Michael Lowry seeks to halt trial on alleged tax offences

TD claims transfer of trial to Dublin breaches his rights and amounts to punishment for being popular with voters in Tipperary

Independent TD Michael Lowry claims the DPP is pursuing an "improper policy" of pursuing him over alleged tax offences.

A Revenue Appeals Commissioner found last year Mr Lowry has no personal income tax liability arising from a €372,000 payment made in August 2002 to an Isle of Man trust account, the High Court was told.

The only outstanding disputed liability is a surcharge corporate tax liability of €2,400 for his company Garuda, his counsel Patrick Treacy SC said.

On those and other grounds, this prosecution was “unfair, “unjust”, in breach of Mr Lowry’s constitutional rights, “fundamentally oppressive” and should be halted.


The court heard the €372,000 payment was due to Garuda by a Finnish company, Norpe OY, and, on the direction of Mr Lowry, was paid into an Isle of Man trust account held by Kevin Phelan.

Also on the direction of Mr Lowry, there was a “self-correction” in 2007 of accounts of Garuda to address tax issues concerning that 2002 payment, counsel said.

While that “self-correction” was made in 2007 and not 2002 as Mr Lowry accepted it should have been, it was still made years before these criminal proceedings were brought against Mr Lowry, counsel said. The 2007 payment was an underpayment due to errors including about the correct rate of conversion from Sterling to euro and the additional tax and interest, totalling some €38,000, was paid in 2013, he added.

Mr Treacy also alleged an "unparalleled" media campaign against Mr Lowry was led by the Sunday Independent following publication of an article about the "Lowry Tapes", a "purported recording" of a conversation between Mr Lowry and Mr Phelan in 2004, in that newspaper in February 2013.

That article was an “unparalleled and savage” attack on Mr Lowry and was published on February 23rd, 2013, the day after one of its authors, journalist Elaine Byrne, made a complaint arising from material on those tapes to the Criminal Assets Bureau, counsel said.

The article was published despite a February 6th, 2013 letter from Mr Phelan to then Sunday Independent editor Anne Harris, the contents of which made clear there was an issue whether the tapes could ever be used in criminal proceedings, counsel said. Mr Lowry had been informed by another journalist of the existence both of that letter and of an email from Mr Phelan to Ms Byrne raising concerns about the tapes being published, he added.

In proceedings before Mr Justice Seamus Noonan, Mr Lowry denies charges of allegedly filing incorrect income tax returns for the year 2002. He also denies charges he had connived in the alleged delivery by Garuda of incorrect corporation tax returns for the years ending 2002 and 2006.

Mr Treacy said a fifth charge, of wilfully causing a company to fail to keep proper books of account between August 28th, 2002 and August 3rd, 2007, was added at the last minute in November 2014 in an effort to make this a prosecution under the Companies Act and not just a revenue prosecution.

The DPP, represented by Remy Farrell SC, denies the claims, including of any improper policy in relation to the prosecution.

Mr Lowry was in court for the hearing. His trial, which remains stayed pending the outcome of the High Court challenge, was transferred from Co Tipperary to Dublin Circuit Criminal Court on the application of the DPP.

The TD claims his prosecution is “extraordinary” because it concerns a payment he had both declared and paid. He also alleges transfer of his trial to Dublin breaches his rights and amounts to his being punished for being popular with voters in Co Tipperary.

A Revenue Appeals Commissioner found last summer Mr Lowry has no personal income tax liability, the court heard. The TD’s  company Garuda, trading as Streamline Enterprises, was found to have no PAYE/PRSI liabilities. Garuda was found to have a surcharge liability of some €2,400, a figure disputed by Mr Lowry.

Mr Justice Noonan rejected preliminary arguments by Mr Treacy the DPP should not be entitled to exhibit the full determination and comments of the Appeals Commissioner on grounds the appeal was heard in private.

As Mr Lowry relied on the appeal commissioner’s decision as a central plank of his judicial review, it was “extraordinary” for him to assert he could rely on that decision but the court could not see that decision in full, the judge said. Mr Lowry had waived his right to privacy over the appeal commissioner’s decision and the full ruling could be exhibited, he ruled.

In his proceedings, Mr Lowry, of Glenreigh, Holycross, Co Tipperary, contends he is entitled to prohibition orders on grounds of unfairness, breach of his right to a fair trial, alleged prejudicial publicity and alleged wrongful release of taxpayer information into the public domain.

If the court refuses to halt the trial, it should restrain it pending an investigation into disclosure to the media of the existence and details for a Garda search warrant for Mr Lowry’s private residence, it is also argued.

Mr Lowry further pleads the prosecution should be restrained pending a Garda investigation into a protected disclosure by an authorised officer at the Department of Jobs, Enterprise and Innovation alleging an established practise of non- prosecution of certain political figures in relation to tax matters.

The case continues.

Mary Carolan

Mary Carolan

Mary Carolan is the Legal Affairs Correspondent of the Irish Times