High Court of Ireland Decisions

APPROVED                                                                                                 [2025] IEHC 78

THE HIGH COURT

Record No.: 2024/136 R

BETWEEN:

 

FIRE SAFETY SECURITY ADVANTAGE LIMITED (FORMERLY SUPERIOR GROUP IRL LIMITED)

                                                                                                            Appellant

 

-and-

 

THE REVENUE COMMISSIONERS

                                                                                                            Respondent

 

JUDGMENT of Mr Justice Rory Mulcahy delivered on 14 February 2025

 

Introduction

 

1.         This appeal by way of case stated concerns the Employment Wages Subsidy Scheme (the "EWSS" or "Scheme") introduced by the Emergency Measures in the Public Interest (Covid-19) Act 2020 as amended (the "EMPI Act 2020").

 

2.         Between July 2020 and August 2021, the appellant received EWSS subsidies in the total amount of €2,244,179.50. On 15 July 2022, the respondent ("Revenue") raised 14 separate assessments against the appellant. The assessments, taken together, sought repayment of the entirety of the EWSS subsidies received by the appellant. Each of the assessments stated that Revenue was satisfied that the appellant had "not abided by the terms of the scheme and ha[d] incorrectly been paid subsidies in" a specified amount.

3.         The appellant appealed those assessments to the Tax Appeal Commission ("TAC"). By determination dated 7 December 2023 ("the Determination"), the Tax Appeals Commissioner ("the Commissioner") concluded that Revenue was correct in raising the assessments. In this case stated, the appellant argues that the Commissioner (and Revenue) misapplied the provisions of the EMPI Act 2020.

 

The Tax Appeal Commission

 

4.         At paragraph 38 of the Determination, the Commissioner set out his material findings of fact. In order to explain the context in which this case stated arises, these can helpfully be set out in full:

 

1.      The Appellant is a security company which was incorporated in 2010. On 19 May 2022, it changed its name from the Superior Group IRL Limited to Fire Safety Security Advantage Limited.

2.      The Appellant registered to participate in the EWSS on 1 August 2020. It received payments under the EWSS in the total amount of €2,244,179.50 between July 2020 and August 2021 inclusive.

3.      The Appellant sought further payments under the EWSS for September, October and November 2021 but these payments were withheld by the Respondent and not paid to the Appellant.

4.      On 15 July 2022, the Respondent raised assessments against the Appellant in respect of the entirety of the EWSS payments received by the Appellant between July 2020 and August 2021, i.e. €2,244,179.50. These assessments were appealed to the Commission.

5.      The hearing of the appeal was held on 9 November 2023. On 7 November 2023, the Appellant's agent submitted new calculations on behalf of the Appellant. These calculations purported to show that the Appellant owed €1,091,229.58 in EWSS repayments, but was entitled to a further €1,006,278.00 for months not granted or claimed, leaving a 'net liability' of €84,951.58.

6.      The calculations carried out by the Appellant's agent and submitted on 7 November were not based on contemporaneous rolling reviews but were calculated on an ex post facto, retrospective basis using actual turnover figures (as claimed) for 2020, 2021 and 2022 versus actual turnover figures (as claimed) for 2019.

7.      The Appellant's calculations, which aimed to show which months the Appellant was eligible for EWSS payments, were performed on a straight month versus month basis, e.g. July 2019 turnover versus July 2020 turnover. However, the EWSS required that calculations be carried out on a 'specified period' versus 'corresponding period' basis.

 

5.         The reference to "as claimed" in point 6 of the material facts appears to refer to the fact that Revenue disputed the appellant's figures but requested that the Commissioner proceed on the basis of the figures provided by the appellant in circumstances where Revenue contended that, even on those figures, the appellant had not been entitled to any EWSS payments and, therefore, its assessments should stand. The Commissioner agreed to proceed on that basis, taking the appellant's case "at its height". By this, he clearly meant no more than he would accept that the appellant's figures were accurate notwithstanding that they were disputed.

 

6.         In these proceedings, the appellant pointed out, as was fairly accepted by Revenue, that the last of the 'findings of fact', that the EWSS required that calculations be carried out on a 'specified period' versus 'corresponding period' basis, is more properly characterised as a finding of law, in fact the very question of law which is at the heart of this case stated.

 

7.         The appellant's claim in the appeal before the respondent was based on a retrospective review of its accounts by the appellant's agent. As appears from the material findings of fact, the agent compared the appellant's actual turnover on a month-by-month basis between the specified period and the corresponding period. Where its turnover was 30% lower in any given month in the specified period when compared with that month in the corresponding period, the appellant contended that it was entitled to EWSS payments for that month. It argued that this process was in accordance with the guidelines issued pursuant to section 28B of the EMPI Act 2020.

 

8.         In addition, the appellant claimed for some of the EWSS payments which had been withheld by Revenue and for payments for months which had never previously been claimed by it.

 

9.         Revenue contended that the appeal should be refused on a number of grounds. First, the entitlement to EWSS payments could not be determined based on a retrospective assessment of turnover, rather it was necessary to show that there had been an anticipated reduction in turnover when the payment was claimed. Second, even if it were permissible to rely on the appellant's retrospective figures, the correct comparison was between the entire specified period and the entire corresponding period, not a month-by-month comparison. Put simply, eligibility for any payments, argued Revenue, required that there be a 30% reduction in turnover over the full specified period when compared with the relevant corresponding period. Taking that approach, the appellant's figures did not show a reduction of 30% in any of the specified periods when compared to the relevant corresponding period and, therefore, did not establish entitlement to any payment. Finally, Revenue contended that the Commissioner was confined to considering assessments actually raised by it and could not consider the claims in relation to payments which had been disallowed, or in relation to periods where no claim had previously been made.

 

10.     At the outset of his analysis, the Commissioner stressed that the burden of proof rested on the appellant to show that Revenue was incorrect in raising the assessments it did. He cited the decision of the High Court (Charleton J) in Menolly Homes Ltd v Appeal Commissioners [2010] IEHC 49 (at para. 22):

 

"The burden of proof in this appeal process is, as in all taxation appeals, on the taxpayer. This is not a plenary civil hearing. It is an enquiry by the Appeal Commissioners as to whether the taxpayer has shown that the relevant tax is not payable."

 

11.     The Commissioner agreed that his jurisdiction was confined to the assessments actually raised by the respondent. He concluded that there was no appeal against disallowed EWSS payments provided for by the EMPI Act 2020, nor was he entitled to consider claims for payments for periods which had never previously been claimed. He noted that no grounds for appeal had, in any event, been advanced in relation to these periods.

 

12.     The Determination records a dispute between the parties as to whether rolling reviews of eligibility for the Scheme had been carried out by the appellant, as required by the Act, noting that no evidence was provided for the appellant's assertion that they had been. He considered this question irrelevant, however, because, as set out at paragraph 58, the Commissioner found that the "figures relied on by [the appellant] were, by express admission, not the product of contemporaneous rolling reviews carried out during the Appellant's participation in the EWSS, but were calculated and derived on an ex post facto, retrospective basis for the purposes of this appeal." He concluded that the appellant's reliance on a retrospective analysis was impermissible and that any entitlement to EWSS payments was required to be based on projections of future reductions in turnover.

 

13.     As noted at paragraph 54 of the Determination, Revenue calculated, using the appellant's figures but applying the correct test, i.e., comparing the specified periods with the relevant correspondent periods, that the appellant was not entitled to subsidies, because there was no reduction in turnover of 30% for any specified period. At paragraph 55, the Commissioner stated:

 

"The Commissioner considers that it was incumbent on the Appellant to attempt to demonstrate that the Respondent's calculations were incorrect, but that it did not do so. The Appellant's agent asked the Commissioner to review its figures "and make a determination based on it." However, as the Commissioner made clear to the Appellant's agent in the hearing, it is not his role to review a party's figures/accounts etc. and come to an independent view as to what the correct assessment might be. It is his role to determine whether an appellant has sufficiently demonstrated that an assessment raised by the Respondent is correct."

 

14.     He noted that despite repeated invitations to do so, the appellant did not challenge Revenue's calculations or make submissions as to why Revenue's understanding of the statutory test was wrong. He concluded that it had failed to discharge the evidential burden of showing that the assessments were not payable.

 

15.     Accordingly, the Commissioner concluded that Revenue was correct in raising EWSS assessments against the appellant in the amount of €2,244,179.50 and that the assessments should, therefore, stand.

 

16.     By notice dated 18 January 2024, the appellant sought to appeal by way of case stated. In its notice, the appellant argued that the Commissioner had erred in three respects.

 

17.     First, it contended that the Commissioner had erred by finding that a comparison of monthly turnover figures to the corresponding monthly turnover figure in 2019 was an invalid test of projected turnover. It argued that there was "nothing in the guidelines to prohibit this".

 

18.     Second, in relation to whether monthly reviews were carried out, it argued that they were carried out but that the appellant had acted reasonably in waiting until the end of each six-month period to assess performance. Its notice stated that the Commissioner had erred in failing to give sufficient weight to the fact that the final outcome can only be determined at the end of each six-month period.

 

19.     Third, the notice claimed that the Commissioner had erred in not considering the general repayment of taxes overpaid provisions. As stated in the notice:

 

"On first principles if a taxpayer is entitled to a relief, he or she should get that relief. Based on the legislation the EWSS relief applies where certain conditions are met. The absence of a repaying clause in the EWSS legislation does not prevent a retrospective claim for repayment of taxes overpaid within the general time limit."

 

20.      Although Revenue objected to the form of the appellant's request for a case stated, the Commissioner did not consider it appropriate to decline to state a case. He sent a draft case stated to the parties on 21 March 2024 in which he had distilled from the appellant's notice three points of law to be stated for the opinion of the High Court. No representations on the draft case stated were received from either party. The case stated was transmitted to the High Court on 22 May 2024.

 

Points of Law

21.     At paragraph 47 of the case stated, the Commissioner set out the points of law on which the opinion of the High Court was being sought. These are:

 

I.                    Did the Commissioner err in his interpretation of the "specified period" and "corresponding period" as defined by section 28B of the EMPI Act 2020 and in determining that the Appellant's application of a straight "month versus month" comparison, for the purpose of determining whether it had incurred a reduction in turnover of at least 30% was not in compliance with the requirements of section 28B?

 

II.                 Did the Commissioner err in determining that the Appellant was not entitled to use figures calculated on a retrospective basis to claim for EWSS payments?

 

III.              Did the Commissioner err in determining that the Appellant could only appeal against the assessments to tax raised against it by the Respondent, and that he did not have jurisdiction to consider claims by the Appellant for EWSS payments not allowed by the Respondent or claims for payments not made at the time by the Appellant but subsequently raised by it for the purposes of the appeal?

 

Hearing of case stated

22.     The case stated was heard on 28 January 2025. At the outset of the hearing, counsel for the appellant indicated that he no longer wished to pursue the points of law raised at (II) and (III) above and that the "net issue, in very simple terms, is the accounting period". I queried with the parties the appropriateness of leaving unanswered questions raised in a case stated, though Revenue had no objection to the course of action proposed by the appellant.

 

23.     It bears noting that the appellant suggested that the second question was characterised by the appellant as "not really appropriate" because there wasn't a finding of fact that the figures were retrospective. In light of the express conclusion of the Commissioner quoted above at paragraph 12, this is a little difficult to understand. The Commissioner concluded that the appellant had accepted that its figures were retrospective. It is plain that this is so. The appellant then requested a case stated on the Commissioner's conclusion that reliance on such figures was impermissible. There was nothing, therefore, inappropriate about the question stated for the opinion of this court.

 

24.     It is unsatisfactory that the Commissioner be asked to state a case for the opinion of the High Court on an issue which the requesting party then does not seek to pursue. Although section 949AP of the Taxes Consolidation Act 1997, as amended ("TCA 1997") makes clear that the process before this court is an appeal on a point of law by way of case stated, section 949AR(1) provides that the High Court shall hear and determine any question of law arising in a case stated. It would, however, be inappropriate to determine an issue not argued before this court.

 

25.     Section 949AR(2) permits the court to send a case stated back to the TAC for amendment. The case stated here could be sent back for amendment in order to omit the second and third questions posed in circumstances where the appellant no longer wishes to appeal on the grounds that the Commissioner erred in the manner suggested. However, in a number of cases, a court has exercised a jurisdiction to amend a case stated of its own motion, i.e., without sending it back to the TAC. In O'Sullivan v Revenue Commissioners [2021] IEHC 118, the High Court (Sanfey J) noted as follows (at para. 58):

 

"I do not consider that any purpose would be served in the present case by sending the case stated back to the Commissioner for amendment in circumstances where I have had the benefit of submissions from both parties as to the suitability of the questions posed by the Commissioner. I am satisfied that s.949AR(2), which states that the High Court "...may send the case stated back to [TAC] for amendment...", is permissive only, and that the High Court can amend the questions to reflect more accurately the issues that arise on the case stated."

 

26.     In that case, the questions were amended for the purpose of more accurately reflecting the legal issues arising between the parties. In this case, where the issues identified in questions 2 and 3 no longer arise between the parties, it seems to me that the appropriate course is that I treat the case stated as amended by omission of those two questions.

 

27.     As appears below, however, the question of retrospectivity, at issue in the second question is relevant to the consideration of the one issue of law remaining.

 

28.     On that one issue, both parties were agreed that, in effect, the case stated turns on a question of statutory interpretation. Before addressing the arguments advanced, it is helpful, therefore, to set out the relevant and detailed statutory provisions.

 

 

 

Section 28B of the EMPI Act 2020

 

29.     Section 28B of the EMPI Act 2020 was inserted by section 2 of the Financial Provisions (Covid-19)(No. 2) Act 2020. It sets out the basis upon which an employer could qualify for subsidy payments under the EWSS. The section runs to twenty-three subsections, not all of which are relevant for present purposes.

 

30.     The relevant provisions for the purpose of this case stated are set out below, as originally enacted:

(1)   In this section -

...

'qualifying period' means the period commencing on 1 July 2020 and expiring on 31 March 2021 or on such later day than 31 March 2021 as the Minister may specify in an order made by him or her under subsection (21)(a)

...

(2) Subject to subsections (4) and (5), this section shall apply to an employer where—

(a) (i) in accordance with guidelines published by the Revenue Commissioners under subsection (20)(a), the employer demonstrates to the satisfaction of the Revenue Commissioners that, by reason of Covid-19 and the disruption that is being caused thereby to commerce—

(I) there will occur in the period from 1 July 2020 to 31 December 2020 (in this subsection referred to as "the specified period"), at least a 30 per cent reduction, or such other percentage reduction as the Minister may specify in an order made by him or her under subsection (21)(b), in either the turnover of the employer's business or in the customer orders being received by the employer by reference to the period from 1 July 2019 to 31 December 2019 (in this subsection referred to as "the corresponding period"),

(II) in the case where the business of the employer has not operated for the whole of the corresponding period but the commencement of that business's operation occurred no later than 1 November 2019, there will occur in the part of the specified period, which corresponds to the part of the corresponding period in which the business has operated, at least a 30 per cent reduction, or such other percentage reduction as the Minister may specify in an order made by him or her under subsection (21)(b), in either the turnover of the employer's business or in the customer orders being received by the employer by reference to that part of the corresponding period, or

...

and

(b) the employer satisfies the conditions specified in subsection (3).

(3) The conditions referred to in subsection (2)(b) are—

(a) the employer has logged on to the online system of the Revenue Commissioners (in this section referred to as "ROS") and applied  on ROS to be registered as an employer to which this section applies,

(b) having read the declaration referred to in ROS as the "Covid-19: Employment Wage Subsidy Scheme" declaration, the employer has submitted that declaration to the Revenue Commissioners through ROS,

(c) the employer has provided details of the employer's bank account on ROS in the "Manage bank accounts" and "Manage EFT" fields, and

(d) the employer is throughout the qualifying period eligible for a tax clearance certificate, within the meaning of section 1095 of the Act, to be issued to him or her.

...

(5) Where, by virtue of subsection (2) (apart from paragraph (a)(ii) thereof), and subsection (3), an employer is an employer to which this section applies—

(a) immediately upon the end of each income tax month (in this subsection referred to as "the relevant income tax month") in the qualifying period, apart from July 2020 and the last such month, the employer shall review his or her business circumstances, and

(b) if, based on the result of that review, it is manifest to the employer that the outcome referred to in clause (I), (II) or (III), as the case may be, of  subsection (2)(a)(i), that had previously been envisaged would occur will not, in fact, now occur, then—

(i) the employer shall immediately log on to ROS and declare that, from the first day of the income tax month following the relevant income tax month (in subparagraph (ii) referred to as "the relevant day"), the employer is no longer an employer to which this section applies, and

(ii) on and from the relevant day, the employer shall not be an employer to which this section applies and shall not represent that his or her status is otherwise than as referred to in this subparagraph nor cause the Revenue Commissioners to believe it to be so otherwise.

(6) (a) In this subsection, "authorised officer" means an officer of the Revenue Commissioners authorised by them in writing to exercise the powers conferred by this subsection.

(b) Where, upon making enquiries or on the basis of information already in the possession of the Revenue Commissioners, an authorised officer determines that it is reasonable to conclude that an employer, at any time in the qualifying period—

(i) has, with respect to the operation of the employer's payroll, in relation to the payment of emoluments to a qualifying employee, resorted to any contrivance by way of deferring, suspending, increasing or decreasing the gross pay that would otherwise have normally been paid to the qualifying employee, with a view to securing from the Revenue Commissioners a wage subsidy payment, or an increase in the amount of a wage subsidy payment, in relation to the qualifying employee, or

...

the employer shall be deemed to have ceased to be, and to have never been, an employer to which this section applies in relation to any of its employees, and any wage subsidy payments that had been paid by the Revenue Commissioners to the employer in relation to those employees shall be refunded by the employer to the Revenue Commissioners.

...

(7) Subject to subsections (8) and (9), where this section applies to an employer, then, following the notification by the employer of the payment of emoluments to a qualifying employee in an income tax month in the qualifying period in accordance with Regulation 10 of the Regulations, the following provisions shall apply where such notification was received by the Revenue Commissioners no later than the return date (within the meaning of section 983 of the Act) for the income tax month:

(a) the Revenue Commissioners shall pay to the employer in relation to the qualifying employee the amount (in this section referred to as a "wage subsidy payment") specified in subsection (8);

(b) the payment referred to in paragraph (a) shall be made by way of bank transfer to the bank account of the employer, the details of which have been provided in accordance with subsection (3)(c);

(c) where, under paragraph (a), two or more payments are required to be made by the Revenue Commissioners to the employer in respect of an income tax month, whether in relation to one or more than one qualifying employee, all such payments under paragraph (a) may be aggregated by the Revenue Commissioners for the purposes of compliance with paragraph (b);

(d) a payment or aggregate payment required under this subsection to be made by the Revenue Commissioners to the employer in respect of an income tax month in relation to a qualifying employee or qualifying employees shall be made by the Revenue Commissioners as soon as may be practicable after the return date (within the meaning of section 983 of the Act) for the income tax month concerned;

(e) as respects the payment of the aforesaid emoluments to the qualifying employee, the employer shall treat the qualifying employee as falling within such class of Pay-Related Social Insurance for the purposes of the employer's obligations under the Social Welfare Acts and the employer's reporting obligations specified in Chapter 4 of Part 42 of the Act and the Regulations as the employer determines to be appropriate having regard to guidelines published by the Revenue Commissioners under subsection (20)(b);

(f) the employer shall comply with any other direction of the Revenue Commissioners that, by virtue of this paragraph, they may reasonably give regarding the payment to the employer of a wage subsidy payment in relation to a qualifying employee in accordance with paragraph (a), being a direction that facilitates the effective administration of this section.

...

 

(11) Where the Revenue Commissioners have paid to an employer a wage subsidy payment in relation to an employee in accordance with subsection (7)(a) and it transpires that the employer was not entitled to receive such payment in relation to the employee, the wage subsidy payment so paid to the employer shall be refunded by the employer to the Revenue Commissioners.

(12) An amount that is required to be refunded by an employer to the Revenue Commissioners in accordance with subsection (11) (in this section referred to as "relevant tax") shall be treated as if it were income tax due and payable by the employer from the date the wage subsidy payment referred to in that subsection had been paid by the Revenue Commissioners to the employer and shall be so due and payable without the making of an assessment.

(13) Notwithstanding subsection (12), where an officer of the Revenue Commissioners is satisfied there is an amount of relevant tax due to be paid by an employer which has not been paid, that officer may make an assessment on the employer to the best of the officer's judgment, and any amount of relevant tax due under an assessment so made shall be due and payable from the date the wage subsidy payment referred to in subsection (11) had been paid by the Revenue Commissioners to the employer.

...

 

(20) The Revenue Commissioners shall prepare and publish guidelines with respect to—

(a) the matters that are considered by them to be matters to which regard shall be had in determining whether a reduction, as referred to in subsection (2), will occur by reason of Covid-19 and the disruption that is being caused thereby to commerce, and

(b) the matters to which an employer shall have regard in determining the appropriate class of Pay-Related Social Insurance to be operated by an employer in relation to a qualifying employee for the purposes of compliance by the employer with subsection (7)(e).

 

31.     The EWSS continued into 2021 and 2022 and, therefore, as explained in the case stated, section 28B was amended from time to time to, inter alia, account for changes to the specified periods and corresponding periods. As originally enacted in s. 28B(2), employers were entitled to EWSS where they could establish that in the specified period, 1 July 2020 to 31 December 2020, turnover or customer orders would decrease by 30% when compared with the corresponding period, 1 July 2019 to 31 December 2019. (For convenience, I will refer only to turnover hereafter, but the same principles apply to customer orders.)

 

32.     From 1 January 2021, an additional specified period was added, 1 January 2021 to 30 June 2021. The corresponding period for that specified period was 1 January 2019 to 30 June 2019 (section 28B(2A)). From 1 July 2021, a further specified period was added, 1 January 2021 to 31 December 2021, with the corresponding period fixed at 1 January 2019 to 31 December 2019 (section 28B(2B)). Finally, from 1 January 2022, a specified period from 1 December 2021 to 31 January 2022 was added, with a corresponding period of 1 December 2019 to 31 January 2020 (section 28B(2C)).

 

Guidelines

  

33.     Section 28B(2)(a) provides an employer to demonstrate to the satisfaction of Revenue "in accordance with guidelines published by the Revenue Commissioners under section 20(a)" eligibility for the Scheme.

 

34.     Revenue published guidelines, entitled 'Employment Wage Subsidy Scheme, Main Guidelines on the operation of the Employment Wage Subsidy Scheme' ("the Guidelines"). These were updated from time to time. The parties referred me to the version dated 9 July 2021 but were agreed that any amendment in the terms of the Guidelines from those originally published was immaterial for the purpose of these proceedings.

 

35.     Page 3 of the Guidelines set out that:

 

"The scheme is administered by Revenue on a "self-assessment" basis. Revenue will not be looking for proof of eligibility at the registration stage. We will, in the future, based on risk criteria, review eligibility. In that context, employers should retain their evidence/basis for entering and remaining in the scheme."

 

36.      Appendix 1 contains additional information on how an employer might determine or establish that they will suffer a reduction in turnover.

 

37.     Under the heading 'Continued Review of Employer Eligibility required', the Guidelines provide as follows (p. 8):

 

"Employers must undertake a review of the six month period on the last day of every month (other than July 2020 and the final month of the scheme) to be satisfied whether they continue to meet the eligibility criteria and to take the necessary action of withdrawing from the scheme where they do not.

 

This review must be undertaken on a rolling monthly basis comparing the actual and projected business performance over the specified period (July to December 2020 for 2020 paydates and January to June 2021 for January to June 2021 paydates) as illustrated below:"

 

38.     The Guidelines then set out some illustrative examples of how those reviews, referred to as rolling reviews in the Determination, should take place. These show that at the outset of the specified period, eligibility for the scheme is based entirely on projected turnover, but as the relevant period progresses, greater reliance will be placed on actual figures because, at each monthly review an additional month of actual rather than projected data will be available.

 

39.     On page 10 of the Guidelines, it is made clear that if an employer becomes aware at any time, i.e., even prior to a monthly review, that it will no longer meet the eligibility criteria, it must immediately deregister from the scheme. However, the Guidelines state:

 

"Subsidies correctly claimed in accordance with the terms and conditions of the scheme prior to deregistration will not be repayable."

 

40.     Registration for the scheme was through Revenue Online Service (ROS). At page 20 of the Guidelines, it states that as part of the registration process, employers will be required to agree to the following declaration:

 

"I declare that I have read the eligibility criteria for the Employment Wage Subsidy Scheme and that the business qualifies for the scheme. I undertake that the business will abide by the terms and conditions of the scheme. I understand and accept that failure by the business to adhere to the terms of the scheme could result in recoupment of monies together with interest, penalties and prosecution. I undertake that the business will retain all records relating to the scheme, including the basis of eligibility, for review by Revenue."

 

Applicable Principles

                                                              i.      Appeal by way of case stated

 

41.     The principles applicable to the determination of a case stated and to the issues of statutory interpretation which arise were not put in issue by either party.

 

42.      The proper approach for a court to take in considering a case stated is that set out by Kenny J in Mara (Inspector of Taxes) v Hummingbird [1982] ILRM 421 as approved by the Supreme Court in O'Culachain v McMullan Brothers Ltd [1995] 2 IR 217 (at pp. 222 -223).

 

"(1) Findings of primary fact by the judge should not be disturbed unless there is no evidence to support them.

(2) Inferences from primary facts are mixed questions of fact and law.

(3) If the judge's conclusions show that he has adopted a wrong view of the law, they should be set aside.

(4) If his conclusions are not based on a mistaken view of the law, they should not be set aside unless the inferences which he drew were ones which no reasonable judge could draw.

(5) Some evidence will point to one conclusion, other evidence to the opposite: these are essentially matters of degree and the judge's conclusions should not be disturbed (even if the Court does not agree with them, for we are not retrying the case) unless they are such that a reasonable judge could not have arrived at them or they are based on a mistaken view of the law."

 

43.     Those principles have been approved more recently in Byrne v Revenue Commissioners [2021] IEHC 262, in which Twomey J noted the "high threshold" facing an appellant in a case stated, having regard to the curial deference due to the Tax Appeals Commission. Twomey J's observations were, in turn, endorsed in McNamara v Revenue Commissioners [2023] IEHC 15 by Barr J, though Barr J did sound a note of caution, referencing the observations of Murray J in Stanberry Investments Ltd v Commissioner of Valuation [2020] IECA 33 that curial deference depends on a tribunal having provided a properly reasoned decision, and was not a mechanism for compensating where the decision was not so reasoned.

 

ii.         Statutory Interpretation

 

44.     The principles applicable to statutory interpretation have been the subject of a number of recent decisions of the Superior Courts, and accordingly, there was also no dispute between the parties regarding the proper approach to take. A helpful review of the principles is to be found in Perrigo Pharma International DAC v McNamara and Ors [2020] IEHC 552, a case concerning the interpretation of provisions of the Taxes Consolidation Act 1997 (see paragraph 74).

 

45.     In the more recent Supreme Court decision in Heather Hill Management Company CLG v An Bord Pleanála [2022] IESC 43; [2022] ILRM 313, the court (Murray J) again reviewed the relevant authorities. The court emphasised the primacy of the words used in a statute but explained that even plain words should not be interpreted divorced from the context in which they are used.

 

Arguments

 

46.     Before briefly summarising the appellant's arguments, it is worth noting that the arguments advanced by the appellant at the hearing of the case stated differ substantially from those advanced before the Commissioner and, perhaps more strikingly, from those contained in the notice requesting a case stated and in its written submissions. Of course, the appellant has indicated that it does not wish to pursue the second and third points of law and therefore some adjustment could be anticipated, but even its arguments in relation to the first question bear little relation to those previously advanced, even those set out in its written submissions. In fact, the focus of the appellant's submissions has shifted to such an extent that it is not clear that there is any disagreement between the parties on the one question of law on which this court's opinion is still sought by the parties, though there may be some disagreement about what consequences flow from the answer to that question.

 

47.     As appears from the narrative above, at the hearing before the Commissioner, the appellant made a case that it was entitled to subsidies for each month in which it could show that its turnover had reduced by 30% from the turnover in the corresponding period. Notably, as appears from the Determination, the appellant had called in aid the Guidelines to make that argument. The Commissioner concluded as follows in relation to this argument:

 

"The Commissioner is satisfied that there is nothing in the Guidelines to support the Appellant's contention that a straight month versus month comparison was permitted, and he finds that they were not. Consequently, as this was the basis on which the Appellant's appeal was brought, it follows that the appeal cannot succeed."

 

48.     In its notice seeking a case stated, the appellant contended that there was "nothing in the guidelines" to prohibit the approach it had taken. But in its written submissions, the appellant characterised the Commissioner's decision as having impermissibly relied on the Guidelines to interpret the Act. This, despite the fact that it was the appellant who had requested the Commissioner to apply the Guidelines and, moreover, without identifying anything in the Guidelines which was inconsistent with the Act.

 

49.     In oral submissions to the court, the appellant, for the first time, engaged with the provisions of section 28B. It focussed on sub-sections 5 and 6 of section 28B. It argued that sub-sections 5 and 6 provided the mechanisms by which an employer who had registered as part of the EWSS could "fall out" of the scheme. Sub-section 5 is the provision of the EMPI Act 2020 which required an employer to keep under review the question of whether it satisfied the qualifying criteria for the scheme. Where it becomes apparent to an employer that it no longer meets the criteria, then it must immediately notify Revenue, and they will thereafter cease to be an employer to whom the scheme applies. However, the appellant argues that this does not have the effect of disentitling such an employer to subsidies already received, i.e., at a time when the employer did meet the criteria. It refers to the passage from page 10 of the Guidelines quoted above to the effect that subsidies correctly claimed do not become repayable on registration.

 

50.     It contrasts the provisions of sub-section 5 by which, it argues, deregistration does not operate to retrospectively disentitle an employer to subsidies already received, with those of sub-section 6, by which may become so disentitled. That section expressly provides that where an employer is found, in effect, to have obtained EWSS payments by a "contrivance", the employer will be deemed never to have been an employer to whom the scheme applied, and any subsidies received will become repayable.

 

51.     Since Revenue has not relied on sub-section 6, the appellant argues that the Commissioner should have determined when it became disentitled to EWSS, i.e. when it ceased to satisfy the criteria for the scheme and disallowed  only subsidies received after that date. It claims that the Commissioner erred in disallowing all the subsidies without making the necessary findings of fact to determine to which subsidies it was no longer entitled.

 

52.     It argues that it claimed, at the hearing of its appeal, for months where its turnover was down 30% on the corresponding month in the corresponding period and that the Commissioner erred in disallowing all such claims on the basis that the turnover for each of the periods in respect of which claims had been made had not fallen 30% when compared with the corresponding periods. It argued that it is clear from the remaining provisions of section 28B, in particular, sub-section 7, that the Act contemplates payments being made under the scheme in respect of particular months, not just for entire specified periods. It suggested an example of an employer who, having appropriately registered for the scheme on the basis of an anticipated reduction in turnover in a specified period, upon review during that specified period, forms the view that its turnover will not decrease by as much as expected and therefore deregisters from the scheme. In such a scenario, absent evidence of a "contrivance", the appellant argues that the employer would be entitled to retain any subsidies it had received prior to deregistration.

 

53.     The appellant maintained the argument that it was permissible to compare on a month-by-month basis, but its chief complaint was that the Commissioner had erred in concluding that it was not entitled to any subsidy because its turnover for each specified period had not fallen by 30% or more.

 

54.     The appellant's focus was on sub-section 5 and, by way of contrast, sub-section 6. Revenue's argument was directed almost exclusively to sub-section 2 of section 28B. This section (and the subsequent amendments to section 28B in sub-sections 2A, 2B and 2C) set out the qualifying criteria for the scheme. On Revenue's case, it is abundantly clear from those provisions that it is only where the taxpayer satisfies Revenue that turnover for the entire of any of the specified periods, for instance, under sub-section 2,  1 July 2020 to 31 December 2020, will fall by 30% when compared with the corresponding period, 1 July 2019 to 31 July 2019, that the taxpayer will qualify for the scheme. It is immaterial, on Revenue's case, whether turnover in any given month was 30% less than the corresponding month in the corresponding period.

 

55.     It agreed with the appellant's suggestion that a person who received subsidies on the basis of an anticipated reduction in turnover which didn't materialise might be permitted to retain the subsidies received if that person complied with the terms of the scheme. Those terms included reviewing the anticipated shortfall in turnover every month in a specified period and deregistering from the scheme immediately it became apparent that the qualifying criteria were no longer satisfied. That is not what occurred in this case, and the appellant was not entitled to rely on a hypothetical scenario to assert legal error on the part of the Commissioner.

 

56.     Revenue stressed the prospective nature of the scheme - that entitlement to EWSS was based on anticipated reduction in turnover for a specified period, not on evidence of an actual reduction in turnover.

 

Discussion

57.     The first question posed in the case stated is, in terms, a question of statutory interpretation. However, it seems from the arguments advanced at the hearing that the question does not fully capture the dispute between the parties. In order to try and answer the question posed and to address the issues raised by the parties at the hearing, I propose first to consider how the statutory scheme operates, interpreting the statute in accordance with the principles identified above, and then address the consequence of that interpretation for the case stated. There is, in fact, little difficulty in interpreting the statute; the words used in their ordinary meaning and in their immediate context are readily capable of being understood. The difficulty in this case appears to have arisen because the scheme was not operated precisely as contemplated by the statute.

 

58.     Section 28B sets out qualifying criteria which an employer must satisfy in order to be entitled to claim EWSS payments. Section 28B(2)(a)(i)(I) contemplates that an employer must demonstrate to Revenue - in accordance with Guidelines to be published by Revenue - that it will experience a 30% reduction in turnover "in" one period "by reference to" a second period. The two periods to be compared in section 28B, as originally enacted, were 1 July 2020 to 31 December 2020 and 1 July 2019 and 31 December 2019.

 

59.     Although the appellant sought to argue that it was entitled to subsidies for individual months, it did not seriously dispute the qualifying criteria for the scheme required a comparison which showed a reduction in turnover over the entire relevant specified period, or suggest an interpretation of the Act which entitled an employer to qualify for the Scheme by showing that its turnover for a particular month would be down 30% on the turnover for the month in the corresponding period. There is, in my view, no such interpretation available and the approach of the Commissioner and Revenue reflects the wording of the Act.

 

60.     Section 28B(2)(a)(i)(I) requires a reduction in turnover "in" a specified period by reference to another specified period. Although the word "in" could conceivably bear the meaning "during", so that a reduction in turnover at any point (or for an individual month) during the specified period might be sufficient, there is no ambiguity regarding what the reduction in turnover must be judged by reference to, i.e., the corresponding period, not some part of the corresponding period. If that is so, then turnover "in" the specified period must refer to turnover in the entire specified period.

 

61.     That this is the correct interpretation is confirmed by section 28B(2)(a)(i)(II) which expressly provides that where an employer has not operated for the whole of the corresponding period, then eligibility for the Scheme requires that there be a reduction in turnover "in the part of the specified period" which corresponds to the part of the corresponding period in which the business did operate which makes all the clear that it is in turnover in the entirety of each periods which must be compared. The correctness of the Commissioner's (and Revenue's) interpretation is, moreover, confirmed by the requirement for ongoing reviews in sub-section 5.

 

62.     The appellant's case at the hearing was that, once an employer had registered for the Scheme, a conclusion that it did not meet the qualifying criteria - whether based on rolling reviews or otherwise - might have had the effect that that employer could no longer claim the benefit of the Scheme, but that any subsidies it had been paid up to that point could be retained. Revenue accepts that that is correct in principle. However, Revenue's position is that the appellant could only have been entitled to retain subsidies paid if it complied with the terms of the scheme. In this context, what Revenue really means is that the appellant was only entitled to retain subsidies if it met the qualifying criteria for the scheme. Revenue relies on section 28B(11), pursuant to which an employer must repay any subsidies which it transpires the employer was not entitled to receive.

 

63.     The difference between the parties appears to arise not out of conflicting interpretations of section 28B, or of the relevant period for the purpose of comparison but rather out of a dispute as to how the Scheme should have operated in the appellant's case. As noted above, this arises because the Scheme as operated does not precisely match the statutory scheme. The Act contemplates that an employer be required to demonstrate what was anticipated to happen in order to qualify for payments. The Guidelines, however, provided a slightly different mechanism for entry to the Scheme. Rather than demonstrating eligibility to Revenue in advance, an employer was entitled to register for the Scheme on a "self-assessment" basis but subject to the entitlement of Revenue to review eligibility in due course, an entitlement clearly provided for by section 28B(11). The manner in which Revenue elected to implement the Scheme is not the subject of this case stated, but may have created some of the confusion between the parties.

 

64.     The difficulty has arisen because the Scheme, as provided by statute, contemplates that there would be a prior determination that an employer has demonstrated that it meets the qualifying criteria. In other words, there would be a decision that an employer was entitled to receive subsidies. Had that occurred and it was determined, on the basis of a rolling review or otherwise, that the qualifying criteria were no longer met, then there would be no basis under the statute, other than the mechanism provided in sub-section 6, for reclaiming subsidies paid prior to the determination that the criteria were no longer met.

 

65.     However, because of the manner in which the Scheme was operated, there was no such prior determination. Although, perhaps unfortunately, not addressed in these terms before the Commissioner, the question then arose as to what the statute required or permitted in the context of the appellant's appeal.

 

66.     There is, also unfortunately, a lack of clarity in the assessments issued by Revenue. Each refers to the appellant not having abided by the terms of the Scheme and having received subsidies to which it was not entitled. It is not made clear with what terms of the Scheme the appellant had failed to abide. However, it is clear from the fact that the assessments sought the repayment of all the subsidies received by the appellant that Revenue had formed the view that the appellant was not entitled to receive subsidies at any time during the operation of the Scheme.

 

67.     In its appeal before the Commissioner, the appellant bore the burden of proof. This was not and has not been disputed by the appellant. In this context, the appellant was, therefore, required to show that at some point, it met the qualifying criteria for the Scheme and was, accordingly, entitled to receive subsidies until, thereafter, it ceased to meet the criteria.

 

68.     Leaving aside the question of reliance on retrospective figures, in order for the Commissioner to allow the appeal, it would have been necessary for the appellant to show, in relation to any of the specified periods, a reduction or anticipated reduction in turnover of 30% when compared with the relevant corresponding period. However, the appellant never sought to establish any such reduction. Rather, it sought to rely on the wholly irrelevant fact that its turnover had reduced by 30% in particular months when compared with the corresponding month. The Commissioner was entirely correct in rejecting that as a basis for showing that the appellant was entitled to any of the subsidies.

 

69.     The appellant no longer seriously disputes that this was an error by the Commissioner. Rather, he argues that once the Commissioner rejected the month-by-month comparison, he should have then evaluated at what point the appellant ceased to comply with the terms of the Scheme and determined that the appellant was entitled to subsidies up to that point. This is wholly incorrect and was not required by the statute.

 

70.     Had there been a prior determination that the appellant met the qualifying criteria for any of the specified periods, as anticipated by the statute, the evidence supporting that determination would, it is true, have been evidence supporting an appeal by the appellant against assessments raised on the basis that it was not entitled to receive at least some subsidies. The appellant could have relied on that evidence in seeking to discharge its burden of proof. Put otherwise, its contention that, having entered the Scheme, there must have been a point at which it ceased to qualify for subsidies, and only subsidies paid after that point should be repaid, might have had some force.

 

71.     However, the Scheme operated on the basis of, in effect, self-certification, with advice to employers that they should retain their evidence/basis for entering the Scheme, in other words, their basis for anticipating that they would suffer a reduction in turnover due to Covid-19. When appealing the assessments, the appellant did not seek to rely on any such evidence; rather, it relied on evidence of its actual reduction in turnover which, in fact, didn't show a reduction of 30% in turnover for any of the specified periods.

 

72.     Even if that evidence was admissible as a basis to prove entitlement to a subsidy, it did not show that the qualifying criteria were met. Accordingly, the Commissioner was correct in rejecting the appeal. There is nothing in section 28B(11) which prevents a conclusion that none of the subsidies received should have been paid and that all such payments must be refunded. The fact that s. 28B(6) provides a separate mechanism by which an employer may be deemed never to have qualified for the scheme and thus disentitled to any payments does not alter that position.

 

73.     The appellant sought to contend that it did not need to lead evidence of its anticipated loss of turnover because the Commissioner had agreed to take its case "at its height" and accept its figures. Having rejected the appellant's case at its height, the Commissioner should then have afforded the appellant an opportunity, which it had purportedly been denied by the Commissioner's decision to accept its figures, to make an argument based on different figures. This contention is, frankly, bizarre, though it may explain why the appellant did not wish to pursue its argument that the Commissioner was wrong to reject its entitlement to rely on retrospective evidence, which finding, by itself, was sufficient to doom the appellant's appeal.

 

74.     In order to succeed in its appeal, the appellant was required to discharge the burden of proving that it was entitled to have received some or all of the subsidies it did. It, therefore, always "needed" to provide evidence which established that to be the case. The fact that it presented evidence which, even if accepted as true, failed to establish that does not mean that it should be afforded an opportunity to provide new or different evidence. One does not need to invoke the principles identified in Henderson v Henderson to appreciate that that is an unstateable proposition.

 

Conclusion

 

75.     The  answer to the one question which remains in the case stated is as follows:

 

Did the Commissioner err in his interpretation of the "specified period" and "corresponding period" as defined by section 28B of the EMPI Act 2020 and in determining that the Appellant's application of a straight "month versus month" comparison, for the purpose of determining whether it had incurred a reduction in turnover of at least 30% was not in compliance with the requirements of section 28B?

 

NO

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