Dublin landlord Paul Howard must pay the Revenue Commissioner’s legal costs spent obtaining a High Court judgment against him for some €2.5 million in tax and interest.
Mr Justice Michael Quinn agreed to make the same cost order against Mr Howard’s partner, Una McClean, against whom Revenue obtained a €653,407 tax and interest judgment.
The judge said his judgment orders will take effect in one week, so the defendants’ lawyers can double-check Revenue’s calculation of the interest accrued to date.
He did not agree with submissions made on behalf of the defendants that there were “special circumstances” that should prevent him from directing them to pay Revenue’s legal costs.
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The result of the case is “very clear” and their defence of it has delayed the recovery of taxes, he said.
The judgments obtained by Revenue on Tuesday were higher than the amounts cited in Mr Justice Quinn’s ruling published last month. Revenue’s senior counsel, Shelley Horan, said the figures reflect the up-to-date statutory interest accrued plus the principle tax owed.
Barrister Tim Dixon told the court his clients, Mr Howard and Ms McClean, may seek to appeal the rulings against them. He submitted their cases contained a “novel issue” that has implications for other cases involving Revenue.
In opposing the judgment orders, the defendants did not accept the validity of the amounts Revenue alleged they owed. They also argued the court action could not be maintained because the terms of engagement between Revenue and its solicitors in the proceedings amounted to a “champertous” agreement.
Champerty is an offence arising where a third party with no interest in the litigation assists a participant in a case in return for a share in the proceeds of the action.
The defendants alleged champerty arose from a clause concerning remuneration structure in a January 2020 contract between Revenue and Ivor Fitzpatrick & Company Solicitors, one of six firms on a panel retained by Revenue for collection of unpaid taxes.
Mr Howard and Ms McClean argued this clause amounted to a contingency fee arrangement where the solicitors remuneration would only be paid if sums allegedly due to the Collector General were realised. The clause was deleted under an amendment agreement between Revenue and the Fitzpatrick firm last February.
Mr Justice Quinn rejected the champerty claim in his ruling last month, saying Revenue has a duty to collect all taxes for the Central Fund and does not exercise the same discretion or make the same type of profit-orientated decisions that inform private parties who extend credit.
He ruled that there was no evidence Revenue decisions to pursue unpaid taxes are, or can be, influenced by the terms for retaining solicitors to enforce collection.
He said the assessments against Mr Howard, with an address on Larkfield Avenue, Harold’s Cross, Dublin, covered the period from 2002 to 2014.
Revenue issued the proceedings in November 2021 for taxes of €1.2 million against Mr Howard and €302,000 against Ms McClean, plus statutory interest.
At that point, it expressed “serious concerns” about Mr Howard’s activities related to his assets and secured an injunction restraining him from reducing them below €2.3 million. Ms Horan told that hearing that Mr Howard had a large property portfolio of rented properties but some properties had been sold and some were listed for sale.
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