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City of Limerick V.E.C. v. Carr [2001] IEHC 112 (25th July, 2001)
URL: http://www.bailii.org/ie/cases/IEHC/2001/112.html
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[2001] 3 IR 480,
[2001] IEHC 112
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City of Limerick V.E.C. v. Carr [2001] IEHC 112 (25th July, 2001)
THE
HIGH COURT
1998
No. 6955p
BETWEEN
THE
CITY OF LIMERICK VOCATIONAL EDUCATIONAL COMMITTEE
PLAINTIFF
AND
LUCY
CARR
AND
THE
REVENUE COMMISSIONERS
DEFENDANTS
JUDGMENT
of Mr. Justice O’Higgins dated the 25th day of July, 2001
.
1. A
dispute arose between the plaintiff and the first named defendant which
resulted in proceedings being taken by the first named defendant. On the 17th
October, 1991 the Supreme Court granted a declaration to the first named
defendant in the following terms that she was:-
“In
the position of a principal of a school within its jurisdiction and that she is
entitled to be paid the full amount of salary
de
die in diem
appropriate to that position from the date on which she was originally
suspended (the 22nd June, 1976) giving credit for any payments of salary or in
lieu of salary made to her since that date”.
2. It
was common case that the plaintiff had made two payments to the first named
defendant prior to the hearing before Barron J. The first payment was a sum in
respect of the period of the 26th June 1976 to the 31st July, 1980. It was a
sum of £22,504.51 nett, superannuation and PAYE and PRSI having been
deducted from gross pay of £31,711.94. On the 14th February, 1995 a
further payment of £82,030.40 nett was paid to the first named defendant.
That represented the balance of the gross salary due less superannuation, PAYE
and PRSI from the 1st August, 1980 to the 31st October 1991, less a sum
retained for payment to Social Welfare. Following the payment in 1995 the
matter was referred back to the High Court on foot of the Supreme Court Order
and came before Mr. Justice Barron on the 11th July, 1996. The gross payments
due for each of the 15 years were agreed and there was no dispute about the
PAYE and PRSI deductions. The relevant part of the order of Barron J. reads as
follows:-
“The
Court doth find that the plaintiff is entitled to the sum set forth on the
Second Schedule hereto being the full amount of salary payable to her for each
of the financial years from the date in which the Plaintiff was originally
suspended to the date in which the First Named Defendant resumed payment of the
Plaintiffs salary amounting in aggregate to the sum of £252,009.33 (gross)
against which credit is to be given for payments of salary made by the First
Named Defendant in the sums of £22,501.51 (nett) and £82,030.40
(nett) leaving a balance of £147,447.00.
It
is ordered and adjudged that the First Named Defendant do pay to the Plaintiff
a sum of £147,477.42 and the costs of the proceedings in this Court
arising from the reference backed by the Supreme Court to include the costs
reserved by the said Order dated the 12th October, 1992 when taxed and
ascertained”.
3. From
this sum of £147,474.42 it was agreed between the parties that a sum of
£12,541.09 should be deducted in respect of superannuation contributions
in order to preserve the pension rights of the first named defendant in this
action.
4. The
plaintiff’s claim is for the return of the sum of £112,816.14. It
claims the said sum from either the first named defendant or the second named
defendant. In respect of the first named defendant the plaintiff maintains
that it paid the money to the Revenue Commissioners on her behalf and that it
paid the same amount of money to her again on foot of the order of Barron J.
which the plaintiff contends contemplated that she would pay her tax and PRSI
on the amount of the decree. Alternatively, it claims the said sum as against
the second named defendants as monies paid to them, which, following the order
of Barron J. should rightly be the liability of the first named defendant.
5. When
the matter was remitted to the High Court the first named defendant in these
proceedings, Ms. Carr claimed interest on the two late payments which caused an
extra tax liability for her of £9,000.00. She also claimed damages for
the loss of her ability to shelter her income from tax liability by way of
investments which attracted tax relief in at least some of the years in
question. These claims were not successful. Mr. Quigley, the Chartered
Accountant, called on behalf of Ms. Carr in those proceedings gave evidence
before Barron J. concerning such interest and a claim for £9,000 over
payment of tax. The following appears from the transcript of those
proceedings. In answer to Q. 119 Mr. Quigley stated:-
“We
are assuming in our calculations that when she goes to the Revenue, having
received an award she will be given concessionary treatment; that treatment
will allow her to gain the benefit of her basic tax free allowances as a single
person, PAYE allowance”.
6. At
question 122 Barron J:-
“Suppose
the award of the Court, with 15 separate sums for 15 separate financial years
would she not then get the benefit of all the tax free allowances for each of
those years?”
Mr.
Quigley:-
“Yes,
she will get the benefit of the basic allowances, the personal allowance, the
PAYE allowance but we have assumed that you will get those benefits anyway,
because that is the essence of concessionary treatment, that the Revenue will
allow.”
Q.
123 Barron J.:-
“She
has been paying that income tax. It is all lumped together and paid in one
year, is that right?
”
Mr.
Quigley:-
“If
she gets the concessionary treatment she gets the rates and bands and the basic
allowances that she would have got in each of the 15 years. That is the
concessionary treatment that we have presented. The alternative to that would
be to receive the lump sum now to have it taxed in this year and get just this
years allowance and we would prepare a calculation on the basis that she would
get the concession”.
7. The
plaintiff argues that the above exchange demonstrates that the decree was on
the basis that Ms. Carr would go to the Revenue Commissioners to be assessed
for tax on the amount of the decree. Furthermore it relies on the evidence of
Mr. O’Donnell, Solicitor in the case. He told the Court that after the
decision of Barron J., when Mr. Nugent, the then Counsel for the VEC pointed
out to the learned Trial Judge that tax had already been paid by the VEC, he
was told by the Judge that the matter could be taken up with the Revenue
authorities. The plaintiff further argues that the award of the salary being
“gross
”
clearly envisaged that Ms. Carr would pay tax on it. It is the
plaintiff’s case that the judgment of Barron J. did not reflect his
intention that Ms. Carr would go for assessment to the Revenue Commissioners.
8. The
plaintiff, anticipating that the defendant would contend that this Court should
not interfere with the order of Barron J which was not appealed and would rely
on the doctrine of
res
judicata,
maintains that the first named defendant is estopped from relying on that
doctrine by virtue of the representations made in the course of the case which
have been referred to above.
AMENDING
OR VARYING AN ORDER
9. The
circumstances in which the Court will amend an order are as follows:
10. Order
28 Rule 11 of the Rules of the Superior Courts, 1986 provides:-
“Clerical
mistakes in judgments or orders, or errors arising therein from an accidental
slip or omission may at any time be corrected by the Court on Motion without an
appeal.”
11. In
my view that order has no bearing on the present case. The order accurately
reflects a decision of the learned High Court Judge, even if it was his
understanding that the first named defendant would subsequently go to the
Revenue Commissioners to be assessed for tax. The Judge in fact made no such
order nor was he asked to do so. The Judge when he made the order was aware
that the VEC had deducted the relevant tax and passed it on to the Revenue
Commissioners in accordance with its obligations under the PAYE system.
Accordingly, there was no accidental slip or omission. I am reinforced in my
view by the observations of McCracken J. in
Concorde
Engineering -v- Bus Atha Cliath
[1996] 1 ILRM 533 at 535/6 where he said:-
“.....
the wording as the rule referring as it does to ‘any accidental slip or
omission’, must be construed as encompassing only matters which were
omitted from the judgment or order by reason of a slip or omission. That seems
to me to connote that, were it not for the slip or omission, the amendment
requested would of necessity have been in the original order.”
12. In
the present case it cannot be said with any certainty that Barron J. would have
necessarily included in his order a stipulation that Ms. Carr seek assessment
from the Revenue Commissioners if he had been requested to do so.
13. Apart
from Order 28 Rule 11 the circumstances in which an order may be amended were
the subject matter of several decisions to which I was referred. In
Hughes
-v- O’Rourke & Ors
[1986] ILRM 538 Henchy J. said at page 540 of the Report:-
“I
consider it to be a fundamental principle that, in the absence of a clear
provision to the contrary in a statute or rule of court once a final order has
been made and perfected in the High Court, the jurisdiction of the High Court
as to the matters determined by that order is exhausted, save possibly to the
extent that a subsidiary or supplementary order may be made subsequently by
consent.”
In
Bellville
Holdings -v- Revenue Commissioners
[1994] 1 ILRM 29 where it was held that the jurisdiction to amend an order was
not confined to that given by Order 28 Rule 11 of the Superior Court Rules,
Finlay C.J. stated at page 36 of the Report:-
“There
is, however, I am satisfied, a wider and more fundamental jurisdiction in a
court to amend an order which it has previously made, even though that order is
in the form of a final order and has been perfected.
The
position and principles appear, however, to be accurately stated in the
judgment of Romer J. in Ainsworth -v- Wilding [1896] 1 Ch 673, where, at p.
677, he stated as follows:
So
far as I am aware, the only cases in which the Court can interfere after the
passing and entering of the judgment are these:
(1)
Where
there has been an accidental slip in the judgment as drawn up, in which case
the Court has power to rectify it under Order XXVIII r. 11;
(2)
When
the Court itself finds that the judgment as drawn up does not correctly state
what the Court actually decided and intended.
Having
referred to the decision of the Court of Appeal In Re: Swire 30 Ch. D. 239,
Romer J. quoted from the judgments in that case as follows at page 678:-
“Cotton
L.J. says:
‘It
is only in special circumstances that the Court will interfere with an order
which has been passed and entered, except in cases of a mere slip or verbal
inaccuracy, yet in my opinion the Court has jurisdiction over its own records,
and if it finds that the order as passed and entered contains an adjudication
upon that which the Court in fact has never adjudicated upon, then, in my
opinion, it has jurisdiction, which it will in a proper case exercise, to
correct its record, that it may be in accordance with the order really pronounced
.’
Lindley
L.J. says:
‘If
it is once made out that the order, whether passed and entered or not, does not
express the order actually made, the Court has ample jurisdiction to set that
right, whether it arises from a clerical slip or not.’
And
Bowen L.J. says:
‘An
order, as it seems to me, even when passed and entered, may be amended by the
Court so as to carry out the intention and express the meaning of the Court at
the time when the order was made, provided the amendment be made without
injustice or on terms which preclude injustice.’
I
am satisfied that these expressions of opinion validly represent what the true
common law principle is concerning this question. I would emphasise, however,
that it is only in special or unusual circumstances that an amendment of an
order passed and perfected, where the order is of a final nature, should be
made by the court. The finality of proceedings both at the level of trial and,
possibly more particularly, at the level of ultimate appeal is of fundamental
importance to the certainty of the administration of law and should not lightly
be breached”.
14. The
decision in
Bellville
Holdings -v- The Revenue Commissioners
is of particular relevance. In that case an issue was determined by way of
case stated to the High Court. The learned trial judge did not specifically
direct that the matter be re-entered before the Appeal Commissioners pursuant
to her finding. However in subsequent proceedings between the parties she
amended her order to contain such a direction, on the basis that she considered
it implicit in her judgment [the subject matter of the case stated] that the
matter be re-entered. Notwithstanding that, the Supreme Court held that that
was not a proper interpretation of the previous judgment. Finlay C.J. stated
at p. 38:-
“It
seems to me that the furthest the judgment goes is that it is likely or not
improbable that had there been an application made upon or immediately after
the delivery of the judgment by the Inspector of Taxes for an order remitting
the matter pursuant to s. 428(6) that the learned trial judge might well have
granted such an order.”
15. In
the instant matter taking the plaintiffs case at its very highest all that
could be said is that had an application been made directly after the hearing
to include an order that the plaintiff seek an assessment from the Revenue
Commissioners, it is probable that such an order may have been made. The bases
for so arguing are:-
(a) The
comment made by the learned Judge when it was pointed out that the plaintiff
had already paid tax, that the matter could be taken up with the Revenue
Commissioners
(b) The
fact that in the order the sum was declared to be gross.
(c) The
fact that the parties on both sides were surprised are matters that can be
taken as evidence to suggest that it was understood that a credit was to be
given to the VEC for monies they had paid and that therefore it was reasonable
to expect that Ms. Carr, the first named defendant would pay tax.
16. However,
it is by no means certain that it was the intention of the learned judge that
Ms. Carr seek assessment from the Revenue Commissioners after the hearing. He
interpreted the words
“full
amount of her salary
de
die in diem
”
as being the gross amount. He indicated it as
“the measure of damages”
notwithstanding that the judgment of the Supreme Court had substituted a
declaration for relief by way of damages. It is at least possible in view of
his use of the words
“measure
of damages
”
that the judge awarded damages notwithstanding the order of the Supreme Court
which substituted a declaration for damages. If he did so the remedy was by
way of an appeal.
17. In
that context I should point out that the submission on behalf of the first
named defendant that the Supreme Court ordered that Ms. Carr be given relief
“by
way of damages awarded to the Plaintiff”
is based on a misreading of the order. The Supreme Court ordered as follows:-
“That
the High Court Order be varied by substituting declarations in the terms
hereinbefore recited for the relief by way of damages awarded to the
plaintiff.”
18. I
was referred to a passage in
Howard
-v- Commissioners of Public Works
[1994] 2 ILRM 301 where Lynch J. held that notwithstanding that the basis or
foundation for an injunction had now gone, he was precluded from amending the
injunction. At page 312 of the report he said
“I do not see that I can by an order made in this plenary action amend an
order made in completely separate judicial review proceedings .....”.
In
the case of
McG
-v- D.W.
(Unreported, High Court, McGuinness J. 18th June, 1999) held that she had no
jurisdiction to alter an order she had made in November, 1998. In her judgment
she referred to the decision of the Supreme Court in
A.G.
-v- Open Door Counselling Limited (No 2)
[1994]
2 IR 353 and in particular the passage at page 340 where Finlay J. stated:-
“What
is at issue in this case is as to whether the Court, having delivered a
judgment and made an order in accordance with the law as it then was, which was
perfectly correct and carried out the full meaning and intent of the Court in
1988, can now discharge or vary that order by virtue of an amendment of the law
which has occurred since it was made.
To
that issue, if it were dealing with a question of any statutory amendment of
law or any amendment of the law arising from a further judicial decision in
another case, there can be only one answer, namely, that the Court has not got,
as a court of ultimate appeal, any such jurisdiction and that it must be
obliged, as a matter of fundamental principle, to refuse to alter the order it
previously made.”
19. Counsel
for the first named defendant also referred me to a further decision of
McGuinness J. in
McMullen -v- Clancy
(Unreported, High Court, McGuinness J., 3rd November, 1999).
In
Preston
Banking Company -v- William Alsop & Sons
[1895] 1 Ch 141 the headnote reads as follows:-
“The
Court had no jurisdiction to rehear or alter an order after it has been passed
and entered, provided that it accurately expresses the intention of the Court.
An
application was made in an action that certain costs which the Applicant had by
a previous order in the action been directed to pay might be made costs in the
action, and for a stay of proceedings under the order on the ground that the
order had been obtained by misrepresentation:....”
20. The
Court of Appeal held that this was in effect an application to rehear the
previous order and that the Court had no jurisdiction to entertain it.
21. The
Court’s attention was drawn to
Bright
& Co. Ltd. -v- Sellar
[1904] 1 KB 6 where at page 12 Cozens-Hardy J. stated:-
“It
seems to follow logically from what has been said that the High Court has now
no jurisdiction to review its own order on the ground of apparent error, by a
means of an independent action, and that the party complaining must come to the
Court of Appeal.”
Bentley
-v- O’Sullivan
[1925] W.N. 95, and
Arnott -v- Holloway
[1960] V.R. 22, a decision of the Supreme Court of Victoria were also cited.
22. In
the light of these authorities it seems clear that there is a power in the
court above and beyond the provisions of the slip rule to amend an order of a
court. However, such power is to be exercised sparingly and only when the
court finds that the judgment as drawn up does not correctly state what the
court actually decided or intended. Apart from that the court does not have
jurisdiction to interfere with an order of the court which correctly expressed
the decision of the court and which was not appealed. The plaintiff is in
effect asking the Court to vary the order of Barron J. which was final and not
appealed. It seeks to have an additional term imported into the order by
implication and on the importation of such term seek relief against the First
Named plaintiff for unjust enrichment. In my view this case does not come with
the parameters of the slip rule or the
Belville
decision.
RES
JUDICATA
The
case of
Corporation of Dublin -v- Building and Allied Trade Union
[1996] 1 IR 468 was another unjust enrichment case where the defence of
res
judicata
succeeded. The following passage at p. 48 of the judgment in the judgment of
Keane J., as he then was, with which the other members of the Court agreed is
pertinent in the present case.
“The
doctrine of
res
judicata
applicable to this, as to every final judgement or award of any competent court
or tribunal, has the consequences that the parties are estopped between
themselves from litigating the issues determined by the award again. The
justification of the doctrine is normally found in the maxim
interest
rei publicae ut sit finis litium
and it is important to bear in mind that the public interest referred to
reflects, in part at least, the interest of all citizens who resort to
litigation in obtaining a final and conclusive
determination
of their disputes. However severe the stresses of litigation may be for the
parties involved - the anxiety, the delays, the costs, the public and painful
nature of the process - there is at least the comfort that at some stage
finality is reached. Save in those exceptional cases where his opponent can
prove that the judgment was procured by fraud, the successful litigant can
sleep easily in the knowledge that he need never return to Court again.
That
finality is, of course, secured at a cost. The defendant who discovers as soon
as the case is over that the award of damages against him is grossly excessive
because of facts of which he was wholly unaware and was unable to bring before
the court cannot, in the absence of fraud, resist the enforcement of the
judgment against him. The plaintiff who similarly finds out that his damages
are far less than those which would have been awarded
had
the Court been in possession of evidence not available at the hearing is
equally precluded from disputing the finality of the judgment. The interest of
the public in that finality is given precedence by the law over the injustices
which inevitably sometimes result.”
23. Counsel
for the plaintiffs argued that the first named defendant is precluded or
estopped from relying on the doctrine of
res
judicata
because of the representations made on her behalf by Mr. Quigley. Counsel
referred me to the case of
Cassidy
-v- O’Rourke
(Unreported High Court Carroll J., 18th May, 1983. I was also referred to
Littondale
Limited -v- Wicklow County Council
[1996] 2 ILRM 519;
Republic
of India and Anor -v- India Steamship Company Limited
[1993] A.C. 410;
Showlag
-v- Mansour
(PC) [1995] 1 AC 431 (these were all cases in which the doctrine of counter
estoppel was invoked) and to a passage, 2nd Edition, The Doctrine of Res
Judicata 1986.
24. The
doctrine of counter estoppel is summarised in paragraph 17.10 of McDermott,
Res Judicata and Double Jeopardy (p. 163).
“However
where an estoppel by
res
judicata
meets an estoppel by conduct or representation, there is a genuine cross
estoppel. In such a case the party against whom the plea of
res
judicata
is made does not deny that he is estopped, but insists that the other parties
estopped from saying so”.
25. The
following representations made by Mr. Quigley in the case before Barron J. are
relied on by the plaintiff to preclude the first named defendant from relying
on the doctrine of
res
judicata
.
Answer
to Q. 119.
(1)
“We
are assuming in our calculations that when she goes to the revenue, having
received an award she will be given concessionary treatment; that treatment
will allow her to gain the benefit of her personal basic tax free allowances as
a single person, PAYE allowance.”
26. And
again Question 123 at page 39 of the transcript:
(2)
“If
she gets the concessionary treatment, she gets the rates and bands and the
basic allowances that she would have got in each of the 15 years. That is the
concessionary treatment that we have presented. The alternative to that would
be to received the lump sum now, to have it taxed in this year to get just this
years allowances and we prepared our calculations on the basis that she would
get the concession.”
27. I
cannot agree with the plaintiff’s contention.
28. Firstly,
Mr. Quigley’s evidence must be taken in the context of his evidence on
the topic of Ms. Carr’s claim for interest. Those remarks do not in my
view constitute an undertaking that Ms. Carr would seek assessment on a decree
which had not yet been made. Secondly, there was no undertaking given by Ms.
Carr herself that she would go to the Revenue Commissioners to be assessed in
respect of the award that might be given. Indeed, at the time when Mr. Quigley
gave his evidence it was not known whether the judge would award a gross sum
(as happened) or a net sum: certainly Counsel for the VEC (and probably Counsel
for Ms. Carr) anticipated that the award would be net. In those circumstances
it would be most unlikely that an undertaking would be given by Ms. Carr to
seek an assessment. For that reason I do not consider that the first named
defendant is precluded from successfully relying on the doctrine of
res judicata
.
Furthermore, there is no evidence that the plaintiffs in the present action
acted to their detriment by reason of such representation as was made by Mr.
Quigley. The initial payments made by them to the Revenue Commissioners were
prior to any representation made by Mr. Quigley in the court
case.
The subsequent payment, that is the payment of the amount ordered by the
court, was not an action made on foot of a representation by Mr. Quigley, but
rather an action done in compliance with an order of the High Court.
Accordingly, the plaintiff’s argument that the first named defendant is
estopped from relying on the doctrine of
res
judicata
also fails. The plaintiff has therefore failed to establish its claim against
the first named defendant.
29. The
plaintiff’s claim against the second named defendant is as follows. The
plaintiff argues that the effect of the order of Barron J. was to put Ms. Carr
in the position of an employee who had been given her emoluments without
deduction of tax, since the words ‘
gross
salary’
are referred to in the order. Section 997 of the Taxes Consolidation Act,
1997 (formerly Section 133) provides as follows:-
“(1)
No
assessment under Schedule E for any year of assessment need be made in respect
of emoluments to which this Chapter applies except where - ....
(b)
the emoluments paid in the year of assessment are not in the same amount as the
emoluments which are to be treated as the emoluments for that year ..... but
where any such assessment is made credit shall be given for the amount of any
tax deducted or estimated to be deductable from the emoluments.”
30. The
plaintiff contends that the second named defendant is required to make an
assessment under that section. It also submits that no credit can be given for
the amount of tax deducted; since the order referred to gross salary, it
follows that no tax was deducted
.
In
my view that argument flies in the face of what actually happened. PAYE
deductions were made by the VEC from the salary due to the first named
defendant as is required by law. The fact that in the full knowledge of such
payments by the VEC Barron J. described her salary
de die in diem
to be
“gross”
does not alter the position. Indeed it was the essence of the case argued by
the VEC before Barron J. that they had deducted tax and passed it on, as
required, to the Revenue Commissioners.
31. Moreover,
I am not convinced that Section 997 deprives the Revenue Commissioners of all
discretion, and requires an assessment to be made regardless of the reality of
the case. Section 43 of the Income Tax (Employment) Regulations 1960 (SI No.
28 of 1960) provides in Regulation 43 that:-
“The
Inspector shall, in any case where he does not propose to make an assessment on
an employee with respect to whom tax was deducted during a year, send to the
employee, as soon as possible after the end of the year, a statement of his
liability for the year and showing how it is proposed to deal with any
over-payment or under payment of tax”.
32. The
Inspector in the present case utilised that regulation. In my view it is in no
way in conflict with the provisions of Section 997 of the Taxes Consolidation
Act. I accept the evidence of the Inspector that it would have been quite
inappropriate to employ the provisions of Section 997 in circumstances when
credit was given for tax actually paid the assessment would be nil.
33. It
should also be noticed that no such claim is made in the pleadings nor is any
relief by way of declaration sought by the plaintiff.
34. Under
the Income Tax (Employment) Regulations, 1960 (SI No 28 of 1960) Regulation
31(3):-
“If
the amount which the employer is liable to remit to the collector on paragraph
(1) of this Regulation exceeds the amount actually deducted by him from
emoluments paid during the relevant income tax month, the Revenue
Commissioners, on being satisfied by the employer that he took reasonable steps
to comply with the provisions of these Regulations and that the under deduction
was due to an error made in good faith, may direct that the amount of the
excess should be recovered from the employee, and where they so direct, the
employer shall not be liable to remit the amount of the said excess to the
collector.”
35. Insofar
as it may have been suggested that that regulation has any bearing on the
present proceedings I have to reject that contention. The payment made on foot
of the order of the High Court was not paid in error, it was paid because the
court ordered judgment.
36. In
conclusion, while it is difficult not to feel some sympathy with the plaintiff,
it would open them to appeal the order of Barron J. if they were dissatisfied
with it. They consciously decided not to adopt that course. They cannot
successfully circumvent that decision in these proceedings.
© 2001 Irish High Court