The High Court has granted summary judgment in a claim by the Collector General to recover a debt under a settlement agreement concerning unpaid taxes.
Mr Justice Max Barrett delivered the judgment on 25 October 2017. The court rejected James Farrell’s request to have the summary proceedings sent to a plenary hearing, concluding that he had not advanced an argument that justified doing so.
The judgment says the tax liabilities arose from returns made by Mr Farrell for periods ending in 2003, 2005, 2006, 2007 and 2009, as well as a January–February 2007 VAT period. Mr Farrell signed a “Formal Agreement as a Result of a Revenue Audit” on 1 March 2016, acknowledging and accepting liability for the debt. The court said he had acted with professional advice.
Mr Farrell argued, among other things, that AIB Banks plc was the accountable person for the 2006 Capital Gains Tax liability under section 571 of the Taxes Consolidation Act 1997. The judge said that provision did not remove the debtor’s chargeability and noted that evidence showed the relevant 2005 sale was made by Mr Farrell and his wife personally.
The judgment also recounted that, when Mr Farrell initially sought an adjournment to sell lands and address his liabilities, the Collector General consented on the basis of an undertaking from Mr Farrell’s then solicitor to hold the sale proceeds. The solicitor later wrote that Mr Farrell was withdrawing his authority for the solicitor to act in the sales. The judge said the undertaking was the solicitor’s, and discussed professional guidance on outstanding undertakings. He made no criticism of the solicitors who had acted for Mr Farrell.
The court rejected arguments that a further demand for payment was required before proceedings could be brought, and that the debt could only be recovered through tax assessments. It said the claim was brought on the settlement agreement, which could be sued on as a contract, and that the debt’s precise character did not affect its recoverability in these proceedings.
Applying the principles for deciding whether to grant summary judgment or leave to defend, the court found no basis to send the matter to a plenary hearing. It therefore granted the summary judgment sought. The judgment does not state the amount of the debt.