The Court of Appeal has ruled that Used Car Importers of Ireland Ltd. must provide security for the State’s costs of its appeal over vehicle registration tax, but has not yet set the amount.
In a judgment delivered on 15 December 2017, Mr Justice Gerard Hogan said the company’s financial position and the circumstances of its appeal warranted an order under Order 86, rule 9 of the Rules of the Superior Courts. The court invited the parties to make further submissions on the amount and form of security.
The proceedings began in 1995. The company challenges the vehicle registration tax system and the Revenue Commissioners’ method of valuing imported cars. It alleges that the method was artificial and non-transparent, inflating vehicle values and the tax charged. It also argues that the system exceeds the authority of the legislation, or is unconstitutional, and breaches EU rules on VAT. These are the company’s claims, not findings in this judgment.
The High Court dismissed the company’s action in 2012 after a 33-day hearing and made a costs order against it. The company appealed. The Court of Appeal said it was accepted that the company faced considerable financial difficulties and could not currently pay the High Court costs order. It found that the appeal nevertheless raised arguable grounds and points of general public importance.
The company argued that the State defendants’ alleged wrongdoing had caused its financial difficulties and that the appeal raised an important point of law. The court concluded that the company had not established a sufficiently direct causal link between any actionable wrongdoing and its financial position. It also treated the case, which fundamentally seeks damages for a private company, as subject to the ordinary rules for security on appeal.
The ruling concerns security for the costs of the appeal only. It does not decide the underlying challenge to the tax system or the company’s damages claims, and it does not specify the security amount. Further submissions were required before that could be determined.