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GAZETTE
MARCH 1985
Recent
Irish
Cases
Edited by
Gary Byrne, Solicitor
TAX
Part VI of the Finance Act 1983 which
creates a "Residential Property Tax"
payable annually by certain Tax payers on
certain residential property, is not
unconstitutional.
T h e C o u rt c o n s i d e r ed
t o g e t h er
Appeals in two separate Proceedings
claiming the same relief, a Declaration of
unconstitutionality of Part VI of the
Finance Act, 1983, which established a
Residential Property Tax. The Tax was
created by Section % of the Act, but other
provisions of the Statute restricted its
impact within narrow limits. Tax would
only be payable if the market value of the
property exceeded £65,000 and the owner
had an annual income in excess of
£20,000 or the aggregate of the annual
incomes of those family memb e rs
residing in the house, exceeded £20,000.
The Plaintiffs in the Madigan Action
were husband and wife who jointly
owned a house in Foxrock, Co. Dublin,
having an estimated market value of
£250,000. The husband's income was in
excess of £25,000 and the wife had no
income. They were clearly liable to the
impugned tax.
The Plaintiffs in the Gallagher Action
were mother and son. The mother was the
owner of the house, which had an
estimated market value of £95,000. Her
income was £1,400 per a n n um, but her
husband and five of her children lived in
the house, and she did not know what
their incomes were. Her son, the co-
Plaintiff, was not willing to disclose his
income to his mother, regarding the
request as an invasion of his privacy.
Faced with the impossibility of showing
household income of less than £20,000
and thus claiming the exemption from tax
which the Act provided, the Plaintiffs
were also liable to the impunged tax. The
Court stated that its sole function was to
enquire into the constitutionality of the
impugned provisions, and that it could
not concern itself with Taxation policy,
which was a matter for the Oireachtas.
The Court also refused to consider
arguments based on assumptions and
hypotheses outside the facts, and stated
that it would base its decision only on the
circumstances of one or other of the
Plaintiffs before the Court. The Court did
not rule out a further challenge to the Act
by another Plaintiff with sufficient
locus
standi.
The main cause of complaint in the
Madigan Action related to the method by
which the market value of the residential
property was to be determined, which
was the estimated value of the unencum-
bered Fee Simple. By, for example, not
allowing the owner to deduct the value of
any Mortgage on the property, it was
argued that this ignored the true value of
the owner's beneficial interest, and
thereby unfairly and unjustly taxed him
on an interest in property he did not
possess. It was also argued that to tax
only those whose premises exceeded
£65,000 in value was to fail to treat them
equally with those owners not so taxed. It
was submitted that the Act was in breach
of Article 40.1 (failing to provide equality
of treatment) and of Article 40.3.2.
(unjust attack on the property rights of
the citizen). The Court did not agree,
holding that, as a Tax measure, the Act
necessarily interfered with the property
rights of affected citizens. It could not be
challenged if it was action by the State in
accordance with the principles of social
justice and having regard to the
exigencies of the common good as
envisaged by Article 43.2 of the Constitu-
tion. The Court upheld the view of the
High Cort which was that the Tax was a
"tax on the occupation of property" and
that there was nothing offensive in
measuring the Tax by reference to the
market value of property.
The main cause of complaint in the
Gallagher Action concerned the method
by which, in relation to exemption,
income was assessed. On proof of the fact
that the combined household income was
less than £20,000 per a n n um, the
occupying owner, although assessable,
would be exempt f r om the Tax. The
Plaintiffs claimed that this aggregation
of the incomes of all family members of
the owner occupying the house was unfair
and unjust and amounted to an unjust
attack on the property rights of the
affected Taxpayer, contrary to Article
40.3.2.
The Court did not agree, and pointed
out that the Sections which the Plaintiffs
complained of were
exemptions,
intended
to give relief from tax. The Court was
satisfied that this exemption was "based
on the c ommon experience in society that
members of families and households, to
the extent that they can do so, contribute
to the expenses and outgoings of the
Family Home. To ignore this fact in
framing an exemption to meet cases of
hardship or inability to pay would be to
act without regard to reality". For these
reasons, the Court upheld the constitu-
tionality of the Statute.
Patrick J. Madigan and Another
-v-
The
Attorney General, The Revenue Commis-
v
sioners and the Minister for Finance, and
Catherine Mary Gallagher andAnother
-v-
The Attorney General, The Revenue
Commissioners and The Minister for
Finance - Supreme Court (per O'Higgins
CJ.). nem. diss. 20 November. 1984.
Karl Hayes
DISTRICT COURT CRIMINAL
PRACTICE
Circuit Court not deprived of jurisdiction
to try accused person by reason of non
transmission to County Registrar within
the time prescribed by District Court Rules
of Order sending accused forward for
trial — signature of Orders by affixing
rubber stamp — valid where stamp
impressed by hand or party signing.
In a consultative case stated from the
Circuit Court to the Supreme Court two
questions of law arose. The first related to
whether failure of the District Court
Clerk to transmit to the County Registrar
the Orders of preliminary examination
within ten days of the making thereof
deprived the Circuit Court of jurisdiction
to try the two accused and the second as
to whether the District Justice failed to
sign the Orders because he purported to
sign them by affixing a rubber stamp
thereby rendering them null and void.
The matters were raised by Motion to
quash prior to Arraignment and the
Motion was adjourned pending deter-
mination of the questions raised.
The Court stated that a time limit of ten
days allowed in Rule 38 of the District
Court (Criminal Procedure Act, 1967)
Rules for transmission to the County
Registrar by the District Court Clerk of
the Order sending the accused forward
for Trial was similar to the period of ten
days for forwarding of the District
Justice's Order contained in Rule 63 of
the 1948 Rules. The latter has been
annulled by the 1967 Rules. The Court
cited
The State (Attorney General)
-v-
Judge
Roc [1951] I.R. 172, wherein Ga v an
Duffy P. saw no difficulty about ascribing
to a certified copy Order coming late
from the District Court Clerk to the
County Registrar the same evidential
value as to a copy punctually transmitted.
Mentioned also was Rule 23 of the
District Court Rules 1948 which provides
that non-compliance with the Rules shall
not render any proceedings void but gives
to a District Justice discretion,
inter alia,
to treat proceedings as void or amend or
otherwise deal with them as the Justice
thinks fit. Rule 13 of the 1948 Rules as
inserted by rule 5 of the District Court
Rules 1955 enables a Justice " to enlarge
or abridge the time appointed by these
Rules . . . for doing any a c t . . . and any
such enlargement may be made although
the application for the same is not made
until after the expiration of the time
appointed or fixed". The requirement as
to time specified in Rule 38 of the 1967