The High Court ordered Revenue to receive 60% of its costs in proceedings brought by Fergus Byrne, after finding that two unsuccessful arguments pursued by Revenue were unreasonable and took up about 20% of the hearing.
Mr Justice Twomey delivered the costs judgment on 17 June 2021. Revenue had succeeded in the underlying case stated: all three questions referred to the High Court were answered in the affirmative, contrary to the position Mr Byrne had advanced. The court therefore treated Revenue as entirely successful for the purposes of section 169(1) of the Legal Services Regulation Act 2015, but said that did not automatically entitle it to all its costs.
The main issue was whether no reasonable Tax Appeal Commissioner could have concluded that Mr Byrne should have known of VAT fraud. Revenue succeeded on that issue. It also succeeded on a secondary issue about whether there was sufficient evidence to support the Commissioner’s finding that VAT fraud had occurred.
Revenue lost on two other arguments. It had contended that the High Court lacked jurisdiction to hear the case stated because the Commissioner had made no error of law. The court rejected that submission, finding that conclusions drawn from primary facts may involve mixed questions of fact and law within the court’s jurisdiction. Revenue also argued that the court could not consider the transcript of the hearing before the Commissioner. The judge rejected that position, noting that Revenue itself relied on the transcript and that it was the best record of the evidence.
The judge concluded that neither argument had a reasonable probability of success, even allowing for the latitude involved in litigation and hindsight. Each took less than 10% of hearing time. The court said the case could have been confined to the main issue and the successful secondary issue, making the hearing shorter. It did not criticise Revenue’s legal team, noting their duty to act on their client’s instructions.
Applying the 2015 costs regime and the approach in a Supreme Court decision, the judge ordered Revenue to receive 80% of its costs and Mr Byrne to receive 20% of his costs from Revenue. The resulting net order was for Revenue to receive 60% of its costs. The judgment concerned the allocation of costs; it did not alter the answers given in the underlying case stated.