A high court judge yesterday dismissed a claim by a Co Tipperary farmer that negligence and bad advice from AIB had led to his paying a large tax bill.
Mr Justice Geoghegan also rejected a claim by Mr Michael Gayson that he was unaware of tax evasion relating to an account held by him with the bank.
The judge also stated that AIB, through a former manager of its Cashel, Co Tipperary, branch, Mr Denis Murphy, actively advised Mr Gayson about how he might hide his money from the Revenue. The judge said he inferred AIB's failure to call evidence from Mr Murphy was because the bank feared that evidence would be embarrassing.
Mr Gayson, of Racecourse House, Racecourse Cross, Cashel, had sued the bank, alleging it advised him not to avail of the 1988 tax amnesty. Had he availed of that amnesty, he said he would have had to pay £84,000 and not £175,000 (which included penalties of £60,000) which he ultimately had paid to the Revenue.
Mr Justice Geoghegan ordered that Mr Gayson pay AIB's costs of the nine-day hearing as well as the costs of his own lawyers. The total bill is estimated at £300,000. He rejected Mr Gayson's evidence insofar as he suggested he was unaware of tax evasion.
Mr Gayson (67), a father of seven, was left a 195-acre farm, where he had worked as a herder, in 1959.
In a reserved judgment on the case yesterday, Mr Justice Geoghegan said he did not believe Mr Gayson's evidence of having instructed his solicitors that a trust had been created for his children in connection with monies deposited in the bank. He accepted the evidence of bank witnesses that at no time was the word "trust" used to their knowledge.
The judge said the statement of claim (the claims document prepared by Mr Gayson's lawyers) gave away the true story. It claimed Mr Gayson had informed the bank the money would eventually be required for the educational progress of Mr Gayson's children.
The children were involved only insofar as they formed the motive for the deposit deliberately hidden by Mr Gayson so as to avoid tax, with "no doubt the misguided good intention of benefiting his children".
He said the bank, in the form of Mr Murphy, was not only heavily involved with Mr Gayson in hiding his money from the Revenue but was actively advising and encouraging him as to how this could be done.
None of this evidence was of particular assistance to Mr Gayson unless it tended to support the credibility of his own unlikely story. It did not do so.
It was significant that Mr Gayson never told his accountant about the money on deposit.
He was satisfied that a conversation with a bank official about the 1988 national tax amnesty was "off the cuff" and that it would never have reasonably occurred to either Mr Gayson or the official that any answer would give rise to an action against the bank. The bank could not, as a matter of law, be liable to Mr Gayson for the type of advice allegedly given by the official.
Mr Justice Geoghegan said he was not impressed by the failure of the bank to call Mr Murphy in the case. He did not "for a moment believe he was so unwell as to be completely incapable of giving evidence, even evidence on commission."