The High Court has awarded Dermot Hanrahan all costs of his appeal against a Revenue Commissioners determination, even though he lost a separate argument about a statutory time limit.
In a costs judgment delivered on 24 February 2022, Ms Justice Stack said the appellant had been partially successful in the case stated. He succeeded on the substantive issue of whether the transaction was a “tax avoidance transaction” under section 811 of the Taxes Consolidation Act 1997, but failed to show that the time limit in section 955(2) applied to him.
The appeal concerned a Notice of Opinion upheld by the Appeal Commissioners. The judge said the central question was whether that notice should stand. Under the earlier costs approach, the appellant would have won that overall “event”. But the Legal Services Regulation Act 2015 required the court to consider whether there were separate and distinct issues and left it with discretion over costs where a party was only partly successful.
Revenue argued that each side should receive half its costs, reflecting their respective success on the time-limit and substantive issues. That would leave no net costs order. The judge rejected that approach, finding there was no strict rule limiting a partly successful party to costs for the issues on which it prevailed.
She said the time-limit argument was reasonable to raise because a 2012 legislative change operated after the appellant had appealed to the Appeal Commissioners and affected the outcome of that existing appeal. The additional issues had not materially increased the hearing’s length: the substantive tax-avoidance issue took about half of the three-day hearing.
The judge also said that under Revenue’s proposed approach the appellant would have achieved a significant success on the central issue but would have had to meet his legal costs himself. She ordered Revenue to pay all costs of the case stated, including the costs of the costs application, with the amount to be adjudicated if the parties could not agree. The order is stayed because Revenue intends to appeal the principal judgment.