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You are here: BAILII >> Databases >> Irish Court of Appeal >> Criminal Assets Bureau v Foley [2019] IECA 287 (20 November 2019)
URL: http://www.bailii.org/ie/cases/IECA/2019/2019IECA287.html
Cite as: [2019] IECA 287
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Edwards J.
McGovern J
Baker J
THE COURT OF APPEAL
Neutral Citation Number: [2019] IECA 287
Record No: 1151/2014
THE CRIMINAL ASSETS BUREAU
RESPONDENT
V
MARTIN FOLEY
APPELLANT
JUDGMENT of Mr. Justice Edwards delivered on the 20th of November 2019
Introduction
1. This is an appeal from the judgment and Order of the High Court (Birmingham J) dated
the 20th of January 2014, and perfected on the 21st of January 2014 granting liberty to
the respondent to enter final judgment in the sum of €738,449.27, representing the
“balance” of the amount claimed by the respondent by a Notice of Motion dated the 26th
of September 2013 in proceedings brought by way of a Summary Summons issued on the
8th of March 2013; and awarding the costs of the said motion and Order to the
respondent.
2. The appellant seeks the setting aside of the Order of the High Court, and such further
orders as this Court may see fit to grant, including an order remitting the matter for
plenary hearing on the basis that the appellant has an arguable defence to the
respondent’s claim insofar as it extends to the said “balance”.
The Background to the Matter
3. The background to the matter is not in dispute. The appellant was believed to have been
engaged in criminal activity and to have enjoyed substantial gains arising from this
activity and from other unknown sources. The appellant was assessed to tax in respect of
income enjoyed by him during the tax years 1993-94 to 1999-2000, inclusive, which gave
rise to a liability for income tax of IR£172,586.80.
4. The appellant sought to appeal against the assessments that had been raised. However,
to have a valid appeal he was required under s.957 of the Taxes Consolidation Act, 1997
(“the TCA”) to have made returns of any income which he had enjoyed and to pay the
amounts of tax due on the face of those returns. He duly submitted tax returns in order
to avail of the appeal process, and these returns showed an aggregate income of
IR£56,841.00 for the years in question in respect of which there was a liability to income
tax in the amount of IR£15,050.97.
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5. The appellant did not pay the amount of tax due on foot of the returns that he had made.
At this point he made a part payment only in respect of his admitted liability, in the sum
of IR£3,000.00. As full discharge of any admitted liability due based on returns made is a
statutory precondition to the validity of an appeal against a taxpayer’s liability for an
alternative figure based on an assessment or assessments raised, the revenue officer
concerned refused the appellant’s appeal.
6. The appellant then sought to appeal the revenue officer’s decision to the Revenue Appeals
Commissioner. He submitted revised returns suggesting he had been in receipt of an
aggregate income of IR£105,519 during the tax years in question, giving rise to a revised
income tax liability of IR£39,814.32.
7. It is relevant to what follows to note that the changeover to euros for the general
populace occurred on the 1st of January 2002.
8. The appellant made three further part payments towards his aggregate income tax
liabilities over January and February 2002. These were in punts, amounting in total to
IR£22,966, and required to be converted to euro. However, even when converted the
total of them fell short of what was required to be paid. Once again, as the statutory
precondition to the pursuit of a valid appeal, namely the payment in full of any admitted
tax liability on foot of returns made, had not been satisfied the application to the Revenue
Appeal Commissioner to set aside the refusal of the initial appeal by the revenue officer
was itself refused. The evidence suggests that this also occurred in February 2002. The
appellant did not attempt to further appeal to the Circuit Court, a possibility that was
open to him at the time. Moreover, he neither sought to have a case stated for the
opinion of the High Court, nor to challenge the decision of the Revenue Appeals
Commissioner in judicial review proceedings before the High Court.
9. In the circumstances the assessments became final and conclusive in the amounts stated
therein, i.e., in aggregate IR£172,586.80 (equivalent to €218,140.07), and the appellant
was liable to pay that amount less the four sums which had been paid on account up to
that point.
10. The appellant subsequently made a fifth payment on account of €8,442.67 on the 29th of
March 2002. Total part payments, after punt to euro conversions, when deducted from
the euro equivalent of the assessed aggregate figure (i.e., €218,140.07) left a balance
due for collection on foot of the said assessments, and before any question of interest, of
€178,510.85.
11. The tax paid on account was subsequently allocated by the Collector General against the
liabilities for 1993/94 and 1994/95 respectively, but the remaining balance of
€178,510.85 fell to be collected for the income tax years 1995/96 to 1999/00, inclusive.
It was not paid, however, and eventually, in 2013, the respondent brought proceedings
against the appellant by Summary Summons claiming a total of €881,257.87, being the
said sum of €178,510.85 claimed as income tax due and owing, and an additional sum of
€633,956.09 for interest due on the unpaid tax up to the 31st of January 2013 pursuant
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to the TCA 1997. The respondent subsequently issued a Notice of Motion dated the 26th
of September claiming liberty to enter final judgment in respect of both amounts, and a
further sum for continuing interest.
12. The appellant’s liability to income tax and interest due in respect of each of the income
tax years 1995/96 to 1999/00 is apportioned in the manner set out in the Special
Indorsement of Claim to the Summary Summons herein, which was issued on the 8th of
March 2013. No issue was raised as to the accuracy of calculation of the figures being
claimed, either in the High Court, or before us, although liability for the interest element
remains very much disputed. Further, it is uncontroversial insofar as the appeal is
concerned that the respondent has obtained liberty to enter final judgment for the
principal amount of €178,510.85 by Order of the High Court (Birmingham J) dated the
20th of December 2013, and the appellant raises no issue in respect of it and admits and
accepts that it is due.
13. As stated, the controversy on this appeal arises with respect to the additional sum of
€633,956.09 claimed for interest, which together with additional interest which had
accrued to the date of judgment, resulted in the respondent being granted liberty to enter
final judgment on the 20th of January 2014 for a further sum of €738,449.27, which is
the sum referred to in the introduction to this judgment as the “balance” of the amount
claimed by the respondent in its Notice of Motion dated the 26th of September 2013.
14. An important contextual detail is that the claim for liberty to enter final judgment in
respect of this “balance” was resisted in the court below on the basis that the respondent
had been guilty of an inordinate and inexcusable delay for which no justification had been
offered and the appellant was claiming that he was “unduly prejudiced” on account
thereof. It was argued on his behalf that the claim for interest should be remitted for
plenary hearing on the basis that such was the extent of the delay, and the prejudice
arising therefrom, that he appellant could mount an arguable defence to the effect that
the respondent must be deemed to have waived its entitlement to pursue the appellant
for interest. While neither the appellant’s initial grounding affidavit sworn on the 29th of
July 2013, nor a supplemental affidavit sworn by him on the 1st of November 2013, nor a
further replying affidavit sworn by him on the 19th of December 2013, adequately
particularised the prejudice being claimed, the trial judge adjourned the matter from the
20th of December 2013 until the 20th of January 2014, to afford the appellant the
opportunity to file yet another affidavit in order to provide further and better particulars
of the prejudice that he had suffered if he could do so.
15. The appellant subsequently filed yet another “further replying affidavit” sworn by him on
13th of January 2014. In this latest affidavit he averred, inter alia, that:.
“With regard to the issue of delay, I wish to reiterate that I have been taken by
surprise by these proceedings. To date, the plaintiff has failed to provide this
Honourable Court with any explanation as to why the proceedings have been
commenced over 11 years after the matters were listed before the Appeals
Commissioners. I say and believe that acute prejudice will arise in circumstances
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where the plaintiff claims to be entitled to recover vast sums of money in respect of
interest which it alleges has accrued over a period of literally hundreds of months.
As I have done so from the outset, I question the propriety of such proceedings and
I dispute the plaintiff’s entitlement to recover any such sums in circumstances
where the plaintiff has been guilty of what I believe to be inordinate and
inexcusable delay in the prosecution of these proceedings”
16. Later, at paragraph six of the same affidavit, the appellant added:
“As I have endeavoured to explain in my previous affidavits I was of the belief, up
to the time of the commencement of these proceedings, that the Revenue
Commissioners and the plaintiff had resolved not to pursue these proceedings and
that this was a form of tacit acknowledgment of the legitimacy of your deponents
claim in a separate set of proceedings entitled Martin Foley v Charles Bowden
wherein I sought damages as against Mr. Bowden. Had I been aware of the
plaintiff’s intention to pursue this current course of action I say that I would have
sought to take the necessary steps, at the time when the original assessments were
raised, to address the various issues and to address any liabilities outstanding at
that time. I believe that I am now facing an almost impossible situation at a
remove of some 11 years.”
17. At the resumed hearing on 20 January 2014 the High Court judge ruled as follows:
“Right. Well, when the matter was before me last, at that stage the plaintiff was
seeking liberty to enter final judgment for a sum that covered both the actual tax
involved and also interest. The various authorities in relation to summary judgment
were opened to me, Ryanair and Aer Rianta and the others, including the summary
of the principles applicable by Mr. Justice McKechnie in -- I think it’s Harrisgrange is
the name of the case and I indicated that I was very conscious that it was only in a
situation where it was very clear that the defendant had no defence that it would be
appropriate to permit judgment to be entered on the summary basis and I, in
effect, separated the Courts Acts and the interest element. So far as the interest
element was concerned, insofar as there had been suggestions of prejudice and so
on, I indicated that I would provide an opportunity to Mr. Foley to put before me
material that would establish that matters were not very clear and, if he was in a
position to do that, then liberty would be given to defend the interest aspect. It
seems to me that the latest affidavit really just doesn’t push the matter any further
at all. There is no indication of actual prejudice. It seems to me therefore that, on
the basis of the established jurisprudence, whatever delay that there has been, that
is necessary to look at the situation in the round and this is a situation where
substantial debts are due. No indication has been put forward of any actual defence
and it seems to me that, in the circumstances, that the plaintiff is entitled to liberty
to enter judgment in respect of the balance of the claim.”
The grounds of appeal
18. The Notice of Appeal complains:
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(i). that the High Court judge erred on the facts and in law in determining that the
respondent was entitled to enter final judgment as against the appellant;
(ii). that the High Court judge erred on the facts and in law in granting the respondent
liberty to enter final judgment as against the appellant;
(iii). that the High Court judge erred on the facts and in law in determining that the
appellant had no defence to the proceedings;
(iv). that the High Court judge failed to attribute sufficient weight to the respondent’s
delay in prosecuting the within proceedings.
The appellant’s case
19. Notwithstanding references in the appellant’s affidavits to separate proceedings entitled
Martin Foley v Charles Bowden; and the contention that the respondent had tacitly
acknowledged the legitimacy of those proceedings, in consequence of which the appellant
was contending that he had been induced to believe that the respondent had resolved not
to pursue the present proceedings, it was confirmed at the appeal hearing that the
appellant was not making any claim based on legitimate expectation. Moreover, he was
no longer pressing the suggestion that the matters alluded to could provide him with any
defence to the respondent’s claim for interest on the revenue debt due.
20. In the circumstances, the appellant’s case as argued on appeal rested solely on a claim of
prejudice arising from alleged inordinate and inexcusable delay on the part of the
respondent in pursuing recovery of outstanding taxes from the appellant. Moreover, it
was expressly confirmed by counsel for the appellant that his client was not making a
case of specific prejudice in terms of the ability to defend the claim for interest. To the
extent that he claims to be prejudiced the prejudice is general prejudice, principally
manifested by the size of the interest bill which has by this stage accrued. In that regard
his contention is simply that if the respondent had moved more quickly the interest bill
would have been smaller.
21. The proposition being contended for as framed by counsel for the appellant is that,
although there is no statutory limitation period within which these proceedings might
have been commenced the court has an overarching supervisory function to ensure, inter
alia, that cases are prosecuted with reasonable expedition. Moreover, he submits, in
every case a point is reached where delay is such that there would have to be a
consequence, either in terms of preventing the delaying party from maintaining his or her
claim at all or reducing the premise on which the claim could be advanced. Counsel
contends that that point has been well exceeded in the present case in circumstances
where there was a delay of in the order of 11 years in commencing these proceedings.
22. The appellant relies on the cases of Collins v. Minister for Justice, Equality and Law
contention that while this court must give due consideration to the conclusions of the High
Court judge, we retain a residual jurisdiction to exercise our own discretion should the
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interests of justice dictate such an approach. The respondent has not sought to contest
this as a proposition of law.
23. We were also referred to the well-established jurisprudence setting out the principles that
govern the exercise of the court’s jurisdiction on an application for summary judgment. In
particular we were referred to Ulster Bank limited v. Walter de Krester and Gillian Fox
is: is it “very clear” that the defendant has no case?, per Hardiman J in Aer Rianta c.p.t.
v. Ryanair Limited. Moreover, in regard to the “credibility” of a putative defence:
“a defence is not credible simply because the judge is not inclined to believe the
defendant. … If issues of law or construction are put forward as providing an
arguable defence, then the court can assess those issues to determine whether the
propositions advanced are stateable as a matter of law and that it is arguable that,
if determined in favour of the defendant, they would provide for a defence. In that
context, and subject to the inherent limitations on the summary judgment
jurisdiction identified in McGrath v. O’Driscoll [2007] ILRM 203, the court may come
to a final resolution of such issues. That the court is not obliged to resolve such
issues is also clear from Danske Bank a/s (t/a National Irish Bank) v. Durkan New
Homes [2010] IESC 22.”
24. It was also emphasised in IBRC v. McCaughey that in relation to facts put forward by the
defendant in the context of seeking to defend a claim for summary judgment that, subject
to one qualification, the court is required to accept that facts of which the defendant gives
evidence, or facts in respect of which the defendant puts forward a credible basis for
believing that evidence may be forthcoming, are as the defendant asserts them to be.
The qualification referred to is the distinction between mere assertions and facts that are
either supported by evidence or are supported by a realistic suggestion that evidence may
be available. The court is not obliged to accept mere assertions.
25. The respondent has taken no issue with the summary of the law presented by the
appellant relating to the general principles that govern the exercise of the court’s
jurisdiction in the context of applications for summary judgment.
26. In relation to the specific issue of delay, we were referred by the appellant to this court’s
delay in detail and a cited with approval the dictum of Diplock LJ in Allen v. Sir Alfred
McAlpine & Sons Limited [1968]2Q.B. 229 to the effect that:
“The chances of the court be able to find what really happened are progressively
reduced as time goes on. This puts justice to the hazard.”
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27. In McNamee v. Boyce, Irvine J considered two “slightly differing” lines of authority in the
context of inordinate and inexcusable delay, namely (a) the test set out by Finlay P in
Rainsford v. Limerick Corporation [1995] ILRM 561 which was expanded upon and
ultimately became the test in Primor Plc v. Stokes Kennedy Crowley [1996] 2 IR 459; and
(b) that based on O’Domhnaill v. Merrick [1984] IR 151.
28. Earlier, in Cassidy v. The Provincialate Irvine J had set out the difference between the
Primor and O’Domhnaill tests and in doing so stated why she considered it appropriate
that the burden on a defendant who seeks to have the claim against them dismissed
where a delay on the part of the plaintiff is excusable should rightly have to establish
nothing short of a real risk of an unfair trial or unjust result. At para. 37 of her judgment
in Cassidy she stated:-
“Clearly a defendant, such as the defendant in the present case, can seek to invoke
both the Primor and the O’Domhnaill jurisprudence. If they fail the Primor test
because the plaintiff can excuse their delay, they can nonetheless urge the court to
dismiss the proceedings on the grounds that they are at a real risk of an unfair
trial. However, in that event the standard of proof will be a higher one than that
imposed by the third leg of the Primor Test. Proof of moderate prejudice will not
suffice. Nothing short of establishing prejudice likely to lead to a real risk of an
unfair trial or unjust result will suffice. That this appears to be so seems only just
and fair. Why should a plaintiff found guilty of inordinate and inexcusable delay be
allowed to say that just because it is possible that the defendant may get a fair trial
that the action should be allowed to proceed when the evidence establishes that
they would have been in a much better position to defend the proceeding if the
action had been brought within a reasonable time? Likewise, why should a plaintiff
who has not been guilty of any culpable delay have their claim dismissed where the
court is satisfied that the defendant is not at any significant risk of an unfair trial or
unjust result but where, by reason of the passage of time it has become moderately
more difficult to defend a claim?”
29. In this case the appellant, in circumstances where he concedes that he cannot establish
prejudice likely to lead to a risk of an unfair trial, relies firmly on the Primor Plc v. Stokes
Kennedy Crowley line of jurisprudence.
30. It seems to me that in terms of his desire to defend the respondent’s claim against him
based on delay, two questions arise: (i) has he an arguable case that the respondent, or
the Collector General of the Revenue Commissioners in whose shoes the respondent
stands, was guilty not just of delay but inordinate and inexcusable delay, and (ii) if so,
that the balance of justice would tilt against allowing the respondent to recover some, or
perhaps all, of the interest claimed on the tax debt in respect of which the respondent has
already secured judgment? Clearly, the question of the balance of justice would only
arises for consideration if the delay in question was found to be inordinate and
inexcusable.
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31. Counsel for the appellant contends that he does have an arguable case that the
approximately 11-year delay in this case, which is entirely in the nature of pre-
commencement delay, and which is unexplained, was inordinate and inexcusable. In
support of this contention, we were referred to several tax cases in which the issue of
delay has previously been considered. These were Deighan v Hearne [1990] 1 IR 499 and
Fortune v The Revenue Commissioners [2009] IEHC 28. His case in that regard is that
although the Supreme Court in Deighan v Hearne found that the assessment of tax was
an administrative function and not a judicial one, O’Neill J in Fortune v. The Revenue
Commissioners held that:
“This finding does not go so far as to mean that the general principles which
emanate from protracted civil litigation cases would not be applicable to a case
involving the exercise of an administrative function.”
32. Counsel for the appellant conceded that he can provide no authority as to where the line
is to be drawn in a case such as the present between mere delay and inordinate and
inexcusable delay. Be that as it may, he says that, notwithstanding that he cannot
pinpoint precisely where the boundary was crossed, it can nonetheless be cogently argued
that it has been crossed in this case. Consequently, he maintains, it cannot be said that it
is “very clear” that his client has no case.
The respondent’s case.
33. The respondent has submitted that the observations in the appellant’s submissions
regarding Fortune v. The Revenue Commissioners are noted. However, that case was
concerned with whether the Revenue could “… in equity now be restrained from
proceeding with the … assessment …” In the instant case, there was no issue raised about
the time taken to issue the assessments. The assessments against the appellant were
issued in a timely fashion and became final and conclusive after the unsuccessful
attempted exercise of the appeal mechanisms available to the appellant.
34. Assuming the Primor line of authority to be applicable to the respondent’s proceedings for
liberty to enter final judgment, the respondent says that it is notable that the appellant
did not bring an application to strike out the proceedings against him. Nor did he place
before the Master of the High Court or the High Court itself such averments as would
have satisfied the test in the Primor line of authority. In circumstances where the
appellant was statutorily obliged to pay his taxes, was fully aware of the level at which
they had been assessed against him and was also fully aware that should he fail to pay
the tax assessed he would be liable for interest thereon pursuant to statute until
judgment or payment, he cannot credibly contend that the respondent’s pre-
commencement delay was inordinate and inexcusable. He had always it within his power
to stop the interest clock from running. All he had to do was to pay the tax that he owes,
and which he accepts that he owes. Moreover, the appellant did not place before the
Master, or the High Court, material which showed prejudice or other evidence which
would incline a judge to conclude that the balance of justice favoured striking out the
proceedings.
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Decision.
35. There is no statute of limitations that would have limited the period within which the
respondent, or the Collector General, could have commenced action against this appellant
to recover both the taxes assessed against him, and any interest accruing because of late
payment of those taxes. It is a matter of public policy that people should pay their taxes
in a timely manner. A citizen’s obligations in that regard are statutory, and those
obligations are common knowledge. The appellant had no basis for any confidence that he
would not ultimately be pursued in respect of his debt and interest, nor could he have had
in the light of his statutory obligations and the public policy considerations alluded to.
36. In addition, while the appellant contends that if action had been commenced sooner, his
interest bill would have been smaller, the point made by the respondent concerning his
own default is well made. He well knew that he had an unpaid bill for taxes due, he well
knew that interest was accruing, he had no basis for believing that those taxes would not
ultimately be pursued, and so it was totally within his power at every stage to stop the
interest clock from running and to cap the interest bill. All he had to do was to pay the
outstanding taxes that he admits were due.
37. While it is true that the respondent has put forward no explanation for the pre-
commencement delay in this case, the mere existence of a substantial and unexplained
delay does not make that delay presumptively inordinate and inexcusable. It is necessary
in every case to have regard to the actual delay and its implications for the late claim
then being brought.
38. Inordinate simply means out of the ordinary, and I would have to accept that an eleven-
year pre-commencement delay is arguably inordinate.
39. However, was it also arguably excusable? In that regard, Hamilton C.J., in Primor made
clear that the onus of establishing that delay has been both inordinate and inexcusable
would appear to lie upon the party seeking a dismiss and opposing a continuance of the
proceedings (or as applied to this case, the party seeking to resist summary judgment).
40. I am not satisfied that the appellant has discharged that onus, particularly in
circumstances where there manifestly has been, having regard to the identity of the
respondent, a relevant Criminal Assets Bureau investigation. Having regard to the
appellant’s statutory obligations with respect to the prompt payment of taxes due by him,
the level of his knowledge, and the absence of any claim of specific prejudice other than
the size of the interest bill itself, I do not believe that it can be credibly argued that such
pre-commencement delay as occurred in this case was inexcusable, or that the balance of
justice would require preventing the respondent from maintaining its claim for interest
incurred pursuant to statute, either in whole or in part.
41. I am not therefore persuaded that were this case to go to plenary hearing with respect to
the interest being claimed by the respondent that the appellant could present an arguable
case based on the Primor line of authority that he should not have to pay that interest. It
is clear to me that the appellant has no case, and I would dismiss the appeal.
Result: Dismiss Appeal