Irish tax litigation – understanding the High Court process
Irish tax litigation – understanding the High Court process
Taxpayers who are dissatisfied with a decision or assessment of the Irish Revenue Commissioners (Revenue) have the right to appeal to the Tax Appeals Commission (TAC), which is the statutory body that has power to set aside, vary or uphold a decision of Revenue, or seek judicial review of the relevant Revenue decision directly to the High Court. Parties in receipt of a TAC determination have a right of further appeal on a point of law to the High Court. The purpose of this insight is to outline the process involved in these High Court proceedings. For further detail on the TAC process see our here.
Appealing a TAC determination to the High Court
Determinations made by a TAC Commissioner are final and conclusive. However, each party has a limited right to appeal the matter to the High Court on a point of law. An appeal on a point of law means the party is effectively requesting the High Court to clarify the law on a particular issue of relevance to the determination. Essentially, a party cannot appeal a TAC determination on the mere basis they do not ‘like’ the determination given but rather they must have issue with the application or interpretation of a point of law as applied or interpreted by the TAC Commissioner. In this regard, whilst a party cannot appeal a TAC determination on a question of fact it is a question of law as to whether there was sufficient evidence before the TAC on which the findings of fact may have been based.
Formal request for case stated
Once an appeal has been determined by the TAC Commissioner, either the appellant or the Revenue Inspector may express dissatisfaction with the decision as being erroneous on a point of law and seek a case to be stated for the opinion of the High Court on the determination of the appeal. This dissatisfaction is expressed to the TAC Commissioner who heard the appeal immediately after the determination. Having expressed dissatisfaction, pursuant to section 941(2) Taxes Consolidation Act 1997 (TCA) the appealing party must within 21 days formally write to the Clerk of the Appeal Commissioners seeking the TAC to state and sign a case for the opinion of the High Court on the determination of the appeal (or more frequently termed a ‘case stated’). A fee of €25 is payable to TAC by the dissatisfied party (S 941(3) TCA).
Form of statement of case stated and transmission to the High Court
Regardless of which party requests the case stated it is imperative that both parties are content that the matters at issue are fully and accurately set out within the statement of a case. Generally, Revenue and the appellant will have input into the draft of the case stated before the TAC Commissioner finalises same and it is common practice for the person seeking the case stated to prepare a first draft for review by the other party for preferred agreement and transmission to TAC. To the extent the parties cannot agree a draft case stated, both parties may issue their drafts to TAC for consideration. The case stated should generally include (1) TAC’s material findings of fact; (2) Outline of Arguments of both parties; (3) case law / statute relied upon; (4) TAC’s determination and its reasoning; and (5) the point(s) of law on which the opinion of the High Court is sought.
When the TAC has signed and stated the case, the party seeking the case stated transmits this to the High Court within 7 days of receiving it from the TAC (section 941(4) TCA) and notifies the other party that this has been done (section 941(5) TCA). Once the case has been transmitted to the Central Office of the High Court, the party seeking to appeal by way of case stated should apply in the Central Office to have the case stated listed for mention in the non-jury list in the High Court on the next available date(s). Date(s) will then be published once the matter is listed for hearing.
Scope of determination of the High Court
The hearing by the High Court will generally be in public. At that hearing the High Court will hear and determine the question(s) of law arising in the case and ultimately may affirm, amend or reverse the determination, remit the matter to the TAC with the opinion of the High Court on the matter or make any such other order in relation to the matter including as to costs. The High Court may cause the case to be sent back for amendment (whereupon the case shall be amended accordingly) and the judgment delivered after it has been amended. The decision of the High Court may be appealed to the Court of Appeal or potentially to the Supreme Court. A Court may refer the matter to the Court of Justice of the European Union (CJEU) if there is a question of EU law to be determined that requires CJEU determination.
Importantly and as noted above, whilst the High Court cannot determine an appeal on a question of fact it can examine whether based on the evidence before it the TAC could reach the conclusion it did. The High Court will have regard only to the evidence produced as part of the TAC process and additional facts or evidence cannot be produced for the purposes of the case stated. As such, the High Court will therefore not interfere with a finding of fact by the TAC unless there is evidence to support such interference. Clearly, therefore, taxpayers should be aware that full facts and evidence be brought out at the TAC hearing to support its case at that hearing and any subsequent appeal to the High Court, or beyond.
Leave for the High Court to judicially review a Revenue decision
If a taxpayer has grounds to believe that the Revenue’s decision-making or administrative process was flawed the taxpayer can seek leave from the High Court to judicially review the decision. Essentially, when judicially reviewing a matter the High Court is tasked with scrutinising how a public body (e.g. Revenue) carries out its duties and exercises the powers granted to it by statute. Judicial review can also apply as regards tribunal decisions so in principle this could include decisions of TAC.
Application and grounds for judicial review
Applications for judicial review are to be made generally within three months of the decision giving rise to the potential right of review, i.e. in a tax context the notice of assessment / amended assessment issued by Revenue to the taxpayer. The grounds for judicial review can vary from lack of jurisdiction, bias and procedural unfairness (resulting in an abuse of power) to interference / infringement of a taxpayer’s legitimate expectations or its constitutional rights.
Pleadings required as part of judicial review process
A Notice of Motion / Ex Parte Docket is generally issued seeking leave to apply for Orders by way of judicial review, an Order quashing the assessment with declarations as regards the effectiveness of the assessment in light of the grounds for judicial review, accompanied by appropriate Affidavits of Verification and Service. The Notice of Motion / Ex Parte Docket will typically also seek a stay on any proceedings before the TAC (if an appeal on the merits has also been made to TAC), an Order as to costs and any other Order the High Court deems necessary. Further Notices of Motion (with appropriate Affidavits) may issue where the matter is appropriate for hearing at the Commercial Court.
A Statement of Grounds to ground the application for judicial review is served and this sets out in some detail the salient facts and legal basis for the application sought. Revenue separately issue a Statement of Opposition which essentially sets out their grounds for opposing the judicial review request.
Much like other commercial-type hearings much of the work involved in preparing for hearing pertains to the gathering and documenting of appropriate witness evidence, submitted by way of sworn Affidavit (with appropriate Exhibits) with witnesses required to provide oral testimony at hearing. The taxpayer will also issue an Outline Legal Submissions which sets out the skeleton of legal arguments to be made at the hearing.
High Court hearing and determination
The High Court hearing is generally in public with oral testimony, cross-examination and legal submissions provided by both parties. The period for hearing can vary depending on the complexity of the case and the extent of relevant witness evidence required to determine the issue. The High Court Judge may reserve its decision and adjourn the matter after legal submissions with a view to considering the arguments and preparing a written decision to be published in a timely manner. That decision of the High Court can be appealed to the Court of Appeal and further appealed to the Supreme Court in certain circumstances.