SUV dealers ordered to pay €10m to Revenue

THE Revenue has won an unprecedented summary judgment order from the Commercial Court requiring two SUV dealers to pay more than €10 million in unpaid VAT and interest.

The application against brothers Pauraig and John Kane, with addresses at Granard, Co Longford, was the first of its kind by the Revenue.

Mr Justice Peter Kelly, who previously remarked the application by the Revenue may be indicative of a new policy, yesterday ruled the brothers had advanced no arguable defence and the Revenue was entitled to summary judgment for €5.27 million against Pauraig Kane and €4.95m against John Kane.

He refused an application by Simon Boyle SC, for the brothers, to stay on the judgment orders pending a possible appeal to the Supreme Court.

The judge also continued orders freezing the accounts of the defendants below €10m and retaining receiver William O’Riordan in place over their assets and businesses.

Anthony Collins SC, for the Revenue, also secured an order requiring the defendants to provide a statement of their accounts and assets after saying the Revenue had been unsuccessfully seeking that information for more than 12 months.

In his reserved judgment, Mr Justice Kelly said, as far as the Revenue was concerned, there was “a considerable history of unsatisfactory behaviour” by the two in their tax affairs.

The defendants had started their motor sales businesses in 2000 and claimed to be one of Ireland’s 4x4 specialists. The Revenue began investigations in 2004 and, after examination of extensive documents seized from the premises, tax assessments were raised in substantial sums.

Both brothers appealed those assessments and were then represented by solicitor Paul Madden. The Appeals Commissioner subsequently issued a direction requiring them to provide specific information by September 21, 2008, but that was not done. The brothers also failed in negotiations to have the assessments reduced.

The appeal was due to resume on February 25, 2009, but, the previous day, Mr Madden wrote to the Revenue giving “formal notice” his clients did not wish to proceed with their appeals.

The defendants later claimed that Mr Madden was not instructed to withdraw their appeals, an allegation that the solicitor denied in a letter to the court.

The judge ruled the brothers’ admitted failure to provide the information sought by the Appeal Commissioner placed them in the same position as if no notice of appeal had been given and, therefore, the tax assessments were final and conclusive.