Revenue case against Kanes back in court

A JUDGE will rule next week on an unprecedented application by the Revenue Commissioners for summary judgment orders for €10 million against two Co Longford SUV dealers over alleged unpaid taxes.

Mr Justice Peter Kelly heard submissions yesterday as to whether Pauric Kane and John Kane, who operate businesses at Granard, Co Longford, had made out a defence to the summary judgment application. He reserved his decision to Friday next, adding it may have implications for other cases.

Mr Justice Kelly continued orders freezing the defendants’ assets not to be reduced below €10 million.

However, he directed that applications for payments of wages and utilities could be made to the receiver appointed over the businesses.

Anthony Collins SC, for the Revenue, told the judge his clients were mindful of the pressures on the court in these times and had only brought the case after serious consideration and after negotiations failed.

The Revenue believed there was no defence to its claims and that the brothers’ right to appeal the tax assessments raised against them had been exhausted.

Mr Collins said the amounts involved were very considerable, and the Revenue was also concerned limited companies had been set up at stages into which assets were transferred.

Mr Collins also said the Revenue regarded as “totally unsatisfactory” any arrangement under which the defendants might be allowed to defend the proceedings provided they paid a total of €500,000 into court.

The defendants had said it would take time to raise such an amount and the Revenue would wish that much more substantial sums were provided.

Simon Boyle SC, for the Kanes, had earlier argued that a defence was made out on grounds his clients continued to have a right of appeal to the Revenue Appeal Commissioners against the tax assessments raised.

Mr Justice Kelly had last month agreed to admit the case to the Commercial Court, which fast-tracks actions over commercial disputes.

The case is the first of its kind by the Revenue.

It said it had moved before the Commercial Court because of the “very substantial liability” due, and because that court could make orders resulting in the “effective collection” of the alleged unpaid tax.

It added that if the matter was pursued in the High Court it could be the end of this year before the Revenue secured the orders sought.

The Revenue had raised tax assessments against Pauric and John (also known as Alex) Kane over their operation of businesses in Granard selling sports utility vehicles.

It is seeking €5.29 million against Pauric Kane and €4.9 million against John Kane over alleged underpayment of tax and VAT over several years.

A receiver was appointed over their businesses last month.

The brothers have denied claims by the Revenue that they had “dragged out” appeals against those assessments until they had transferred assets to two companies and then withdrew those appeals.