Glynn & Ors v Revenue Commissioners (Approved)

Factual and Procedural Background

This opinion concerns an application by the Revenue Commissioners ("Revenue") in an appeal by way of case stated pursuant to section 949AP of the Taxes Consolidation Act 1997, as amended ("TCA"), against a determination of the Appeal Commissioners dated 21 May 2020. The appellants/respondents in the appeal before the Appeal Commissioners are partners in Deloitte ("Deloitte"), whose appeals were designated precedent appeals for other Deloitte partners for assessment years 2007 to 2015.

The case stated concerns voluntary partner retirement payments ("VPR payments") made by Deloitte to certain retired partners and whether these payments are deductible as normal trading expenses under section 81(2) TCA in computing Deloitte’s Schedule D Case II profits. Deloitte contended that the VPR payments were deductible as business expenses incurred wholly and exclusively for the partnership's business. Revenue contended that the payments were not business expenses but rather allocations of profits to retiring partners and thus not deductible.

The specific procedural issue addressed is Revenue's late application to admit the transcript of evidence given before the Appeal Commissioners into the record for the High Court's hearing of the case stated, which Deloitte opposed. The admissibility of the transcript was thus raised as a preliminary matter before the substantive hearing of the case stated.

Legal Issues Presented

1. Whether the transcript of the evidence given to the Appeal Commissioners should be admitted and produced to the High Court on the hearing of the case stated.
2. Whether the case stated should be amended to exhibit the transcript or a portion thereof.
3. Whether the case stated should be remitted to the Appeal Commissioners for amendment to include the transcript.

Arguments of the Parties

Appellant's Arguments (Revenue Commissioners)

• Revenue applied to admit the transcript of evidence given before the Appeal Commissioners for the purposes of the High Court hearing.
• Alternatively, Revenue sought to amend the case stated to append the transcript or remit the matter to the Appeal Commissioners to include it.
• Revenue contended that the transcript was necessary because the appeal questions included whether the Appeal Commissioners erred in law by making findings of fact that no reasonable Appeal Commissioner could have made, specifically regarding whether the VPR payments had a sole business objective.
• Revenue acknowledged ambiguity in the points of law but submitted that it needed the transcript to argue that there was no evidence supporting certain findings if Deloitte contended those were primary findings of fact.
• Revenue relied on prior case law, including Byrne v. Revenue Commissioners, to support the relevance of the transcript in appeals challenging findings of fact or inferences.

Appellee's Arguments (Deloitte)

• Deloitte argued that a case stated should be a single composite document containing all necessary facts, findings, arguments, and determinations without requiring the court to refer to external documents such as transcripts.
• Deloitte objected to the late production of the transcript and contended that the proper procedure was to apply by notice of motion grounded on affidavit to admit such evidence.
• Deloitte submitted that the points of law in the case stated did not challenge any primary findings of fact as being unsupported by evidence, but rather challenged inferences drawn by the Appeal Commissioners.
• Deloitte maintained that the transcript was not necessary for the High Court to determine the issues of law raised and that the Appeal Commissioners had set out sufficient findings of fact in the case stated.

Table of Precedents Cited

Court's Reasoning and Analysis

The Court began by affirming the established principle that a case stated must be a self-contained document setting out material findings of fact, contentions of the parties, relevant case law, the Appeal Commissioners' determination, and the points of law for the High Court's opinion. The transcript of evidence is not ordinarily required or appropriate to be included in the case stated unless the appeal raises a question of law whether findings of primary fact were made without any evidential basis.

The Court reviewed statutory provisions, including section 949AQ TCA and its 2019 amendments, which allow exhibits to be appended to the case stated but do not mandate inclusion of transcripts. The Court emphasized the principles from key precedents, notably Emerson v. Hearty and Morgan, Mitchelstown Co-Op Society, and Mara v. Hummingbird, which distinguish between findings of primary fact and inferences drawn from them, and clarify when evidence is relevant on appeal.

The Court found ambiguity in the points of law raised by Revenue, particularly paragraph 121(f) of the case stated, which did not clearly specify whether the appeal challenged primary findings of fact as unsupported by evidence or challenged inferences drawn from those facts. Revenue had not identified any primary findings of fact challenged on the basis of no evidential support, nor had it applied to amend the case stated to include such a point of law.

The Court noted that Revenue's reliance on Byrne v. Revenue Commissioners was misplaced because in Byrne the transcript was admitted by agreement and the appeal expressly questioned sufficiency of evidence. Here, no such clear challenge to primary findings existed.

Accordingly, the Court held that the transcript was not material to the legal issues before it, and the proper procedure to include the transcript would have been to apply by notice of motion to amend the case stated, which was not done. The Court further considered the power to remit the case stated to the Appeal Commissioners to include the transcript but found it unnecessary given the transcript’s irrelevance to the issues.

The Court acknowledged that the power to amend a case stated exists but declined to decide whether Revenue would be precluded from applying to amend the questions of law at a later stage. The Court emphasized that the appellant must clearly identify the errors of law relied upon in the notice to the Appeal Commissioners to enable proper drafting of the case stated.

Holding and Implications

DISMISSED

The Court refused the application of the Revenue Commissioners to admit the transcript of evidence before the High Court either informally, by way of amendment to the case stated, or by remitting the matter to the Appeal Commissioners to include the transcript. The Court found no question of law in the case stated requiring the transcript and no application to amend to include such a question. The direct effect is that the hearing of the case stated will proceed without the transcript being admitted as evidence. No new precedent was set; the decision reaffirmed established principles governing the content of case stated appeals and the limited circumstances in which transcripts may be included.