The Criminal Assets Bureau yesterday accepted it cannot win its Supreme Court appeal against a High Court refusal to grant it judgment for £350,000 for alleged unpaid income tax and interest against a Scotsman who had been living in Co Mayo.
The CAB is now facing a substantial bill for legal costs arising out of its unsuccessful proceedings against Mr Lindsay Craft and his wife, Ms Claire McWatt, and also in relation to lengthy proceedings regarding a Dublin man, Mr Sean Hunt, and his wife, Rosaleen. Those latter proceedings ended adversely for CAB at the Supreme Court on Wednesday, which prompted the end yesterday of CAB's appeal in the Craft case.
In the Hunt case, the Supreme Court overturned a judgment for £1.77 million for alleged unpaid income tax and VAT granted by the High Court to CAB against Mr Hunt, formerly of Ramilles Road, Ballyfermot, but now believed to be in Spain.
The court found CAB was not entitled to seek judgment where tax assessments in relation to Mr Hunt were not, at the time the proceedings were taken, final and conclusive under tax legislation and because no prior demand for payment had been made. Mr Hunt had also not exhausted his right to appeal against the assessments to the Revenue Appeals Commissioners.
The court also held that bank statements related to accounts in the name of Mr Hunt's wife, accounts which CAB alleged Mr Hunt was the beneficial owner of, were not admissible in evidence.
As similar issues relating to CAB's tax-collecting practices were raised in the case of Mr Craft and his wife, that case was listed for mention with the case of Mr Hunt in the Supreme Court yesterday. Dealing initially with the Hunt case and the costs of that, the Supreme Court rejected arguments by Mr Richard Nesbitt SC, for CAB, that it should not award costs to Mr Hunt on grounds that the latter had failed to meet his tax payment obligations.
Dr Michael Forde SC, for Mr Hunt, and Mr Seamus Ó Tuathail for Mrs Rosaleen Hunt, applied for their costs. Dr Forde said CAB had pursued extraordinary and unprecedented litigation against his client and, if the court accepted CAB should not have to pay the costs of actions which it lost, that would leave defendants in an almost impossible position.
Awarding costs to the Hunts, the Chief Justice, Mr Justice Keane, said the court could not accede to CAB's submission on costs because a litigant who succeeded was entitled to be indemnified their costs. This was not a case of making a monetary payment to a person but was to ensure they did not have to bear their own costs.
While the court was not rejecting CAB's remarks about the conduct of Mr Hunt's tax affairs, the tax code contained sanctions regarding penalties and interest for any failure to meet tax obligations. It would not be proper for the Supreme Court to impose its own order for costs.
In relation to the Craft case, Mr Nesbitt said the effect of the court's judgment in the Hunt case was that CAB's appeals in the Craft case could not succeed while a cross-appeal by the Crafts would succeed. The Supreme Court adjourned the matter to next month, when it will deal with the costs issue.
In June 2000, the High Court had ruled that CAB's claim for judgment for alleged outstanding tax against Mr Craft, owner of a windscreen replacement business, with an address at Westport Road, Castlebar, Co Mayo, was premature. However, Mr Justice O'Sullivan did find that the CAB was entitled in principle to a decree for outstanding VAT against Mr Craft.
The CAB had claimed some £350,000 for alleged arrears of both income tax and value added tax, plus interest.
Craft was arrested at his home on May 7th, 1998. Craft, who came here in 1994 and was last seen here in July 1998, was suspected of being engaged in drug trafficking but denied that on affidavit. That same day, CAB completed income tax and VAT assessments and these were served on Craft while he was in custody. Both assessments were appealed later the same month but the appeal was rejected.
In refusing CAB a declaration in respect of the alleged outstanding income tax, the High Court held the proceedings were premature.
