Cussens & ors v T.G. Brosnan (Inspector of Taxes) [2019] IESC 77 (01 November 2019)

BAILII is celebrating 24 years of free online access to the law! Would you consider making a contribution?
No donation is too small. If every visitor before 31 December gives just £1, it will have a significant impact on BAILII's ability to continue providing free access to the law.
Thank you very much for your support!

Judgment of Mr. Justice Clarke, Chief Justice, delivered the 1st November, 2019.

1. 1 Value Added Tax is, to a very significant extent, governed by the law of the European

Union. The various Value Added Tax directives required member states to introduce that

tax and make significant provision for the parameters within which the tax is to operate.

It follows that many cases involving issues surrounding Value Added Tax have a

1. 2 These proceedings have a very lengthy history which it will be necessary to outline in a

little greater detail in due course. However, when this appeal first came before the Court,

it was considered necessary to refer certain questions of EU law to the Court of Justice of

the European Union (“the CJEU”) under the preliminary reference procedure set out in

Article 267 of the Treaty on the Functioning of the European Union (“TFEU”). At the core

of the issues in these proceedings and in the questions referred by this Court to the CJEU

were matters concerning the potential applicability of the principle that abusive practices

are prohibited (that is, the abuse doctrine) in EU law to the circumstances of this case.

1. 3 While it will be again necessary to consider that doctrine in greater detail in due course, it

has a lengthy history and it has been clear that the abuse doctrine has application in the

field of tax (where that tax is governed by EU law) since the judgment of the CJEU of 21

February 2006 in Halifax and Others v. Commissioners of Customs and Excise (Case C-

255/02) [2006] E.C.R. I-01609, ECLI:EU:C:2006:121. However, the basic problem which

emerged in these proceedings was that the transactions, whose tax treatment was the

subject of dispute between the parties, were carried out prior to the decision of the CJEU

in Halifax. In those circumstances, a question arose as to the extent to which the abuse

doctrine which was applied by the CJEU to tax matters in Halifax could be said to be

1. 4 The CJEU delivered its judgment on the preliminary reference made by this Court on 22nd

November 2017, Cussens and Others v. Brosnan (Case C-251/16), ECLI:EU:C:2017:881,

in terms which it will be necessary to analyse in due course. The matter was

subsequently listed before the Court to obtain the views of the parties as to the

consequences for this appeal of the response given by the CJEU. At that stage, it became

clear that there were significant differences between the parties which, I think it can be

1. 5 First, it was said on behalf of the appellants (“the taxpayers”) that at least some of the

answers given by the CJEU were insufficiently clear and also that a subsequent decision of

the CJEU cast doubt about the correctness of the judgment given in this case so that, it

was argued, in accordance with the jurisprudence of the CJEU itself, it was appropriate to

treat this as one of those exceptional cases where it would be permissible and appropriate

1. 6 Second, it was said that it was still not possible to finally determine this appeal given

that, for the reasons set out in its judgment, the CJEU did not consider it necessary or

appropriate to answer some of the questions which were referred by this Court.

1. 7 Thereafter, further written submissions were filed and an oral hearing ensued. This

1. 8 The facts and the underlying issues which arise on this appeal are set out in the earlier

judgment of this Court delivered by Laffoy J. on 21 April 2016 (Cussens v. Brosnan

[2016] IESC 79) and it is unnecessary, therefore, to repeat either those facts or the

issues. The starting point for a consideration of the remaining questions which this Court

must address is, in those circumstances, the questions referred by this Court to the CJEU

2. 1 The first and second questions referred by this Court, which the CJEU found appropriate

“(1) Is the principle of abuse of rights, as recognised in the judgment of the Court in

Halifax as being applicable in the sphere of VAT, directly effective against an

individual in the absence of a national measure, whether legislative or judicial,

giving effect to that principle, in circumstances where, as here, the redefining of the

pre-sale transactions and the purchaser sales transactions (collectively referred to

as the appellants’ transactions) as advocated by the Commissioners, would give

rise to a liability on the part of the appellants to VAT where such liability, on the

proper application of the provisions of national legislation in force at the relevant

(2) If the answer to question (1) is that the principle of abuse of rights is directly

effective against an individual, even in the absence of a national measure whether

legislative or judicial giving effect to that principle was the principle sufficiently

clear and precise to be applied to the appellants’ transactions, which were

completed before the judgment of the Court in Halifax was delivered and in

particular having regard to the principles of legal certainty and the protection of the

2. 2 In response to the first question referred, the CJEU held, amongst other things, that the

principle that abusive practices are prohibited is not a rule established by a directive, but

is based on the settled case law of the CJEU, as set out in paras. 68 and 69 of the Court’s

judgment in Halifax, which states that first, EU law cannot be relied on for abusive or

fraudulent ends and second, the application of EU legislation cannot be extended to cover

abusive practices by economic operators, that is to say transactions carried out not in the

context of normal commercial operations, but solely for the purpose of wrongfully

2. 3 The principle that abusive practices are prohibited was held to have the general,

comprehensive character which is naturally inherent in general principles of EU law.

According to its case-law, the CJEU found that the refusal of a right or an advantage on

account of abusive or fraudulent acts is simply the consequence of the finding that, in the

event of fraud or abuse of rights, the objective conditions required in order to obtain the

advantage sought are not in fact met, and accordingly such a refusal does not require a

specific legal basis. Citing the judgment of 18 December 2014, Schoenimport ‘Italmoda’

Mariano Previti and Others (Cases C 131/13, C 163/13 and C 164/13) EU:C:2014:2455,

the CJEU held that, therefore, the principle that abusive practices are prohibited may be

relied on against a taxable person to refuse him the right to exemption from VAT, even in

the absence of provisions of national law providing for such refusal.

2. 4 Considering the second question, the CJEU held that such application of the abuse

doctrine is consistent with the principles of legal certainty and of the protection of

legitimate expectations. It was held that the interpretation which the CJEU, in the

exercise of the jurisdiction conferred upon it by Article 267 TFEU, gives to EU law clarifies

and defines the meaning and scope of that law as it must be, or ought to have been,

understood and applied from the date of its entry into force. The Court then stated that

unless there are “truly exceptional circumstances”, which were not claimed in the within

proceedings, EU law as thus interpreted must be applied by the courts even to legal

relationships which arose and were established before the judgment ruling on the request

2. 5 It was also noted that, in its judgment in Halifax, the CJEU expressly did not restrict the

effects of the interpretation which it gave to the principle that abusive practices are

prohibited in the sphere of VAT only to those events which occurred in the future.

Further, dismissing the taxpayers’ reliance on the principles of legal certainty and

legitimate expectations to resist the refusal of the VAT exemption, the CJEU held that it is

settled case-law (see the judgment of 8 June 2000, Breitsohl (Case C 400/98)

[2000] ECR I-4321, EU:C:2000:304, Halifax and Italmoda) that a taxable person who has

created the conditions for obtaining a right in a fraudulent or abusive manner is not

justified in relying on those principles in order to oppose the refusal to grant the right in

question, pursuant to the principle that abusive practices are prohibited.

2. 5 It was therefore concluded, in response to the first and second questions referred by this

Court to the CJEU, that the principle that abusive practices are prohibited must be

interpreted as being capable, regardless of a national measure giving effect to it in the

domestic legal order, of being applied directly in order to refuse to exempt from VAT sales

of immovable goods, such as the sales at issue in the within proceedings, which were

carried out before the judgment of the CJEU in Halifax was delivered, and that the

principles of legal certainty and of the protection of legitimate expectations do not

“(3) If the principle of abuse of rights applies to the appellants’ transactions so that they

(a) what is the legal mechanism by means of which the VAT due on the

appellants’ transactions is assessed and is collected since no VAT is due

2. 7 The CJEU considered that the third question essentially sought to establish how the EU

directive which provides for the harmonisation of laws relating to VAT between member

states, the Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of

the laws of the Member States relating to turnover taxes — Common system of value

added tax: uniform basis of assessment (“the Sixth Directive”) is to be interpreted in

order to determine the legal basis on which the transactions which do not constitute an

2. 8 Following the CJEU’s decisions in Halifax and in its judgment of 22 December 2010, Weald

Leasing (Case C-103/09), [2010] ECR I-13589, EU:C:2010:804, it was held that where

an abusive practice has been found to exist, the transactions involved must be redefined

so as to re-establish the situation that would have prevailed in the absence of the

transactions constituting that abusive practice. That redefinition must, however, go no

further than is necessary for the correct charging of the VAT and the prevention of tax

evasion. That redefined situation should then be assessed in the light of the relevant

2. 9 Thus, the CJEU held that the principle that abusive practices are prohibited obliges the

national authorities, in essence, to apply the relevant VAT legislation to the transactions

concerned, while disregarding those of the transactions that constitute an abusive

2. 10 As the Sixth Directive cannot of itself impose obligations on an individual (see, the

judgment of 21 September 2017, DNB Banka (Case C-326/15), EU:C:2017:719), the

CJEU held that should this Court, as the referring court, find that the leases preceding the

sales of the properties at issue in these proceedings constituted an abusive practice, the

liability of those sales to VAT would have to be based on the relevant provisions of

national legislation providing for such liability, which would thus constitute the legal basis

2. 11 The CJEU therefore concluded, in response to the third question, that the Sixth Directive

must be interpreted as meaning that, if the transactions at issue in the main proceedings

should be redefined pursuant to the principle that abusive practices are prohibited, those

of the transactions which do not constitute such a practice may be subject to VAT on the

basis of the relevant provisions of national legislation providing for such liability.

2. 12 The fourth question referred to the CJEU was the following:-

“(4) In determining whether the essential aim of the appellants’ transactions was to

obtain a tax advantage should the national court consider the pre-sale transactions

(which it has been found were effected solely for tax reasons) in isolation or must

the aim of the appellants’ transactions as a whole be considered?”

2. 13 The CJEU considered this question to inquire as to whether the referring court, in seeking

to determine whether the essential aim of the impugned transactions is to obtain a tax

advantage, should take account, in the within proceedings, of the object of the leases

preceding the sales of the property in isolation, or of the joint objective of those leases

2. 14 At the outset, the CJEU held that the case-law stemming from the judgment in Halifax

does not require it to be established that the accrual of a tax advantage is the only

objective of the transactions at issue. Rather, as established in its judgment of 21

February 2008, Part Service (Case C 425/06), [2008] ECR I-00897, EU:C:2008:108), it

is sufficient to establish that the accrual of a tax advantage constitutes the essential aim

2. 15 To determine the essential aim of the transactions at issue, the CJEU held, citing Weald

Leasing and its judgment of 17 December 2015, WebMindLicenses (Case C-419/14),

EU:C:2015:832, that a court is to take into account and assess only the objective of the

transactions which are alleged to constitute an abusive practice and not that of the

supplies which, as a result of those initial transactions, formally satisfy the conditions for

obtaining a tax advantage. The application of the abuse doctrine results only in the

transactions which constitute an abusive practice being disregarded, whereas the relevant

provisions concerning VAT must be applied to the supplies which are not constituent

2. 16 The CJEU stated therefore, in response to the fourth question referred, that the principle

that abusive practices are prohibited must be interpreted as meaning that, in order to

determine whether the essential aim of the transactions at issue in the within proceedings

is to obtain a tax advantage, account should be taken of the objective of the leases

2. 17 In providing clarification in order to give this Court guidance in its task of determining this

appeal, the CJEU stated that in order to determine the substance and real significance of

the leases at issue in the within proceedings, this Court may, in particular, take account

of the purely artificial nature of those transactions and the links of a legal, economic

and/or personal nature between the operators at issue. Such aspects are capable of

demonstrating that the accrual of a tax advantage constitutes the essential aim pursued,

notwithstanding the possible existence of additional economic objectives.

2. 18 The CJEU rejected the taxpayers’ submission that the leases were intended to achieve the

sales in the most tax efficient way, holding that such an objective cannot be regarded as

constituting an aim other than obtaining a tax advantage, as the desired effect was to be

2. 19 The fifth and sixth questions referred to the CJEU were the following:-

“(5) Is [section] 4(9) of the VAT Act to be treated as national legislation implementing

the Sixth Directive notwithstanding that it is incompatible with the legislative

provision envisaged in Article 4(3) of the Sixth Directive on the proper application

of which the appellants in relation to the supply before first occupation of the

properties, would be treated as taxable persons notwithstanding that there had

(6) If [section] 4(9) [of the VAT Act] is incompatible with the Sixth Directive are the

appellants by relying on that subsection engaged in an abuse of rights contrary to

the principles recognised in the judgment of the Court in Halifax?”

2. 20 The two above questions were held by the CJEU to be inadmissible, on the basis that the

premise for the questions referred, that s. 4(9) of the Value Added Tax Act 1972 (“the

1972 Act”) is incompatible with the Sixth Directive, was not adequately explained in the

order for reference provided. Thus, the order did not demonstrate how the legislative

provision is not to be regarded as transposing the Sixth Directive, nor did it make it

possible to determine the effect that such a finding of incompatibility could have on the

application of the case law regarding the abuse doctrine on the within proceedings.

2. 21 The seventh question referred to the CJEU was the following:-

“(7) In the alternative if [section] 4(9) [of the VAT Act] is not incompatible with the

Sixth Directive have the appellants achieved a tax advantage which is contrary to

2. 22 The CJEU interpreted the seventh question as asking whether the abuse doctrine must be

interpreted as meaning that supplies of immovable property such as those at issue in the

within proceedings result in the accrual of a tax advantage which is contrary to the

2. 23 The CJEU then turned to consider the purpose of the provisions of the Sixth Directive.

Article 13B(g) of the Sixth Directive, read together with Article 4(3)(a) of the directive,

exempts from VAT the supply of buildings or parts thereof, and of the land on which they

stand, which have already been the subject of ‘first occupation’, therefore relating to

supplies of immovable property occurring after the property has actually been used by its

owner or its tenant. By contrast, the first supply of a new property to the final consumer

2. 24 As per the order for reference provided to the CJEU, the properties at issue in the main

proceedings had, before their sale to third party purchasers, not yet been actually used

by their owner or their tenant, a matter which was stated to be for this Court to verify.

2. 25 Therefore, the answer provided by the CJEU to the seventh question was that the

principle that abusive practices are prohibited must be interpreted as meaning that

supplies of immovable property such as those at issue in the main proceedings are liable

to result in the accrual of a tax advantage contrary to the purpose of the relevant

provisions of the Sixth Directive where the properties had, before their sale to third party

purchasers, not yet been actually used by their owner or their tenant.

“(8) Even if [section] 4(9) [of the VAT Act] is not to be treated as implementing the

Sixth Directive, does the principle of abuse of rights as established by the judgment

of the Court in Halifax nevertheless apply to the transactions in issue by reference

2. 27 The CJEU considered that the eighth question referred asked whether the principle that

abusive practices are prohibited must be interpreted as being applicable in a situation

such as that at issue in the main proceedings, which concerns the possible exemption of a

2. 28 Considering the provisions of the Sixth Directive, the CJEU recalled that the general

principle resulting from Article 2(1) of the Sixth Directive is that VAT is levied on all

supplies of goods for consideration by a taxable person. Such a supply relating to

immovable property is thus in principle covered by that tax. The exemption provided in

Article 13B(g) of the Sixth Directive, read in conjunction with Article 4(3)(a), applies to

supplies of immovable property other than supplies before first occupation of the building,

2. 29 Thus, only the first supply of a building or part of a building is, in principle, subject to

VAT. However, in order to determine which supply is the first one, account should not be

taken of supplies of a purely artificial nature whose essential aim is to obtain a tax

2. 30 The answer provided by the CJEU, therefore, to the eighth question is that the principle

that abusive practices are prohibited must be interpreted as being applicable in a situation

such as that at issue in the within proceedings, which concerns the possible exemption of

2. 31 As appears from the answers given by the CJEU, it was determined that the fact that the

transactions at the heart of this appeal predated the judgment of the CJEU in Halifax did

not operate as a barrier to the application of the abuse principle to the facts of this case.

It is that finding which the taxpayers say should be revisited. It is also said that the

answers given by the CJEU in that regard are insufficiently clear to enable this Court to

2. 32 As is also clear, the CJEU did not find it necessary to answer the fifth and sixth questions

referred. It is that aspect of the determination of the CJEU which leads to the second

3. 1 Essentially, two points are made under this heading. First, it is said that it is not

sufficiently clear from the judgment of the CJEU and the answers given to the questions

referred that the CJEU was satisfied that the abuse principle could be applied

notwithstanding the principle of legal certainty. I will shortly turn to that question.

3. 2 In addition, secondly, it is argued that there is an inconsistency between the judgment of

the CJEU in this case and a judgment of a Grand Chamber of the CJEU, delivered less

than two weeks after the judgment in these proceedings on 5 December 2017 in M.A.S.

and M.B. (Case C-42/17), ECLI:EU:C:2017:936. It will also be necessary to turn to that

3. 3 However, the first matter which must be addressed is the jurisdiction to make a second

reference of what are, in substance, the same or similar questions. There was, however,

no significant dispute between the parties at the level of principle as to the existence of

4. 1 The taxpayers rely on the decision of the ECJ (as it then was) in Da Costa (Cases 28-

30/62) [1963] ECR 31, ECLI:EU:C:1963:6, to the effect that there exists the

jurisdiction to make a second reference regarding a question of EU law which has

previously been ruled upon by the CJEU, in circumstances where some “new factor” or

argument has been raised. In Da Costa, it was established that there is no need to make

a reference to the CJEU for a preliminary ruling under Article 267 TFEU (Article 177 of the

EEC Treaty, as it then was) where a national court concludes that the CJEU has already

resolved the question of EU law before it. The national court is still able, in formal terms,

to refer a matter to the CJEU, even where it has ruled on the issue. However, if no new

factor has been raised before the Court and the second reference is considered to be

“materially identical” to that which has already been the subject of a preliminary ruling in

a similar case, the CJEU will be strongly inclined to restate the substance of the earlier

4. 2 This principle was elaborated on in the judgment of the ECJ in Pretore di Salò (Case

14/86) [1987] ECR 2545, ECLI:EU:C:1987:275, where it was held that a national court

which has already made a reference for a preliminary ruling which has been answered by

the Court of Justice is not precluded from making a further reference to the Court if it

“Such a reference may be justified when the national court encounters difficulties in

understanding or applying the judgment, when it refers a fresh question of law to

the court, or again when it submits new considerations which might lead the court

4. 3 It is submitted by the taxpayers that the suggested tension between the CJEU’s ruling in

the within proceedings and the Court’s subsequent decision in M.A.S and M.B. is such as

to constitute a “new factor” sufficient to warrant a further reference being made by this

4. 4 This jurisdiction to make a second reference to the CJEU is accepted by the respondent

(who, given his representative capacity as an Inspector of Taxes, I will refer to as “the

Revenue Commissioners”), but it is submitted that it is a jurisdiction to be utilised

exceptionally, such as in the circumstances in Pretore di Salò, where the criminal

prosecutions at issue in the main proceedings had been brought against persons

4. 5 It must, of course, also be noted that there is a difference between circumstances where

separate questions to those already referred emerge in the course of the legal process

within a single set of proceedings. In such circumstances, there could be no barrier to a

national court referring such new questions to the CJEU should it conclude that answers

to those questions had become necessary for the proper disposition of the proceedings.

4. 6 However, the issue earlier noted relates to a different matter, being whether a national

court can or should refer what is, in substance, the same question to the CJEU for what

4. 7 It would seem to follow that, if the answers given by the CJEU were insufficiently clear to

enable the national court to deal with the proceedings in a proper fashion, the national

court would be obliged to seek further clarity by means of a second reference. So far as

the first limb of the argument under this heading is concerned, therefore, the question is

whether the judgment of the CJEU is sufficiently clear. I turn to that question.

5. 1 The underlying argument under this heading turned on the question of legal certainty. At

its simplest, the argument put forward on behalf of the taxpayers was that it would be a

breach of the principle of legal certainty to apply the judgment in Halifax to facts which

predated the handing down of that judgment by the CJEU. It is said that the judgment of

the CJEU in these proceeding is insufficiently clear because it does not make express

5. 2 However, it seems to me that the argument to that effect is without merit. The whole

point behind the issue which the CJEU had to consider was whether applying Halifax

abuse principles to facts which predated Halifax was impermissible precisely because it

was said that to do so would be a breach of the principle of legal certainty. A fair reading

of the judgment as a whole makes it clear that, hardly surprisingly, the Court was well

aware of that argument. However, it is equally clear that the Court rejected the

argument and concluded that there was no barrier to the application of Halifax abuse

principles notwithstanding the requirement for legal certainty. As I read the judgment of

the CJEU it is, in substance, to the effect that the abuse principle generally formed a

fundamental principle of EU law which, indeed, had been recognised and established long

prior to the decision in Halifax. Seen in that way, the judgment of the CJEU in Halifax can

be viewed as simply a confirmation that the general abuse principle applies in the field of

5. 3 Until the proper interpretation of the law (whether that be the application of the Treaties,

general principles or the proper interpretation of legislation) has been definitively

determined by the CJEU, there is always the possibility that there might be legitimate

debate about how that law will ultimately be interpreted. Indeed, if there were never any

such questions of interpretation, then the preliminary reference procedure would be

largely redundant. But, certainly in and of itself, it is also clear that the fact that there

might be a legitimate debate about the proper interpretation of EU law does not

necessarily mean that the principle of legal certainty is breached. The Treaties are there.

The general principles of EU law are there. The legislation is there. How they are to be

interpreted and applied in particular circumstances may be the subject of legitimate

debate, but the existence of that debate does not mean that the law is uncertain to the

extent that it breaches the principle of certainty. Indeed, if an argument to the contrary

were to prevail it would almost inevitably follow that, in the vast majority of cases, a

preliminary reference would be of little value given that, almost by definition, there must

be some uncertainty about EU law in order to justify a national court making a

preliminary reference in the first place. If that uncertainty were to require that a certain

view of the law could not be applied to facts which occurred prior to the clarification of the

legal issue itself, then in many cases it could not be applied in the individual case in which

the reference was made and there would not, therefore, be a justification for making a

reference in the first place as the clarification would not be necessary to decide the case.

5. 4 In my view, the reasoning of the CJEU in its judgment in this case is clear and is to the

effect that the principle of legal certainty does not place a barrier in the way of the

application of the abuse principle in proceedings such as this. It follows that it is

necessary to go on to consider the second leg of the argument under this heading, being

as to whether doubt has now been cast on the correctness of the judgment on the

reference in this case by reason of the subsequent judgment of the CJEU in M.A.S. and

6. Is there now doubt about the correctness of the CJEU’s judgment?

6. 1 The judgment in M.A.S. and M.B. concerned the interpretation of Article 325(1) and (2)

TFEU, which require member states to counter fraud and other illegal activities affecting

the financial interests of the Union through effective and deterrent measures and to take

the same measures to counter fraud affecting the financial interests of the Union as

member states take to counter fraud affecting their own financial interests. The reference

arose from an earlier decision of the CJEU in its judgment of 8 September 2015, Taricco

6. 2 In Taricco, the CJEU directed that the Italian courts set aside provisions of national law

which impose limitation periods in respect of the prosecution of criminal offences, where

such provisions affect Italy’s obligations under Article 325(1) and (2) TFEU by preventing

the imposition of effective and dissuasive penalties in cases of serious fraud affecting the

financial interests of the EU, or by providing for longer limitation periods in respect of

cases of fraud affecting the financial interests of the member state concerned than in

6. 3 In M.A.S. and M.B., the request for a preliminary ruling was also made in criminal

proceedings for infringements relating to VAT, in circumstances where the referring court,

the Italian Constitutional Court, had concerns that disapplying the limitation period, in

accordance with the rule in Taricco, was incompatible with the constitutional principle of

legality, which requires that rules of criminal law are precisely determined and are not

6. 4 Considering the requirements of the principle that offences and penalties must be defined

by law, which was not argued before the CJEU in Taricco, the Court of Justice concluded

that Article 325(1) and (2) TFEU must be interpreted as requiring the national court, in

criminal proceedings for infringements relating to VAT, to disapply national provisions on

limitation, unless that disapplication entails a breach of the principle of legality because of

the lack of precision of the applicable law or because of the retroactive application of

legislation imposing conditions of criminal liability stricter than those in force at the time

6. 5 In the course of its reasoning, the CJEU held that the competent national courts, when

deciding whether the disapply limitation periods, are required to ensure that the

fundamental rights of the accused are observed. This protection must meet the level of

protection provided for by the EU Charter of Fundamental Rights (“the Charter”) as, in

accordance with Article 51(1) thereof, the provisions of the Charter must be observed by

member states in the implementation of EU law. The principle of legality in relation to the

imposition of criminal penalties was held to have been enshrined in Article 49 of the

Charter, in the constitutional traditions common to member states, and in other

international treaties, including, in particular, in Article 7(1) of the European Convention

6. 6 As provided for by Article 52(3) of the Charter, the right guaranteed in the Charter should

have the same meaning and scope as the right guaranteed by the Convention. The CJEU

then proceeded to consider the case law of the European Court of Human Rights (“the

ECtHR”) concerning the scope of Article 7(1) and the requirements of foreseeability,

precision and non-retroactivity which inhere in the principle of legality.

6. 7 It is the CJEU’s treatment of Convention rights in M.A.S. and M.B. on which the taxpayers

place reliance in these proceedings. They submit that the CJEU’s decision in the earlier

preliminary ruling in these proceedings failed to consider and give effect to the rights

protections of the Convention, specifically in relation to legal certainty.

6. 8 They submit that the right to property contained in Article 17 of the Charter, which

provides, amongst other things, that “[n]o one may be deprived of his or her possessions

except... under the conditions provided for by law”, has a corresponding provision in

Article 1 of Protocol 1 to the Convention, which states that “[n]o one shall be deprived of

his possessions except in the public interest and subject to the conditions provided for by

6. 9 In light of the guarantee that the meaning and scope of a Charter right shall be the same

as that which is laid down in a corresponding Convention right, the taxpayers suggest

that the principle of legal certainty, which they consider to inhere in “the general

principles of international law”, should govern the property right protections contained

within Article 17 of the Charter. This “right to legal certainty” as it is characterised by the

taxpayers, is subject only to such compromise or dilution as would be permitted under

Article 1 of Protocol 1 to the Convention. As, it is contended, there are no apparent

exceptions to this principle of legal certainty in respect of instances of fraud or abusive

practices under the jurisprudence of the ECtHR, the taxpayers submit that the finding of

the CJEU, as upheld in previous judgments of Breitsohl, Halifax and Italmoda, that the

principles of legitimate expectation and legal certainty in EU law cannot be relied upon in

6. 10 This analysis, the taxpayers argue, constitutes a “new factor” or new consideration which

may lead the CJEU to an alternative conclusion than that which was reached in the

judgment in these proceedings. This factor is said to fulfil the criteria, as set out in

Pretore di Salò, for this Court to make a second reference for a preliminary ruling.

6. 11 The Revenue Commissioners submit that the judgment of the CJEU in M.A.S. and M.B.

crucially concerned the principle that offences and penalties in the sphere of criminal law

must be precisely defined by law, a principle which, they contend, has no application

whatsoever to the present case. The criminal law context of M.A.S. and M.B. is said to be

manifest from the underlying proceedings which gave rise to the reference made by the

Italian Constitutional Court. The taxpayers contest this distinction, arguing that the CJEU

in M.A.S. and M.B. also recognised and acknowledged the applicability of the general

6. 12 The Revenue Commissioners state that the principle of legal certainty is a general

principle of EU law but it is not a general principle that has a higher status in the legal

hierarchy than the principle that abusive practices are prohibited. This reasoning, it is

argued, as found in M.A.S. and M.B. does not undermine the unequivocal findings in the

CJEU’s judgment in these proceedings, where, balancing the two principles, it was ruled

that, in the circumstances of the case, a taxable person is not justified, pursuant to the

principle that abusive practices are prohibited, in relying upon the principle of legal

certainty so as to seek to oppose the refusal to grant a VAT exemption which arises as a

result of the abusive practice. This finding, they state further, is not incompatible with

6. 13 In order to consider the parties’ dispute regarding the specificity of the context in which

the judgment in M.A.S. and M.B. was delivered, it is appropriate to consider the following

paragraphs from the judgment, which precede the conclusion of the CJEU that the

“46. The competent national courts, for their part, when they have to decide in

proceedings before them to disapply the provision of the Criminal Code at issue, are

required to ensure that the fundamental rights of persons accused of committing

criminal offences are observed (see, to that effect, judgment in Taricco, paragraph

47. In that respect, the national authorities and courts remain free to apply national

standards of protection of fundamental rights, provided that the level of protection

provided for by the Charter, as interpreted by the Court, and the primacy, unity

and effectiveness of EU law are not thereby compromised (judgment of 26 February

2013, Åkerberg Fransson, C 617/10, EU:C:2013:105, paragraph 29 and the case-

48. In particular, where the imposition of criminal penalties is concerned, the

competent national courts must ensure that the rights of defendants flowing from

the principle that offences and penalties must be defined by law are guaranteed.

49. According to the referring court, those rights would not be observed if the

provisions of the Criminal Code at issue were disapplied in the proceedings pending

before it, in so far as, first, the persons concerned could not reasonably foresee

before the delivery of the Taricco judgment that that Article 325 TFEU requires the

national court to disapply those provisions in the circumstances set out in that

50. Second, according to the referring court, the national court would not be able to

define the particular circumstances in which it would have to disapply those

provisions, namely where they prevent the imposition of effective and deterrent

penalties in a significant number of cases of serious fraud, without exceeding the

limits imposed on its discretion by the principle that offences and penalties must be

51. In this respect, the importance given, both in the EU legal order and in national

legal systems, to the principle that offences and penalties must be defined by law,

as to its requirements concerning the foreseeability, precision and non-retroactivity

52. That principle, as enshrined in Article 49 of the Charter, must be observed by the

Member States when they implement EU law, in accordance with Article 51(1) of

the Charter, which is the case where, in the context of their obligations under

Article 325 TFEU, they provide for the application of criminal penalties for

infringements relating to VAT. The obligation to ensure the effective collection of

the Union’s resources cannot therefore run counter to that principle (see, by

analogy, judgment of 29 March 2012,Belvedere Costruzioni, C 500/10,

53. Moreover, the principle that offences and penalties must be defined by law forms

part of the constitutional traditions common to the Member States (see, with

reference to the principle of non-retroactivity of the criminal law, judgments of 13

November 1990, Fedesa and Others, C 331/88, EU:C:1990:391, paragraph 42, and

of 7 January 2004, X, C 60/02, EU:C:2004:10, paragraph 63) and has been

enshrined in various international treaties, in particular in Article 7(1) of the ECHR

(see, to that effect, judgment of 3 May 2007, Advocaten voor de Wereld, C 303/05,

54. It may be seen from the Explanations relating to the Charter of Fundamental Rights

(OJ 2007 C 303, p. 17) that, in accordance with Article 52(3) of the Charter, the

right guaranteed in Article 49 has the same meaning and scope as the right

55. As to the requirements that follow from the principle that offences and penalties

must be defined by law, it must be observed, in the first place, that the European

Court of Human Rights has held in relation to Article 7(1) of the ECHR that, under

that principle, provisions of criminal law must comply with certain requirements of

accessibility and foreseeability, as regards both the definition of the offence and the

determination of the penalty (see ECtHR, 15 November 1996, Cantoni v. France,

CE:ECHR:1996:1115JUD001786291, § 29; ECtHR, 7 February 2002, E.K. v. Turkey,

CE:ECHR:2002:0207JUD002849695, § 51; ECtHR, 29 March 2006, Achour v.

France, CE:ECHR:2006:0329JUD006733501, § 41; and ECtHR, 20 September

56. In the second place, the requirement that the applicable law must be precise, which

is inherent in that principle, means that the law must clearly define offences and

the penalties which they attract. That condition is met where the individual is in a

position, on the basis of the wording of the relevant provision and if necessary with

the help of the interpretation made by the courts, to know which acts or omissions

will make him criminally liable (see, to that effect, judgment of 28 March 2017,

57. In the third place, the principle of non-retroactivity of the criminal law means in

particular that a court cannot, in the course of criminal proceedings, impose a

criminal penalty for conduct which is not prohibited by a national rule adopted

before the commission of the alleged offence or aggravate the rules on criminal

liability of those against whom such proceedings are brought (see, by analogy,

judgment of 8 November 2016, Ognyanov, C 554/14, EU:C:2016:835, paragraphs

6. 14 The 12 paragraphs just cited make continual and detailed reference to the criminal nature

of the proceedings under consideration and the rights of person involved in such

proceedings. Paragraph 46 is specifically directed towards the rights of “persons accused

of committing criminal offences”. Paragraph 48 refers to “the imposition of criminal

penalties.” Paragraph 50 makes specific reference to the principle “that offences and

penalties must be defined by law”. In particular, para. 51 emphasises the importance of

that principle in both the EU legal order and in national legal systems. Paragraphs 52 and

53 again involve a discussion of that principle both in the context of EU law and in the

constitutional traditions common to member states. Paragraph 55 involves a discussion

of the requirements of accessibility and foreseeability which derive from the principle

“that offences and penalties must be defined by law”, while para. 56 states that the

requirement that the applicable law must be precise is also inherent in that principle.

6. 15 That analysis clearly demonstrates that it was the criminal nature of the matters under

consideration which lay at the heart of the judgment of the CJEU in M.A.S. and M.B. It is

true, of course, that the principle of legal certainty has application well beyond the sphere

of criminal law. Likewise, retrospective legislation, while typically wholly impermissible in

the criminal field, may also require to be assessed for compatibility with rights in other

fields. It is also true that revenue statutes are, in many legal systems, scrutinised to a

greater degree for certainty than might apply in respect of what one might call ordinary

6. 16 But none of those considerations suggest that it necessarily follows that the same result

must apply in assessing the application of the requirement for legal certainty in the

context of, respectively, criminal and civil measures. The fact that a higher level of

scrutiny must necessarily be applied in the criminal context means that there is no

necessary inconsistency between a conclusion that it is impossible lawfully to remove a

limitation period which breaches EU law in a criminal context and a conclusion that the

abuse doctrine can be applied, in a revenue context, to transactions which occurred

6. 17 It is also important to emphasise the point made by the CJEU in its judgment in the

reference in these proceedings which recalled that the Court, in Halifax itself, had

considered the question of whether the effects of its judgment could be applied in a

partially retrospective manner and, by declining the confine the effects of its judgment to

future events, determined that it could. In substance, it would have required the CJEU in

its judgment in the reference in these proceedings to revisit aspects of Halifax for it to

6. 18 In the light of that analysis, it does not seem to me that it can fairly be said that the

subsequent judgment of the CJEU in M.A.S. and M.B. casts doubt on the correctness of

the judgment given in these proceedings or gives rise to the consideration of a new factor

which might realistically lead to a different conclusion being reached. It seems to me that

this Court must operate on the assumption that the CJEU has correctly answered the

questions referred to it. This is not a case where some wholly separate factor has come

to light which might legitimately be said to potentially influence the result. The question

of the balance between the abuse principle, on the one hand, and the protection of rights

which is inherent in the principle of legal certainty, on the other, was at the heart of the

argument both before this Court and before the CJEU in these proceedings. If it were

possible to request a second reference simply because there might be a new way of

putting an argument which had not been considered at the time of the initial reference,

6. 19 In my view, this appeal falls a long way short of the sort of circumstances where, in

accordance with the established jurisprudence, it would be appropriate for this Court to,

in substance, invite the CJEU to reconsider the issues which have already been asked and

answered. I would propose, therefore, that the Court reject the arguments put forward

on behalf of the taxpayer to the effect that there should be a second reference based

either on the alleged lack of clarity in the judgment of the CJEU or on the existence of a

new factor which might reasonably be expected to lead the CJEU possibly to give different

answers to similar questions. There remains the final matter for consideration, being the

question of whether this Court is now in a position finally to deal with this appeal

notwithstanding the fact that the CJEU did not answer certain of the questions raised. I

7. The Parties’ Position on whether this Court can now finally determine the Appeal

7. 1 Having concluded that there is no legitimate basis for referring the same or similar issues

to those which have already been answered by the CJEU back to that Court in the form of

a second reference, it only remains to consider whether the answers already given enable

7. 2 It is appropriate, therefore, at this juncture to set out the questions which remain live on

the appeal. Following the dismissal of the taxpayers’ appeal against the relevant VAT

assessments, under the provisions of the Taxes Consolidation Act 1997 which were then

in force, the Circuit Court Judge stated a case for the opinion of the High Court on certain

questions of law on the basis of the facts found by him. The Circuit Court Judge found

that neither the lease nor the leaseback arrangements of the pre-sale transactions had

any commercial reality, finding that there was no evidence of intention to sell the

property by way of lease to any third party and that, in effect, the pre-sale transactions

were entered into for the purpose of reducing VAT. A more detailed account of the

transactions concerned can be found in the earlier judgment of this Court in these

7. 3 The questions posed in the case stated for the opinion of the High Court were whether the

“(1) The lease dated 8th March 2002 between the Applicants and Shamrock Estates

Limited was effective for the purposes of VAT, despite the absence of the prior

written consent of ACC Bank Plc thereto required by clause 6.1 of the deed of

(2) The lease and leaseback arrangements had no commercial reality and constitute an

abusive practice within the doctrine set out in the Halifax case; and should be

(3) The European Court decision in Halifax and the doctrine of abusive practice have

direct effect in the absence of implementing national legislation.

(4) There should be no interest on any VAT due by the Applicants.”

7. 4 Following the hearing of the case stated, the High Court (Charleton J.), in a judgment

dated 11 June 2008 (Cussens and ors v. Brosnan (Inspector of Taxes) [2008] IEHC 169),

provided the following answers to the questions posed by the Circuit Court Judge, at para.

“(i) The lease dated 8th March, 2002, between the partnership and Shamrock Estates

Ltd. was ineffective for the purpose of VAT because of the absence of prior written

consent of the mortgagee, namely, ACC Bank, which was required by clause 6.1 of

(ii) The lease and leaseback had no commercial reality and constituted an abusive

practice within the doctrines identified by the European Court of Justice. As such,

even if such lease and leaseback were apparently valid, which they are not because

of the prior mortgage, they should be redefined for the purpose of VAT in order to

(iii) The European Court decisions as to abusive process are of general application and

they require national courts to redefine abusive measures in accordance with

reality. As this is a matter of interpretation, and given the supremacy of European

law, implementing national legislation is not required in a Member State in respect

of this principle of European law and nor has any such implementing national

legislation come to my attention where the doctrine of abusive practice has been

(iv) As to whether interest is due on any late payment of VAT by the applicants is a

matter to be decided by the Inspector of Taxes and is not something which was

before His Honour Judge Harvey Kenny and neither was it before this Court.”

7. 5 The taxpayers’ appeal to this Court is grounded on, amongst other things, the contention

that Charleton J. was wrong in law and on the evidence in making the above findings.

Further, it should be noted that in Cussens and ors v. Inspector of Taxes [2015] IESC 48,

Laffoy J. granted leave to amend the notice of appeal of the taxpayers on the basis that

no prejudice to the Revenue Commissioners was identified as being likely to result from

such an amendment. It is apparent that the first ground of the appeal, regarding the

validity of the lease dated 8 March 2002 between the taxpayers and their connected

company, Shamrock Estates Limited, is no longer in issue between the parties. It

therefore appears to this Court that the grounds of appeal which remain live before this

Court primarily concern whether the High Court erred in answering the questions (ii) –

7. 6 Turning to the submissions of the parties in this matter, it is the taxpayers’ position that

the Court is not yet in a position to consider the substantive appeal, in light of the fact

that the CJEU did not answer certain of the questions referred, namely Questions 5 and 6.

As previously discussed at paras. 2.18 and 2.19 above, the Court of Justice considered

that the order for reference did not adequately explain the reasons behind the contention

that s. 4(9) of the 1972 Act is incompatible with the Sixth Directive, instead indicating the

claims of the parties to the proceedings in that regard. While not elaborating in any great

detail on this matter, the taxpayers submit that the questions as to the compatibility of s.

4(9) with the Sixth Directive are relevant and require to be addressed prior to the

resolution of the substantive appeal. In circumstances where this may pose uncertainty

for the Court, the taxpayers submit that the appropriate course of action would be to

reformulate Questions 5 and 6 and to submit these in the form of a further reference to

7. 7 The Revenue Commissioners submit that in light of the clear and comprehensive answers

provided by the CJEU, this Court is now in a position to finally determine this appeal,

notwithstanding the Court’s decision not to answer Questions 5 and 6. It is their position

that this Court should uphold the findings of Charleton J. in relation to questions (ii) and

(iii) of the case stated, which questions grounded the original order for reference to the

CJEU in these proceedings. This is on the basis that, in line with the holdings of the

preliminary ruling of the Court of Justice, the principle that abusive practices are

prohibited, as applied in the sphere of VAT, requires that transactions should be redefined

so as to put the taxpayer in to the position he would have been in had he not engaged in

the abusive practice, and it is a general principle of EU law which can be applied without

any national measures giving effect to it in the domestic legal order.

7. 8 Applying the rulings of the CJEU to the facts of these proceedings, the Revenue

Commissioners suggest that this Court can now conclude that the pre-sales transactions

at issue had no commercial reality other than the accrual of a tax advantage, and that

this advantage constituted the essential aim of the transactions. It is submitted that this

resulted in the accrual of a tax advantage which was contrary to the purposes of relevant

provisions of the Sixth Directive, such that the general principle of EU law prohibiting

abusive practices applied. This, it is said, therefore requires that the pre-sale

transactions are classified as abusive and that those transactions which do not constitute

an abusive practice, that is, the sale of the properties to third party purchasers, are

redefined as being subject to VAT on the basis of the relevant provisions of the 1972 Act.

The legal basis on which VAT should be levied on the taxpayers is submitted to be the

provisions of ss. 2 and 4 of the 1972 Act, which give effect to the principle set out in

Article 2(1) of the Sixth Directive that VAT is levied on all supplies of goods for

consideration by a taxable person and that, accordingly, such a supply relating to

immovable property was liable to VAT. Further, the Revenue Commissioners argue that

the exemption from VAT contained in Article 13B(g) in respect of supplies relating to

immovable property which have already been the subject of ‘first occupation’ is not

applicable in these proceedings for the reasons identified by the CJEU.

7. 9 In reference to question (iv) regarding the payment of interest on any late payment of

VAT, the Revenue Commissioners submit that the question of interest payable on the late

payment of VAT is a matter governed by statute and agree with the finding of the High

Court that this was not a question before the Circuit Court. Further, the Revenue

Commissioners suggest that the CJEU’s judgment makes clear that the sales of the

properties in question constituted taxable supplies for the purposes of the Sixth Directive

and that the abuse doctrine requires that such transactions should be redefined so as to

put a taxpayer in the same position as would have applied if the abusive practice had not

been engaged in. This, it is said, means that the taxpayers, being taxable at the material

time under the 1972 Act, are statutorily liable to interest on the unpaid amount in

accordance with s. 21(2)(b) of the 1972 Act. On that basis, it is argued that any interest

payable on VAT does not concern the imposition of any penalty, as contended by the

taxpayers, and would not contravene the ruling of the CJEU in Halifax, at para. 93, to the

effect that a finding of abusive practice must not lead to a penalty, but rather only an

8. 1 It is important to start by identifying the precise nature of the appeal before this Court.

These proceedings followed the normal pattern which applied at the time in question in

respect of appeals in tax matters. As already noted, an Inspector of Taxes raised an

assessment, which a taxpayer contested. An appeal was pursued to the Appeal

Commissioners, which was followed, by virtue of the appeal being unsuccessful, by a

further appeal to the Circuit Court. Thereafter, the Circuit Court Judge stated a case for

the opinion of the High Court on certain legal issues. It is important to re-emphasise that

a case stated is a particular form of procedure which carries its own rules and operates

subject to established parameters. The High Court, when considering a case stated such

as this, is, to a very large extent, bound by the findings of fact of the Circuit Court Judge

as set out in the case stated. The limited extent to which the High Court can consider the

facts is fully set out in Mara (Inspector of Taxes) v. Hummingbird [1982] 2 I.L.R.M. 421.

8. 2 The function of the High Court Judge in considering the case stated is simply to answer

the questions posed by the Circuit Court Judge and to remit the matter back to enable the

Circuit Court Judge to make a final order. It follows that the sole function of this Court, in

considering an appeal from the High Court (or, indeed, in more recent times, the function

of the Court of Appeal in considering an appeal from the High Court and the function of

this Court in considering either a leapfrog appeal from the High Court or an appeal from

the Court of Appeal under the new constitutional architecture) is simply to determine

whether the answers given by the court or courts below were correct in law. It follows

that the only function of this Court in this appeal is to determine whether the answers

given by the High Court to the case stated of the Circuit Court Judge in these proceedings

8. 3 In passing, in that context, it should be noted that the notice of appeal in this case sets

out a request that this Court should grant various declarations whose terms can be found

in the notice of appeal. That form of appeal is misconceived. The proper course of action

to adopt would have been to suggest that this Court should answer the questions posed

by the Circuit Court Judge in a manner different to the answers given in the High Court

and to set out the answers which, it was to be argued, this Court should give. However, I

propose to treat the appeal on the basis that it was formulated in the correct way and

that it amounts to a suggestion that this Court should answer the questions posed by the

8. 4 As noted earlier, question (i) is no longer relevant. By questions (ii) and (iii), the Circuit

Court Judge sought to determine whether he was correct to hold that the lease and

leaseback arrangements had no commercial reality and constituted an abuse of practice

such that they should be disregarded for the purposes of VAT and further, that such a

situation pertained notwithstanding the absence of implementing national legislation. On

the basis of the findings of fact of the Circuit Court Judge, by which both the High Court

and this Court are bound, there can be no doubt that the transactions were an abusive

practice for the purposes of the Halifax doctrine. As has been noted on a number of

occasions, the central thrust of the substantive appeal brought on behalf of the taxpayers

was to the effect that the abusive practice doctrine could not be applied in this case

because the transactions concerned predated Halifax and there were no national

implementing measures to provide a proper legal basis for disregarding the abusive

element of the transactions and imposing VAT on the transactions when shorn of their

8. 5 However, it is abundantly clear that the CJEU has determined that the abuse doctrine

does apply to transactions which predate the decision of the CJEU in Halifax. In addition,

it is clear that, as a matter of EU law, the application of that doctrine in practical terms

does not require specific national measures (or, indeed, EU legislation), given that it

derives from a fundamental principle of European Union law. In those circumstances, it

does not seem to me that any question of compatibility of Irish VAT legislation with EU

8. 6 It is correct that Irish VAT legislation, in itself, does not make provision for disregarding

certain transactions which are found to be abusive. However, it is clear from the

judgment of the CJEU in this case that it is unnecessary that there be national

implementing measures to enable the abuse doctrine to be applied in appropriate cases.

It follows that Irish law, including, as it does, mandatory requirements of EU law which

can apply in the absence of implementing measures, does itself permit the abuse doctrine

to be applied notwithstanding the absence of an express measure to be found in Irish VAT

legislation. Therefore, in the light of the answers given by the CJEU to the other

questions which arose on the reference to it by this Court, there can no longer be any

question of the compatibility of Irish VAT law with the overarching requirements of EU

law. It follows in turn that this Court is now in a position to determine the substantive

8. 7 In that context, it is appropriate to note that the High Court Judge agreed with the Circuit

Court Judge that, on the facts set out in the case stated, the lease and leaseback

arrangement concerned had no commercial reality, constituted an abusive practice and

should be redefined in order to reflect the true reality of the actions of the taxpayers. The

High Court Judge went on to find that such a position pertained notwithstanding the

8. 8 In the light of the findings of fact of the Circuit Court Judge, as set out in the case stated

in these proceedings, and in the light of the definitive determination of EU law to be found

in the judgment of the CJEU in the reference made to it by this Court in this case, it is

impossible to see any basis on which it can now properly be suggested that the High

Court Judge’s answer to those questions as posed by the Circuit Court Judge are

incorrect. I, therefore, propose that this Court dismiss the appeal in that regard and

8. 9 There remains the question of the payment of interest. It is clear from the case stated

that the Circuit Court Judge was of the view that no interest should be payable. The High

Court took the view that this matter was not properly before the Circuit Court and was

thus not properly before the High Court. Whether, and if so in what circumstances,

interest applies is a matter of law. If a taxpayer believes that the Revenue

Commissioners are seeking to demand the payment of interest which is not properly due

as a matter of law, then it is open to such a taxpayer to challenge what is said to be the

unlawful imposition of interest by any procedural means properly open. The question of

the payment or otherwise of interest on a tax found to be due because of the application

of the abuse principle is, indeed, a separate matter from whether the underlying tax

which is found to be due as a result of the application of that principle should itself be

8. 10 On the materials before this Court (which are the same materials which were before the

High Court), I am not satisfied that it can properly be said that the question of whether

interest was lawfully due on the tax found to be payable on foot of the application of the

abuse doctrine was properly before the Circuit Court Judge. In those circumstances, I am

satisfied that the High Court Judge was correct to hold that the question of interest was

not a matter properly before him, notwithstanding the fact that the Circuit Court Judge

had decided that no interest should be payable, but had asked a question in the case

8. 11 I would propose that question (iv) be answered as follows:-

“The question of whether interest is properly due on any VAT which the taxpayers are

liable to pay on foot of the substantive decision of the courts on these appeals is a

matter of law and not a matter within the discretion of the Circuit Court. The

question of whether, as a matter of law, interest is so payable in all the

circumstances of this case, was not, on the basis of the materials before this Court,

properly before the Circuit Court and, in those circumstances, the Circuit Court was

not correct to hold that no interest was payable. That answer is, however, without

prejudice to the entitlement of the taxpayers to seek to argue, in any appropriate

9. 1 For the reasons analysed earlier in this judgment, I am not satisfied that it is appropriate

for this Court to make a further reference to the Court of Justice in these proceedings. I

do not consider that the answers given by the CJEU to the questions already referred are

in any way unclear or are open to any legitimate suggestion to the effect that the CJEU

did not deal fully with each of the questions to which it did provide answers. Likewise, I

am not satisfied that the judgment of the CJEU in M.A.S. and M.B., which was given

shortly after the judgment of that court in these proceedings, casts doubt on the

correctness of the judgment given in these proceedings or gives rise to the consideration

of a new factor which might realistically lead to a different conclusion being reached. As

noted earlier, I am of the view that the circumstances of this appeal fall a long way short

of the sort of circumstances where, in accordance with the established jurisprudence, it

would be appropriate for this Court to, in substance, invite the CJEU to reconsider the

9. 2 Further, for the reasons analysed earlier in this judgment, I am also satisfied that the fact

that the CJEU did not find it appropriate to answer some of the issues presented to it by

this Court does not give rise to a situation where it is impossible finally to determine this

appeal. Each of the questions asked were concerned with different aspects of the same

fundamental issue, being as to whether there was a legitimate basis for deploying the

abuse principle, as set out in Halifax, in circumstances where the transactions in question

predated the judgment of the Court of Justice in Halifax itself. The context in which that

question arose was the absence of any specific Irish national measure which, at the

relevant time, could have been used to give rise, as a matter of national law, to the

adjusted treatment of the transactions which the Revenue Commissioners determined and

which the Circuit Court and the High Court upheld. For the reasons set out earlier in this

judgment, I am satisfied that it is clear from the findings of the Circuit Court Judge as set

out in the case stated and from the judgment of the CJEU in the reference in these

proceedings, that it is appropriate to treat the transactions concerned in the matter

9. 3 I should only add that I have proposed one minor change to the answer to question (iv).

However, with that minor exception, I would dismiss the appeal and uphold the decision

of the High Court. In respect of the answer to question (iv), I would vary the order of the

High Court by answering that question in the manner set out earlier in this judgment.

Result: Appeal dismissed

	[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]
	Supreme Court of Ireland Decisions
You are here: BAILII >> Databases >> Supreme Court of Ireland Decisions >> Cussens & ors v T.G. Brosnan (Inspector of Taxes) [2019] IESC 77 (01 November 2019) URL: http://www.bailii.org/ie/cases/IESC/2019/2019_IESC_77.html Cite as: [2019] IESC 77

Supreme Court of Ireland Decisions