Tax Appeals to the High Court: The Case Stated Procedure

Every year, the Tax Appeals Commission (TAC) deals with thousands of appeals. Not all of them end up at hearing – most are withdrawn or settled. If an appeal does go to hearing before the Appeal Commissioners, the taxpayer can expect an efficient process. A tax appeal can go from Notice of Appeal stage, to hearing and then determination within twelve months. Those familiar with litigation timelines in Ireland will appreciate this is quite an achievement.

Under the Taxes Consolidation Act 1997 (the TCA), an Appeal Commissioner’s determination is final and conclusive. This is, however, without prejudice to a party’s right to appeal to the High Court on a point of law. The dissatisfied party brings an appeal by requesting a case to be stated to the High Court on a point of law. The TAC must set out the facts, arguments and legal issues involved in the appeal, and ask the High Court to give its opinion on the specific point(s) of law in question.

It is only a small number of tax appeal cases which are appealed from the TAC to the High Court. A review of the statistics from the past five years reveals a fluctuating pattern in the number of appeals made to the High Court following determinations by the TAC. In 2018, there were 11 cases stated to the High Court, which slightly decreased to 10 cases stated in 2019. However, a significant surge was observed in 2020, with the number of appeals to the High Court more than doubling to 28. This peak was followed by a slight reduction in 2021, where 22 cases were taken to the High Court. The latest data from 2022 indicates a downward trend, with 16 appeals recorded.

Appealing a TAC Determination to the High Court is not simple or straightforward. It involves strict deadlines, complex legal arguments and potentially significant costs –  as well as an element of publicity that’s not usually a feature in the TAC. 

In this article, we will: 

• explain the main steps and challenges in the case stated procedure;

• highlight some recent High Court decisions that have clarified and refined rules and principles; and

• provide insights into the process.

Case stated procedure

Once a party to a tax appeal case has received the Appeal Commissioner’s determination, the dissatisfied party has 42 days to notify the TAC in writing of its request for the Appeal Commissioner to state and sign a case for the opinion of the High Court. 

The notification must specify precisely why the party is dissatisfied with the determination, and how the determination is alleged to be wrong on a point or points of law. It must also be sent to the other party at this point.

The Appeal Commissioner then takes responsibility for drafting the case stated, which must include:

• the material findings of fact;

• the legal arguments and case law relied on by the parties;

• the determination and the reasons therefor; and

• the point or points of law on which the opinion of the High Court is sought. 

The Appeal Commissioner has three months to prepare and send a draft case stated to both parties, who then have six weeks to make representations on the draft. 

These representations must be shared with the other party as well as with the Appeal Commissioner. The Appeal Commissioner will consider them and has the discretion to amend the draft accordingly. 

After the representation period, the Appeal Commissioner completes and signs the case stated and sends it to the parties. Within 14 days of receiving it, the appealing party must then lodge the signed case stated in the High Court.

The High Court's role and approach

The High Court's role in a case stated is to answer the question or questions of law posed by the TAC, based on the facts and arguments presented in the case stated. 

The High Court does not re-hear the evidence or re-assess the merits of the case, nor does it interfere with the TAC's findings of primary fact – unless there is no evidence to support them. In general, the High Court doesn’t have access to the case materials presented to the TAC, so the case stated must be comprehensive enough to get the correct facts before the court.

When the High Court can set aside TAC conclusions

In the case of Mara v Hummingbird¹, the High Court listed the principles it will follow when considering a case stated. 

It found that the High Court can set aside an Appeal Commissioner's conclusions if it finds that the Appeal Commissioner adopted a wrong view of the law, or if the conclusions are based on inferences from primary facts that no reasonable judge could draw. Otherwise, the High Court will not disturb the Appeal Commissioner's conclusions unless they are based on a mistaken view of the law or an incorrect interpretation of documents. 

When the High Court can amend or send back a case

The TCA provides that the High Court can send a case stated back to the Appeal Commissioner for amendment, if necessary. Stack J confirmed in the case of Express Motor Assessors Limited v Revenue Commissioners² that the High Court can also amend a case stated without referring the matter back to the Appeal Commissioner.

In summary, Stack J stated that:

• The High Court has a discretion to amend the case stated itself or to send it back to the Appeal Commissioner for amendment.

• If the case stated has sufficient findings of fact to allow the point of law to be determined,  the case stated does not need to be sent back to the Appeal Commissioner to be amended, and the High Court may amend it. 

• If the case stated lacks the necessary findings of fact, the High Court will send it back to the Appeal Commissioner to allow for sufficient findings of fact to be included.

• The High Court can exercise its discretion not to send a case stated back for amendment where the issue of law sought to be introduced (and in respect of which findings of fact would be required) is frivolous, or where the relevant issue of law is outside the jurisdiction of the Appeal Commissioner. 

• The timing and extent of the amendment also matter. Applications for minor amendments that don’t need more evidence can be made at or before the trial. Applications for major amendments relating to the omission of evidence or relevant facts should be raised by interlocutory motion.

A decision of the High Court on a case stated can be further appealed to the Court of Appeal and, in limited circumstances, to the Supreme Court if the case raises a point of law of exceptional public importance. 

The costs and risks of a case stated

The hearing of a tax appeal by way of case stated, and all associated interlocutory applications, are held in public. For TAC hearings, the taxpayer may choose a public or private hearing. 

If a taxpayer chooses a private TAC hearing, the Appeal Commissioner’s determination is anonymised to protect the taxpayer’s confidentiality. 

On the other hand, High Court judgments are a matter of public record, available in unredacted form. Parties must consider the potential impact of the appeal, with the taxpayer’s name and details becoming available to the public.

Another consideration is the potential costs involved. While each party bears their own costs in hearings before the TAC, the general rule is that the unsuccessful party pays the legal costs of the successful party, as well as its own costs, unless the High Court decides otherwise. The High Court has discretion to make different orders on costs, taking into account:

• the nature and circumstances of the case;

• the conduct of the parties; and

• whether the case stated raised questions of general public importance³.

The High Court has indicated that one purpose of the case stated procedure is to reduce the duration and cost of tax litigation. The courts can penalise litigants for adopting a “scattergun” approach to litigation, including tenuous or unnecessary claims in their proceedings. Litigants must remain disciplined, economical and focused throughout.

_{¹ [1977] WJSC-HC-1021
² [2021] IEHC 420
³ Lee v Revenue Commissioners [2021] IECA 114}

Conclusion

The case stated procedure is a valuable and important mechanism for taxpayers and Revenue alike. 

It’s also complex and challenging, requiring careful preparation, analysis and presentation of the facts, arguments, and legal issues involved in the appeal. 

A party considering a case stated should be aware of the:  

• strict deadlines;

• high level of complexity;

• requirement for the careful and precise drafting of the appeal documents; and

• potential costs and publicity of the procedure.

While only a very small number of cases are escalated from the TAC to the High Court, it's important to recognize that each case is unique, with its own set of circumstances and merits.

If you are considering a tax appeal to TAC or to the High Court, our team is committed to providing expert guidance and comprehensive support throughout the tax appeals process  - contact us today.