Yesreb Holdings Ltd v Revenue Commissioners
| Jurisdiction | Ireland |
| Judge | Mr. Justice Allen |
| Judgment Date | 01 June 2022 |
| Neutral Citation | [2022] IECA 127 |
| Court | Court of Appeal (Ireland) |
| Docket Number | Appeal Number: 2021/170 |
[2022] IECA 127
Costello J.
Haughton J.
Allen J.
Appeal Number: 2021/170
THE COURT OF APPEAL
CIVIL
Case stated – Sub-sale relief – Accountable person – Appellant appealing from two judgments of the High Court on an appeal by case stated by the appellant from a determination of the Tax Appeals Commission – Whether the Commissioner was correct in law in her determination that the conditions necessary to avail of sub-sale relief in accordance with s. 46 of the Stamp Duties Consolidation Act 1999 in respect of the deed of conveyance were not met and that the appellant was thereby unable to avail of sub-sale relief
Facts: The appellant, Yesreb Holdings Ltd (Yesreb), appealed to the Court of Appeal from two judgments of the High Court (O’Connor J) on an appeal by case stated by the appellant from a determination of the Tax Appeals Commission issued on 23rd December, 2019. By agreement in writing dated 1st July, 2005 in more or less the Law Society of Ireland printed form (2001 Edition) made between Ms Crowley and Mr Walsh as legal personal representatives of Mr Duggan (the executors) and Mr Dunne, the executors agreed to sell and Mr Dunne to purchase a house called Walford at 24 Shrewsbury Road, Ballsbridge, in the City of Dublin for €57,950,000. The contract provided for completion on 14th December, 2005 but the sale and purchase was not then or thereafter completed. Instead, by deed of conveyance dated 29th March, 2013 made between the executors, Mr Dunne, Mrs Dunne, Matsack Nominees Ltd (Matsack) and Yesreb, the property was assured to the appellant. The primary issue on the appeal – as it was in the High Court, and as it was before the Tax Appeals Commission – was whether the conveyance to Yesreb was a sub-sale of the property. If it was, the conveyance was sufficiently stamped for €270,000. If it was not, the conveyance attracted a liability for stamp duty of €1,429,000, as well as interest. There was a secondary issue on the appeal as to whether even if the deed was subject to the higher amount of duty, the appellant was the “accountable person” in respect of any more than the €270,000 which it paid. The substance of the appeal was that the High Court judge did not sufficiently engage with the appellant’s arguments and when, and to the extent to which he did, he was wrong.
Held by Allen J that Mr Dunne, not having had a power of sale on 28th March, 2013, could not have validly contracted for a sub-sale to Yesreb. Allen J held that, Mr Dunne having no power to sell, there could be no legal nexus between the contract of 28th March, 2013 and the conveyance of the following day; therefore the conveyance cannot have been in consequence of that contract. Allen J held that whatever, if any, notional residual interest Mr Dunne might have retained in the 2005 contract, the conveyance to Yesreb required the concurrence of the executors and Mrs Dunne, at least, if not also of Matsack; that being so, it could not be said that the same property was immediately conveyed to Yesreb. Allen J was satisfied that the High Court was correct in answering the first question of law in the case stated in the affirmative and in refusing the appellant’s application for an order pursuant to s. 949AR of the Taxes Consolidation Act 1997, as amended, remitting the case stated to the Appeal Commissioner for amendment. Allen J held that the accountable person was to be identified by simply establishing the identity of the purchaser under the conveyance or transfer. Allen J held that the argument that the appellant was not the accountable person also failed. For those reasons Allen J was not persuaded that there was any error in the determination of the High Court on the questions of law. Allen J held that the appeal must be dismissed.
Allen J’s preliminary view was that the respondent had been entirely successful on the appeal and accordingly should be entitled to the costs of the appeal.
Appeal dismissed.
JUDGMENT of Mr. Justice Allen delivered on the 1st day of June, 2022
This is an appeal from two judgments of the High Court (O'Connor J.) on an appeal by case stated by the appellant from a determination of the Tax Appeals Commission issued on 23rd December, 2019.
By agreement in writing dated 1st July, 2005 in more or less the Law Society of Ireland printed form (2001 Edition) made between Caroline Crowley and Eamon Walsh as legal personal representatives of Patrick Aloysius Duggan (“the executors”) and Sean Dunne (“Mr. Dunne”), the executors agreed to sell and Mr. Dunne to purchase a house called Walford at 24 Shrewsbury Road, Ballsbridge, in the City of Dublin for €57,950,000. The contract provide for completion on 14th December, 2005 but the sale and purchase was not then or thereafter completed.
Instead, by deed of conveyance dated 29th March, 2013 made between the executors, Mr. Dunne, Mrs. Gayle Dunne (nee Killilea) (“Mrs. Dunne”), Matsack Nominees Limited (“Matsack”) and Yesreb Holdings Limited (“the appellant”) the property was assured to the appellant.
The primary issue on this appeal – as it was in the High Court, and as it was before the Tax Appeals Commission – is whether the conveyance to Yesreb was a sub-sale of the property. If it was, the conveyance was sufficiently stamped for €270,000. If it was not, the conveyance attracted a liability for stamp duty of €1,429,000, as well as interest.
There is a secondary issue on the appeal as to whether even if the deed was subject to the higher amount of duty, the appellant is the “accountable person” in respect of any more than the €270,000 which it paid.
The appeal to the High Court was by way of case stated pursuant to s. 949AQ of the Taxes Consolidation Act, 1997, as amended (“ TCA”) by which the Commissioner stated three questions of law for the opinion of the High Court which were:-
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1. Whether, on the facts proved or admitted, she was correct in law in her determination that the conditions necessary to avail of sub-sale relief in accordance with s. 46 of the Stamp Duties Consolidation Act, 1999 (“SDCA”) in respect of the deed of conveyance dated 29 March 2013, were not met and that the appellant was thereby unable to avail of sub-sale relief.
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2. Whether, on the facts proved or admitted, she was correct in law in her determination that the appellant was the accountable person in respect of the conveyance on sale dated 29 March 2013, in accordance with s. 1 SDCA 1999.
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3. Whether, on the facts proved or admitted, she was correct in law in her determination that 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.
The parties were agreed that the substance of the third question was the same as the second.
The appellant accepts, as it must, that it is bound by the findings of fact of the Tax Appeals Commission. That being so, the first relevant event is the contract dated 1st July, 2005 made between the executors and Mr. Dunne for the sale and purchase of Walford.
Part of the case made by the appellant before the Tax Appeals Commission – and all the appearances are that it was a significant part of the case then made – was that by reference to a manuscript document dated 23rd March, 2005 which was described as “Property Transfer Agreement” and expressed to have been made between Mr. Dunne and Mrs. Dunne and by which Mr. Dunne undertook to give to Mrs. Dunne seventy per cent of the profits accrued from the sale of six identified properties, the subsequent contract for the purchase of Walford had been made in trust for Mrs. Dunne. But that was rejected by the Commissioner and the appellant accepts that it is bound by the determination.
The contract of 1st July, 2005 provided for a deposit of €5,795,000 which, in the ordinary way, was to be paid to the vendors' solicitors to be held by them as stakeholders and the stakeholder receipt was duly completed.
The contract was subject to a number of special conditions notably, for present purposes, special condition 14, which provided that:-
“This agreement is personal to the purchaser who shall not assign, mortgage, charge or otherwise deal with the benefit thereof in whole or in part (other than to a related company within the meaning of section 4(5) of the Companies (Amendment) Act, 1990 without the previous consent in writing of the vendors. The vendors shall not be required to deliver a deed of assurance in favour of any party other than the purchaser named in the contract or a member or members of his immediate family or a company controlled by him or them.”
By a manuscript declaration of trust dated 23rd July, 2005 Mr. Dunne declared that his entire interest in the contract for the purchase of Walford was held by him in trust for Mrs. Dunne, on foot of the Property Transfer Agreement of 23rd March, 2005 and confirmed that he would transfer Walford to her or her nominee when called upon to do so.
The contract of 1st July, 2005, as I have said, provided for completion on 14th December, 2005. The sale and purchase were not then completed but in July, 2006 the balance of the purchase monies were paid, the documents of title were delivered, and possession passed. The determination of the Tax Appeals Commission does not expressly say so, but the conveyance of the property on 29th March, 2013 shows that the entire purchase price of €57,950,000 – the receipt of which the executors thereby acknowledged – had been paid by Mrs. Dunne.
By a nominee agreement dated 9th October, 2006 made between Matsack and Mrs. Dunne, Matsack agreed to hold the “Trust Fund” – comprising the property at Walford and a sum of €25,000 in cash – upon trust to...
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