The Criminal Assets Bureau (CAB) may be facing an action for damages arising from its unsuccessful proceedings against a Scotsman, who had been living in Co Mayo, and his wife.
The bureau must also pay substantial legal costs awarded against it by the Supreme Court yesterday following its earlier acceptance that it could not win its appeal to that court against the High Court's refusal to grant it judgment for £350,000 for alleged unpaid income tax and interest against Mr Lindsay Craft.
The bureau had obtained orders freezing the assets of Mr Craft and his wife, Ms Claire McWatt. Those orders were lifted by the Supreme Court.
It is understood lawyers for Mr Craft and Ms McWatt, who are now living in Scotland, are considering taking an action for damages against CAB.
CAB's decision not to pursue in the Supreme Court its proceedings against Mr Craft and Ms McWatt followed a Supreme Court decision in March overturning a judgment for £1.77 million for alleged unpaid income tax and VAT granted by the High Court to CAB against Mr Seán Hunt, formerly of Ramilles Road, Ballyfermot, but now believed to be in Spain.
The court found CAB was not entitled to seek judgment in circumstances where tax assessments in relation to Mr Hunt were not, at the time the proceedings were taken, final and conclusive under the tax legislation and where 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, Ms Rosaleen Hunt, also known as Jean Hunt and Jean Maher, of which accounts, CAB alleged, Mr Hunt was the beneficial owner, were not admissible in evidence.
Similar issues relating to CAB's tax-collecting practices were raised in the case of Mr Craft and his wife and led to its decision not to pursue those proceedings in the Supreme Court.
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 bureau was entitled in principle to a decree for outstanding VAT against Mr Craft.
CAB had claimed some £350,000 for alleged arrears of both income tax and VAT plus interest. Mr Craft was arrested at his home on May 7th, 1998. He came here in 1994 and was last seen here in July 1998 and was suspected of being engaged in drug trafficking but denied that on affidavit. Also on May 7th, 1998, CAB completed income tax and VAT assessments which were served on Mr 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 Revenue Commissioners could not commence proceedings as soon as income tax has become due and payable without first issuing a demand to the taxpayer.