Dooner -v Fahy (Approved)

Factual and Procedural Background

This opinion concerns two applications before the High Court relating to alleged tax non-compliance by the Respondent. The Applicant, a Revenue Officer, seeks a civil penalty for the Respondent's alleged deliberate failure to file income tax and VAT returns for the years 2015, 2016, and 2017, and for the taxable periods from 1 January 2015 to 31 December 2017 respectively. The Respondent opposes this application and also seeks separate reliefs, including dismissal of the Applicant's motion, quashing of a prior criminal conviction certificate related to different tax years (2009-2012), and the return of monies allegedly wrongfully taken by the Revenue Commissioners.

The procedural history includes the Applicant issuing an Originating Notice of Motion in March 2022 supported by affidavits detailing the alleged failures and statutory basis for penalties. The Respondent filed a Notice of Motion in January 2023 with affidavits opposing the penalty claim and seeking additional reliefs. The Respondent also sought leave to cross-examine the Applicant on her affidavits, which was refused by the Court. The Court heard submissions and reviewed all affidavits, including supplemental affidavits from both parties, and made determinations on the applications accordingly.

Legal Issues Presented

1. Whether the Respondent is liable to a civil penalty under section 1077B and 1077E of the Taxes Consolidation Act 1997 and section 116 of the Value Added Tax Consolidation Act 2010 for deliberate failure to file income tax and VAT returns for the specified periods.
2. Whether the Respondent cooperated with the Revenue investigation, affecting the penalty amount.
3. Whether the Respondent is entitled to relief quashing a prior criminal conviction certificate related to different tax years.
4. Whether the Respondent is entitled to an order for the return of monies allegedly wrongfully taken by the Revenue Commissioners.
5. Whether leave to cross-examine the Applicant on her affidavits should be granted.

Arguments of the Parties

Applicant's Arguments

• The Respondent deliberately failed to deliver income tax and VAT returns for the years and periods specified.
• The Respondent did not cooperate with the Revenue investigation, including failing to attend scheduled meetings and failing to produce requested documentation.
• The penalty amount is properly calculated based on unappealed Notices of Assessment, which are final and conclusive.
• The civil penalty application is properly brought by Originating Notice of Motion and not by Summary Summons, as it involves a penalty.
• The Respondent is a Revenue Officer authorised under the relevant statutory provisions to bring these proceedings.

Respondent's Arguments

• The claim is for "estimated" sums and not a liquidated amount, and therefore the application is flawed and should be struck out or brought by Summary Summons.
• The Revenue Commissioners wrongfully took €26,484.12 from the Respondent's bank account without a court order, which disentitles the Applicant to relief.
• The headings of the relevant statutory provisions imply penalties only apply where incorrect returns are made, not where no returns are made, so the Applicant's claim is maliciously deceptive.
• The Respondent challenges the validity of a prior criminal conviction certificate related to different tax years, alleging unlawful prosecution and coercion.
• The Applicant has not produced sufficient evidence of authorisation to bring these proceedings.
• The Respondent seeks leave to cross-examine the Applicant on how penalty figures were calculated, the alleged wrongful attachment of monies, and the introduction of the criminal case in these proceedings.
• Alternatively, the Respondent seeks referral of the matter to the Supreme Court on points of law.

Table of Precedents Cited

Court's Reasoning and Analysis

The Court analysed the statutory framework under the Taxes Consolidation Act 1997 and the Value Added Tax Consolidation Act 2010, focusing on provisions allowing penalties for deliberate failure to deliver returns. The Court noted that penalties depend on whether the failure was deliberate or careless and whether there was cooperation with Revenue investigations.

The evidence established that the Respondent did not file income tax or VAT returns for the relevant periods and failed to attend scheduled meetings or produce requested documentation, indicating non-cooperation. The Respondent did not specifically deny key factual averments, including registration dates, failure to file returns, and receipt of notices and assessments, which were final and unappealed.

The Court rejected the Respondent's argument that the claim was for estimated sums and should be brought by Summary Summons, clarifying that the claim is for a penalty, which under procedural rules is not suitable for Summary Summons.

The Court further rejected the Respondent's contention that the headings of statutory sections limited penalties to incorrect returns only, finding the statutory text explicitly includes failure to deliver returns.

The Respondent's complaints about a prior criminal conviction related to different tax years were held irrelevant to the penalty determination for the current years.

The Court held that the attachment of monies by Revenue was lawful and did not affect the penalty liability, and any claim of wrongful attachment must be pursued separately.

Regarding the application for leave to cross-examine the Applicant, the Court applied established case law requiring a real conflict of fact relevant to the issues. Finding no such conflict—only legal points or irrelevant allegations—the Court refused leave to cross-examine, noting the Respondent's application appeared intended to delay proceedings.

Holding and Implications

The Court's final decision is to GRANT the Applicant's motion for a determination that the Respondent is liable to a civil penalty of €88,872 pursuant to the Taxes Consolidation Act 1997 and the Value Added Tax Consolidation Act 2010, reflecting deliberate failure to file returns and non-cooperation with the Revenue investigation.

The Court also ordered that the penalty may be collected and recovered in the same manner as tax under section 1077C of the Taxes Consolidation Act 1997.

The Court REFUSED the Respondent's application for dismissal of the Applicant's motion, for quashing of the criminal conviction certificate, for return of monies allegedly wrongfully taken, and for referral to the Supreme Court.

The Court further refused the Respondent's application for leave to cross-examine the Applicant on her affidavits.

The decision directly affects the parties by confirming the Respondent's liability to the civil penalty and permitting its recovery. No new legal precedent was established beyond the application of existing statutory provisions and case law to the facts.