The Court of Appeal has upheld High Court judgments requiring business and life partners Paul Howard and Una McClean to pay more than €3.18 million in unpaid taxes, interest and penalties.
The High Court had ordered Howard to pay €2,531,229.36 and McClean €653,407.21, together with costs. Their tax assessments covered the years 2002 to 2014 and had previously been affirmed by the Tax Appeals Commission, making them final and conclusive under tax legislation.
On appeal, Howard and McClean did not pursue a substantive answer to the tax debts. Their central argument concerned the Collector General's January 2020 fee agreement with Ivor Fitzpatrick & Co., one of six solicitor firms retained to collect Revenue debts.
The agreement provided for fixed payments and commissions at different stages of debt recovery. It also allowed the solicitors, where a court made a costs order, to charge costs assessed under the ordinary legal-costs regime if those costs were successfully recovered from the taxpayer.
The appellants argued that this amounted to champerty, an unlawful form of supporting litigation in return for a share of its proceeds. Mr Justice Binchy rejected that argument.
The court held that the Collector General has a statutory duty to collect unpaid tax and did not need financial support from his solicitors in order to pursue the litigation. It also held that legal costs were not the "fruits" of the litigation for champerty purposes. The proceeds were the taxes, surcharges and interest recovered.
The court further held that champerty cannot be used as a defence to defeat an otherwise stateable cause of action. Any successful defendant who could establish unlawful maintenance would instead have a separate remedy against the person responsible.
The appellants' allegation that the costs arrangement involved fraud or misrepresentation was also rejected as entirely unfounded.
The appeals were dismissed. The court's preliminary view was that the Collector General should also receive his appeal costs, subject to further written submissions.