J.S.S. & Ors v A Tax Appeals Commissioner (Approved)

Reliance is placed by the notice party on the interpretation of O.84, r.21 RSC 1986 in a number of authorities including the decisions of the Court of Appeal in Arthropharm (Europe) Ltd v Health Products Regulatory Authority [2022] IECA 109 [4] (particularly at ¤¤141-145 ) which applies the decision of the High Court (Carroll J.) in Finnerty v Western Health Board [1998] IEHC 143 approved of by the Supreme Court (McKechnie J., Clarke J and Dunne J.) in Sfar v Revenue Commissioners [2016] IESC 15 (at ¤¤ 39-42 of the judgment of McKechnie J.).

In summary, these authorities provide the basis for the legal proposition that a decision which is a reiteration of a previous decision is not a new decision and that time begins to run when the final decision is first made and that the running of time cannot be stopped by entering into correspondence with the decision-maker after the decision and then seeking to characterise a reiteration of the initial decision as a new decision from which time then runs.

The applicants respond that no application for an extension of time is needed because the respondent had agreed to revisit matters and decided the matter afresh on the 1 st December 2022.

The ancillary or consequential relief sought by the applicants is an order staying the further hearing of the appeals before the respondent pending the determination of these proceedings. The parties agree that the legal test for the granting of a stay in the context of a judicial review application is that set out by the Supreme Court (Clarke J.) in Okunade v Minister for Justice & Ors [2012] IESC 49 , [2012] 3 IR 152 which seeks effectively to ensure that the least injustice is done pending the determination of the dispute which is before the court.

As referred to in the Affidavit of Eugene Dolan sworn on the 24 th February 2023 (at ¤13), the contextual background to this application for judicial review arises from a judgment of the Court of Appeal (Power J.) in J.S.S., & Ors v Tax Appeal Commission & CAB [2020] IECA 73 where the Court of Appeal (Donnelly, N’ Raifeartaigh and Power JJ.) allowed an appeal from a decision of the High Court (Twomey J.) and granted an order of certiorari in respect of a series of decisions made by an Appeal Commissioner of the Tax Appeal Commission following a preliminary hearing on whether certain tax appeals sought by the appellants should be admitted.

The Commissioner had admitted appeals in respect of years where the appellants had delivered tax returns and had refused to admit appeals in respect of years in which either no tax returns had been delivered and/or no self-assessed tax liabilities had been paid. Judicial review proceedings were instituted in respect of the decision to refuse to admit certain appeals and on appeal from the decision of the High Court which had initially refused to grant an order of certiorari , the Court of Appeal Ð applying authorities such as Connelly v An Bord Pleanála [2018] IESC 31 , [2021] 2 IR 752 , A.P. v Minister for Justice and Equality [2019] IESC 47 and Nano Nagle Schools v Daly [2019] IESC 63 , [2019] 3 I.R. 369 Ð found that this was a case in which it was impossible to know why the Commissioner had rejected the applicantsÕ core legal argument that a Ôchargeable personÕ did not include a non-resident person and to know why he had come to that view i.e. the Commissioner had failed to provide reasons for his decision not to admit the aforesaid appeals Ð and granted the order of certiorari sought.

In its written submissions in this leave application, the notice party points out that the matters were then remitted by the Court of Appeal to the Tax Appeal Commissioner.

Mr. îÕFloinn SC fairly accepted that for the purposes of this leave application, and in the absence of any other affidavits filed by any other parties, the factual position which informs this application is that set out in the grounding affidavit of Eugene Dolan, tax consultant on behalf of the applicants.

In that affidavit, Mr. Dolan avers to the following matters at paragraphs 18 to 21:

By correspondence dated 25 th November the Commission acknowledged the AppellantsÕ request for a further and updated decision in relation to the onus of proof, to be delivered at the commencement of the resumed hearing on 1 December 2022, taking into account the additional authorities submitted on behalf of the Appellants.

This request was granted and the Commissioner undertook to endeavour to deliver an updated decision on 1 December 2022. I beg to refer to true copies of the written submissions delivered by both parties on this issue upon which pinned together and marked with the letters ÒED3Ó I have signed my name prior to the swearing hereof.

On 1 st December 2022 the Respondent delivered an updated decision refusing to vary the decision of 13 th October in light of the new authorities adduced on behalf of the Applicants. I beg to refer to a true copy of the RespondentÕs decision dated [sic.] upon which marked with the letters ÒED4Ó I have signed my name prior to the swearing hereofÉÓ

The respondentÕs decision dated 1 st December 2022 is exhibited at Exhibit ÒED4Óto the Affidavit of Eugene Dolan sworn on the 23 rd February 2023.

At the beginning of the decision it states (in bold and underlining): Ò Please note that this decision should be read in conjunction with my preliminary decision on onus dated 13 October 2022, attached at Appendix I of this decision .Ó

It recites that it is in relation to the appeals in reference numbers 184/16 Ð 188/16 and is in consideration of revised submissions of the Appellants furnished to the TAC on 22 nd November 2022 and of the RespondentÕs submissions of 29 th November 2022 by the Commissioner.

The decision then sets out the background to the proceedings.

In summary, the decision recites that the appeals were set down for three days hearing on 10 th , 13 th and 14 th October 2022 and that a large amount of time was taken up with the applicantsÕ advisorsÕ submissions in relation to the onus of proof and it was necessary for the Commission to rule on these submissions and on the 13 th October the Commissioner issued her preliminary written decision on the onus of proof in these appeals.

Nothing turns on the use of the word ÔpreliminaryÕ in the decision as it relates to the determination of an issue Ð the question of the onus of proof Ð within the appeals.

The decision then refers to the fact that the appeals were set down for continued hearing for 1 st , 2 nd , 20 th , 21 st and 22 nd December 2022 and that those dates were notified to the parties and agreed by them in October 2022. The decisions then recites the following: Ò On 22 November 2022, eight days prior to the resumption of the hearing on 1 December, Mr. Dolan on behalf of the Appellants [5] sent to the Commission, revised submissions (not previously requested by the Commission) together with legal authorities not previously furnished to the Commission. Mr. Dolan on behalf of the Appellants, requested that I consider same and that I issue a further and updated decision in relation to the onus of proof, taking into account the new authorities he now placed reliance upon and that I do so at the commencement of the resumed hearing on Thursday, 1 December, 2022. The two new authorities furnished are Untelrab Ltd v McGregor [1986] STC and Cesena Sulphur Co. Ltd v Nicholson 1 TC 888 (the additional authorities).Ó

The Commissioner then states as follows:

At Exhibit ÒED3Ó to the Affidavit of Eugene Dolan sworn on the 23 rd February 2023 at pages 47 to 49 of the Booklet (prepared for this application), a letter from the Chief State Solicitor on behalf of the notice party in relation to TAC References: 184/16, 185/16, 186/16, 187/16, 188/16 to the Tax Appeals Commission refers inter alia to: ÒÉ the email correspondence of 25 th November, 2022, by which the Commission acknowledged the AppellantsÕ request for a further and updated decision in relation to the onus of proof, to be delivered at the commencement of the resumed hearing on 1 December 2022, taking into account the additional authorities submitted on behalf of the Appellants. We note that the request of the AppellantsÕ advisors has been granted and that the Commissioner will endeavour to deliver an updated decision on 1 December 2022 ÉÓ

With the agreement of the parties I requested, and was furnished with, the correspondence dated 25 th November, 2022.

This comprised an e-mail dated the 25 th November 2022 from an official on behalf of the respondent to the representatives of the appellants and the notice party in relation to TAC Appeals Reference Numbers 184/16, 185/16, 186/16, 187/16, 188/16 which appeals involve the applicants.

The communication of the 25 th November 2022 inter alia stated that:

The decision of the Respondent on the 25 th November 2022 (i) to accede to a further and updated decision in relation to the onus of proof and (ii) to set out a process which involved directions for the receipt of submissions from the applicants and the notice party in relation to the onus of proof distinguishes it from the line of authority referred to by Mr. îÕ Floinn SC (for the notice party) which is often referenced by the observation of the High Court (Carroll J.) in Finnerty v Western Health Board [1998] IEHC 143 that Ò a decision which is a reiteration of a previous decision is not a new decision .Ó

In Finnerty Mr. Finnerty had been informed by a letter dated the 9 th April, 1994, that he did not satisfy the criteria for entry to the General Medical Services (GMS) scheme. He wrote to the Minister for Health in September, 1994, who in reply supported the Health BoardÕs decision. Mr. FinnertyÕs request to the CEO of the Health Board on the 11 th May, 1995 for matters to be reconsidered was rejected and the Health BoardÕs previous decision was reaffirmed. There then followed a solicitorÕs letter, again contesting the decision and calling on the CEO to admit the applicant to the scheme, failing which proceedings would issue. This letter was acknowledged on the 26 th June, 1995, and replied to on the 31 st July, 1995 wherein the CEO repeated what previously had been stated, namely that the applicant did not satisfy the necessary criteria for entry to the scheme. An application for judicial review was then made seeking an order of certiorari quashing the BoardÕs rejection in Ô a letter of 31 st July, 1995Õ .

The High Court (Carroll J.) summarised the position as follows:

In Sfar v Revenue Commissioners [2016] IESC 15 , on the facts of that case , Mr. HowleyÕs letter of the 28 th January, 2010, was a repetition of Mr. BuckleyÕs letter of the 27 th January, 2009.

Similarly in Donnelly v Financial Services and Pensions Ombudsman [2023] IEHC 228 the Ombudsman had clearly communicated that he had closed the file on the applicantÕs complaint against Danske Bank and explained his reasons for doing so.

In contrast to the above line of authority, in this case, after the first decision dated the 13 th October 2022 was made , the respondent agreed to an additional process (which included the furnishing of submissions) in relation to the matter of the onus of proof leading to a further and updated decision in relation to the onus of proof which culminated in the decision dated the 1 st December 2022.

The applicants are, therefore, in time to challenge the decision dated 1 st December 2022. It is for the court hearing the substantive matter to assess the consequences, if any, of a challenge to the decision of the respondent dated 1 st December 2022.

Turning to the question of arguability, which applies to the leave threshold and is also the first matter to be considered in the stay application (having regard to the series of steps outlined by Clarke J. in Okunade ; see also the observations of OÕDonnell C.J. in OÕDoherty & Anor v The Minister for Health & Ors [2022] IESC 32 (at ¤39)), I am of the view that the applicantsÕ main claim in these proceedings Ð that the respondentÕs decision of the 1 st December 2022 contains an error of law on the face of the record in holding that when an appellant (namely the applicants herein), appealing a tax assessment on themselves, raises an issue of tax residency before the Tax Appeals Commissioner, the onus of proving that the tax payer is not within the jurisdiction of the State is on the appellant rather than on the Revenue Commissioners to show that they have jurisdiction to raise an assessment to tax on that person Ð is ÔarguableÕ or ÔstateableÕ in the sense understood by the decision of the Supreme Court in G v DPP .

Of course, this is no more than finding at this stage that the threshold of ÔarguabilityÕ (which is a low threshold) has been reached.

Turning to the other steps which are required to be considered in a stay application, the notice party raises concerns over the consequences of a stay which might go beyond the appeals the subject of this application for judicial review. In essence this speaks to an important aspect of the test in Okunade which provides that in considering where the greatest risk of injustice would lie I should give all appropriate weight to the orderly implementation of measures which are prima facie valid and any related public interest considerations including the consequences of staying the hearing of the appeals. The notice party also rejects the characterisation on behalf of the applicants that there has been a de facto stay after the initiation of these proceedings.

In assessing where the greatest risk of injustice would lie, I also have to consider the consequences for the applicants of being required to comply with the respondentÕs decision of the 1 st December 2022 in circumstances where it may be found to be unlawful. Further, this is not a case where damages (or an undertaking as to damages) is applicable.

Also, while characterised by the applicants as an error of law on the face of the record, the applicantsÕ sole ground for challenge in this case Ð the finding by the respondent that in the context of a tax assessment appeal when an appellant raises an issue of tax residency before the Tax Appeals Commissioner, the onus of proving that the tax payer is not within the jurisdiction of the State is on the appellant rather than on the Revenue Commissioners to show that they have jurisdiction to raise an assessment to tax on that person Ð raises, at this stage, an ÔarguableÕ ground as to the respondentÕs jurisdiction having regard to decisions such as Killeen v DPP [1997] I.R. 218.

In the circumstances, I consider that the greatest risk of injustice would lie if I refused the application for a stay in respect of the tax appeals in reference numbers TAC Ref:-184/16, TAC Ref:-185/16; TAC Ref:-186/16, TAC Ref:-187/16, TAC Ref:-188/16. Accordingly, in accordance with O. 84, r.20(8) of the RSC 1986 I will grant a stay in relation to these appeals until this application for judicial review is determined by the High Court.

I therefore grant the applicants leave to seek certiorari of the respondentÕs decision dated 1 st December 2022 in the manner described at paragraph D.1 and on the grounds set out at paragraph E(a) of the Statement of Grounds.

As mentioned, I also consider it just and convenient to grant an order pursuant to O. 84, r.20(8) of the RSC 1986 staying the further hearing of the appeals limited to these applicants only in respect of tax appeals reference numbers TAC Ref:-184/16, TAC Ref:-185/16; TAC Ref:-186/16, TAC Ref:-187/16, TAC Ref:-188/16 until this matter is determined by the High Court.

I also request that the applicants notify the respondent of this judgment and ruling.

I propose to reserve the question of the costs of this leave application.