Supreme Court permits winding up of four companies over revenue debts

The three judge court unanimously found, no matter how sincererly Martin Power, the "moving spirit" behind the companies, believed otherwise, the evidence did not establish the Revenue sought winding up for ulterior motive or improper purpose.

The "express, obvious", purpose was to gather together hundreds of thousands of Euro due to the State and, therefore, the public, Mr Justice John MacMenamin said.

The Revenue presented winding up petitions in July 2008 for the four companies- Tweedswood Ltd, Global Test and Survey Technologies Ltd, M.J. Power Construction (Wexford) Ltd and Groupco Management Services Ltd.

They were adjourned to October 2008 when the High Court ordered the winding up of three. In December 2008, it ordered the fourth company, Tweedswood Ltd, be wound up.

The companies lodged appeals in 2009 and a stay applied on the winding up orders pending that appeal.

For reasons including objections by the companies and delays in the court system, the appeal was not heard by the Supreme Court until this year. No blame attached to the Revenue for the delay, the court said.

Giving the court’s judgment, Mr Justice MacMenamin noted the events took place well before the Companies (Amendment) Act 2014 was enacted but the winding ups will proceed under that Act. He refused to put a further stay on the winding up orders.

He ruled the companies had not established evidence from which the court could infer the Revenue and other persons, who were not parties to the litigation, were part of a "conspiracy" to "stifle" the companies. Nor had they established the Revenue acted for ulterior motive or improper purpose.

One of the main issues in controversy was a series of transactions concerning the Custom House Quay site in Wexford town, he noted.

In a 2008 affidavit, Mr Power claimed that, in February 2002, Tony Dempsey, then a Fianna Fail TD who held a 50 per cent shareholding in Tweedswood, sold his interest in the Custom House Quay block to Tweedswood.

Having conveyed the property in 2002, Mr Dempsey began a process of "reversing" or rescinding the sale in September or October 2002 and the Revenue had wrongly approved that, Mr Power alleged.

It was alleged, in dealing with Tweedsood re VAT, the Revenue treated the sale as closed but, in its dealings with Mr Dempsey, it treated the sale as rescinded by him. Mr Power claimed, as a result, Mr Dempsey benefited financially and was able to make appropriate returns as to his financial interests to the standards in public office authorities.

The Revenue denied it acted unlawfully in its treatment of the VAT transactions and denied the winding up petitions were an effort to cover up what it allegedly did.

The judge stressed Mr Dempsey was not a party to this litigation and had had no chance to answer the claims concerning him which could not be taken as established fact. The allegation must also be seen in light of proceedings brought by Mr Dempsey concerning a contract for sale of the Custom House Quay building, which High Court case settled in 2008 on terms including Mr Dempsey getting judgments totalling more than €864,000 against Tweedswood and Mr Power.

The complaints concerning the Revenue’s handling of the Custom House transaction dated back to 2002/3, some five years before the winding up petitons were initiated, and well before the settlement of Mr Dempsey case in 2008, he noted.

A "mass" of "new material" presented in the appeal concerning the validity of the assembly of a site for government departments in Wexford town was "speculative" and suggested "clutching at straws", he also said.

An inquiry ordered at Wexford County Council found no evidence of impropriety in relation to assembly of the site and there was no "chain of connection" between that and the winding up petitions which would establish ulterior motive on the Revenue’s part.