The High Court has affirmed a Tax Appeals Commissioner’s determination that Desmond O’Sullivan did not establish his entitlement to claim tax relief for losses said to arise from an investment in the Santa Maria Property Partnership (SMP).
Mr Justice Mark Sanfey, in a judgment delivered on 22 February 2021, was hearing a case stated on questions of law under section 949AQ of the Taxes Consolidation Act 1997. The court was not retrying the tax appeal. It considered whether the Commissioner had erred in law, including whether the findings were ones a reasonable Commissioner could make on the evidence.
The underlying appeal concerned Mr O’Sullivan’s claims for loss relief against employment income for 2009 and 2010. He asserted that he invested €700,000 in SMP, which acquired a development site on Cunningham Road, Dalkey. Revenue disallowed the relief and issued amended assessments totalling €63,480. The Commissioner found that Mr O’Sullivan had not met the burden of proving the investment and left the assessments in place.
The Commissioner accepted that Mr O’Sullivan transferred €500,000 to Tuskar Property Holdings, an investment vehicle used by accountant Alan Hynes. But the evidence did not establish how that money was allocated among SMP and two other projects, Moongate and The Laurels. The High Court noted inconsistent accounts of the amounts invested and the partnership’s total contributions, a lack of contemporaneous supporting documents, and unanswered questions about a €300,000 lodgement. A solicitor who testified had not been involved in the transactions and relied on limited records; another witness could not confirm the amounts invested in each project. Hynes did not give evidence before the Commissioner.
Mr O’Sullivan argued that he had been taken by surprise by questions about Moongate and The Laurels. The court held that Revenue could ask about those projects because documents disclosed shortly before the hearing showed the investments, and the Commissioner could consider the answers when assessing whether funds sent through Tuskar went to SMP. The court also found no error of law in the Commissioner’s reliance on inconsistencies between the written submissions and Mr O’Sullivan’s evidence.
At the High Court hearing, Mr O’Sullivan sought to introduce bank statements, loan documents, a retired bank manager’s letter and a note of a case management conference. The court declined to admit them and said it had not taken them into account. It concluded that its case stated jurisdiction did not extend to considering further evidence and, alternatively, that the documents did not justify admission in this case.
The court amended two of the stated questions of law, found no error of law in the Commissioner’s determination, and affirmed it. The parties were given 14 days to make brief submissions on the form of the formal orders, including costs; the judgment did not determine costs.