Molloy v. Revenue Commissioners [2008] IEHC 247 (26 June 2008)


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High Court of Ireland Decisions
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URL: http://www.bailii.org/ie/cases/IEHC/2008/2008_IEHC_247.html
Cite as: [2008] IEHC 247

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Neutral Citation: [2008] IEHC 247


     

    THE HIGH COURT

    Record No 2007/1012SS

    BETWEEN
    RONAN MOLLOY

    APPELLANT

    AND
    THE REVENUE COMMISSIONERS

    RESPONDENTS

    Judgment of Mr Justice Charleton, delivered ex tempore on the 26th of June 2008 at the High Court sitting at Tullamore.

  1. This is a case stated which came before me having been signed by Appeal Commissioner John O'Callaghan and which relates to an issue dealing with the changeover from death duties to taxes under the Capital Acquisitions Tax Act. Whilst I don't know anything about the substantive issue in the case and I make no comment on it, I am sure the issues involved are serious issues, and it is incumbent on the High Court on cases stated to assist the parties, be it the Circuit Court Judge or the Appeal Commissioners, in dealing with these cases.

  2. There is also a motion before me to strike out the Appellant's appeal on two grounds, raising issues as to whether there was an inexplicable and unwarranted delay in processing the case; and whether this court has jurisdiction to deal with the matter, based on non-compliance with statute. I have read the papers and it seems to me I have to look at two things: -

    3. 1) The agreement that was reached following earlier judicial review proceedings in this case in 1995,
    2) The statute in terms of time limits and whether there was compliance with it, and whether there was expedition of the procedures in this case apart from statute.

  3. In relation to number 1, from the correspondence opened it appears that Julia Molloy died on the 11th of December 1965, and in her will bequeathed property to Edward Molloy and, following his death, to her nephew Ronan Molloy, the appellant. I am assuming that Edward Molloy is the brother of Julia Molloy. On the 20th of January 1994 Edward Molloy released his life interest in the properties to Ronan Molloy, thus accelerating Ronan Molloy's inheritance. An issue arose between the parties as to whether the release constituted a gift or deemed inheritance under the Capital Acquisitions Tax Act 1975. The Appellant sought a certificate of discharge from inheritance tax in order to sell the property. An application was made to the Revenue Commissioners for the certificate, which application was refused. On that, and it is now 13 years ago, the Appellant brought judicial review proceedings. The matter came on for hearing before Mr. Justice Frank Murphy, who has since retired, and he directed that the proper forum for the appellant was an appeal to the Appeal Commissioners and he suggested the parties agree to put the money in question, being the amount of the tax in dispute, on joint deposit pending resolution of the matter before the Appeal Commissioners. The proceedings were settled on the terms set out in the agreement dated 5 July 1995. The money was placed on joint deposit in the National Irish Bank Malahide. The correspondence establishes this was the agreed pot of money to satisfy whichever side won the appeal.

  4. Now, before I deal with the issue of delay, the second issue is that of failure to comply with a statutory time limit and this involves considering what is contained in the Act and what overall attitude the Oireachtas has taken in the Act to the time limits involved. This brings to mind the provisions of the Mental Health Act of 2001. That Act provides for periodic independent review of patients so that no one can be locked up for years at a time. That Act allows for an appeal by way of case stated to the High Court similar to that contained in the Taxes Consolidation Act of 1997. In the 2001 Act, however, it is clear from the time limits that matters are to proceed within certain time limits, and it is obvious that cases by way of appeal to the High Court and Circuit Court are expected to be dealt with with expedition. That is the general thrust of the legislation, and this is similar. Under Section 941 of the Taxes Consolidation Act 1997, it is clear that dissatisfaction must be expressed when the Appeal Commissioners give their decision and then an appeal made to the High Court by way of case stated. There are time limits in the Act and these are very tight. Section 941(4) refers to 21 days within which to request the Appeal Commissioner to sign and state a case for the opinion of the High Court. The section states that the Appeal Commissioner must then sign and state a case for the High Court. In theory, the Appeal Commissioners write their own case stated. The practice has grown up, however, whereby both parties try to agree the draft case stated which is then sent to the Appeal Commissioner to amend, state and sign. Another sub-section – section 941 (2) – deals with the fee of €25 to be paid.

  5. Section 941(4) says that the matter must then be transmitted within 7 days to the High Court and when you add together 21 days and 7 days you get 28 days and this is a reasonable period, excluding the time for drafting the case stated. The case stated has to be given to the Revenue at that time, or before it. There are very good reasons to provide for tight time limits in that Revenue may be out of money for some time and the State has to pay its own staff. The case has to be dealt with expeditiously under the legislative scheme. You can't sit on your hands. This is not like tort cases where you have a period of 6 years to initiate proceedings under the Statute of Limitations, and you can sit on your hands up to the last day before the 6 years period and then initiate your proceedings; subject to any later argument as to delay making a fair trial impossible.

  6. Section 941(5) deals with the point at issue in this case, namely the meaning of "at or before…" the transmission of the case stated to the High Court, which is when the Revenue have to have it delivered to them under the Act. It seems to me that there is a purpose for dealing with these cases expeditiously, and that this applies to cases stated. Reading through the cases, which have been opened to me throughout this hearing, it could be argued (and I do not make such comment) that the courts have been seen as soft in applying the time limits. Although there have been excuses in other cases, I am obliged to apply the statute in accordance with the cases. I note in particular the judgement of Mr. Justice Henchy in the Kiernan[1] case. I note and agree with the canons of statutory interpretation, but I also regard as significant his quotation at page 120:

    7. "That case was not signed by the Circuit Court judge until May, 1980. There is no suggestion that any fault for this inordinate delay attached to the Circuit Court judge. It is said that it was due to a disagreement between the parties as to the form of the questions that should be put in the Case Stated. Even so, that does not excuse a lapse of over 10 years between the hearing in the Circuit Court and the signing of the Case Stated. Time and again this court has condemned such dilatoriness as being inimical to the due administration of justice: see page 146 of the report of Brown –v- Donegal County Council.[2] If the respondent was not liable for the assessments in question, elementary justice required that he should have been given a conclusive answer to that effect several years ago. If he was liable, the proper collection of the State's taxes demanded that these assessments should have been gathered before years of rampant inflation were allowed to erode their worth. Moreover, it is not unlikely that the validity of similar assessments of other taxpayers depended on the outcome of this case. In other jurisdictions a Case Stated, thus vitiated by delay, would be struck out for want of prosecution. If in a future case the party with carriage of a Case Stated suffers such a fate in the High Court or in this Court, because of such prolonged and inexcusable inertia, he will not be able to complain with any justification that ample warning has not been given of the possibility of such a dismiss".

    Whilst the layperson may not be aware of the importance of time limits, professional people would know this.

  7. I then have to look at the case, as well, in the context of what constitutes delay from the point of view of the court exercising its inherent authority to stay a case because of inordinate and inexcusable delay and I must apply the Rainsford[3] principles, as follows: -

    8. 1) Has there been inordinate delay;
    2) if so is that delay excusable? And, if the delay is both inordinate and inexcusable,
    3) where does the balance of justice lie? and
    4) do mitigating circumstances apply?

  8. I note the case stated was drafted in an agreed form by the parties by the 13th of October 1997, but was not submitted by the Appellant to the Appeal Commissioners until July 2004, over 6 years later. The Appeal Commissioner wondered whether he should sign it in such circumstances. He did sign it, but the basis he had no discretion in the matter. What do the parties say? The Appellant says that family difficulties arose for his solicitor. I can't say I blame the solicitor, because the vast majority of people want their cases brought on and in the event the client was determined to get the case heard, he would have so done. The sum involved here, at the moment is €150,000 with interest earned - not a slight sum. I am surprised that the client didn't come forward with a demand for an explanation as to the delay, which is clearly inordinate.

  9. What did the Revenue do? Judges have commented in other cases against the State on what has been done by the State. Judges may often be argued to bend over backwards in relation to the actions of a State party, but what they are asking is whether the State party is culpable, given the disparity in resources compared to an ordinary litigant? I am satisfied that there is not much more that Revenue could have done in this case. I refer to the affidavits of Mairéad Duffy. I refer to the 13 reminder letters over a period of 6 years, which works out at an average of two letters a year. I think that there was nothing more that could have been done in the circumstances.

  10. There is nothing of significance here in regard to the importance of the case and the rights of the parties that has to be weighed in the balance and which might cause the court not to act on the basis of the delay that has occured.

  11. The second point deals with statutory interpretation, and Section 941(5) of the Taxes Consolidation Act 1997 governs the valid transmission of a case. It states that "at or before" the time when the party requiring the case transmits it to the High Court, that party shall send notice in writing of the fact that the case has been stated on that party's application, together with a copy of the case, to the other party, which is here the Revenue. The case stated must be signed and lodged in the High Court. In this current case there was a delay of 8 days between lodgement in the High Court and service on the other side. I have looked at two cases on this issue, in particular, A and B –v- WJ Davis (Inspector of Taxes)[4] and also Veterinary Council –v- Corr[5]. I am bound by the decisions in these cases. I don't have any power to enlarge the time as a matter of law if the Act has not been complied with. No circumstances arise here to allow me in any way to enlarge the meaning of the word "at". I understand the logic of the judge in dealing with the Corr case. That had specific facts that brought it, as a matter of sense, within the statutory restriction. There was no post box available at the Revenue Commissioners' Office so the clerk was unable to serve the case stated, which he would have done on the same day as transmitting it to the High Court, but he returned the very next morning when the office of the Revenue was open and gave it to them then. That was a sensible decision. I note in particular the comments of Maguire CJ in the High Court in the A and B –v- Davis case where he says: -

    12. "I am satisfied that this failure was due, not to any default on the part of the appellants, but to a misunderstanding. Nevertheless, I cannot see my way to hold that the letter sent on the 29th of May 1946, by the appellant's solicitor to the revenue solicitor was in any sense a sufficient compliance with the rule that "a note is in writing of the fact that the case has been stated on his application, together with a copy of the case" should be sent to the other party".

  12. In the other case of Corr, Maguire CJ found that the next day was sufficient for service on the other party.

  13. I am satisfied that Revenue only take objections to late service where circumstances are sensible and here would not have done so, but for the inordinate and inexcusable delay here on the general facts of the case.

  14. In the circumstances I dismiss this case both on the grounds of inordinate delay and for failure to comply with the time limit laid down by statute.

    15. [NOTE; Following an application by the Respondents for their costs, the judge awarded the costs of the motion, but not the costs of the case stated, to the Respondents.]

    Approved: Charleton J.

Note 1   Inspector of Taxes v Kiernan 1981 I.R. 117    [Back]

Note 2   1981 I.R. 132    [Back]

Note 3   Rainsford v Limerick Corporation [1995] 2 I.L.R.M. 561    [Back]

Note 4   [1946] 2 Irish Tax Reports 60    [Back]

Note 5   [1953] IR 12    [Back]

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URL: http://www.bailii.org/ie/cases/IEHC/2008/2008_IEHC_247.html