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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Howley v S & Ors (Approved) [2025] IEHC 289 (22 May 2025)
URL: http://www.bailii.org/ie/cases/IEHC/2025/2025IEHC289.html
Cite as: [2025] IEHC 289

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APPROVED                                                             [2025] IEHC 289

 

 

harp graphic.

 

THE HIGH COURT

REVENUE

 

2019 266 R

2019 267 R

2019 268 R

2019 269 R

2019 270 R

 

 

BETWEEN

 

 

JOSEPH HOWLEY

 

 

PLAINTIFF

 

AND

 

 

S & ORS

 

 

DEFENDANTS

 

 

 

JUDGMENT of Mr. Justice Garrett Simons delivered on 22 May 2025

 

 

Introduction

1.             This judgment is delivered in respect of five related sets of debt collection proceedings.  In each instance, the plaintiff seeks to recover an amount due under notices of assessment raised by either an inspector of taxes or a revenue officer.  The defendants are all members of the same extended family and are engaged in the trade of tarmac contracting.

2.             The proceedings were all commenced by way of summary summons.  The respective defendants have each brought a motion seeking to strike out the proceedings against them for want of prosecution (collectively, "the strike out application"). 

3.             The strike out application is unusual in that it is predicated exclusively on Order 122, rule 11 of the Rules of the Superior Courts.  The defendants have not sought to invoke the High Court's inherent jurisdiction to dismiss the proceedings on the grounds of inordinate and inexcusable delay.  More significantly, perhaps, the defendants have not sought to strike out the proceedings on the grounds that the claim is bound to fail or has no reasonable chance of succeeding (as allowed for under Order 19, rule 28).  Much of the argument advanced on behalf of the defendants went well beyond the limited scope of the application actually before the court.

 

 

Taxes Consolidation Act 1997

4.             It should be explained that most of the notices of assessment, the subject-matter of these proceedings, relate to chargeable periods prior to the commencement of the amendments introduced to the rules for self-assessment under the Finance Act 2012 (1 January 2013).  A small number of the notices of assessment relate to the year of assessment 2013 and 2014 and are thus subject to the amendments.

5.             Insofar as relevant to the present proceedings, there is no material difference between the provisions of the pre- and post- 1 January 2013 versions of the Taxes Consolidation Act 1997.  For ease of exposition, and unless otherwise stated, any reference in this judgment to a specific section should be understood as a reference to the post 1 January 2013 version of the Taxes Consolidation Act 1997.

6.             Separately, the procedures governing tax appeals are mostly to be found under Part 40A of the Taxes Consolidation Act 1997.  This part was inserted by the Finance (Tax Appeals) Act 2015.  The effect of the transitional provisions under the latter Act is that the new procedures apply to tax appeals made after the commencement date of 21 March 2016.  This is so even if the notices of assessment relate to an earlier period. 

7.             The tax appeals the subject-matter of these proceedings were all made in April 2016 and thus are subject to the new procedures under Part 40A of the TCA 1997.

 

 

Procedural history

8.             The debt collection proceedings seek to recover monies said to be owed by the respective defendants pursuant to notices of assessment.  The notices of assessment are what are now known as "Revenue assessments", i.e. an assessment made by an inspector of taxes or a revenue officer setting out such sum as, according to the best of the inspector or officer's judgment, ought to be charged on that person.  The notices of assessment relate to various periods between 2004 to 2014.

9.             There is a statutory right of appeal against a Revenue assessment to the Tax Appeals Commission ("TAC").  For ease of exposition, an appeal of this type will be referred to in this judgment as a "tax appeal" so as to distinguish it from the two appeals from the High Court to the Court of Appeal which feature as part of the overall procedural history. 

10.         There are certain statutory conditions attaching to the making of a tax appeal against a Revenue assessment: section 959AH (1) of the Taxes Consolidation Act 1997 (as inserted by the Finance Act 2012).  First, where the assessment was made in default of the delivery of a return, the chargeable person must deliver a return.  Second, in all cases, the chargeable person must pay an amount of tax on foot of the assessment.  

11.         The defendants had each purported to file appeals against the notices of assessment to the Tax Appeals Commission in April 2016.  The purported appeals did not comply with the statutory conditions described above.  The defendants sought to justify this non-compliance by arguing that the conditions do not apply to individuals who were not tax resident during the relevant years of assessment.

12.         The Tax Appeals Commission had ruled that the tax appeals were inadmissible ("the admissibility ruling").  The defendants instituted judicial review proceedings against the admissibility ruling.  The judicial review proceedings were ultimately successful before the Court of Appeal.  The Court of Appeal delivered its judgment on 13 March 2020: J.S.S. v. Howley [2020] IECA 73.  The Court of Appeal set aside the admissibility ruling and remitted the matter to the Tax Appeals Commission for reconsideration.  The question of whether or not the tax appeals are admissible without compliance with the statutory conditions (described above) has thus been reopened.

13.         The present proceedings, i.e. the debt collection proceedings, were issued at a time subsequent to the Tax Appeals Commission's decision to refuse to admit the defendants' appeals, but prior to the determination by the Court of Appeal of the judicial review proceedings challenging that decision.  The judicial review proceedings had been unsuccessful before the High Court; the Court of Appeal had heard an appeal from the High Court and judgment had then been awaited.  By order dated 19 July 2019, the Court of Appeal had refused an application to stay any debt collection proceedings in the interim.

14.         The Tax Appeals Commission's reconsideration of the admissibility of the tax appeals has resulted in a further set of judicial review proceedings to the High Court and a further appeal to the Court of Appeal.  The appeal had still been pending as of the date the strike out application was heard before the High Court (10 April 2025), but the Court of Appeal has since delivered its judgment: J.S.S. v. Tax Appeals Commissioner [2025] IECA 96 (9 May 2025).  The judicial review proceedings have been dismissed and the matter will now return to the Tax Appeals Commission.

15.         As of today's date, therefore, there remains a live controversy between the parties as to the admissibility of the tax appeals.  The controversy falls to be determined, in the first instance, in the proceedings before the Tax Appeals Commission (subject to the possibility of an appeal by way of case stated to the High Court or further judicial review proceedings).  For ease of exposition, the proceedings before the TAC will be referred to in this judgment as "the parallel proceedings".  In the event that the tax appeals are held to be inadmissible, then the notices of assessment, upon which the debt collection proceedings are predicated, would be "final and conclusive" for the purposes of the Taxes Consolidation Act 1997 (as amended).

16.         The debt collection proceedings have been becalmed pending the outcome of the parallel proceedings before the Tax Appeals Commission.

 

 

Legal principles governing application to dismiss

17.         The strike out application is unusual in that it is predicated exclusively on Order 122, rule 11 of the Rules of the Superior Courts.  This rule provides, in relevant part, that in any cause or matter in which there has been no "proceeding" for two years, the defendant may apply to the court to dismiss the same for want of prosecution, and on the hearing of such application the court may order the cause or matter to be dismissed accordingly or may make such order and on such terms as to the court may seem just.

18.         The defendants have not sought to invoke the High Court's inherent jurisdiction to dismiss the proceedings on the grounds of inordinate and inexcusable delay.  The parties were invited, at the hearing of the strike out application, to address the implications, if any, of this narrow approach.  In response, the parties submitted that the narrow approach did not materially affect the legal test and that the case law in respect of the inherent jurisdiction should apply by analogy. 

19.         Having regard to the attitude of the parties, it is not necessary for the resolution of the present proceedings to identify the precise differences between the two types of "delay" jurisdiction.  In particular, it is not necessary to consider whether the two year period prescribed under Order 122, rule 11 should be regarded as a proxy for inordinate delay.

20.         The principles governing an application to dismiss proceedings on the basis of inordinate and inexcusable delay are well established.  The leading judgment remains that of the Supreme Court in Primor plc v. Stokes Kennedy Crowley [1996] 2 IR 459 ("Primor").  The Supreme Court summarised the position thus (at pages 475/76 of the reported judgment):

"The principles of law relevant to the consideration of the issues raised in this appeal may be summarised as follows:–

 

(a)        the courts have an inherent jurisdiction to control their own procedure and to dismiss a claim when the interests of justice require them to do so;

 

(b)        it must, in the first instance, be established by the party seeking a dismissal of proceedings for want of prosecution on the ground of delay in the prosecution thereof, that the delay was inordinate and inexcusable;

 

(c)        even where the delay has been both inordinate and inexcusable the court must exercise a judgment on whether, in its discretion, on the facts the balance of justice is in favour of or against the proceeding of the case;

 

(d)        in considering this latter obligation the court is entitled to take into consideration and have regard to

 

(i)      the implied constitutional principles of basic fairness of procedures,

 

(ii)     whether the delay and consequent prejudice in the special facts of the case are such as to make it unfair to the defendant to allow the action to proceed and to make it just to strike out the plaintiff's action,

 

(iii)    any delay on the part of the defendant — because litigation is a two party operation, the conduct of both parties should be looked at,

 

(iv)    whether any delay or conduct of the defendant amounts to acquiescence on the part of the defendant in the plaintiff's delay,

 

(v)     the fact that conduct by the defendant which induces the plaintiff to incur further expense in pursuing the action does not, in law, constitute an absolute bar preventing the defendant from obtaining a striking out order but is a relevant factor to be taken into account by the judge in exercising his discretion whether or not to strike out the claim, the weight to be attached to such conduct depending upon all the circumstances of the particular case,

 

(vi)    whether the delay gives rise to a substantial risk that it is not possible to have a fair trial or is likely to cause or have caused serious prejudice to the defendant,

 

(vii)   the fact that the prejudice to the defendant referred to in (vi) may arise in many ways and be other than that merely caused by the delay, including damage to a defendant's reputation and business."

 

21.  As appears, a court must consider three issues in sequence: (1) has there been inordinate delay; (2) has the delay been inexcusable; and (3) if the answer to the first two questions is in the affirmative, it then becomes necessary to consider whether the balance of justice is in favour of or against allowing the case to proceed.  The onus of proof is on the defendant, as moving party, to establish all three limbs of the legal test.

22.  The principles governing an application to dismiss on the grounds of delay have been considered more recently by the Court of Appeal in Cave Projects Ltd v. Kelly [2022] IECA 245.  Collins J. reiterated that an order dismissing proceedings should only be made in circumstances where there has been significant delay, and where, as a consequence of that delay, the court is satisfied that the balance of justice is clearly against allowing the claim to proceed.  The nature of the assessment to be carried out is described as follows (at paragraph 36):

"The court's assessment of the balance of justice does not involve a free-floating inquiry divorced from the delay that has been established.  The nature and extent of the delay is a critical consideration in the balance of justice.  Where inordinate and inexcusable delay is demonstrated, there has to be a causal connection between that delay and the matters relied on for the purpose of establishing that the balance of justice warrants the dismissal of the claim.  A defendant cannot rely on matters which do not result from the plaintiff's delay."

 

23.  The need for expedition in litigation is addressed as follows (at paragraph 37):

"It is entirely appropriate that the culture of 'endless indulgence' of delay on the part of plaintiffs has passed, with there now being far greater emphasis on the need for the appropriate management and expeditious determination of civil litigation.  Article 6 ECHR has played a significant role in this context.  But there is also a significant risk of over-correction.  The dismissal of a claim is, and should be seen as, an option of last resort.  If the Primor test is hollowed out, or applied in an overly mechanistic or tick-a-box manner, proceedings may be dismissed too readily, potentially depriving plaintiffs of the opportunity to pursue legitimate claims and allowing defendants to escape liability that is properly theirs.  Defendants will be incentivised to bring unmeritorious applications, further burdening court resources and delaying, rather than expediting, the administration of civil justice.  All of this suggests that courts must be astute to ensure that proceedings are not dismissed unless, on a careful assessment of all the relevant facts and circumstances, it is clear that permitting the claim to proceed would result in some real and tangible injustice to the defendant."

 

24.  These, then, are the principles to be applied in assessing the application to dismiss these proceedings.

 

 

Discussion

 

(1).    Whether delay inordinate

25.         The assessment of whether there has been inordinate delay falls to be carried out by reference to the period between (i) the date of the institution of the proceedings, and (ii) the date of the filing of the defendants' motions seeking to strike out the proceedings.  The relevant period is some four years, running from November 2019 to December 2023.  Other than the entering of appearances by the individual defendants, there had been no significant steps taken in relation to the proceedings during this period.

26.         This court is satisfied that this represents an inordinate delay in the context of summary summons proceedings.  As has been observed in a number of recent judgments of the High Court, summary summons proceedings should be expedited with all due dispatch: see, for example, Havebell DAC v. O'Hanlon [2018] IEHC 557 (at paragraph 20) and Bank of Ireland v. Wilson [2020] IEHC 646 (at paragraph 41).

27.         As an aside, it should be observed that the fact that proceedings have been brought by way of summary summons may be relevant to the third limb of the Primor test, i.e. the consideration of the balance of justice.  Proceedings which have been properly brought by summary summons should, generally, be capable of being heard and determined on affidavit evidence only and should not entail any significant factual controversy between the parties.  It is less likely, therefore, that the form of prejudice most commonly relied upon in the context of applications to dismiss for delay, i.e. that the recollection of the witnesses will have faded over time, will arise. 

 

 

(2).    Whether delay inexcusable

28.         Counsel on behalf of the defendants contends that there is no justification or proper excuse for the delay.  It is submitted that there is an obligation to progress summary proceedings expeditiously, yet the plaintiff here has failed to pursue a motion to enter judgment in proceedings which were instituted as long ago as November 2019.  It is further submitted that had a motion to enter judgment been pursued, the appropriate order would have been for the court to remit the proceedings to plenary hearing.

29.         It is said that the plaintiff had not been entitled to await the outcome of the parallel proceedings before the Tax Appeals Commission and the Court of Appeal, at least not without informing the defendants that this is what he intended to do.  The judgment in Rodenhuis and Verloop BV v. HDS Energy Ltd [2010] IEHC 465, [2011] 1 IR 611 is cited in support of the proposition that it is not open to a party to take the unilateral action of allowing one set of proceedings to go asleep because of the existence of another set of proceedings; rather, if it is inappropriate for some reason not to progress a set of proceedings because of the existence of other proceedings, then it is, at a minimum, incumbent on the party who holds that view to raise the issue in correspondence and seek to reach agreement.  Counsel also cites Bagnall v. McCarthy Commercials [2012] IEHC 205 and Bank of Ireland v. Wilson [2020] IEHC 646.

30.         For the reasons which follow, this court is satisfied that the existence of the parallel proceedings before the Tax Appeals Commission and, latterly, the Court of Appeal provides a justification for the delay in progressing the debt collection proceedings.  The parallel proceedings represent the appropriate vehicle through which the core dispute between the parties will be determined.  This is because the proper procedural mechanism for challenging a notice of assessment is either to pursue a tax appeal to the Tax Appeals Commission or to institute judicial review proceedings before the High Court.  It is not normally permissible to pursue a collateral challenge to an unappealed notice of assessment, which has become "final and conclusive", by seeking leave to defend summary summons proceedings.

31.         This principle has recently been confirmed by the Court of Appeal in Gladney v. Taglienti [2021] IECA 300.  As explained at paragraph 65 of the judgment, the fundamental issue to be decided on those appeals had been whether the trial judge had erred in finding that there was no arguable defence to summary summons proceedings because the assessments had been rendered "final and conclusive" by reason of the taxpayers' failure to challenge their respective assessments through the statutory appeal mechanism provided for in the relevant legislation and, insofar as they asserted that the assessments were invalid, their failure to challenge the assessments by way of judicial review.  The Court of Appeal ultimately dismissed the appeals for the reasons explained, in particular, at paragraphs 97 to 108 of the judgment.  The key finding is stated as follows:

"While it is the case that the relevant statutory codes in issue here, by precluding a challenge to an assessment which has been deemed "final and conclusive", have eliminated a certain defence that might otherwise have been available to the appellants in the within applications for summary judgment, that, however, has not been done in a vacuum.  The bar to being able to challenge the assessments at enforcement stage arises in circumstances where the self-same statutory codes make extensive provision for a statutory appeal to the TAC from the assessments, and thereafter make provision for an appeal on a point of law to the High Court, with a further right of appeal to this Court. [...]"

 

32.         The Tax Appeals Commission's decision on the validity of a tax appeal may be challenged before the High Court by way of judicial review or by way of case stated.  The High Court does not, however, have a freestanding jurisdiction to decide the validity of the tax appeals in the context of these summary proceedings. 

33.         It follows, therefore, that the parallel proceedings must be determined first, prior to the resumption of the debt collection proceedings.  The submission, on behalf of the defendants, that the debt collection proceedings should have been progressed in the interim and remitted to plenary hearing is incorrect as a matter of law.  The High Court would not have jurisdiction, in the context of the debt collection proceedings, to entertain a challenge to the validity of the notices of assessment.  This is an issue which can only be resolved in the parallel proceedings.

34.         Counsel for the defendants has cited the judgment of the High Court (Barton J.) in Gladney v. Lambe [2014] IEHC 350 in support of the proposition that questions as to the validity of a tax appeal can be determined in summary summons proceedings.  The facts of that case are, however, distinguishable from the present case.  The purported tax appeal in Gladney v. Lambe had been made pursuant to the former appeals regime, prior to its amendment by the Finance (Tax Appeals) Act 2015.  Under the former appeals regime, the notice of appeal was to be given, in the first instance, to an official of the Revenue Commissioners who might refuse to accept the tax appeal (subject to a right of appeal against that refusal to the Appeals Commission).  The dispute which arose in Gladney v. Lambe was whether certain letters, which had been sent to the inspector of taxes, constituted valid notices of appeal.  This was a dispute which might properly be resolved in proceedings between the taxpayer and the Revenue Commissioners.  This is especially so given that the taxpayer sought to attach significance to the fact that the inspector of taxes had not exercised his power, under the former appeals regime, to refuse to accept the tax appeal. 

35.         By contrast, the purported tax appeals in the present case had been submitted directly to the Tax Appeals Commission as required under Part 40A of the Taxes Consolidation Act 1997.  The Revenue Commissioners no longer have any statutory function in examining, even on a preliminary basis, the validity of a purported tax appeal.  It would be inappropriate to allow the question of validity to be determined in proceedings to which the Tax Appeals Commission are not a party.

36.         Even if one assumes, for the purpose of argument only, that there may be exceptional cases under the new appeals regime whereby a dispute as to the correctness of a notice of assessment might, in principle, be determined in the context of summary summons proceedings, this is not such a case.  Here, the defendants have invoked the statutory decision-making procedures before the Tax Appeals Commission to agitate their challenge to the notices of assessment.  The suggestion that the self-same issues should also have been agitated in the context of the debt collection proceedings is untenable.  To have done so would have resulted in unnecessary duplication, with an attendant increase in costs to the parties and an inefficient use of judicial resources.  Rather, it was entirely sensible to await the final outcome of the parallel proceedings prior to the resumption of the debt collection proceedings.

37.         It would only ever be appropriate to remit summary proceedings of this type to plenary hearing if that represented the appropriate forum in which to obtain a ruling upon the status of the notices of assessment.  It does not for the reasons explained above.

38.         For completeness, it is necessary to address the argument that the plaintiff has acted unilaterally in not progressing the debt collection proceedings.  The main judgment cited in support of this argument is Rodenhuis and Verloop BV (cited above).  More recent case law has introduced a significant gloss upon the principle articulated in that judgment: the focus is now on whether a party adopted an "unorthodox approach" to litigation on a unilateral basis (Comcast International Holding Inc v. Minister for Public Enterprise [2012] IESC 50).  Clarke J. indicated (at paragraph 5.9 of his judgment) that all parties are entitled contemporaneously to reasonable disclosure of an intention to adopt an unorthodox approach which is likely to lead to a delay of a significant variety in the progress of litigation.  More recently, the High Court (Barr J.) emphasised the need not to leave a party "in the dark" in respect of an intention to put proceedings on hold (Bank of Ireland v. Wilson [2020] IEHC 646).

39.         Applying these principles to the present case, it cannot sensibly be said that the non-progression of the debt collection proceedings, pending the final outcome of the parallel proceedings, entailed an "unorthodox approach" to the litigation.  The two sets of proceedings are inextricably linked.  The final outcome of the parallel proceedings is likely to be dispositive of the debt collection proceedings.  It makes eminent sense for the parallel proceedings to be heard and determined first.  In contrast to the type of circumstances at issue in much of the case law, this is not a case where a party is awaiting the outcome of satellite litigation or the report of a tribunal of inquiry.

40.         For similar reasons, it cannot sensibly be said that the defendants were "in the dark" as to why the debt collection proceedings have become becalmed.  The defendants are represented by the same solicitor and counsel in both sets of proceedings.  The defendants' legal representatives cannot but be aware of the overwhelming significance of the outcome of the parallel proceedings for the debt collection proceedings.  It is, frankly, fanciful to suggest that the plaintiff's solicitor should have formally written to his opposite number to explain the self-evident reason why the debt collection proceedings were not being progressed. 

 

 

(3).    Balance of justice

41.         For the reasons explained under the previous heading, this court is satisfied that there has been no inexcusable delay.  Strictly speaking, therefore, it is not necessary to consider the third limb of the Primor test, namely the balance of justice.  For completeness, however, and lest the matter end up on appeal, the third limb will be addressed briefly.

42.         The type of factors to be considered in deciding whether the balance of justice is in favour of or against allowing the proceedings to go to full trial have been enumerated by the Supreme Court in the passages from Primor cited at paragraph 20 above.  As appears, the range of factors to be weighed in the balance is broad.  The exercise is not confined to a consideration of the effect of the delay upon a defendant's ability to defend the proceedings.  It can also include factors external to the defence of the proceedings, such as, for example, reputational damage caused by the prolonged existence of the proceedings.

43.         As recently emphasised by the Court of Appeal in Cave Projects Ltd v. Kelly [2022] IECA 245, where inordinate and inexcusable delay is demonstrated, there has to be a causal connection between that delay and the matters relied on for the purpose of establishing that the balance of justice warrants the dismissal of the claim.

44.         The proper approach to the assessment of prejudice has been explained as follows in Cave Projects (at paragraph 36, page 33):

"[...] The absence of any specific prejudice (or, as it is often referred to in the caselaw, 'concrete prejudice') may be a material factor in the court's assessment.  However, it is clear from the authorities that absence of evidence of specific/concrete prejudice does not in itself necessarily exclude a finding that the balance of justice warrants dismissal in any given case.  General prejudice may suffice.  The caselaw suggests that the form of general prejudice most commonly relied on in this context is the difficulty that witnesses may have in giving evidence – and the difficulty that courts may have in resolving conflicts of evidence – relating to events that may have taken place many years before an action gets to trial.  That such difficulties may arise cannot be gainsaid.  But it is important that assertions of general prejudice are carefully and fairly assessed and that they have a sufficient evidential basis.  As a matter of first principle, only such prejudice as is properly attributable to the period of inordinate and inexcusable delay for which the plaintiff is responsible ought to be taken into account in this context."

 

45.         The judgment goes on to say (at page 36) that any suggestion that a defendant might succeed in having a claim against them dismissed in the absence of evidence of prejudice is a "far-reaching one" and would appear to represent "a significant development of (or, perhaps more correctly, departure from) existing jurisprudence, in which, as already discussed, the issue of prejudice has been acknowledged to be central".

46.         The defendants in the present case have failed to identify, on affidavit, any potential prejudice arising from the delay in progressing the debt collection proceedings.  In each instance, the grounding affidavit has been sworn not by the individual defendant but by their solicitor.  In each instance, the grounding affidavit is entirely perfunctory, merely setting out the chronology of the summary summons proceedings.  There is no suggestion, for example, that the defendants' ability to defend the proceedings has been adversely affected by the delay in progressing the proceedings.

47.         Counsel sought, on his feet, to suggest that the defendants had suffered prejudice insofar as they had incurred the (modest) expense of having to enter an appearance to the proceedings in the Central Office of the High Court.  It was also suggested that ongoing costs are being incurred in that the defendants' solicitor has to maintain a file in relation to the proceedings.  With respect, neither of these points can carry any weight in the assessment of the balance of justice.  There is no causal link between the delay in progressing the proceedings and the expense of having to enter an appearance.  This expense had been incurred in January 2020, i.e. within a matter of weeks of the proceedings having first been instituted and well before any delay had occurred.  As to the supposed ongoing costs, it is difficult to understand how anything other than de minimis costs can have been incurred in respect of proceedings which have been becalmed.  Prior to the defendants' motion, there had been no activity in relation to the proceedings.  If the plaintiff had filed any motion or affidavit, same would have had to be served upon the defendants' solicitor.  Accordingly, there was no requirement on the solicitor to actively monitor the file.

48.         In all the circumstances, this court is not satisfied that the defendants have established that the balance of justice lies in favour of dismissing the proceedings.  The Court of Appeal in Cave Projects has indicated that courts must be astute to ensure that proceedings are not dismissed unless, on a careful assessment of all the relevant facts and circumstances, it is clear that permitting the claim to proceed would result in some real and tangible injustice to the defendant.  There is no such injustice asserted in the present case.  The real issues in controversy between the parties fall to be determined in the parallel proceedings currently before the Tax Appeals Commission.  It is only if the defendants' attempt to appeal the notices of assessment is unsuccessful that the debt collection proceedings will be reanimated.  The issues remaining to be resolved will have narrowed significantly and it will be beyond doubt that the notices of assessment will be "final and conclusive".  The ability to defend the summary proceedings will not have been prejudiced by delay: there will be no factual dispute which requires to be resolved on oral evidence.

49.         Finally, the correctness of the finding that the balance of justice weighs against the striking out of the proceedings can be tested in the following way.  One of the factors which is often considered by a court in weighing the balance of justice is whether the respective rights of the parties might be vindicated by a step short of the dismissal of the proceedings.  In particular, a court will consider whether an order directing that the proceedings be brought on for full hearing in early course might meet the justice of the case.  Tellingly, such an approach would not be appropriate in the present proceedings precisely because the logical sequence is that any hearing of the debt collection proceedings must await the outcome of the parallel proceedings before the Tax Appeals Commission.  This simply serves to illustrate that the strike out application is misconceived and should be refused.

 

 

Allegation that proceedings are unsustainable

50.         Much of the submission on behalf of the defendants was addressed to an issue which does not actually arise on the motion.  More specifically, it was sought to argue that the debt collection proceedings are "unsustainable" in circumstances where, or so it is alleged, the notices of assessment had been quashed by the Court of Appeal. 

51.         If the defendants had wished to pursue an argument that the proceedings disclose no reasonable cause of action or have no reasonable chance of succeeding, then a motion should have been brought pursuant to Order 19, rule 28 (as amended by the Rules of the Superior Courts (Order 19) 2023).  This was not done.  Instead, the defendants confined themselves to an application under Order 122, rule 11.  Accordingly, the argument that the proceedings are unsustainable cannot be entertained by the court in the context of these motions.

52.         For completeness, it should be recorded that the assertion that the debt collection proceedings are unsustainable is predicated on a false premise.  It is asserted, mistakenly, in the written legal submissions that the Court of Appeal had quashed the notices of assessment.  This is incorrect.  As is apparent from the judgment, and the formal order, the Court of Appeal set aside the Tax Appeals Commission's refusal to admit the tax appeals.  The question of whether the defendants could pursue a tax appeal without complying with the statutory requirements under section 959AH (1) of the Taxes Consolidation Act 1997 was remitted to the Tax Appeals Commission for reconsideration.  The notices of assessment remain in being unless and until the following two events occur: first, a decision is made to admit the tax appeals, and, secondly, the tax appeals subsequently succeed on the merits.  As with Schrödinger's cat, it may not be possible to say, at this time, whether the notices of assessments are "final and conclusive".  Their precise status will only be known once the parallel proceedings have been determined.

53.         It should also be observed, as an aside, that it does not necessarily follow from the fact that there is the potential for a tax appeal to be admitted against the notices of assessment that the notices cannot be relied upon for the purpose of instituting and maintaining debt collection proceedings.  An issue of this type has already been addressed, albeit on an interim basis only, by the Court of Appeal.  It will be recalled that the defendants had sought to restrain the institution of proceedings pursuing the defendants in respect of the sums allegedly due to the Revenue Commissioners on foot of the notices of assessment.  The Court of Appeal, by order dated 19 July 2019, refused to grant a stay.

 

 

Conclusion and proposed form of order

54.         For the reasons explained, the application to strike out the proceedings is refused.  In brief, the existence of the parallel proceedings before the Tax Appeals Commission and, latterly, the Court of Appeal provides a justification for the delay in progressing the debt collection proceedings.  Even if, counterfactually, the delay had been inexcusable, the balance of justice weighs against the striking out of the proceedings (paragraphs 41 to 49 above).

55.         As to legal costs, the usual approach is that a party who has been "entirely successful" on a standalone interlocutory application will be entitled to recover their costs against the losing side.  Here, the plaintiff has been entirely successful in resisting the application to strike out his proceedings.  This court's provisional view, therefore, is that the plaintiff is entitled to recover the costs of each individual motion as against the respective defendant.  If the defendants wish to contend for a different form of costs order than that provisionally proposed, they should contact the registrar within fourteen days and a date will then be fixed for the hearing of submissions in relation to costs.  If the registrar is not contacted within fourteen days, then a costs order along the lines provisionally proposed will be made.

 

 

 

Appearances

Benedict Ó Floinn SC and David Quinn for the plaintiff instructed by the Chief State Solicitor

Tim Dixon for the defendants instructed by PB Cunningham & Co Solicitors

 

 

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