THE SUPREME COURT
[Appeal No: 34/2010]
Clarke J.
Laffoy J.
O’Malley J.
Criminal Assets Bureau
Plaintiff/Respondent
Defendant/Appellant
Judgment of Mr. Justice Clarke delivered the 25th May, 2017.
1. Introduction
1.1 This appeal is concerned with a potential liability for tax. While it is brought using the title of the plaintiff/respondent (“CAB”), it in fact involves, for reasons which I will shortly address, a claim actually brought by an individual officer of that body.
1.2 A range of issues were canvassed on the appeal. Questions concerning the statutory regime by which assessments to tax may become conclusive and incapable of being reopened were addressed together with issues concerning the appropriate proof which must be tendered to a court in order to establish a liability for tax on an application for summary judgment.
1.3 However, a further point, which logically arises first, was argued which concerned the question of whether it had been established that the relevant officer of the CAB was entitled to bring these proceedings at all. If the Court were persuaded that there was a lack of sufficient proof in that regard then it would follow that the proceedings should have been dismissed. It would also follow that none of the other issues would require to be decided.
1.4 In any event these summary proceedings were brought against the defendant/appellant (“Mr. McN”) claiming sums said to be due on foot of a liability to tax which was argued to have become final. The claim was for €3,313,990.15 representing tax and interest being €1,791,168.75 for tax together with interest up to the 27th September, 2007 in the sum of €1,522,821.40. Continuing interest was also claimed.
1.5 Liberty to enter final judgment was initially given by the Master but Mr. McN appealed to the High Court. A range of issues were pursued before the High Court on that appeal. However, the High Court (Feeney J.) ultimately concluded, in a judgment of the 14th September, 2009 (Criminal Assets Bureau v. McN [2009] IEHC 414), that it had “been proved in evidence and/or admitted facts the necessary proofs to result in judgment being granted in favour of the plaintiff …”. Likewise, it was said that Mr. McN had failed to identify any bona fide defence. Therefore, the High Court dismissed Mr. McN’s appeal and affirmed the order of the Master.
1.6 Mr. McN appealed to this Court. I have ultimately concluded that this appeal should be allowed. I have come to that view because I consider that one of the grounds put forward on behalf of Mr. McN (the capacity to sue argument) provides an appropriate basis for disposing of this appeal. In those circumstances I do not find it necessary to deal with the remainder of the grounds relied on. I, therefore, propose addressing the facts and argument relevant to the ground concerned.
2. The Facts
2.1 The case made on behalf of CAB was that Mr. McN had not made tax returns in respect of the tax year 2000/1 and each of the tax years (which had by then undergone a calendar change) between 2001 and 2005. On that basis it is said that assessments were raised in respect of each of those tax years on 17th July, 2007.
2.2 Next it is said that no appeal was lodged in respect of those assessments within the time limit provided for in law. Furthermore, it is said that no application for late appeal was brought prior to the commencement of these proceedings. While it will be necessary briefly to turn to certain aspects of the legislative scheme in due course, it is clear that it is possible to seek an extension of time to file a late appeal against assessments but that there are significant limitations on that entitlement most particularly where proceedings have been commenced. In those circumstances it is said that the relevant assessments had become final and conclusive and that it is no longer possible to seek an extension of time to appeal against them because no such application had been made prior to the commencement of these proceedings. It would appear that Mr. McN wishes to say that the amounts of the assessments raised were very significantly greater than the true amount of tax due.
2.3 However, when the matter was before the High Court on appeal from the Master, a separate and specific legal issue was raised on behalf of Mr. McN concerning the capacity of the relevant officer to sue. That issue was also the subject of the appeal to this Court. In order to understand that legal issue it is necessary first to say something about the legislation governing the CAB being the Criminal Assets Bureau Act, 1996 (“the 1996 Act”).
3. The 1996 Act
3.1 While the plaintiff is described as the CAB in reality the plaintiff is a bureau officer of CAB (described for the purposes of anonymity as “Revenue Bureau Officer 32”). The special endorsement of claim pleads that “The plaintiff brings these proceedings in the name of the Criminal Assets Bureau pursuant to the provision of s.10 of the Criminal Assets Bureau Act, 1996”.
3.2 In material part, s.10(4) of the 1996 Act provides that a bureau officer who is an officer of the Revenue Commissioners and who exercises powers or duties under revenue law must exercise such powers “in the name of the Bureau and not in the name of the individual bureau officer involved, notwithstanding any provision to the contrary in any relevant enactment”.
3.3 There was not any dispute, therefore, that an anonymous bureau officer, such as Revenue Bureau Officer 32, was entitled to maintain these proceedings using the name of the CAB. However, it follows that what needs to be considered is the legal basis on which Revenue Bureau Officer 32 brought these proceedings and tendered the proof necessary to establish the claim.
3.4 That leads to a consideration of s.966 of the Taxes Consolidation Act, 1997 (“the 1997 Act”).
4. Section 966
4.1 Section 966(1) provides that, without prejudice to any other means by which payment of sums due in respect of income tax may be enforced, an officer of the Revenue Commissioners “authorised by them for the purposes of this subsection” can sue in his or her own name in the High Court for recovery of sums due and the same subsection also provides that the relevant proceedings can, as here, be commenced by summary summons. It follows that, provided that Revenue Bureau Officer 32 was authorised for the purposes of s.966(1), he could bring proceedings for tax due in his own name and could, by virtue of the 1996 Act, do so using the name CAB.
4.2 Next it is necessary to turn to s.966(3) which provides that, for the purposes of proceedings under s.966, a certificate signed by a Revenue Commissioner, certifying that a person is an officer of the Revenue Commissioners and is authorised in accordance with the section, is to be prima facie proof of those matters.
4.3 No certificate as contemplated by s.966(3) was produced in evidence. One of the legal issues which arose for debate was to whether it was possible to establish the entitlement of Revenue Bureau Officer 32 (using the name CAB) to bring these proceedings in any other way. A second issue was as to whether, even if it is possible in theory so to do, such authority has, in fact, been proved in the circumstances of this case.
4.4 In that context reference is made by CAB to para. 2 of the special indorsement of claim which reads as follows:-
“The plaintiff is a bureau officer appointed by the Criminal Assets Bureau pursuant to section 8 of the Criminal Assets Bureau Act, 1996. The plaintiff is also an officer of the Revenue Commissioners nominated by the Revenue Commissioners to exercise the powers and functions of the Collector General and who has also been authorised by the Revenue Commissioners to sue in his own name in the High Court”.
4.5 Furthermore, in an affidavit sworn by Revenue Bureau Officer 32, it is deposed at para. 1 that the officer concerned has been “duly nominated to exercise the powers and functions as conferred on the Collector General pursuant to s.851(3)(a) and (b) of the 1997 Act”. On that basis, and relying on other affidavit evidence to similar effect, it was also argued that, even where no certificate was tendered under s.966(3), Revenue Bureau Officer 32 had demonstrated that he was nonetheless entitled to bring the proceedings on the basis of having been nominated, in accordance with s.851(3)(a) of the 1997 Act, to exercise on behalf of the Collector General the powers of the Collector General under revenue legislation.
4.6 It is said that s.851(2) confers on the Collector General the function and power to collect tax due so that, it is said, in any event and independent of s.966, the Collector General could sue and, therefore, the relevant bureau officer could exercise the same power on being nominated under section 851(3)(a). It was said that there was evidence to that effect thus establishing the entitlement to sue.
4.7 Thus, under this heading, there were two sub issues. The first was as to whether a certificate under s.966(3) was the only means by which the entitlement of Revenue Bureau Officer 32 to bring these proceedings could have been established. There being no such certificate it would follow, if that was the proper interpretation of the law, that the proceedings would necessarily have to fail. On the other hand, if it were held to be possible to establish the entitlement of Revenue Bureau Officer 32 to bring these proceedings in other ways, the issue arose as to whether the entitlement to bring the proceedings had properly been established in whatever alternative ways might be permissible.
4.8 I propose dealing with both of those issues in turn. I will, therefore, turn firstly to the question of whether a certificate under 966(3) is the only means of establishing the entitlement of Revenue Bureau Officer 32 to sue such that a certificate under that section would be a necessary proof in proceedings of this type.
5. Is a Certificate under Section 966(3) a necessary proof?
5.1 While this may seem to be a very technical point, it is of some importance to emphasise that establishing an entitlement to sue is quite a fundamental aspect of any court proceedings. In many, indeed most, cases there will not be an issue. If I assert that I have been injured in a motor accident due to the negligence of a defendant then it is fairly obvious that I am the person entitled to sue. If I allege that I have suffered loss by reason of a breach of contract by a named party then, again, I can obviously bring the proceedings.
5.2 However, there can be cases where it may not be quite so obvious that the individual commencing the proceedings actually has an entitlement to sue. No particular individual or body has a natural entitlement to bring proceedings for the recovery of tax said to be due. The liability of any taxpayer to pay tax is, of course, a matter of statute. It is for the statute concerned to specify how proceedings to recover any monies said to be due for tax are to be brought and in particular to specify who can sue. Obviously an ordinary member of the public could not bring proceedings for the recovery of tax. But equally an ordinary public servant could not, simply by being an officer of the State, bring proceedings for the recovery of tax. For example, a senior garda officer could not, without an appropriate form of legal authorisation, sue for tax said to be due. From a legal perspective the fact that someone might well owe tax would not be the business of the relevant garda officer. It follows that the identification of an entitlement to sue, while frequently wholly uncontroversial, is nonetheless an important matter for without an appropriate authorisation any proceedings are wholly misconceived.
5.3 Against that backdrop I turn first to section 966.
5.4 Section 966 has a number of important subsections at least some of which are designed to make proving essential facts in certain types of tax collection cases a lot easier. The basic provision to be found in the s.966 is that contained in subs.(1) which allows an officer of the Revenue Commissioners “authorised by them for the purposes of this subsection” to sue in his or her own name for the recover of tax. Clearly Revenue Bureau Officer 32, using the name CAB, would be entitled to bring these proceedings if it could be shown that he was an officer of the Revenue Commissioners and that he was authorised, under s.966(1), to bring proceedings of this type in his own name. However, it is of relevance to note that s.966(1) is stated to be “without prejudice to any other means by which payment of the sums due” can be enforced. It seems clear, therefore, that s.966(1) is permissive and does not necessarily require that any proceedings for the collection of relevant tax must be brought in the manner contemplated by that subsection.
5.5 Section 966(3) provides that “in proceedings pursuant to this section” a certificate signed by a Revenue Commissioner to the effect that a specified person is an officer of the Revenue Commissioners and has been authorised for the purposes of subs.(1) can be taken as evidence of those facts until the contrary is proven. It follows, therefore, that a certificate in the appropriate form signed by a Revenue Commissioner would provide prima facie evidence that an individual was an officer of the Revenue Commissioners and authorised to sue in his or her own name thus, again on a prima facie basis, establishing an entitlement to sue.
5.6 It is also of some relevance to note that s.966(5) allows for a similar form of certificate proof of various matters including the fact that assessments have become final and that certain sums are due. Such a certificate under s.966(5) did form part of the evidence before both the Master and the High Court. However, there was no certificate under s.966(3) establishing that Revenue Bureau Officer 32 was an officer of the Revenue Commissioners and authorised under subs.(1) to bring proceedings in his own name. A certificate as to authority under subs.(3) must be “signed by a Revenue Commissioner”. On the other hand a certificate proving debt under subs.(5) can be “signed by an officer of the Revenue Commissioners”. A subs.(5) certificate could not be a substitute for the absence of a subs.(3) certificate.
5.7 In those circumstances the question arises as to whether the absence of a subs.(3) certificate was fatal. In my view it cannot be said that the absence of a certificate under s.966(3) is necessarily fatal to proceedings brought for the collection of tax. Provided that there is a statutory basis for an individual being entitled to bring the proceedings then the fact that one possible legislative entitlement so to do has not been established is not fatal to the case. Indeed the wording of s.966(1) is, as I have already noted, permissive rather than mandatory.
5.8 It follows that it would be open to a bureau officer (or indeed any other person) to show either that there was evidence, independent of a certificate under s.966(3), that they were entitled to sue under s.966(1) or, importantly, that some other authorisation could be found in statute for the entitlement to bring proceedings in their own name and that there was sufficient evidence to establish that the conditions required by that other statutory provision had been met.
5.9 The absence of a certificate under s.966(3) is not, however, of no relevance. It means that that relatively easy way of establishing that a person is entitled to sue in their own name by virtue of s.966(1) was not, and therefore cannot, be relied on. The presence of such a certificate would provide prima facie evidence which would entitle both the Master and the Court to conclude that the individual concerned was entitled to sue. The absence of such a certificate means that the entitlement to sue must be demonstrated in some other way.
5.10 It follows that it is necessary to consider whether there was any evidence before the Master and the High Court from which it could be determined that Revenue Bureau Officer 32 was, independent of a certificate under s.966(3), proven to be entitled to sue.
6. A More General entitlement to sue?
6.1 The ordinary function of collecting tax is conferred, by s.851 of the 1997 Act, on the Collector General. However, section 851(3)(a) permits the Revenue Commissioners to nominate persons to exercise on behalf of the Collector General any or all of the powers and functions conferred on the Collector General by revenue legislation. Likewise, section 851(3)(b) indicates that such powers and functions may be “exercisable on his or her behalf” by nominated persons. The reference to “his or her” is to the Collector General.
6.2 It is clear, therefore, that, at the level of principle, any officer of the Revenue Commissioners can be nominated by those commissioners to carry out “on behalf of” the Collector General, any of the powers and functions of the Collector General.
6.3 However, there is a real question as to whether that general provision could permit an individual to bring proceedings in their own name as opposed to bringing proceedings in the name of the Collector General and on behalf of the Collector General. It is important to note that s.851 does not directly transfer the powers of the Collector General to the nominated person. Rather it permits that person to exercise powers “on behalf of” the Collector General.
6.4 That aspect of s.851 comes into particular focus when it is read in conjunction with section 966. If section 851 were to be interpreted as including a power on the part of a nominated person to sue in the courts in their own name then there would clearly be no need for s.966 for the nominated person would already have the power to bring proceedings in their own name as a result of an appropriate authorisation under section 851. Put another way, if s.851(3) entitles the Revenue Commissioners, when nominating a Revenue officer to exercise the powers and functions of the Collector General on behalf of the Collector General, to bring proceedings in their own name, then a nomination under s.851 would suffice to allow Revenue officials to bring proceedings in their own name. If that were to be the correct interpretation of the breadth of s.851 then s.966 would be redundant for the power to carry out the potentially narrower function of suing in one’s own name would already be present within the more general power to carry out functions on behalf of the Collector General which are permitted to be conferred on a nominated person by section 851.
6.5 In those circumstances it does not seem to me that it can be said that an authorisation under s.851 can allow a person nominated under that section to bring proceedings in their own name. Rather it allows nominated persons to carry out actions “on behalf of” the Collector General (as the section itself specifies) rather than in their own name. Thus, for example, a demand for tax may be signed by an authorised officer “on behalf of” the Collector General.
6.6 For those reasons it does not seem to me that a general authorisation to act on behalf of the Collector General allows a nominated person to go further and bring proceedings in their own name as opposed to taking actions necessary to bring proceedings on behalf of the Collector General. To take any other view of the section would be to render s.966(1) redundant which, in turn, would be contrary to principle.
6.7 It seems to me to follow, therefore, that the only means by which an individual, other than the Collector General, can be authorised to bring proceedings in their own name (as opposed to on behalf of the Collector General) is section 966(1). However, for the reasons already identified, it does not seem to me that a certificate under s.966(3) is the only means by which an authorisation under s.966(1) can be established. It can, in principle, be established by any legitimate evidential means.
6.8 It is in that context that it is necessary to review the evidence which was before the Master and the High Court to ascertain whether there was sufficient evidence in that regard.
6.9 In the original affidavit of John O’Mahoney, of the Criminal Assets Bureau, sworn on the 27th November, 2007, it is deposed that Revenue Bureau Officer 32 “is an officer of the Revenue Commissioners nominated by the Revenue Commissioners to exercise any of the powers and functions of the Collector General…” . That averment seems to me to be sufficient to establish that Revenue Bureau Officer 32 was an officer of the Revenue Commissioners. However, by reason of my analysis of s.851, I am not satisfied that the averment in question goes so far as to establish an authorisation for the bringing of proceedings in the name of the officer concerned under s.966 for such proceedings are not brought “on behalf of” the Collector General but rather are brought in the name of the individual concerned.
6.10 Likewise, in an affidavit sworn by Revenue Bureau Officer 32, in October, 2008, it is deposed that he is nominated to exercise the powers and functions as conferred on the Collector General as a result of s.851(3) of the 1997 Act. Those powers can, as already noted, only be exercised on behalf of the Collector General and not in the individual’s own name.
6.11 Finally, in a further affidavit of John O’Mahoney, there appears a similar averment to that contained in his original affidavit.
6.12 It follows that the only evidence before the High Court was to the effect that Revenue Bureau Officer 32 was authorised to carry out powers and functions of the Collector General on behalf of the Collector General. There was no evidence to establish that Revenue Bureau Officer 32 was authorised to bring proceedings in his own name rather than on behalf of the Collector General.
6.13 It would, of course, have been very easy to establish the entitlement of Revenue Bureau Officer 32 to bring these proceedings in his own name not least by means of a certificate under section 966(3). However, no such certificate was proved in evidence. It would even have been possible to have proved the same matters in some other way by admissible evidence. However, in my view, there was just no evidence to establish the entitlement of Revenue Bureau Officer 32 to bring these proceedings in his own name and thus no evidence to establish that the proceedings could have been brought by that officer using the title CAB in accordance with the permission in that regard contained in the 1996 Act.
6.14 One further issue needs to be touched on. In what was a curious procedural development, which occurred while these proceedings were before the Master, a document purporting to be a “defence and counterclaim” was filed on behalf of Mr. McN having, apparently, been prepared by a then barrister, Mr. Russell, who has since been disbarred. Feeney J. placed some reliance on the fact that the special endorsement of claim, as noted earlier, asserted, amongst other things, that the plaintiff “has also been authorised by the Revenue Commissioners to sue in his own name …” The document purporting to be a defence and counterclaim did not contain any denial of that assertion. On that basis Feeney J. took into account the fact that an assertion of authority had been included in the pleadings and had not been denied.
6.15 However, it seems to me that no reliance could properly have been placed on the document in question for the purposes of deeming Mr. McN to have admitted (by the absence of a denial) the authority of Revenue Bureau Officer 32 to sue. The rules of court make no provision, in summary summons proceedings, for the filing of a defence and counterclaim in the ordinary way. Indeed, the whole point of the summary summons procedure is that a party is not entitled to defend (and, if appropriate, counterclaim) unless the Court is persuaded that they have established an arguable defence. In my view the document in question must, therefore, be treated as of no legal effect. At the point when it was filed, the Court had not given leave to defend. The Rules of the Superior Courts make no provision for the filing of such a document at that stage. It is, it has to be said, extraordinary that someone who had qualified at the bar would have been so unaware of the proper procedures to be followed that such a document would have been filed. Be that as it may there was no legal basis on which the document in question could have been filed. It was not, therefore, in any proper sense of the term, a pleading in these proceedings for it was entirely unauthorised. In those circumstances it does not seem to me that it can be taken as containing implied admissions which would relieve Revenue Bureau Officer 32 of the burden of establishing, in an appropriate evidential way, his authority to sue. Given that, for the reasons which I have analysed earlier, I am not satisfied that there was appropriate evidence to establish authority to sue, it seems to me to follow that the absence of such evidence cannot be cured by the content of a document which is not a recognised form of pleading in proceedings such as this (at least at the stage which the proceedings had reached).
6.16 It seems to me to follow that the High Court should have dismissed these proceedings on the basis that the plaintiff, being Revenue Bureau Officer 32 acting in the name CAB, had not established an entitlement to sue for the taxes which are the subject of the claim.
7. Some Further Observations
7.1 It might seem that the resolution which I propose to this appeal is unduly technical. However, for the reasons already set out, it is of significant importance that courts ensure that there is adequate evidence before them to establish the entitlement of the individual named as plaintiff to bring the proceedings in the first place.
7.2 Furthermore, it might be thought that the basis on which I would propose that Mr. McN. be entitled to succeed on his appeal may afford him little benefit for there can be little doubt but that it would be easy to remedy the problem identified in this judgment in further proceedings. However, it may be that, in the particular circumstances of this case, a decision that these proceedings should be dismissed would be of advantage to Mr. McN. in that, as long as proceedings are not in being, it is open to him to seek an extension of time to appeal the relevant assessments on the merits. As noted earlier no extension of time can be granted as long as proceedings are in being. I should emphasise that nothing in this judgment should be taken as implying that I would favour any particular result either to an application to extend time to appeal the assessments or in any further proceedings which might be brought in respect of these taxes.
7.3 Having concluded that these proceedings should have been dismissed on the basis that there was no evidence before either the Master or the High Court to establish that Revenue Bureau Officer 32 was entitled to maintain these proceedings for the collection of tax in his own name, it follows that it is unnecessary to consider the other points which were raised on behalf of Mr. McN. on this appeal. I would, therefore, express no opinion on whether Feeney J. was correct in the views which he expressed in his judgment on those questions.
8. Conclusions
8.1 For the reasons set out in this judgment I have come to the view that the evidence before the Master and before the High Court was not sufficient to establish that Revenue Bureau Officer 32 (quite properly using the title CAB) could bring these proceedings in his own name. I am not satisfied that a certificate under s.966(3) of the 1997 Act is the only means by which such an entitlement could be established. However, for the reasons which I have sought to analyse, I am not satisfied that the entitlement to sue in his own name had, in all the circumstances of this case, been established by any other means either.
8.2 It follows that, in my view, the proceedings should have been dismissed by the High Court on the basis that the plaintiff had failed to establish an entitlement to maintain the proceedings in his own name. I would, therefore, allow the appeal and substitute an order dismissing the proceedings.
8.3 It should be clear that an order dismissing the proceedings does not act as a barrier to any duly authorised person bringing fresh proceedings seeking to recover any taxes properly due. In addition, the fact that these proceedings will stand dismissed but that fresh proceedings may be instituted in the future does mean that there may be a period during which there will not be proceedings for the recovery of the relevant taxes in being against Mr. McN. It may, in those circumstances, be possible for him to make an application for an extension of time to appeal against the assessments which are the subject of these proceedings in such a way as would allow a consideration on the merits of whether the assessments are correct. However, it is not for this Court to express any view on whether such an application could be brought and, if so, whether it would be appropriate to extend time. Those matters were not before the Court.
