Exempting judiciary from levy a mistake


Judges are now exposed to political pressure and public disdain – the danger the Constitution sought to avoid, writes PATRICK HUME

THE EXEMPTION of judges’ salaries from the pension levy was claimed to be necessary to preserve the constitutional independence of judges.

However, as the unfolding debate shows, the legislation has led to a situation where the independence of the judiciary is in danger of being compromised.

Contrary to what is being repeatedly stated, the difficulty arises not from the provisions of the Constitution but from a particular interpretation of those provisions – one which does not accord with a judgment of the Supreme Court as far back as 1959. This is the judgment referred to by Mr Justice Donal Barrington in a comment reported in The Irish Times (June 24th): “But one would have thought that this issue was decided by the Supreme Court in the O’Byrne case.”

Ireland is not alone in having to consider the constitutionality of the taxation of judges’ salaries. As far back as 1920, the US Supreme Court held in Evans v Gore that such taxation was unconstitutional. However, one of the most eminent justices of the then supreme court, Oliver Wendell Holmes, dissented. “I see nothing in the purpose of this clause of the constitution to indicate that the judges were to be a privileged class, free from bearing their share of the cost of the institutions upon which their wellbeing, if not their life, depends.” Like many of his dissenting judgments, it eventually became received wisdom.

The Irish Supreme Court case of O’Byrne v Minister for Finance [1959] was decided before many cases in the US and elsewhere.

Almost echoing Holmes’s dissent, then chief justice Conor Maguire followed the prophetic line and held: “To require a judge to pay taxes on his income on the same basis as other citizens and thus contribute to the expenses of government cannot be said to be an attack on his independence.”

If anything, the Supreme Court in Ireland can be commended for reaching its decision ahead of other jurisdictions.

Canadian cases shed further light on salary protection. In Queen v Beauregard [1986], the court elaborates on the central purpose of the protection – that is, the protection of the independence of the judiciary.

This case concerned a change in the pension contributions of judges, among other matters. The court remarked, as a general observation: “Canadian judges are Canadian citizens and must bear their fair share of the financial burden of administering the country.”

The court also offered a test to the constitutionality of a law affecting judges’ remuneration.

Laws “enacted for an improper or colourable purpose, or if there was discriminatory treatment of judges vis-a-vis other citizens . . . might well be held to be ultra vires”. This test could equally apply in situations where judges are taxed/levied or exempted from taxes/levies.

It has been said that the McMenamin case [1996] limits the power of the Irish Government to apply the pension levy to judges. Here the Supreme Court considered the application of a law specifically regulating judges’ pensions. Due to the passing of time, the 1961 Act resulted in a real reduction in the lump sum payable to district judges on retirement. What they paid in was not paid out.

This was seen to be “unjust and inequitable”. Then the court looked to article 35.5 which protects judges’ remuneration and proposed that it would guide a remedy but refused to make any order. McMenamin was limited in its application and did not replace the O’Byrne precedent which has a broader application.

About that time, the Canadian supreme court advanced the matter when considering what reductions were consistent with judicial independence.

In Re Remuneration of Judges [1997], Lamer CJ held: “Across- the-board measures which affect substantially every person who is paid from the public purse, in my opinion, are prima facie rational. For example, an across-the-board reduction in salaries that includes judges will typically be designated to effectuate the government’s overall fiscal priorities, and hence will usually be aimed at furthering some sort of larger public interest.”

There are clear guidelines in international instruments which permit the reduction of judges’ remuneration in exceptional circumstances. Both the International Bar Association Code of Minimum Standards of Judicial Independence [15 (B)] and the Universal Declaration on the Independence of Justice [2.21 (C)] state: “Judicial salaries shall not be decreased during the judges’ term of office, except as a coherent part of an overall public economic measure.”

As I point out in an article in the May 2009 issue of the Law Society Gazette, the only “exempting” legislation which I found in my research into this issue was a decree of 1974 by President Idi Amin of Uganda which has been used to exempt judges in Uganda from taxation.

The exclusion of judges from the levy had exactly the opposite effect of what was intended. It has placed judges under social and political pressure – the very danger the Constitution sought to avoid. There is room to suggest that the Revenue acts ultra vires when it collects levies from which one is exempted, which further compromises the judges.

The solution to the difficulty is the removal of the exemption by way of legislation. The Government should amend the Act, removing the exemption in respect of judges. Progress often requires a change of mind.

Nothing less than amending legislation can protect the principle of judicial independence and uphold the Constitution.

Patrick J Hume SJ is a solicitor at the Jesuit Centre for Faith and Justice, Dublin; phume@jcfj.ie