Revenue has secured court orders freezing the assets of two SUV dealers below a total €10.1m arising from their alleged 'long history of tax evasion'.
Mr Justice Peter Kelly made the freezing orders against Pauraig Kane, operating as Granard Motors, Granard, Co Longford, and his brother John Kane, also known as Alex Kane, operating as John Kane and Kanes of Granard.
Gary McCarthy, for Revenue, said it wanted the freezing orders because it was concerned the brothers would seek to dissipate their assets.
Revenue claims the recent incorporation by Pauraig Kane of a limited liability company was 'a sham' to move assets beyond the Revenue's reach and that Pauraig Kane and John Kane have both bought several properties while failing to pay substantial sums to the Revenue.
It claims John Kane, just before withdrawing his appeal against a tax assessment, had set up Kanes of Granard Ltd in late 2008 with a view to defeating claims by the Revenue. It alleges the business of both brothers appears to be operated as a single business.
Counsel, who sought the freezing orders on an ex parte basis (only one side represented) said the brothers were involved in operating one of the biggest SUV specialist dealerships in the country at Granard, Co Longford with some 184 valuable vehicles there.
Revenue also believes another brother, Seamus Kane, remains involved in the family business although such involvement had been denied by him, counsel added.
Mr McCarthy said Revenue would be applying to the court on Monday to enter proceedings against Pauraig and John Kane aimed at recovering sums allegedly due in unpaid taxes. Pending that, the accounts freezing order was being sought.
Revenue is seeking €5.27m from Pauraig Kane and €4.9m from John Kane relating to alleged substantial under-declaration of tax and VAT.
Revenue alleges the defendants operated two systems of accounts, one for themselves and the other for the Revenue with 'deliberate concealment' of the nature of the trade carried on.
Pauraig Kane had dragged out an appeal against an assessment raised against him in order, the Revenue believed, to change from being a sole trader, and instead set up a limited liability company in the name of Prestige 4 x 4 Specialists Ltd, incorporated in November 2008.
Counsel said Revenue obtained judgements in 2002 amounting to more than €897,000 against Seamus Kane which remain unpaid. Seamus Kane had denied under cross-examination he had any assets apart from one property at Farrell's Terrace, Granard, but Revenue believed he owns other properties and was seeking to defeat execution of the judgements.
Mr Justice Kelly noted that this was the first time Revenue has looked to enter litigation into the Commercial Court in an effort to recover monies allegedly owed. He said an affidavit by Collector General Gerard Harrahill indicated a prima facie entitlement to the sums sought and also showed a lot of dealings between the Revenue and the defendants in the past.
Given the matters set out by the Revenue, the judge said he was satisfied to make the freezing orders. Those matters included the alleged dragging out by Pauraig Kane of an appeal to the Revenue Appeals Commissioners; the proposal, previously unknown to the Revenue, to set up a limited liability company with the intention to take over the business previously carried on by the defendants; alleged falsification of records; and alleged failure by either brother to make tax returns for 2005, 2006 and 2007.
In his affidavit, Mr Harrahill said the businesses of Pauraig and John Kane, taken together, was described as a family run garage and motor sales business. That business started in 1990 and was operated by all three brothers until November 1996. He said Pauraig and Seamus Kane then continued separate businesses until 2001 when Seamus Kane was said to have ceased doing business, a view the Revenue did not share.
Mr Harrahill said John Kane commenced business about 2000 and the Kanes of Granard business owned by Pauraig and John Kane claimed to be one of Ireland's largest 4x4 specialists. The Revenue began investigating their businesses from 2004 and had discovered very serious irregularities following a seizure of documents.
