339 / 370
GAZETTE
DECEMBER 1988
Between:
Solicitors and VAT
THE H I GH COURT
REVENUE
J. J. Bou r ke, I n s pe c t or of Taxes,
Appellant
W. G. Br ad l ey & Sons, So l i c i t o r s,
Respondent
Note of J u d g m e n t delivered the 28 th day of July 1988
by Mr. Justice Lardner.
The question which arises for
decision in this case is one which
is raised in a Case Stated by a
learned Circuit Court Judge in
relation to fees charged and
received by Messrs. W. G. Bradley
& Sons as So l i c i t o rs in t he
particular circumstances wh i ch
have been found by the learned
Circuit Court Judge which are
referred to in the Case Stated.
Mess r s. Bradleys ca r ry on
practice as Solicitors in Dublin and
in the course of that practice the
learned Circuit Court Judge has
f ound that they were taxable
persons for the purposes of Value
Added Tax. There is no doubt that
they performed their obligations in
paying tax in respect of those parts
of their professional practice which
were concerned w i th acting for
Irish clients. Those facts are so
found in the Case Stated.
The particular facts which gave
rise to this case were in relation to
business wh i ch they undertook for
Lloyd's Unde r w r i t e rs as their
clients. Messrs. Bradleys were
retained by Lloyd's Underwriters
who had entered into contracts of
indemnity w i th Irish clients and
Bradleys were retained by Lloyd's in
r espect of t he se po l i c i es of
insurance to provide Solicitors'
services.
Lloyd's have no place of estab-
lishment in this country but they
have an establishment in the United
Kingdom. It was in respect of
business carried out in a number of
cases for Lloyd's that estimated
assessments were raised by the
Revenue Commi ss i one rs upon
Bradleys. These assessments were
uphe ld by t he Ap p e al Com-
mi s s i one r.
Mess r s.
Bradleys
appealed the decision to the Circuit
Court and the learned Circuit Court
Judge found that Messrs. Bradleys
were not liable for VAT.
I think that the crucial findings of
facts which the learned Circuit
Court Judge made are contained at
paragraphs 6(e) and (f) in the Case
Stated. The learned Circuit Court
Judge found as follows:
" 6 . On the basis of the foregoing
oral and documentary evidence
I f ound t hat the f o l l ow i ng
matters to be proved or admitted
in the course of the hearing:
(e) The amo u n ts of t he
estimated assessments which
were the subject of the Appeal
were attributable entirely to
s e r v i c es supp l i ed by t he
Respondents in advising and
representing the said Under-
writing Syndicates at Lloyd's
wh i ch the Respondents had
treated as not c on s t i t u t i ng
services supplied wi t h in the
State but services wh i ch were
deemed to be supplied where
the Syndicates in question had
their establishment elsewhere in
the community, that is to say, in
London.
(f) The services in question were
se r v i ces supp l i ed by t he
Respondents as Solicitors in the
cou r se of a c t i ng on t he
instructions of Unde rwr i t i ng
Sy nd i c a t es as a f o r esa id in
relation to litigation in which the
named Defendant was indemni-
fied under an Insurance Policy
issued by a Lloyd's Syndicate.
The learned Circuit Court Judge
proceeds then to find certain other
ancillary findings of fact which are
also set out in paragraph 6 of the
Case Stated.
I think that those findings of fact
were not challenged at any time
before me and it seems to me that
the documentary evidence amply
supports the findings of fact arrived
at by the learned Circuit Court
Judge.
The question which arises in this
case is whether in those circum-
stances the conclusions of the
learned Circuit Court Judge were
correct?
The charge to Value Added Tax
is set forth in Section 2 of the Value
Added Tax Act 1972:
" 2 - (I) With effect as and from
the specified day a tax, to be
called Value Added Tax, shall,
s ub j e ct to t h is Act
and
Regulations, be charged, levied
and paid -
(a) on the delivery of goods and
t he r ende r i ng of s e r v i c es
delivered or rendered by an
a c c oun t ab le person in t he
course of business . . . "
Mr. Cooke on behalf of Messrs.
Bradleys, t he t axpaye r, has
submitted that Value Added Tax is
a tax that falls to be charged on
consideration paid for services
rendered in furtherance of any
commercial transaction. I think that
is a correct understanding of the
charged tax.
The question then arises, what
was t he bus i ness for w h i ch
services were rendered by Messrs.
Bradleys? I think that on the facts
found by the learned Circuit Court
Judge, I would have reached the
same conclusion, i.e. that the
services were supplied by Messrs.
Bradleys in advising and represent-
ing Lloyd's Underwriters. I think
that there was a retainer of Messrs.
Bradleys to render certain services
as Solicitors.
In essence, the contract was to
render those services to the Lloyd's
Syndicates. It is true that the
services were to represent, advise
and de f end pe r sons in Irish
litigation insured by Lloyd's in
Ireland. But it is clear from the
Policies of Insurance in question
that the insurers remained in sole
control of the proceedings for all
practical purposes. There are some
exceptional circumstances but it is
not
s u bm i t t ed
t h at
t ho se
considerations arose in any of the
cases under consideration at this
hearing.
Messrs. Bradley's services were
rendered to Lloyds and Lloyds were
thereby enabled to fulfill their
obligations to the insured persons
under their insurance policies. It
seems to me therefore that the
commercial transaction for which
the services were rendered was the
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