on the basis that it is contrary to the relevant statutory provision (s. 133 of the Finance Act, 1992, as amended), the Constitution and European Community Law, including the Sixth VAT Directive 388/77. It also impugns the constitutionality of s. 133 and its validity under European Community Law. One of the reliefs sought is a mandatory injunction directing the return of all excess VRT paid by the plaintiff.

3 The history of the proceedings has some relevance to the matter now being considered. The proceedings commenced on 15th March, 1995. In May, 1995 the plaintiff issued a motion seeking an interlocutory mandatory injunction directing the second defendant to publish to the plaintiff the values for VRT purposes of the full range of new and used motor vehicles and to publish revised values from time to time as they should occur. An order was made on foot of the motion by Costello P. on 17th July, 1995, wherein, as the order indicates, by consent of the parties a timeframe was fixed for delivery of pleadings. It was further ordered that each side should make discovery within six weeks from the delivery of the defence "of the documents which are or have been in their respective possession or power relating to the matters in question" in the action. Unfortunately, the enthusiasm for a speedy resolution of the matter which obviously inspired that order appears to have dissipated. Three years later, by order of this Court (Geoghegan J.) dated 22nd June, 1998, the first and second defendants were ordered to make further discovery of specific documentation.

This application

4 The matter the court is now concerned with is an appeal from an order of the Master on foot of a motion for further and better discovery which the plaintiff issued on 17th May, 2004. The items which the plaintiff sought in that notice of motion were:

5 (a) further and better discovery on oath of all documents and records in whatever format they are held of all surveys, internal reviews and market research of whatever kind relating to all aspects of the VRT valuation system, including its development and operation, since its inception item (a);

6 (b) a working copy of the desktop version of the Vehicle Registration Tax valuation programme used by the second defendant to calculate VRT as referred to in paragraph No. 5 of a letter of 12th May, 2003 from the second defendant (item (b));

7 (c) all data û in relation to each vehicle registered by the plaintiff û necessary to enable the plaintiff and its experts to perform and validate the valuation determined by the defendants applying the methodology used by the defendants, either in Microsoft Excel spreadsheet file or a Microsoft Access database file or at a minimum a CSV(comma separated value) in ASCI format file (item (c)), and

8 (d) access for the plaintiff and its experts to the full database of all vehicles registered for VRT, as will allow them to conduct such studies as are necessary to establish the manner in which the tax has been administered (item (d)).

9 By order of the Master made on 10th December, 2004, item (b) was ordered. This appeal is concerned with items (a), (c) and (d).

10 On the basis of the evidence before the court there was something of an hiatus in the correspondence between the solicitors in relation to discovery between the autumn of 1999 and the spring of 2003. However, from 25th February, 2003, when the plaintiff's solicitors sought to follow through on an offer made by the second defendant in May, 1997 to provide a "record dump" of a certain database, to which I will return later, the correspondence between the plaintiff's solicitors and the solicitor for the second defendant became very technical. While I have read the correspondence carefully, I do not profess to have any real understanding of the technical material.

11 In a letter date 6th August, 2003 the plaintiff's solicitors sought voluntary discovery of the valuation programme, database and related documentation. In that letter, the reason why the valuation programme and the database were relevant to the issues in the case and why it was necessary for the plaintiff to have access to them was set out. The "related documentation" was not specified nor was any reason given why it was necessary. The related documentation was specified by the plaintiff's solicitors in a letter of 18th February, 2004, where it was explained that related documentation was intended to mean market research and surveys conducted by the second defendant to validate the valuation system. This was the genesis of item (a). Although voluntary discovery was sought in that letter of those documents invoking O. 31, r. 12(4) of the Rules of the Superior Courts, 1986, I do not think that the plaintiff can be said to have furnished any reason why this category of documents was required to be discovered in that letter. However, the letter did raise the issue of the adequacy of the discovery already made by the second defendant.

12 Not overlooking that, on the authority of the decision of the Supreme Court in Ryanair Plc v. Aer Rianta Cpt. [2003] 4 I.R. 264, under the current O. 31, r. 12 an applicant for discovery must discharge the prima facie burden of proving that discovery sought "is necessary for disposing fairly of the cause or matter", the approach I propose adopting is to consider the arguments advanced by counsel for the defendants as to why the orders sought should not be made. It was submitted that the plaintiff's case is about the legality of the tax; that it does not go to the calculation of VRT. I do not accept that argument and I am satisfied from reading the pleadings that the calculation of VRT due and paid by the plaintiff on used vehicles imported by it is an issue in the case.

Item (a)

13 In relation to item (a), it was submitted on behalf of the second defendant that the letter of 18th February, 2004 did not comply with O. 31, r. 12(4) because no reasons were set out why this category of documents was sought. As I have already indicated, I think that is correct. The point was not taken before the Master, but it was submitted that this appeal is a hearing de novo and it is open to the defendant to argue it. It was submitted that the absence of reasons in the letter seeking voluntary discovery deprives the court of jurisdiction. Even if the court has jurisdiction, it was submitted, the court cannot surmise why discovery is necessary. In an affidavit sworn on this application, albeit in response to affidavits sworn on behalf of the defendants, Niall O'Dowling, on behalf of the plaintiff, specified the type of material which is being sought and he referred to an affidavit of Moore McDowell sworn subsequently as setting out in further detail the class of material...