The Gazette 1988

GAZETTE

DECEMBER 1988

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

Solicitors and VAT THE H I GH COURT REVENUE

Between:

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.

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