In advance of the Tax Bar Association Conference on 29th September, we are sharing two case updates prepared by members of the Tax Bar Association. In the second of these updates, Catherine Dunne BL summarises the Supreme Court delivered judgment of Heather Hill Management Company CLG and Gabriel McGoldrick v An Bord Pleanála, Burkeway Homes Limited and the Attorney General.
Judgment of Mr Justice Murray, delivered on 10th November 2022.
On 10 November 2022, Mr Justice Murray in the Supreme Court delivered judgment in Heather Hill Management Company CLG & McGoldrick v An Bord Pleanála, Burkeway Homes Limited and the Attorney General  IESC 43, overturning an earlier decision of the Court of Appeal and reinstating the decision of Mr Justice Simons in the High Court. The decision addresses the task of statutory interpretation against the backdrop of the Supreme Court decisions in Dunnes Stores v Revenue Commissioners  IESC 50 and Bookfinders Ltd v The Revenue Commissioners  IESC 60.
This case concerned the correct interpretation of Section 50B of the Planning and Development Act 2000 (“s.50B”), which provides for a protective costs order in certain environmental and planning claims. The Supreme Court held that s.50B applies to any challenge to a decision made pursuant to a statutory provision which gives effect to the Directives listed in the provision, and that there is no basis under s.50B or the Aarhus Convention for the splitting of costs where some grounds and issues raised in the proceedings engage those Directives, and others do not. The court held that certain provisions of the Aarhus Convention require contracting states to take the necessary legislative measures to ensure that environmental law proceedings are “not prohibitively expensive”. Mr. Justice Murray stated that the respondents had not advanced “any persuasive alternative analysis of the text” of s.50B that could displace its “literal construction”.
This decision was delivered against the backdrop of a number of recent Supreme Court decisions issued in the sphere of taxation, each of which gave consideration to the task of statutory interpretation.
Murray J considered Dunnes Stores, where Mr Justice McKechnie concluded that a “provision should be construed in context having regard to the purpose and scheme of the Act as a whole, and in a manner which gives effect to what is intended”. The court held that even where a literal approach is available, if that approach is absurd or fails to give effect to the purpose of the Act, the Court will decline to apply it.
The court subsequently considered the literal interpretation in the significant Bookfinders. The appellant, a franchise of the fast-food chain ‘Subway’, sought to import an interpretation of the statute’s words which were then pieced together in a manner which read the term ‘food and drink’ to mean only items of food and drink purchased together, and not food or drink purchased separately, which would have allowed it to avail of the zero-rate of VAT. In rejecting the appeal, O’Donnell J (as he then was) addressed the meaning of the literal approach and criticised the appellant’s attempts to divorce the meaning of words from the overall surroundings of the statute itself:
“It is not, and never has been, correct to approach a statute as if the words were written on glass, without any context or background, and on the basis that, if on a superficial reading more than one meaning could be wrenched from those words, it must be determined to be ambiguous, and the more beneficial interpretation afforded to the taxpayer, however unlikely and implausible”.
Murray J gave detailed consideration to the meaning of interpretive elements such as “words used in context” and “ascertaining the purpose of an Act”. The Court acknowledged the above-mentioned jurisprudence in noting that the meaning of ‘context’ has broadened in recent times:
“To that extent I think that the Attorney General is correct when he submits that the effect of these decisions – and in particular of Dunnes Stores and Bookfinders – is that the literal and purposive approaches to statutory interpretation are not hermetically sealed”.
The Supreme Court confirmed in Bookfinders that the provisions of the Interpretation Act 2005 do not apply to taxing statutes, and Murray J noted in Heather Hill that absent these provisions:
“in no case can the process of ascertaining the legislative intent or the will of the Oireachtas be reduced to the reflexive rehearsal of the literal meaning of words or the determination of the plain meaning of an individual section viewed in isolation from either the text of the statute as a whole or the context for which and the purpose for which it was enacted.”
Consideration was also given to the decision in The People (DPP) v AC  IESC 74 in which O’Donnell CJ gave an alternative description of the literal approach:
“I prefer to describe this as ‘the plain meaning approach’ rather than a ‘literal approach’, because it may be that the literal meaning may, at its margin, have a connotation of strict or even artificial interpretation, and the two terms are used relatively interchangeably. It is important, however, that this approach does not invite a court to isolate the critical words… and consider if they have a plain or literal meaning in the abstract.”
Permissible Admission of Context vs. Impermissible Imposition on Legislation
In Heather Hill, Murray J provided a four-point critical analysis of “the line between the permissible admission of context and identification of ‘purpose’ and the impermissible imposition on legislation of an outcome that appears reasonable or sensible to an individual judge or which aligns with his or her instinct as to what the legislators would have said had they considered the problem at hand, becomes blurred”:
- The court notes that ‘legislative intent’ is a misnomer where it is used to describe the objective of the interpretive exercise, as the court “cannot peer into the minds of parliamentarians” to ascertain what their subjective intention may have been.
- It states that interpretation is identifying the legal effect attributed to legislation by a series of rules and presumptions that have been developed by common law and statute for that purpose:
“That is the price of an approach which prefers the application of transparent, coherent and objectively ascertainable principles to the interpretation of legislation, to a situation in which judges construe an Act of the Oireachtas by reference to their individual assessments of what they think parliament ought sensibly to have wished to achieve by the legislation.”
- It is confirmed that the words of the statute are given primacy:
“[the words] are the best guide to the result the Oireachtas wanted to bring about. The importance of this proposition and the reason for it, cannot be overstated. Those words are the sole identifiable and legally admissible outward expression of its members’ objectives: the text of the legislation is the only source of information a court can be confident all members of parliament have access to and have in their minds when a statute is passed. In deciding what legal effect is to be given to those words their plain meaning is a good point of departure, as it is to be assumed that it reflects what the legislators themselves understood when they decided to approve it.”
- The court notes that the Oireachtas usually enacts a composite statute, and not a collection of disassociated provisions. It does so in a pre-existing context and for a purpose. For this reason, Murray J that the best guide to this purpose is the language of the statute revised as a whole; however, that often must be informed by reliable and identifiable background information of the kind identified by McKechnie J in The People (DPP) v Brown  IESC 67. However, Murray J observes that the ‘context’ that is deployed to that end and ‘purpose’ so identified must be:
“clear and specific and, where wielded to displace the apparently clear language of a provision, must be decisively probative of an alternative construction that is itself capable of being accommodated within the statutory language.”
The court’s initial concern appeared to be that context may be used to wrench the meaning of a statute from the plain meaning of the words used. It notes in the first instance that the most preferable context is “the immediate context of the sentence within which the words are used.” However, it later states that the overriding concern is that the context must be clear, specific and, where wielded to displace the ostensibly clear language of a provision, it must be “decisively probative of an alternative construction that is itself capable of being accommodated within the statutory language.”
Murray J concluded that the words of the statute are the “first port of call”:
“The words of the section are the first port of call in its interpretation, and while the court must construe those words having regard to the context of the section, of the Act in which the section appears, the pre-existing relevant legal framework and the object of the legislation insofar as discernible, the onus is on those contending that a statutory provision does not have the effect suggested by the plain meaning of the words chosen by the legislature to establish this.”
The takeaway for tax practitioners from this judgement is that care should be taken in regard to the context of a statute, because the words themselves have primacy. However, context should not be separated entirely from the words as the two are not “hermetically sealed”. This is significant in the sphere of taxation where the approach to separate the two still lingers.
The views expressed above are the author’s own and do not reflect the views of The Bar of Ireland.
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