418 / 432
GAZETTE
JULY 199s
Belville Holdings Ltd v Revenue Com-
missioners
Supreme Court 1993 No. 139
(Finlay CJ, Blayney and Denham Jj) 8
February 1993
Revenue - Case stated by Appeal Com-
missioner - Manner in which allowable
losses should be computed - Whether
notional fees attributable to services af-
forded by appellant company to subsidi-
ary companies should be taken into ac-
count - Manner in which discretion of
High Court judge in relation to remitting
matter should be exercised - Income Tax
Act 1967, s. 428
Facts
On 24 April 1984 the Appeal Com-
missioner, at the request of the appellant
company, stated a case for the opinion of
the High Court pursuant to s. 428 of the
Income Tax Act 1967 following the de-
termination of appeals brought by the
appellant company against two assess-
ments to corporation tax made in respect
of it by the inspector of taxes. The ques-
tion for decision on that case stated was
whether for the two relevant accounting
periods the losses shown in the company
accounts should be allowed for the pur-
pose of the claim to payment of tax
credits under s. 16(2) and s. 25 of the
Corporation Tax Act 1976 in respect of
dividends received from subsidiary com-
panies.
The Appeal Commissioner determined
that in computing the taxable profits or
losses of the parent company for the
period in question, provision should be
made for notional management fees
equivalent to the market value of the
services provided to subsidiaries, which
he estimated at 10% of the income of the
paying companies.
The question of law stated for the
opinion of the High Court in the case
stated concerned whether the Appeal
Commissioner was correct in holding
that the notional fees attributable to the
services afforded by the appellant com-
pany to its subsidiary companies should
be taken into account.
In a judgment delivered on 14 May
1985, Carroll J held that while it was
correct that notional fees should be taken
into account, the actual notional fees
fixed by the Appeal Commissioner were
not justified and she answered the ques-
tion posed in the case stated in the nega-
tive (See [19851 IR 465).
In August 1986, the joint receivers of
the appellant company wrote to the Rev-
enue Solicitor making a demand totalling
£122,979.69 for refunds of corporation
tax based on an assertion that the finding
of the High Court to the effect that the
Appeal Commissioner was wrong in his
determination entitled the company to
these refunds with interest thereon. In
reply it was stated that it was the intention
of the Revenue Commissioners to apply
by notice of motion to Carroll J for an
order under s. 428(6) of the Income Tax
Act 1967 remitting the appeals to the
Appeal Commissioner. When no such
motion was brought, proceedings by sum-
mary summons were initiated on behalf
of the company and a motion for judg-
ment was brought. On 25 February 1988,
Carroll J made an order in the context of
the summary proceedings directing that
her earlier order of 14 May 1985 should
be amended by the addition of a direc-
tion that the appeal should be re-entered
before the Appeal Commissioner so that
it could be determined having regard to
the previous finding of the court.
The appellant company appealed to the
Supreme Court against that order.
Held
by the Supreme Court (Finlay CJ;
Blayney and Denham JJ concurring) in
allowing the appeal and in directing that
the proceed i ngs by way ofsummarysum-
mons be continued in the High Court
pursuant to the court's decision on the
appeal: (1) There is a wide and funda-
mental jurisdiction in a court to amend
an order which it has previously made
even though that order is in the form of a
final order and has been perfected.
Dicta
of Romer J in
Ainsworth v Wilding
11896]
1 Ch 673 applying
In re Swire
(1885) 30
ChD 239, approved. (2) Where an order
of a final nature has been passed and
perfected, an amendment should be made
by the court only in special or unusual
circumstances. (3) A judge who, upon
the hearing of a case stated pursuant to s.
428 of the Income Tax Act 1967, deter-
mines that the adjudication of the Appeal
Commissioner on a point of law was
incorrect has a distinct discretion which
must then be exercised as to whether or
not it is appropriate for the case to be
remitted. (4) S. 428 of the Income Tax Act
1967 was not mentioned in the judgment
of the learned trial judge of 14 May 1985
and there was no reference in the judg-
ment as to the exercise by the learned
trial judge of a discretion on the issue
pertaining to whether or not it was an
appropriate case in which to make an
order remitting it for further hearing by
the Appeal Commissioner. (5) It was not
inclusive, in the sense of meaning neces-
sarily and inevitably implied, in the judg-
ment of the learned trial judge of 14 May
1985 that the case stated should have
been referred back to the Appeal Com-
missioner for hearing. (6) The granting of
such an order would have been an addi-
tional remedy not di rected by the terms of
the judgment of 14 May 1985. In these
circumstances and having regard to the
principles regarding the amendment or
alteration of a final order made otherwise
than through accidental error, the com-
pany's appeal on the first issue should be
allowed and the order of 28 February
1988, having been made in error, should
be set aside.
Reported at [199411 ILRM 29
Hanbridge Services Ltd v Aerospace
Communications Ltd:
Supreme Court
(Finlay CJ,0'Flaherty, Egan, Blayney and
Denham JJ) 10 March 1993.
Practice-Jurisdiction of courts-Conflict
of laws - Claim for damages for breach of
contract - Defendant company registered
and domiciled outside jurisdiction -
Motion to strike out plaintiff's claim for
want of jurisdiction - Jurisdiction of
Courts and Enforcement of Judgments
(European Communities) Act 1988.
Facts
The plaintiff company was regis-
tered and domiciled in Ireland and the
defendant company was registered and
domiciled in the United Kingdom. The
plaintiff claimed damages for breach of
contract and in so claiming asserted that
the High Court had jurisdiction to hear
and determine its claim under Article 5.1
of the Brussels Convention 1968 as im-
plemented in Ireland by the Jurisdiction
of Courts and Enforcement of Judgments
(European Communities) Act 1988. This
was on the basis that the place of per-
formance of the obligation arising under
the alleged contract was Ireland. The
plaintiff contended that under a contract
made between it and the defendant, it
was agreed that the plaintiff would manu-
facture and sell 8,000 computers to the
defendant over the period of three years
1991 to 1993 inclusive. It was accepted
by the parties that between August and
November 1990, six sample computer
systems were ordered by the defendant
from the plaintiff and the latter received
payment. Subsequently, on receiving an
inquiry from the plaintiff, the defendant
asserted that no agreement existed; what
had been merely a possible project was
now abandoned for various reasons and
that it had no further obligations to the
plaintiff. Lardner J dismissed the applica-
tion to have the proceedings struck out.
The defendant appealed to the Supreme
Court.
Held
by the Supreme Court (Finlay CJ;
O'Flaherty, Egan, Blayney and Denham
JJ) in allowing the appeal: (1) The onus is
on the plaintiff seeking to have a claim
tried in the jurisdiction of a contracting
state other than the contracting state in
which the defendant was domiciled to
establish that such claim unequivocally
came within the exception provided for
in Article 5.1 of the Brussels Convention.
(2) In the case of a claim for breach of
contract, therefore, the plaintiff must prove
that the obligation in question in that
claim was, by virtue of the terms of the
6