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High Court of Ireland Decisions
You are here: BAILII >> Databases >> High Court of Ireland Decisions >> City of Limerick V.E.C. v. Carr [2001] IEHC 112 (25th July, 2001)
URL: http://www.bailii.org/ie/cases/IEHC/2001/112.html
Cite as: [2001] IEHC 112, [2001] 3 IR 480

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City of Limerick V.E.C. v. Carr [2001] IEHC 112 (25th July, 2001)

THE HIGH COURT
1998 No. 6955p
BETWEEN
THE CITY OF LIMERICK VOCATIONAL EDUCATIONAL COMMITTEE
PLAINTIFF
AND
LUCY CARR
AND
THE REVENUE COMMISSIONERS
DEFENDANTS
JUDGMENT of Mr. Justice O’Higgins dated the 25th day of July, 2001 .

1. A dispute arose between the plaintiff and the first named defendant which resulted in proceedings being taken by the first named defendant. On the 17th October, 1991 the Supreme Court granted a declaration to the first named defendant in the following terms that she was:-

“In the position of a principal of a school within its jurisdiction and that she is entitled to be paid the full amount of salary de die in diem appropriate to that position from the date on which she was originally suspended (the 22nd June, 1976) giving credit for any payments of salary or in lieu of salary made to her since that date”.

2. It was common case that the plaintiff had made two payments to the first named defendant prior to the hearing before Barron J. The first payment was a sum in respect of the period of the 26th June 1976 to the 31st July, 1980. It was a sum of £22,504.51 nett, superannuation and PAYE and PRSI having been deducted from gross pay of £31,711.94. On the 14th February, 1995 a further payment of £82,030.40 nett was paid to the first named defendant. That represented the balance of the gross salary due less superannuation, PAYE and PRSI from the 1st August, 1980 to the 31st October 1991, less a sum retained for payment to Social Welfare. Following the payment in 1995 the matter was referred back to the High Court on foot of the Supreme Court Order and came before Mr. Justice Barron on the 11th July, 1996. The gross payments due for each of the 15 years were agreed and there was no dispute about the PAYE and PRSI deductions. The relevant part of the order of Barron J. reads as follows:-

“The Court doth find that the plaintiff is entitled to the sum set forth on the Second Schedule hereto being the full amount of salary payable to her for each of the financial years from the date in which the Plaintiff was originally suspended to the date in which the First Named Defendant resumed payment of the Plaintiffs salary amounting in aggregate to the sum of £252,009.33 (gross) against which credit is to be given for payments of salary made by the First Named Defendant in the sums of £22,501.51 (nett) and £82,030.40 (nett) leaving a balance of £147,447.00.
It is ordered and adjudged that the First Named Defendant do pay to the Plaintiff a sum of £147,477.42 and the costs of the proceedings in this Court arising from the reference backed by the Supreme Court to include the costs reserved by the said Order dated the 12th October, 1992 when taxed and ascertained”.

3. From this sum of £147,474.42 it was agreed between the parties that a sum of £12,541.09 should be deducted in respect of superannuation contributions in order to preserve the pension rights of the first named defendant in this action.

4. The plaintiff’s claim is for the return of the sum of £112,816.14. It claims the said sum from either the first named defendant or the second named defendant. In respect of the first named defendant the plaintiff maintains that it paid the money to the Revenue Commissioners on her behalf and that it paid the same amount of money to her again on foot of the order of Barron J. which the plaintiff contends contemplated that she would pay her tax and PRSI on the amount of the decree. Alternatively, it claims the said sum as against the second named defendants as monies paid to them, which, following the order of Barron J. should rightly be the liability of the first named defendant.

5. When the matter was remitted to the High Court the first named defendant in these proceedings, Ms. Carr claimed interest on the two late payments which caused an extra tax liability for her of £9,000.00. She also claimed damages for the loss of her ability to shelter her income from tax liability by way of investments which attracted tax relief in at least some of the years in question. These claims were not successful. Mr. Quigley, the Chartered Accountant, called on behalf of Ms. Carr in those proceedings gave evidence before Barron J. concerning such interest and a claim for £9,000 over payment of tax. The following appears from the transcript of those proceedings. In answer to Q. 119 Mr. Quigley stated:-

“We are assuming in our calculations that when she goes to the Revenue, having received an award she will be given concessionary treatment; that treatment will allow her to gain the benefit of her basic tax free allowances as a single person, PAYE allowance”.

6. At question 122 Barron J:-

“Suppose the award of the Court, with 15 separate sums for 15 separate financial years would she not then get the benefit of all the tax free allowances for each of those years?”



Mr. Quigley:-
“Yes, she will get the benefit of the basic allowances, the personal allowance, the PAYE allowance but we have assumed that you will get those benefits anyway, because that is the essence of concessionary treatment, that the Revenue will allow.”

Q. 123 Barron J.:-
“She has been paying that income tax. It is all lumped together and paid in one year, is that right? ”

Mr. Quigley:-
“If she gets the concessionary treatment she gets the rates and bands and the basic allowances that she would have got in each of the 15 years. That is the concessionary treatment that we have presented. The alternative to that would be to receive the lump sum now to have it taxed in this year and get just this years allowance and we would prepare a calculation on the basis that she would get the concession”.

7. The plaintiff argues that the above exchange demonstrates that the decree was on the basis that Ms. Carr would go to the Revenue Commissioners to be assessed for tax on the amount of the decree. Furthermore it relies on the evidence of Mr. O’Donnell, Solicitor in the case. He told the Court that after the decision of Barron J., when Mr. Nugent, the then Counsel for the VEC pointed out to the learned Trial Judge that tax had already been paid by the VEC, he was told by the Judge that the matter could be taken up with the Revenue authorities. The plaintiff further argues that the award of the salary being “gross ” clearly envisaged that Ms. Carr would pay tax on it. It is the plaintiff’s case that the judgment of Barron J. did not reflect his intention that Ms. Carr would go for assessment to the Revenue Commissioners.

8. The plaintiff, anticipating that the defendant would contend that this Court should not interfere with the order of Barron J which was not appealed and would rely on the doctrine of res judicata, maintains that the first named defendant is estopped from relying on that doctrine by virtue of the representations made in the course of the case which have been referred to above.

AMENDING OR VARYING AN ORDER

9. The circumstances in which the Court will amend an order are as follows:

10. Order 28 Rule 11 of the Rules of the Superior Courts, 1986 provides:-

“Clerical mistakes in judgments or orders, or errors arising therein from an accidental slip or omission may at any time be corrected by the Court on Motion without an appeal.”

11. In my view that order has no bearing on the present case. The order accurately reflects a decision of the learned High Court Judge, even if it was his understanding that the first named defendant would subsequently go to the Revenue Commissioners to be assessed for tax. The Judge in fact made no such order nor was he asked to do so. The Judge when he made the order was aware that the VEC had deducted the relevant tax and passed it on to the Revenue Commissioners in accordance with its obligations under the PAYE system. Accordingly, there was no accidental slip or omission. I am reinforced in my view by the observations of McCracken J. in Concorde Engineering -v- Bus Atha Cliath [1996] 1 ILRM 533 at 535/6 where he said:-

“..... the wording as the rule referring as it does to ‘any accidental slip or omission’, must be construed as encompassing only matters which were omitted from the judgment or order by reason of a slip or omission. That seems to me to connote that, were it not for the slip or omission, the amendment requested would of necessity have been in the original order.”

12. In the present case it cannot be said with any certainty that Barron J. would have necessarily included in his order a stipulation that Ms. Carr seek assessment from the Revenue Commissioners if he had been requested to do so.

13. Apart from Order 28 Rule 11 the circumstances in which an order may be amended were the subject matter of several decisions to which I was referred. In Hughes -v- O’Rourke & Ors [1986] ILRM 538 Henchy J. said at page 540 of the Report:-

“I consider it to be a fundamental principle that, in the absence of a clear provision to the contrary in a statute or rule of court once a final order has been made and perfected in the High Court, the jurisdiction of the High Court as to the matters determined by that order is exhausted, save possibly to the extent that a subsidiary or supplementary order may be made subsequently by consent.”

In Bellville Holdings -v- Revenue Commissioners [1994] 1 ILRM 29 where it was held that the jurisdiction to amend an order was not confined to that given by Order 28 Rule 11 of the Superior Court Rules, Finlay C.J. stated at page 36 of the Report:-
“There is, however, I am satisfied, a wider and more fundamental 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.
The position and principles appear, however, to be accurately stated in the judgment of Romer J. in Ainsworth -v- Wilding [1896] 1 Ch 673, where, at p. 677, he stated as follows:
So far as I am aware, the only cases in which the Court can interfere after the passing and entering of the judgment are these:
(1) Where there has been an accidental slip in the judgment as drawn up, in which case the Court has power to rectify it under Order XXVIII r. 11;
(2) When the Court itself finds that the judgment as drawn up does not correctly state what the Court actually decided and intended.
Having referred to the decision of the Court of Appeal In Re: Swire 30 Ch. D. 239, Romer J. quoted from the judgments in that case as follows at page 678:-
“Cotton L.J. says:
‘It is only in special circumstances that the Court will interfere with an order which has been passed and entered, except in cases of a mere slip or verbal inaccuracy, yet in my opinion the Court has jurisdiction over its own records, and if it finds that the order as passed and entered contains an adjudication upon that which the Court in fact has never adjudicated upon, then, in my opinion, it has jurisdiction, which it will in a proper case exercise, to correct its record, that it may be in accordance with the order really pronounced .’
Lindley L.J. says:
‘If it is once made out that the order, whether passed and entered or not, does not express the order actually made, the Court has ample jurisdiction to set that right, whether it arises from a clerical slip or not.’
And Bowen L.J. says:
‘An order, as it seems to me, even when passed and entered, may be amended by the Court so as to carry out the intention and express the meaning of the Court at the time when the order was made, provided the amendment be made without injustice or on terms which preclude injustice.’
I am satisfied that these expressions of opinion validly represent what the true common law principle is concerning this question. I would emphasise, however, that it is only in special or unusual circumstances that an amendment of an order passed and perfected, where the order is of a final nature, should be made by the court. The finality of proceedings both at the level of trial and, possibly more particularly, at the level of ultimate appeal is of fundamental importance to the certainty of the administration of law and should not lightly be breached”.

14. The decision in Bellville Holdings -v- The Revenue Commissioners is of particular relevance. In that case an issue was determined by way of case stated to the High Court. The learned trial judge did not specifically direct that the matter be re-entered before the Appeal Commissioners pursuant to her finding. However in subsequent proceedings between the parties she amended her order to contain such a direction, on the basis that she considered it implicit in her judgment [the subject matter of the case stated] that the matter be re-entered. Notwithstanding that, the Supreme Court held that that was not a proper interpretation of the previous judgment. Finlay C.J. stated at p. 38:-

“It seems to me that the furthest the judgment goes is that it is likely or not improbable that had there been an application made upon or immediately after the delivery of the judgment by the Inspector of Taxes for an order remitting the matter pursuant to s. 428(6) that the learned trial judge might well have granted such an order.”

15. In the instant matter taking the plaintiffs case at its very highest all that could be said is that had an application been made directly after the hearing to include an order that the plaintiff seek an assessment from the Revenue Commissioners, it is probable that such an order may have been made. The bases for so arguing are:-

(a) The comment made by the learned Judge when it was pointed out that the plaintiff had already paid tax, that the matter could be taken up with the Revenue Commissioners
(b) The fact that in the order the sum was declared to be gross.
(c) The fact that the parties on both sides were surprised are matters that can be taken as evidence to suggest that it was understood that a credit was to be given to the VEC for monies they had paid and that therefore it was reasonable to expect that Ms. Carr, the first named defendant would pay tax.

16. However, it is by no means certain that it was the intention of the learned judge that Ms. Carr seek assessment from the Revenue Commissioners after the hearing. He interpreted the words “full amount of her salary de die in diem ” as being the gross amount. He indicated it as “the measure of damages” notwithstanding that the judgment of the Supreme Court had substituted a declaration for relief by way of damages. It is at least possible in view of his use of the words “measure of damages ” that the judge awarded damages notwithstanding the order of the Supreme Court which substituted a declaration for damages. If he did so the remedy was by way of an appeal.

17. In that context I should point out that the submission on behalf of the first named defendant that the Supreme Court ordered that Ms. Carr be given relief “by way of damages awarded to the Plaintiff” is based on a misreading of the order. The Supreme Court ordered as follows:-

“That the High Court Order be varied by substituting declarations in the terms hereinbefore recited for the relief by way of damages awarded to the plaintiff.”

18. I was referred to a passage in Howard -v- Commissioners of Public Works [1994] 2 ILRM 301 where Lynch J. held that notwithstanding that the basis or foundation for an injunction had now gone, he was precluded from amending the injunction. At page 312 of the report he said “I do not see that I can by an order made in this plenary action amend an order made in completely separate judicial review proceedings .....”.

In the case of McG -v- D.W. (Unreported, High Court, McGuinness J. 18th June, 1999) held that she had no jurisdiction to alter an order she had made in November, 1998. In her judgment she referred to the decision of the Supreme Court in A.G. -v- Open Door Counselling Limited (No 2) [1994] 2 IR 353 and in particular the passage at page 340 where Finlay J. stated:-
“What is at issue in this case is as to whether the Court, having delivered a judgment and made an order in accordance with the law as it then was, which was perfectly correct and carried out the full meaning and intent of the Court in 1988, can now discharge or vary that order by virtue of an amendment of the law which has occurred since it was made.
To that issue, if it were dealing with a question of any statutory amendment of law or any amendment of the law arising from a further judicial decision in another case, there can be only one answer, namely, that the Court has not got, as a court of ultimate appeal, any such jurisdiction and that it must be obliged, as a matter of fundamental principle, to refuse to alter the order it previously made.”

19. Counsel for the first named defendant also referred me to a further decision of McGuinness J. in McMullen -v- Clancy (Unreported, High Court, McGuinness J., 3rd November, 1999).

In Preston Banking Company -v- William Alsop & Sons [1895] 1 Ch 141 the headnote reads as follows:-
“The Court had no jurisdiction to rehear or alter an order after it has been passed and entered, provided that it accurately expresses the intention of the Court.
An application was made in an action that certain costs which the Applicant had by a previous order in the action been directed to pay might be made costs in the action, and for a stay of proceedings under the order on the ground that the order had been obtained by misrepresentation:....”

20. The Court of Appeal held that this was in effect an application to rehear the previous order and that the Court had no jurisdiction to entertain it.

21. The Court’s attention was drawn to Bright & Co. Ltd. -v- Sellar [1904] 1 KB 6 where at page 12 Cozens-Hardy J. stated:-

“It seems to follow logically from what has been said that the High Court has now no jurisdiction to review its own order on the ground of apparent error, by a means of an independent action, and that the party complaining must come to the Court of Appeal.”

Bentley -v- O’Sullivan [1925] W.N. 95, and Arnott -v- Holloway [1960] V.R. 22, a decision of the Supreme Court of Victoria were also cited.

22. In the light of these authorities it seems clear that there is a power in the court above and beyond the provisions of the slip rule to amend an order of a court. However, such power is to be exercised sparingly and only when the court finds that the judgment as drawn up does not correctly state what the court actually decided or intended. Apart from that the court does not have jurisdiction to interfere with an order of the court which correctly expressed the decision of the court and which was not appealed. The plaintiff is in effect asking the Court to vary the order of Barron J. which was final and not appealed. It seeks to have an additional term imported into the order by implication and on the importation of such term seek relief against the First Named plaintiff for unjust enrichment. In my view this case does not come with the parameters of the slip rule or the Belville decision.

RES JUDICATA
The case of Corporation of Dublin -v- Building and Allied Trade Union [1996] 1 IR 468 was another unjust enrichment case where the defence of res judicata succeeded. The following passage at p. 48 of the judgment in the judgment of Keane J., as he then was, with which the other members of the Court agreed is pertinent in the present case.
“The doctrine of res judicata applicable to this, as to every final judgement or award of any competent court or tribunal, has the consequences that the parties are estopped between themselves from litigating the issues determined by the award again. The justification of the doctrine is normally found in the maxim interest rei publicae ut sit finis litium and it is important to bear in mind that the public interest referred to reflects, in part at least, the interest of all citizens who resort to litigation in obtaining a final and conclusive determination of their disputes. However severe the stresses of litigation may be for the parties involved - the anxiety, the delays, the costs, the public and painful nature of the process - there is at least the comfort that at some stage finality is reached. Save in those exceptional cases where his opponent can prove that the judgment was procured by fraud, the successful litigant can sleep easily in the knowledge that he need never return to Court again.
That finality is, of course, secured at a cost. The defendant who discovers as soon as the case is over that the award of damages against him is grossly excessive because of facts of which he was wholly unaware and was unable to bring before the court cannot, in the absence of fraud, resist the enforcement of the judgment against him. The plaintiff who similarly finds out that his damages are far less than those which would have been awarded had the Court been in possession of evidence not available at the hearing is equally precluded from disputing the finality of the judgment. The interest of the public in that finality is given precedence by the law over the injustices which inevitably sometimes result.”

23. Counsel for the plaintiffs argued that the first named defendant is precluded or estopped from relying on the doctrine of res judicata because of the representations made on her behalf by Mr. Quigley. Counsel referred me to the case of Cassidy -v- O’Rourke (Unreported High Court Carroll J., 18th May, 1983. I was also referred to Littondale Limited -v- Wicklow County Council [1996] 2 ILRM 519; Republic of India and Anor -v- India Steamship Company Limited [1993] A.C. 410; Showlag -v- Mansour (PC) [1995] 1 AC 431 (these were all cases in which the doctrine of counter estoppel was invoked) and to a passage, 2nd Edition, The Doctrine of Res Judicata 1986.

24. The doctrine of counter estoppel is summarised in paragraph 17.10 of McDermott, Res Judicata and Double Jeopardy (p. 163).

“However where an estoppel by res judicata meets an estoppel by conduct or representation, there is a genuine cross estoppel. In such a case the party against whom the plea of res judicata is made does not deny that he is estopped, but insists that the other parties estopped from saying so”.

25. The following representations made by Mr. Quigley in the case before Barron J. are relied on by the plaintiff to preclude the first named defendant from relying on the doctrine of res judicata .

Answer to Q. 119.
(1) “We are assuming in our calculations that when she goes to the revenue, having received an award she will be given concessionary treatment; that treatment will allow her to gain the benefit of her personal basic tax free allowances as a single person, PAYE allowance.”

26. And again Question 123 at page 39 of the transcript:

(2) “If she gets the concessionary treatment, she gets the rates and bands and the basic allowances that she would have got in each of the 15 years. That is the concessionary treatment that we have presented. The alternative to that would be to received the lump sum now, to have it taxed in this year to get just this years allowances and we prepared our calculations on the basis that she would get the concession.”

27. I cannot agree with the plaintiff’s contention.

28. Firstly, Mr. Quigley’s evidence must be taken in the context of his evidence on the topic of Ms. Carr’s claim for interest. Those remarks do not in my view constitute an undertaking that Ms. Carr would seek assessment on a decree which had not yet been made. Secondly, there was no undertaking given by Ms. Carr herself that she would go to the Revenue Commissioners to be assessed in respect of the award that might be given. Indeed, at the time when Mr. Quigley gave his evidence it was not known whether the judge would award a gross sum (as happened) or a net sum: certainly Counsel for the VEC (and probably Counsel for Ms. Carr) anticipated that the award would be net. In those circumstances it would be most unlikely that an undertaking would be given by Ms. Carr to seek an assessment. For that reason I do not consider that the first named defendant is precluded from successfully relying on the doctrine of res judicata . Furthermore, there is no evidence that the plaintiffs in the present action acted to their detriment by reason of such representation as was made by Mr. Quigley. The initial payments made by them to the Revenue Commissioners were prior to any representation made by Mr. Quigley in the court

case. The subsequent payment, that is the payment of the amount ordered by the court, was not an action made on foot of a representation by Mr. Quigley, but rather an action done in compliance with an order of the High Court. Accordingly, the plaintiff’s argument that the first named defendant is estopped from relying on the doctrine of res judicata also fails. The plaintiff has therefore failed to establish its claim against the first named defendant.

29. The plaintiff’s claim against the second named defendant is as follows. The plaintiff argues that the effect of the order of Barron J. was to put Ms. Carr in the position of an employee who had been given her emoluments without deduction of tax, since the words ‘ gross salary’ are referred to in the order. Section 997 of the Taxes Consolidation Act, 1997 (formerly Section 133) provides as follows:-

“(1) No assessment under Schedule E for any year of assessment need be made in respect of emoluments to which this Chapter applies except where - ....
(b) the emoluments paid in the year of assessment are not in the same amount as the emoluments which are to be treated as the emoluments for that year ..... but where any such assessment is made credit shall be given for the amount of any tax deducted or estimated to be deductable from the emoluments.”

30. The plaintiff contends that the second named defendant is required to make an assessment under that section. It also submits that no credit can be given for the amount of tax deducted; since the order referred to gross salary, it follows that no tax was deducted . In my view that argument flies in the face of what actually happened. PAYE deductions were made by the VEC from the salary due to the first named defendant as is required by law. The fact that in the full knowledge of such payments by the VEC Barron J. described her salary de die in diem to be “gross” does not alter the position. Indeed it was the essence of the case argued by the VEC before Barron J. that they had deducted tax and passed it on, as required, to the Revenue Commissioners.

31. Moreover, I am not convinced that Section 997 deprives the Revenue Commissioners of all discretion, and requires an assessment to be made regardless of the reality of the case. Section 43 of the Income Tax (Employment) Regulations 1960 (SI No. 28 of 1960) provides in Regulation 43 that:-

“The Inspector shall, in any case where he does not propose to make an assessment on an employee with respect to whom tax was deducted during a year, send to the employee, as soon as possible after the end of the year, a statement of his liability for the year and showing how it is proposed to deal with any over-payment or under payment of tax”.

32. The Inspector in the present case utilised that regulation. In my view it is in no way in conflict with the provisions of Section 997 of the Taxes Consolidation Act. I accept the evidence of the Inspector that it would have been quite inappropriate to employ the provisions of Section 997 in circumstances when credit was given for tax actually paid the assessment would be nil.

33. It should also be noticed that no such claim is made in the pleadings nor is any relief by way of declaration sought by the plaintiff.

34. Under the Income Tax (Employment) Regulations, 1960 (SI No 28 of 1960) Regulation 31(3):-

“If the amount which the employer is liable to remit to the collector on paragraph (1) of this Regulation exceeds the amount actually deducted by him from emoluments paid during the relevant income tax month, the Revenue Commissioners, on being satisfied by the employer that he took reasonable steps to comply with the provisions of these Regulations and that the under deduction was due to an error made in good faith, may direct that the amount of the excess should be recovered from the employee, and where they so direct, the employer shall not be liable to remit the amount of the said excess to the collector.”

35. Insofar as it may have been suggested that that regulation has any bearing on the present proceedings I have to reject that contention. The payment made on foot of the order of the High Court was not paid in error, it was paid because the court ordered judgment.

36. In conclusion, while it is difficult not to feel some sympathy with the plaintiff, it would open them to appeal the order of Barron J. if they were dissatisfied with it. They consciously decided not to adopt that course. They cannot successfully circumvent that decision in these proceedings.

© 2001 Irish High Court

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