Supreme Court dismisses pension appeal, upholding statutory interpretation that excludes specific age cohort despite absurdity.

THE SUPREME COURT

[091/2014]

Denham C.J.

McKechnie J.

Dunne J.

IN THE MATTER OF THE SOCIAL WELFARE CONSOLIDATION ACT 2005

BETWEEN

PHILIP MEAGHER

APPELLANT

AND

MINISTER FOR SOCIAL PROTECTION

RESPONDENT

JUDGMENT of Mr. Justice William McKechnie delivered on the 29th day of January 2015.

Introduction

1. Since 1999, indeed earlier, Mr. Meagher has been seeking a state contributory pension: on some occasions a full pension but in the

instant case a half pension. To be successful he must demonstrate that he has made social insurance qualifying contributions (PRSI)

for a period of 260 contribution weeks. He submits that on a proper interpretation of s. 21(1)(d) of the Social Welfare Consolidation

Act 2005 (“the 2005 Act”) he can so establish. The Minister in charge (“the Minister”), the respondent to this appeal, denies that this

provision can be given such a meaning. Accordingly neither on that or on any other basis is he entitled to the pension as claimed.

2. The detail and history of his efforts to obtain a state pension are set out later in this judgment, (para. 13 infra), it is, however,

unfortunate to note that a number of rejections were erroneously based. For example, he was incorrectly informed that to meet the

“age” requirement he would have had to be born between 6th April, 1927 and 6th April, 1932. The correct period had a start date of

one year earlier.

3. In any event in April, 2011 the most recent application was made. It was refused by a Deciding Officer in May, 2011 and on appeal,

by an Appeals Officer, whose decision was notified to Mr. Meagher by letter dated 23ndth April, 2012. Phrased rather curiously, as

being a “note on the reasons”, rather than simply “the reasons for”, his decision, the letter fails to expressly address a central

argument on this appeal, but in fairness it is not altogether clear if such was advanced at the time. The Chief Appeals Officer was

asked to revisit the decision, but she declined to so do. Accordingly, an application was made to the High Court challenging the

validity of the determination by the Appeals Officer.

4. This procedural process of appeal to the High Court is provided for by s. 327 of the 2005 Act. In effect, it is a statutory appeal on

a point of law. No point has been taken in either court as to the scope or parameters of such appeal. Therefore, issues which have

frequently been aired in this respect, do not arise for consideration. Likewise, this appeal proceeded in this Court in exactly the same

way as it had been argued in the High Court.

Background to PRSI:

5. Prior to 1979 the system in place involving social insurance was that employers would literally “stamp”, their employee’s social

insurance cards every week, on a flat rate basis, regardless of income. The card would then be “brought” to a local social welfare

office in order to claim social welfare benefit, if required. In that year a pay related system was introduced, hence the birth of PRSI.

This however did not affect the continuing operation of the scheme on the basis of weekly contributions, even though there was no

national uniformity within the workplace, regarding matters such as hours or weeks worked, when employees were paid, whether

weekly, fortnightly, monthly or otherwise or how much they earned, etc.

6. For the first time, the self employed were obliged to pay PRSI as and from the 6th April, 1988. This presented considerable

challenges to the existing system as even greater variation existed within this group, such as background, working conditions, rates,

method and frequency of pay, the number of weeks or even hours worked, the nature of employment such as part time, full time,

seasonality, etc. It was therefore necessary to devise a method so that this group could be “grafted” on to the basic system, as it

then existed and as it would continue.

7. To that end various legislative measures both primary and secondary were enacted and passed. Fortunately for the most part one

can avoid any historical analysis of the situation as it unfolded in the early years of its operation. For our purpose, the 2005 Act and

certain Regulations adopted or applied thereunder, will be sufficient. Some reference will also be made to an important amendment

introduced by the Social Welfare Act 1999.

8. At present all employees pay PRSI as do all self employed persons (with some exceptions which are not relevant), between the

ages of 16 and 66 who earn more than €5,000 per year. The sums so paid fall into different categories, which are known as, classes

or rates of contribution. These classes are largely determined by the nature of one’s employment and the salary received or earned.

There are presently about 10 different classes with some of these being further subdivided. Largely most, but not all employees, are

in Class A and therefore make what are called “Class A” contributions. All self employed persons make “Class S” contributions, which

presently is calculated at 4% of reckonable income or emolument or €253, whichever is the greater. Many people fall into both

categories and are therefore regarded as concurrent contributors. The contributions so made, which by law are compulsory, are paid

into a social insurance fund which has a current account, operated by the Minister and an investment account operated by the

Minister for Finance. This fund provides for a range of social insurance benefits and pensions including the State Pension Contributory

(sometimes referred to as “SPC”). The benefits available to an individual will for the most part be determined by what category or

class he or she is in.

9. In this case the benefit in issue, as stated, is half a state pension contributory: therefore, only those provisions of the relevant

Acts which are material to this claim require consideration.

10. In its original form the contribution conditions for an SPC, included a requirement that an applicant should have entered into

insurance before attaining the age of 56. Evidently, it soon became apparent that a considerable number of self-employed persons

had been over 56 on the 6th April, 1988, and therefore were ineligible for any pension on age related grounds. That led to an

amendment being passed in the Social Welfare Act of 1999 (s. 21): the result being that for those like Mr. Meagher, the entry age

was raised to 62 but the number of weekly contributions was also raised from 156 to 260. This amendment and the other relevant

provisions are now to be found in s. 109 of the 2005 Act and, in particular, s. 109(1), (3)(e), (18) and (19) and (20).

Some Personal Details:

11. Before referring to these provisions, however, it is essential to outline certain critical dates in the context of the appellant’s work

history. It will also be helpful to an understanding of the issues, the argument and the decision, to indicate what is meant by a

number of terms which have a significant bearing for the outcome of this appeal.

12. The appellant’s principal career was that of a self-employed solicitor: from 1980 to 1996 he combined this role with the position of

Coroner for County Laois. Having been born on 4th July, 1926, one can obviously deduce what age he was on some important dates

which feature prominently in this case:

· As of 6th April, 1988: he was over 61 but under 62 years of age.

· As of 4th July, 1992, he was 66 years of age.

· As of 4th July, 1996, he was 70 years of age.

The significance of 1988, as stated, is that the PRSI system was extended to the self-employed: that of 1992 is when he became of

pensionable age and, therefore, was no longer within the framework of the social insurance scheme and of 1996, when he retired fully

from both of his working positions. He therefore paid PRSI as a self-employed person, from 6th April, 1988, to 4th July, 1992, and as

an employed person from 1991 until reaching pensionable age. In respect of the Coroner’s position, he was insurable as a Class M

member before 1991, but this did not count for pension purpose.

Background to the Appeal:

13. The following steps have been taken by Mr. Meagher in seeking a pension:-

(i) In 1997 he made his first claim for a contributory state pension: this was rejected on the basis that he was over 56 as

of April, 1998 and, therefore, was not eligible. An appeal was also disallowed.

(ii) On some date thereafter, a further application was also unsuccessful as he did not meet the age/entry criteria set out

in s. 109(3)(e) of the 2005 Act; in the decision however he was erroneously told that such applied only to those whose

date of birth was between 6th July, 1927 and 6th April, 1932: in fact, the start date was one year earlier.

(iii) In May, 2001 the Ombudsman decided that he did not qualify for half a pension with the reasons therefore being

unclear.

(iv) Having been told that he had not made the necessary 260 weekly contributions before reaching pensionable age, this

further refusal in his and in a number of other similar cases were referred to, and the matter was taken up by the Human

Rights Commission, which in its report of November, 2006, “Report on an Enquiry into the Impact of Certain Provisions of

Social Welfare Legislation on the Self-Employed”, concluded that the “effective cut-off age was 61, not 62, given the

requirement that a person had to have made 260 weekly (5 years’) contributions to qualify for the half-rate pension”

(para. 9.44). Its recommendation that an ex gratia payment be made to those affected was not acted upon by the

respondent.

(v) In April, 2011 the foundation for the present appeal was laid in that a further application was submitted. That was

rejected by a Deciding Officer, by an Appeals Officer, and although asked to revisit the decision under s. 318 of the 2005

Act, the Chief Appeals Officer declined. The decision of the Appeals Officer was notified to Mr. Meagher in a letter dated

16th April, 2012.

14. In his decision, the Appeals Officer held, that in the appellant’s retirement tax year, he had made 13 self-employed contributions

(Class S) as well as an equal number of Class A contributions. He capped the entire number of all contributions, for that year, at

these levels. Whilst referring to Article 23(1) of the Social Welfare (Consolidated Contributions and Insurability) Regulations, 1996 (S.I.

No. 321 of 1996) (“the 1996 Regulations”) he did not invoke the formula as therein outlined, in respect of that year. He simply added

13 contribution weeks, i.e. from the 6th April to the 4th July, 1992, to those of previous years, which in total fell short of the required

number. In so approaching the contributions made in that critical year, it is claimed by the appellant that the Appeals Officer was in

serious error, whereas on the other hand, the broad thrust of this approach is fully supported by the Minister.

15. On 13th May, 2003, the appellant issued a Special Summons challenging the validity of the notified decision under s. 327 of the

2005 Act, it being accepted that what the Deciding Officer had held, is immaterial. That section provides for a statutory appeal on a

point of law. No issue turns on the scope or nature of that provision. The case, it would appear, has been fully reargued in this Court

as it has been in the High Court. Consequently, one can proceed unaffected by any limitations contained in that provision. Finally,

even though there is a constitutional challenge mentioned in the papers, the appellant agrees that such cannot be argued within

these proceedings and to that end he has instituted separate plenary proceedings as a precautionary step.

16. The judgment of the High Court speaks for itself: whether it is correct that some arguments made were not addressed and others

not made, were considered, is not relevant as all parties agree that this Court should conduct a de novo consideration of the legal

issues involved.

The Legislative Provisions for Reduced State Pension Contributory

17. The 2005 Act is technical but its navigation becomes easier on an understanding of some of its important terms: in this exercise I

have omitted, by reference to context, non essential detail:-

(i) “self-employed contributor”: every person over 16 and under pensionable age who has reckonable income/emolument:

(s. 20(1)(a) of the 2005 Act);

(ii) “pensionable age”: at the time was 66 years of age;

(iii) “self-employment contributions”: are “contributions…in respect of self-employed contributors” (s. 6(1)(b) of the Act);

(iv) “contribution week”: one of the successive periods of seven consecutive days in a contribution year: (s. 2(1) of the

Act): the effect of which is that there are 52 contribution weeks in a contribution year;

(v) “contribution year”; the year of assessment within the meaning of the Income Tax Acts: (s. 2(1 of the Act): at the

relevant time this period ran from the 6th April of one year to the 5th April of the following year.

18. The qualifications for obtaining such a pension, which technically are more correctly described as the “contribution conditions”,

are now set out in s. 109 of the 2005 Act with certain other provisions of that Act and a limited number of Articles of the 1996

Regulations being also relevant.

19. Section 109(1) of the Act provides:-

“109.—(1) The contribution conditions for old age (contributory) pension are—

(a) subject to subsection (3), that the claimant has entered into insurance before attaining the age of 56 years,

(b) that the claimant has qualifying contributions in respect of not less than 156 contribution weeks since his or her entry

into insurance, and

(c) that the claimant has a yearly average or, in the case of a person who attains pensionable age on or after 6 April

1992, an alternative yearly average of not less than 48.”

20. Subsection 3(e) of that Section states:-

“(3)(e) In the case of a person who became a self-employed contributor for the first time on or after 6 April 1988 and was

not previously an employed contributor under this Act or … and who on or before 6 April 1988 had attained the age of 56

years but had not attained the age of 62 years, subsection (1)(a) shall be read as if “62” were substituted for “56” for

the purposes of qualifying for a pension under subsections (18) and (19).”

Given the appellant’s date of birth, it is clear that by 6th April, 1988, he had attained the age of 56 but had not attained the age of

62 and, therefore, by reason of this subsection, he satisfied the age and entry requirement of s. 109(1)(a).

21. Section 109(18) then provides that:-

“a pension shall be payable in the case of a person who –

(a) …, or

(b) satisfies the contribution condition in section 109(1)(a) by virtue of subsection (3)(e) and who, but for subsection (3)

(e) fails to satisfy the contribution conditions in subsection (1) or (8),

and who has qualifying contributions in respect of not less than 260 weeks since becoming a self-employed contributor.”

Subparagraph (b) applies to Mr. Meagher and accordingly, in order to satisfy the contribution condition at s. 109(1)(b) of the Act, he

must have made qualifying contributions for not less than 260 weeks between the 6th April, 1988 and the 4th July, 1992.

22. For completeness it should be noted that the half pension provision is contained in subs. (19) of s. 109.

23. To recap: of the three contribution conditions specified in s. 109(1), Mr. Meagher clearly satisfied (1)(a), the age and entry

requirement, with (1)(c), the yearly average, never being in issue. The contest at all times centres on (1)(b) and whether or not he

can be considered as having made 260 qualifying contributions.

The Submissions:

24. The appellant makes the case that in respect of those people who on or before 6th April, 1988, had attained the age of 56, 57,

58, 59 or 60, but not 61, all had at least five full working years within which to make the required 260 weekly contributions, before

reaching pensionable age. However, those who were 61 as of that date, did not have such period available to them. It was therefore

necessary to provide some alternative method of qualification for this group, as those within it also clearly met the age and entry

requirement, of the section. This, it was submitted, is to be found in the provisions of s. 21(1)(d) of the 2005 Act.

25. That Section provides:-

“22(1)(d) Subject to regulations under section 22, where a self-employment contribution has been paid by a self-

employed contributor of not less than the amount that he or she is liable to pay under paragraph (a) or the amount

specified in paragraph (b), whichever is appropriate, the self-employed contributor shall be regarded as having paid

contributions for each contribution week in that contribution year and, where the contribution paid is less than that

appropriate amount, no contribution shall be regarded as having been paid by the self-employed contributor in respect of

any week of that contribution year”. (emphasis added)

26. During the tax year, from 6th April, 1992 to 5th April, 1993, Mr. Meagher was, a “self-employed contributor”, and as such he paid

all his PRSI contributions between 6th April and 4th July of that year, when he ceased to be such a contributor, by reason of

attaining pensionable age. On a literal reading of this provision, it is argued that unless the regulations made under s. 22 of the Act,

restrict or qualify it meaning, he is to “be regarded”, by reason of having been a self-employed contributor and having paid the

appropriate amounts, as “having paid contributions for each contribution week in that contribution year”. As there are 52 contribution

weeks in a contribution year he is entitled to have this number added to those previously acquired. In this way, which is explained

more fully in the following paragraphs, it is claimed that he has met the requirements of s. 109(1)(b) of the Act.

27. The 1996 Regulations to be read as if made under s. 22 of the 2005 Act. Article 23 of those regulations reads as follows:-

“Concurrent employment and self-employment.

23. (1) Subject to sub-article (2), where —

(a) a person is concurrently an employed contributor by virtue of section 9(1) and a self-employed contributor in a

contribution year, and

(b) the total number of contribution weeks in respect of which self-employment contributions have been paid and

the total number of contribution weeks in respect of which employment contributions, (other than an employment

contribution paid by virtue section 9 (1) (b)) have been paid, or treated as paid, or would have been payable but

for the provisions of section 10 (1) (c) or (e) or have been credited, is less than or in excess of 52, the number of

contribution weeks in respect of which self-employment contributions shall be regarded as having been paid shall be

determined by deducting the number of contribution weeks in respect of which employment contributions have been

paid or credited from 52 and treating the remainder as the number of contribution weeks in respect of which self-

employment contributions have been paid.

(2) In the case of a person to whom sub-article (1) applies, a self-employment contribution may be treated as having

been paid in respect of any contribution week for which an employment contribution has been credited for the purposes of

the contribution conditions for old age (contributory) pension, widow's (contributory) pension, widower's (contributory)

pension and orphan's (contributory) allowance, requiring a minimum number of qualifying contributions to have been paid.

(3) Where a person to whom this article applies has paid employment contributions and self-employment contributions for

any contribution year and the aggregate of his earnings, emoluments (if any) and reckonable income has exceeded the

sum specified in section 18(1)(d) he shall be entitled, subject to article 71, to a refund of the self-employment

contributions paid on that portion of his reckonable income or emoluments (or both) which represents the difference

between the aggregate of his reckonable income or emoluments (or both) and his earnings and the sum so specified.”

Subsection (2) has no application to this case as Mr. Meagher has no credited Class A contributions as defined under s. 33 of the

Act: neither has subsection (3).

28. Before setting out how it is claimed that Article 23(b) of the 1996 Regulations in conjunction with s. 21(1)(d) of the 2005 Act,

give rise to the asserted 52 weeks contribution in the tax year ending 5th April, 1993, it should be noted firstly that both Class A and

Class S contributions are reckonable for the purposes of SPC. Secondly, that a person who is both self-employed and employed

cannot have credited to him or her in any one year more than 52 contributions and thirdly, that where such a possibility arises, the

formula by which the numbers are adjusted gives priority to the more favourable Class A contributions, which are thus preserved.

29. The relevance of the 1996 Regulations to s. 21(1)(b) of the 2005 Act is that Article 23 feeds into the operation of its provisions in

circumstances such as those of the instant case. Where the total contributions in respect of both one’s employment and self-

employment are lesser or greater than 52, the number of self-employed contributions is determined by deducting the number of

employed contributions from 52. As the employed contributions in this case numbered 13, being those made between 6th April, 1992,

and 4th July, 1992, the difference of 39 is to be treated as the number of weeks in respect of which self-employed contributions have

been paid. Adding both figures gives a total of 52 qualifying contributions for the year ending 5th April, 1993. This together with the

undisputed contributions for the earlier years, namely meets the requirement of s. 109(1)(b) of the 2005 Act.

30. In support of this argument the appellant points out that s. 21(1)(d) of the 2005 Act is subject only to the above Regulations,

which do not purport to limit or restrict the scope of its application: if the contrary was intended, as the Minister suggests, the

Oireachtas would have said so. It did not however do so, which is in sharp contrast to other provisions of the 2005 Act where

temporal restrictions are contained, as e.g., s. 24 and s. 108. Furthermore, if the legislature intended to benefit, inter alia, only those

over 60 but under 61 as of April 1988, it will have reduced the age and the entry condition. Not having done so, it was logical for it to

provide within the statutory scheme, some method by which a qualifying person such as the appellant could satisfy the 260

contribution weeks, otherwise the upper limit of 62 as the age entry is meaningless. Accordingly, it is therefore submitted that the

interpretation of s. 21(1)(b) of the Act, as suggested, is entirely open not only on the wording of the provision itself but also by

virtue of the policy which underlined the original 1999 amendment and its continuation into the 2005 Act.

31. The Minister does not accept this position, saying that SPC is not available to everyone over the age of 61 but under the age of

62, as of 6th April, 1988. To qualify, the other contribution conditions, including the minimum number of 260 weekly contributions must

be satisfied. It is accepted that if Mr. Meagher’s interpretative argument be rejected, he has only 221 contributions and therefore, he

is excluded by virtue of failing to meet this requirement.

32. The respondent takes an entirely different view of the meaning of s. 21(1)(d) of the 2005 Act even as read in conjunction with

Articles 22 and 23 of the 1996 Regulations. He does so for several reasons but, in particular, because such provisions cannot apply to

an individual who has ceased to be a “self-employed contributor”, which occurs on reaching pensionable age. This is self evident from

a literal reading of those provisions, which in turn is entirely inconsistent with what is advanced on behalf of the appellant. As

unfortunate as it may be, Mr. Meagher, as a matter of fact and law, does not meet the necessary requirements for this type of

person.

Decision:

33. It is accepted by all parties that without what results from the appellant’s interpretation and application of s. 21(1)(d) of the Act

and Article 23 of the Regulations, he cannot meet the minimum weekly contributions of 260. It is not suggested that he is entitled to

a pension without meeting this condition. At one stage an argument was advanced to that effect or alternatively that the

requirement, by some unspecified means, should be modified to meet his circumstances. This is not now being pursued. This means

that qualifying via the age and entry criteria is not of itself sufficient to legally merit a pension. The satisfaction of one condition

cannot extend to cover the satisfaction of all conditions. Consequently, the core issue in this case is the requirement of s. 109(1)(b)

of the Act and whether it has been satisfied: that strictly speaking is a question of statutory interpretation.

34. In this process, howsoever tempting as it might be, principles such as what is just or fair do not enter the exercise. The court is

not involved in applying some jurisdiction based on reasonable grounds or on equitable considerations or the like. Nor can it be

influenced by the existing challenge to the constitutionality of the provisions, if these should be read as denying Mr. Meagher the

pension which he seeks. However, if within the appropriate rules of construction he can be said to have reached the necessary

number of contribution weeks, then he must be entitled to the SPC which he claims.

35. Both parties agree that a literal interpretation should be given to s. 21(1)(d) of the 2005 Act and Article 23 of the 1996

Regulations. Nobody has suggested that a different or even some modified approach is required for this type of statute. This is

despite the fact that the making of the contributions in issue are not a matter of choice, but rather are compulsory under pain of

breaching the civil law, and in the case of “employers”, upon whom the requirement of statutory compliance is based, of also

breaching the criminal law. Moreover, subject to any necessary pre-conditions being satisfied, an applicant has a statutory right to

receive such pension: it cannot in such circumstances be withheld on discretionary grounds. Therefore, one can readily think of other

statutory codes, which to some significant extent are analogous with the 2005 Act, which attract a more strict interpretation.

36. For example, it has long been accepted that penal statutes must be strictly construed: this to preserve the liberty of the

individual on the one hand and to avoid the imposition or extension of criminal liability, by loose, ambiguous or slack language, on the

other hand (Re Emergency Powers Bill 1976 [1977] I.R. 159). The same approach is adopted with revenue statutes (Inspector of

Taxes v. Kiernan [1981] I.R. 117). In fact when dealing with the imposition of a tax or an exemption from its liability, Kennedy C.J. in

The Revenue Commissioners v. Doorley & Ors [1933] I.R. 750 said that unless a person was squarely within the express provision, he

stood outside it (McGrath v. McDermott (Inspector of Taxes) [1988] 1 I.R. 258, but see also Revenue Commissioners v. O’Flynn

Construction Co. Ltd & Ors [2011] IESC 47). In any event, given the submissions of the parties in this case, I am prepared to proceed

with a literal interpretation, without so holding or deciding, that this is necessarily correct.

37. The task therefore, is to ascertain the intention of the legislature through the ordinary and natural meaning of the words and

phrases used, with the text being the primary reference source (Rahill v. Brady [1971] I.R. 69). Regard may be had to other

provisions, even extending, if necessary, to the Act as a whole. The object and purpose are matters for consideration and of

particular relevance in this case is the nature of the legislation in question. In effect, it is more likely that the provisions in issue will

be accorded their true meaning, if the contextual setting in which they operate is kept at the forefront of this exercise.

38. This approach is simply the application of the noscitur a sociis principle, a good example of which is to be found in The People

(Attorney General) v. Kennedy [1946] I.R. 517 where Black J. said:-

“we have an express grant of the right of appeal without any express limitation of parties, and it is said that as the words

are clear, there can be no limitation. I am satisfied that to look at the provision in that way is to adopt an erroneous

measure method of final approach.

A small section of a picture, if looked at close up, may indicate something quite clearly; but when one stands back and

views the whole canvas, the close-up view of the small section is often found to have given a wholly wrong view of what

it really represented.

If one could pick out a single word or phrase and, finding it perfectly clear in itself, refuse to check its apparent meaning

in the light thrown upon it by the context or by other provisions, the result would be to render the principle of ejusdem

generis and noscitur a sociis utterly meaningless; for this principle requires frequently that a word or phrase or even a

whole provision which, standing alone, has a clear meaning must be given quite a different meaning when viewed the light

of its context.” (p. 536)

I respectfully agree with such reasons.

39. In this case it is important to note that after 4th July, 1992, the appellant could not advance the position he was then in, as he

had reached pensionable age: he could not, therefore, acquire any further contribution weeks thereafter. Accordingly, whether or not

the contested requirement has been satisfied, must be considered as the position stood, as of that date. This conclusion inescapably

follows from the definitions which are quoted at para. 17 above. Self evidently on his 66th birthday he ceased to be a self-employed

contributor so that at no point thereafter, could he have made a self-employment contribution. Neither could he, I am also satisfied,

be regarded after that date as being a self-employed contributor or as having made a self-employment contribution.

40. The Minister would suggest that this view is virtually dispositive of the issue whereas the appellant, who does not seriously take

issue with what is stated, nonetheless still argues that by reference to the “deeming provisions” of s. 21(1)(d) of the 2005 Act he

must be regarded as having reached the required contribution number as of 4th July, 1992.

41. The conflict between the appellant and the Minister on the proper interpretation of s. 21(1)(d) of the 2005 Act can be sharply put

in focus by recalling the argument of Mr. Meagher who says that once he was a self-employed contributor, at any time within his

pensionable tax year, even if not for its full duration, such is sufficient to have him “regarded as having paid contributions for each

contribution week in that contribution year”. If correct, the effect will be that for a period of about nine months after he had ceased

to be a self-employed contributor, and thus during a period when he could not have made self-employment contributions, he would

nonetheless have assigned to him weekly contribution credits for this period. As the section is not expressly qualified so as to exclude

the year of retirement, it is claimed on his behalf that such a meaning is open on the basis of its wording and furthermore, is

supported by what is contained in Article 22 of the 1996 Regulations.

42. There are, I feel, fundamental difficulties with this submission. There cannot be any doubt but that once pensionable age is

reached, both self-employed persons and employed persons cease to be within the social insurance scheme. There is no provision to

extend its operation beyond that date: equally, there is no possibility at any future time of one being reinstated into or rejoining the

system. This follows, as I have said, from the statutory definitions of self-employed contributor, self-employment contributions and

pensionable age. Therefore, any provision of the Act which would have the effect of continuing beyond pensionable age, the accrual

of rights which otherwise can only occur before that date, would have to be clear, precise and definite, to that end.

43. Though not decisive, it is nonetheless instructive to have a proper understanding of the State Pension Contributory Scheme and

how it is structured, when searching for the true meaning of the provision in question. The scheme, as is obvious from its name, is

“contributory” rather than “uniform” or “universal”. It is based, as multiple like systems in other Member States, are, on an expression

of social solidarity between citizens. Unlike private pension schemes, it is not actuarially operated and the range of benefits available,

are not proportionate to what one contributes. In short, benefits are not solely dependent on individual funding. This funding is

achieved by obliging employees to make contributions through their participation in the work force, again a strikingly different position

from pensions on the private side.

44. Throughout the entire social welfare system benefits are based on meeting threshold requirements which have always included an

age entry condition and a minimum number of contribution weeks, both of which are closely linked by underlying considerations. This

latter condition is necessary to underpin the affordability of the system, even if funding is also supplemented by employers and the

State. Some of the benefits, such as pensions, can be very valuable to citizens but can also be quite expensive to fund. Thus, this

latter requirement is a critical ingredient of the scheme as a whole and is an arch pillar of its viability and integrity.

45. This point is self-evident by what we see in this case. Normally one must enter into insurance before age 56: this to allow for a

sufficient number of working years within which contributions can be made. For such a person a full pension is available. The 1999

amendment relaxed the entry requirement but at a cost to the individuals in question. As their working life was shorter they were to

receive only a half state pension. However, even to achieve this, the contributions required were specified as having to be not less

than 260.

46. A further matter of some importance is the operational nature of social insurance (paras. 5 and 6 supra). In particular, those who

discharged their tax liabilities on an annual basis, including their PRSI contributions, had to be accommodated under a system which

functioned on a weekly basis. With employees one can readily ascertain what weeks they have worked in any given year but with the

self-employed this would be a very difficult exercise. Therefore some method had to be found so that those once off yearly

payments, could be adapted to fit within what essentially remains, a weekly scheme. In my view it is highly likely that such means is

provided for, by s. 21(1)(d) of the 2005 Act, and that, as the Minister suggests, this provision is designed as a conversion mechanism

whereby such can be achieved.

47. Support for this view is to be found within the section itself where it states: - “…the self-employed contributor shall be regarded

as having paid contributions for each contribution week in that contribution year…”. The reference within this phrase to “each

contribution week” has a significance which must be given effect to: it is intended to align and assimilate the payments made by self-

employed persons with those of employed persons. If the true meaning of the provision was to confer benefits, then this element of

the phrase would be redundant and the deeming provision would simply have read “the self-employed contributor shall be regarded as

having paid contributions for…that contribution year…”. That is not how it is worded: by giving what is stated its ordinary and natural

meaning one is driven to conclude that the respondent’s submission on this point is correct. Moreover, it is not easy to see why the

section would grant such a reward to the self-employed without affording a similar benefit to the employed. Whilst I accept that

multiple distinctions are made between different classes of people in the work force, there is usually some basis for those distinctions.

In this situation I cannot find any. The section in my view is not a provision of substantive law, but rather is an administrative means

to accommodate the diverse groups who are now subject to the PRSI regime. Accordingly, even without recourse to authority the

argument on this point, made on behalf of Mr. Meagher, must in my view fail.

48. There is, of course, an additional reason for the conclusion. If Article 23 of the 1996 Regulations cannot be invoked by Mr.

Meagher, then evidently there is no formula by which he can arrive at the figure which he does in respect of the tax year ending 5th

April, 1992. As that Article makes clear, and as I have repeatedly stated above, it applies only to those who at the date of its

operation remain under pensionable age. Therefore, on and after July, 1992 it could have no relevance to Mr. Meagher. Accordingly,

on this basis I am also satisfied that his interpretation must fail.

49. The appellant makes complaint that such conclusion is unfair when regard is had to Article 22 of the Regulations: it reads as

follows:-

“Cessation as Self-employed Contributor.

22. (1) Where a self-employed contributor ceases insurable self-employment in a contribution year and does not become

an employed contributor in that contribution year and is a person to whom paragraph (a) or (c) of section 18(1) applies,

self-employment contributions shall be payable by him at the percentage amount or the amount specified in the said

paragraphs, whichever is the greater.

(2) In the case of a person to whom this article applies, the number of contribution weeks in respect of which self-

employment contributions shall be regarded as having been paid shall, provided that the total amount of self-employment

contributions payable by virtue of sub-article (1) have been paid, be 52 in any contribution year.”

50. It is argued on his behalf that in the absence of an express reservation to exclude one’s final pensionable year, then Article 22

should also apply to him. I do not accept this submission as in my view the provision does contain such an express reservation. As

can be seen, it is intended to cover a situation where a self-employed contributor ceases in a particular year his self-employment and

“…does not become an employed contributor in that contribution year…”. In other words, it clearly envisages that possibility arising.

Such however is not possible where the cessation of self-employment is mandatory as coinciding with reaching pensionable age. The

provision is regulating a set of circumstances quite different to those of the appellant. The reasons according to the Minister why

such a group obtains the benefit of Article 22 is that because they may at some future time again become PRSI contributors. Whether

the provision is justified on this basis does not call for adjudication in this case, with the critical point being that the Article itself has

no application to Mr. Meagher’s circumstances.

Observations on “Deeming Provisions”:

51. The respondent, during the course of the argument, has referred the court to Marshall (Inspector of Taxes) v. Kerr, [1995] 1

A.C. 148 (“Kerr”), as containing some useful guidance on the interpretation of a “deeming” statutory provision. At p. 16 of the report

the following statement given by Gibson J., in the Court of Appeal, was approved by the House of Lords in the judgment of Lord

Browne-Wilkinson: it reads:-

“For my part I take the correct approach in construing a deeming provision to be to give the words used their ordinary

and natural meaning, consistent so far as possible with the policy of the Act and the purposes of the provisions so far as

such policy and purposes can be ascertained; but if such construction would lead to injustice or absurdity, the application

of the statutory fiction should be limited to the extent needed to avoid such injustice or absurdity, unless such

application would clearly be within the purposes of the fiction. I further bear in mind that because one must treat as real

that which is only deemed to be so, one must treat as real the consequences and incidents inevitably flowing from or

accompanying that deemed state of affairs, unless prohibited from so doing.” (p. 164)

52. The second authority mentioned was O’Connell, Inspector of Taxes v. Keleghan [2001] 2 I.R. 490, a case involving a provision of

the 2nd Schedule to the Capital Gains Tax Act 1975, which contained a “statutory fiction” requiring a transaction, whereby shares

were exchanged for loan notes, to be deemed “not to be a disposal” for the purposes of the Act. Having referred to East End

Dwellings Ltd v. Finsbury Borough Council [1952] A.C. 109 and Commissioners of Inland Revenue v. Metrolands (Property Finance)

Ltd [1981] 1 W.L.R. 637 in which Nourse J. used very much the same language as that of Gibson J. in Kerr, Murphy J. in giving the

judgment of the Court at p. 501 said:-

“That legislation may and does from time to time deem Acts or events to be what they are not is common particularly in

legislation imposing taxation or seeking to prevent its avoidance. There is no reason why the courts would not enforce

such legislative fictions as fully and faithfully as any other legislation or…The courts are not unaccustomed to dealing with

notional or hypothetical situations or (in the words of Danckeertj in In Re Holt [1983] 1 W.L.R. 1488 at 1492) entering

“into a dim world peopled by the indeterminate spirits of fictitious or unborn sales”.”

As is evident, the learned judge treated such a provision in like manner with any other statutory provision and having done so applied

its declared meaning to the facts of the case stated before him.

53. When dealing with statutory provisions whereby matters are not to be treated as what they are but what they are deemed or

regarded as being, care must be exercised in their application. All the more so if the section is silent as to what effects or

consequences must also be considered, as resulting from this putative state of affairs. This is somewhat different from a pure

hypothetical situation where the outer parameters of what is entailed, are frequently specified. It seems to me with such a provision,

the words and phrases used, should at least in the first instance, be given their ordinary and natural meaning and if the result fits

within the statutory purpose or object of the Act, further exploration will not be required. However, as both Lord Browne-Wilkinson

has pointed out in Kerr, where absurdity or injustice results the examination must continue so as to see whether such can be avoided

or whether that result is in any event compelled by the provisions themselves. Where this exercise is required, it can be conducted in

accordance with general interpretive principles aided when necessary by the provisions of the Interpretation Act 2005. In this case,

subject to what is next hereinafter stated, I am satisfied that the interpretation as given accords with the legislative intent,

extracted as it is from the Act and the provisions as a whole.

54. This conclusion, quite frankly, and let me immediately say, leads to a very unsatisfactory position. As evident from the above

discussion, Mr. Meagher clearly satisfied the age and entry requirement of s. 109 of the 2005 Act. No understandable answer has

been offered by the Minister to explain why the appellant was permitted to be part of this age cohort and yet in the same piece of

legislation why it was statutorily made impossible for him to benefit. Saying that the age and entry provision was not intended to

cover all those who had attained 61 but not 62 as of April, 1988 is totally inadequate. Apart from an incidental handful, whose

birthday was the 5th April, and thus coinciding with the end of the tax year, no other individual within this age bracket could

conceivably benefit no matter what steps he or she took in that regard. Mr. Meagher was invited to qualify and did, via one condition,

but was immediately destined from the outset to become disqualified by another provision. I could well understand if this resulted from

some step over which he had control or even input: it did not, a situation which intuitively I find quite undesirable.

55. This begs the question as to whether the conclusion reached should be reassessed in light of both the common law and statutory

presumption against absurdity. At common law in this context “absurd” means contrary to sense and reason. Both Bennion on

Statutory Interpretation (UK; Lexi Nexis; 2008; 5th ed.), from p. 969 onwards and Halsbury’s Laws of England, (Uk; Lexis Nexis; 2008;

5th ed.; vol.96), at para. 1179 onwards, set out six types of undesirable consequences which come within this meaning: these are an

unworkable or impracticable result, an inconvenient result, an anomalous or illogical result, a futile or pointless result, an artificial

result and a disproportionate counter-mischief. As with all interpretive presumptions, the same are rebuttable but even if applicable,

the disputed consequences must stand if the legislature really intended the result in issue.

56. It seems to me that each of the constructions contended for involved some measure of anomaly or inconvenience. In holding as I

have, it becomes logically impossible for Mr. Meagher ever to have qualified for a pension. By accepting the appellant’s view it would

mean that s. 21(1)(d) of the 2005 Act would be given a substantive meaning when in fact I am satisfied that this is not so. In such

circumstances Bennion suggests that one should balance the effect of each construction and determine how best such an

unsatisfactory result can be ameliorated. (p. 985/998). I am satisfied that the balance rests in upholding the submission of the

Minister so that the integrity of the underlying scheme is kept intact. To do otherwise would be to seriously undermine the overall

structure of the scheme, even if there are but a limited number, in the same situation as Mr. Meagher. In addition, I cannot find a

legally valid justification for judicially compounding a statutory mishap by adopting the alternative interpretive version which when the

Act is considered as a whole, is not open.

57. Finally, it is self evident that the Minister must have been conscious of the appellant’s situation for some time. It is therefore

rather surprising and to be regretted that the recommendation made by the Human Rights Commission, which would have achieved a

just solution to this problem, not of the appellant’s making, was not acted upon by her.

58. Nevertheless, in conclusion, for the reasons stated I will dismiss the appeal.