This is all true, but radically incomplete. As Lord Nicholls points out, in Murphy, the Supreme Court held that sections of the Income Tax Act were unconstitutional, and (by a majority of 4-1) held that it had no power to make this determination with prospective effect only. The court also held that the unconstitutionally exacted income taxes were prima facie recoverable as money exacted colore officii. However, in a particularly generous application of the defence of change of position, the court considered that the State could rely on that defence against those who had not already commenced proceedings. [An excellent discussion of the background to and the various issues in the case is to be found in Scannell "The Taxation of Married Women. Murphy v. Attorney General (1982)" in O’Dell (ed) Leading Cases of the Twentieth Century (Round Hall Sweet & Maxwell, Dublin, 2000) 327].

My point is that the limitation on the State's restitutionary liability turned on the application of the defence of change of position, and not on any other principle such as a doctrine of prospective overruling or a more general discretionary power. Admittedly, Henchy J buttressed this conclusion by drawing an analogy with the comparable outcome in the ECJ case of Case 43/75 Defrenne v. Sabena [1976] ECR 455 – Defrenne does stand as an example of something approaching prospective overruling; and it is also discussed by Lord Nicholls in NatWest v Spectrum Plus at [23]-[24] – but the important point is that Henchy J’s reference to it was no more than an analogy. It was neither applied nor adopted, but rather analogically bolstered the application of the defence of change of position. Hence, it was that defence, and not the exercise of a power of prospective overruling, which limited the State’s restitutionary liability.

This aspect of Murphy is widely misunderstood in Ireland, so I am not at all surprised that the misunderstanding should also be found abroad. In fact, the misconception in Ireland is even more profound that Lord Nicholls' muddle: in Ireland, the limitation on the State’s restitutionary liability worked by the defence of change of position in Murphy is often cast as a judicial fiat to deny a claim simply on the basis of unconstrained policy, or the State’s good faith, or the justice of the case. I have long argued against this misreading (see, eg, (1993) 15 DULJ (ns) 27; 43; Annual Review of Irish Law 1997 657-665; (1998) 20 DULJ (ns) 101, 141-152) But whilst the Supreme Court recently came close to renouncing it (see In re Art 26 and the Health (Amendment) (No 2) Bill 2004 [2005] IESC 7), they could not quite bring themselves to do so, and I have since repeated and amplified my concerns ((2005) 27 DULJ (ns) 369) [with GF Whyte]). My hope in this message is simply this, that a misconception about Murphy similar to that which we are now just about to shed in Ireland should not establish itself outside our shores.

All the best,

Eoin.

PS: Other Irish cases also feature in their lordships’ speeches in NatWest v Spectrum Plus: see the approving references to passing to In re Keenan Bros Ltd [1986] BCLC 242; [1985] IR 401 (SC) at paras [56] (Lord Hope of Craighead), [105] (Lord Scott of Foscote), and [140], [150] (Lord Walker of Gestingthorpe) and to In re Holidair Ltd [1994] 1 ILRM 481 at para [150] (Lord Walker of Gestingthorpe, describing the judgment of Blayney J as 'compelling').

 

Dr Eoin O’Dell Fellow Trinity College Dublin 2 Ireland	voicemail: +353-1-608 1178 Law School: +353-1-608 1125 mobile: +353-87-2021120 fax: +353-1-677 0449
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