The High Court has refused the State’s application to dismiss a challenge to restrictions on student accommodation tax relief, finding that the plaintiffs’ delay was inordinate and inexcusable but that the balance of justice favoured allowing the case to continue.
In a judgment delivered on 14 December 2022, Ms Justice Emily Egan said the defendants had not established prejudice likely to create a real risk of an unfair trial. She said the case could be tried fairly and declined to dismiss the proceedings. The court did not decide the underlying challenge to the tax rules.
The plaintiffs, a married couple assessed jointly for income tax, say they invested in two student accommodation developments in reliance on the tax relief scheme: the Foster residence at University College Dublin and the Proby residence on Carysfort Avenue in Blackrock. They plead that later legislative restrictions caused them loss and breached alleged agreements, representations and legitimate expectations, among other claims. These are allegations in the underlying proceedings, not findings made in this judgment.
The State sought dismissal under the court’s inherent jurisdiction, arguing that the plaintiffs had delayed bringing and pursuing the case. The judge rejected the claim of significant pre-commencement delay, saying the plaintiffs could not be treated as having delayed merely because they waited for their alleged loss to crystallise. But she found a period of more than four and a half years with little progress after June 2017 to be inordinate. Difficulties obtaining an expert report and the first plaintiff’s time in Spain during Covid restrictions did not excuse that period; the judge estimated at least three years of inordinate and inexcusable delay.
The State argued that the passage of time would make it harder to challenge the first plaintiff’s account of why the investments were made, and that the case’s wider legal implications caused prejudice. The judge considered those points hypothetical on the evidence presented. She noted that the case would turn mainly on statutes, guidelines, expert evidence and contemporaneous documents, and found no demonstrated prejudice creating a real risk of an unfair trial.
The court said dismissal would deprive the plaintiffs of any opportunity to pursue their claims, while the defendants had established little countervailing prejudice. It therefore refused the dismissal application. The judge said the case should now proceed under a very strict timeframe and listed it for final orders and costs on 20 December 2022, when directions to secure an early trial were to be considered.