The Court of Appeal made no order as to costs after the Revenue Commissioners succeeded in an appeal brought by Kenny Lee over the jurisdiction of the Appeal Commissioners in a tax dispute.
In a judgment delivered on 16 April 2021, Mr Justice Murray said Lee did not dispute that Revenue had been entirely successful in the appeal. The court had previously proposed that costs should follow that outcome, and both sides submitted arguments on costs. Revenue sought its costs; Lee asked the court to make a limited costs order in his favour or, alternatively, no order as to costs.
The substantive appeal concerned whether the Appeal Commissioners could decide if tax liabilities covered by Revenue assessments had been compromised. In its earlier judgment, the Court of Appeal concluded that they did not have that jurisdiction. The costs judgment addressed only who should bear the costs of the proceedings.
Murray said Lee’s case was not a test case and did not concern constitutional or European law of general public importance. It arose from a private taxpayer’s affairs, and Lee had litigated a question on which he failed. The usual presumption was that he should bear the costs of that choice.
But the court considered that the issue was difficult, with legitimate arguments on both sides, and went to the powers of an important tribunal whose jurisdiction could affect many citizens. Murray said the relevant statute did not clearly define the Appeal Commissioners’ jurisdiction. That uncertainty could leave taxpayers and their advisers unsure whether to proceed before the tribunal or the courts, with potential costs and delay.
The judgment also noted that Lee had persuaded both the Appeal Commissioner and a High Court judge that the Commissioners had jurisdiction. Revenue, which sought to recover a tax debt, would itself ultimately benefit from the court’s explanation of the tribunal’s powers. The court considered that clearer legislation could have avoided or simplified the dispute.
Taking those circumstances together, Murray concluded that Revenue should bear its own costs rather than recover them from Lee. The other two judges agreed. The court made no order as to costs of the proceedings; it did not award Lee costs against Revenue.