Yesreb Holding Ltd v Revenue Commissioners

• Jurisdiction: Ireland
• Judge: Mr. Justice Tony O'Connor
• Judgment Date: 06 May 2021
• Neutral Citation: [2021] IEHC 317
• Court: High Court
• Docket Number: [No. 2020 87 R]

Between

Yesreb Holding Limited

Appellant

and

Revenue Commissioners

Respondent

[2021] IEHC 317

[No. 2020 87 R]

THE HIGH COURT

Revenue – Stamp duty – Sub-sale relief – Liability for duty where deed of conveyance gave effect to two contracts for sale of land

Facts: in 2005 a Mr. Dunne entered into a contract to purchase land for €57.95million. A subsequent declaration of trust signed by Mr. Dunne and his wife stated that the interest in the earlier contract was held on trust. In 2013 the fee simple was conveyed to the appellant on payment to Mrs. Dunne of €14million as beneficial owner. A stamp duty return was filed but challenged by the respondent. The matter came before the Tax Appeals Commissioner and the appellant requested that a case be stated after their challenge before the Commissioner failed.

Held, that the case stated asked the Court to determine three questions. Firstly, whether the Commissioner was correct to hold that sub-sale relief was not available to the appellant. Secondly, whether the appellant was the accountable person, and finally whether a sub-purchaser was liable for duty of the deed of conveyance including the first sale. The Court considered the statutory provisions of the Stamp Duties Consolidation Act, 1999 and was minded to answer each of the questions in the affirmative.

Submissions on the resulting orders were invited.

Counsel for Appellant: Gráinne Clohessy SC

Counsel for Respondent: Jacqueline O'Brien SC and Rosemary Healy-Rae.

JUDGMENT of Mr. Justice Tony O'Connor delivered on the of 6 ^th May 2021

INTRODUCTION	Para. 1
BACKGROUND	Para. 2
THE QUESTIONS	Para. 7
RELEVANT STATUTORY PROVISIONS ON STAMP DUTY	Para. 8
PRINCIPLES FOR THIS CASE STATED	Para. 9
JURISDICTION OF THE COURT IN THIS CASE STATED	Para. 11
SUBMISSIONS FOR YESREB ON THE SUBSTANTIVE POINTS	Para. 18
LEGAL SUBMISSIONS FOR YESREB ON “ACCOUNTABLE PERSON”	Para. 24
AGREED EXISTENCE OF A TRUST	Para. 28
SUBMISSIONS FOR REVENUE ON SUBSTANTIVE POINTS	Para. 29
Burden of proof
Fitch Lovell
Three conditions relied upon by the commissioner
10% deposit in 2005
Nominee agreement appointing Matsack
Acknowledgement
Identity
In consequence
No intervening act
Revenue on “accountable person”
STATUTORY INTERPRETATION	Para. 45
DISCUSSION	Para. 46
Trustee
Contests between the parties
Trust for Ms Dunne
Nominee agreement appointing Matsack
Statute of frauds argument
Late introduction of argument for appeal
No objection to argument if full or part performance
Reluctance of this court
CRUX OF THE APPEAL	Para. 56
CONCLUSION ON FACTS FOR SUB-SALE RELIEF	Para. 62
Extent now of sub-sale relief
ACCOUNTABLE PERSON	Para. 65
Accounting for and charging
ORDERS TO BE MADE	Para. 75
POST JUDGMENT HEARING	Para. 76

Introduction

1 . This appeal by way of case stated concerns two substantive issues:

with an incidental issue about the advancement of a point relying on the Statute of Frauds which was not addressed at first instance.

• (i) The availability of sub-sale relief from stamp duty pursuant to s. 46 of the Stamp Duty Consolidation Act 1999 (“ SDCA”) for a particular deed of conveyance;

• (ii) In the absence of such relief whether the appellant ( “Yesreb”) is accountable for the entirety of the duty assessed on that deed of conveyance which gives effect to two contracts for the sale of land

Background

2 . On 1 July 2005, Mr Dunne entered into a contract to purchase 24 Shrewsbury Road Dublin known as “Walford” for €57.95 million from the executors of an estate (“ the 2005 contract”).

3 . In a manuscript document signed by Mr Dunne and Ms Dunne (née Killilea) dated 23 July 2005 (“ the declaration of trust”), Mr Dunne confirmed that his entire interest in the 2005 contract was held by him “on foot of our property settlement agreement of 23 March 2005 established to ensure the financial independence of my wife and children for the future and to secure their independence from my property investments”. The earlier “Property Transfer Agreement” dated 23 March 2005 was in a similar manuscript form and signed by Mr and Ms Dunne.

4 . The deed of conveyance dated 29 March 2013 (“ the 2013 deed of conveyance”) which conveyed the fee simple in Walford to the appellant ( “Yesreb”), recited that Yesreb paid €14 million to “the beneficial owner” described as Ms Dunne.

5 . A related online stamp duty return filed on 26 April 2013 of €270,000 was calculated by reference to the €14 million consideration paid by Yesreb. Under “Vendor details” Matsack Nominees Ltd ( “Matsack”) and Ms Dunne were only named. The appellant's solicitors in their reply to a request from the Court for typed copies of documents mentioned at the hearing of this appeal, stated that “This return was not before the Appeal Commissioner and did not form part of the Case Stated.”

6 . After inquiries were conducted by the respondent (“ Revenue”), Yesreb was notified in February 2016 that the stamp duty payable was €1.429 million together with interest of €269,670 which after taking account of the stamp duty already paid of €270,000 left a balance of €1,428,670 then due.

The questions

7 . The determination ( “the determination”) of the unsuccessful appeal from that assessment was dated 23 December 2019 by the Tax Appeals Commissioner (“ the Commissioner”). The Commissioner by case stated in April 2020, at the request of Yesreb, seeks the opinion of the Court along the following lines, whether upon the facts proved or admitted, the Commissioner was correct in law in her determination that:-

• (i) The conditions necessary to avail of sub-sale relief in accordance with s. 46 of the SDCA, in respect of the deed of conveyance dated 29 March 2013, were not met and that Yesreb was thereby unable to avail of sub-sale relief;

• (ii) Yesreb was the accountable person in respect of the conveyance on sale dated 29 March 2013 in accordance with s. 1 of SDCA;

• (iii) Where sub-sale relief does not apply, the sub-purchaser is liable for stamp duty in respect of the deed of conveyance including the first sale.

Relevant statutory provisions on stamp duty

8 . The following are relevant in this appeal:-

(i) Section 1 of SDCA;

“– (1) In this Act, unless the context otherwise requires –

‘accountable person’ means –

(a) the person referred to in column (2) of the Table to this definition in respect of the corresponding instruments set out in column (1) of that Table by reference to the appropriate heading in Schedule 1.

….

TABLE

Instrument Heading specified in	Accountable person
Schedule 1
(1)	(2)
CONVEYANCE or TRANSFER on sale of any stocks or marketable securities. CONVEYANCE or TRANSFER on sale of any property other than stocks or marketable securities or a policy of insurance or a policy of life insurance.
The purchaser or transferee. The purchaser or transferee. ….

(ii) Section 2 of the SDCA provides:-

“(1) Any instrument which—

(a) is specified in Schedule 1, and

(b) is executed in the State or, wherever executed, relates to any property situated in the State or any matter or thing done or to be done in the State, shall be chargeable with stamp duty.

(2) The stamp duties to be charged for the benefit of the Central Fund on the several instruments specified in Schedule 1 shall be the several duties specified in that Schedule, which duties shall be subject to the exemptions contained in this Act and in any other enactment for the time being in force

(3)….

(4) Where any instrument chargeable with stamp duty is not stamped or is insufficiently stamped—

(a) the accountable person shall be liable, and

(b) where there is more than one such accountable person they shall be liable jointly and severally, for the payment of the stamp duty or, where the instrument is insufficiently stamped, the additional stamp duty and such duty, additional duty and any penalty relating to any such duty shall be deemed to be a debt due by the accountable person to the Minister for the benefit of the Central Fund and shall be paid to the Commissioners …”.

The relevant part of SDCA Schedule 1 provides as follows:

“CONVEYANCE or TRANSFER on sale of any property other than stocks or marketable securities or a policy of insurance or a policy of life insurance”.

(iii) Section 7 of SDCA provides:-

“7. Except where express provision to the contrary is made by this or any other Act—

(a) an instrument containing or relating to several distinct matters shall be separately and distinctly charged, as if it were a separate instrument, with duty in respect of each of the matters;

(b) … .”.

(iv) Section 45(4) of SDCA provides:-

“(4) Where there are several instruments of conveyance for completing the purchaser's title to property sold, the principal instrument of conveyance only shall be charged with ad valorem duty, and the other instruments shall be respectively charged with such other duty as they may be liable to, but the last-mentioned duty shall not exceed the ad valorem duty payable in respect of the principal instrument”.

(v) Section 46 of SDCA provides:-

“(1) Where—

(a) a person having contracted for the purchase of any property, but not having obtained a conveyance of that property, contracts to sell the same to any other person, and

(b) the property is in consequence conveyed immediately to the sub-purchaser,

then the conveyance shall be charged with ad valorem duty in respect of the consideration moving from the sub-purchaser.

2) Where—

(a) a person having contracted for the purchase of any property but not having obtained a conveyance contracts to sell the whole, or any...