ULSTER BANK has secured a court order appointing a receiver over a €352,837 VAT refund claimed by a property developer who owes the bank some €2.9 million but has failed to pay.
Mr Justice Peter Kelly was told yesterday that developer John Kelly had claimed that sum in VAT refunds.
The court also heard that Mr Kelly has so far failed to provide the Revenue with information sought by it before determining whether the monies will be paid.
The Revenue is also reserving its right to seek to set off any possible refund against any monies that may be due to it from Mr Kelly. On the application of James Phillips, for Ulster Bank, the judge made an order appointing a receiver over any VAT refund which may be paid to Mr Kelly, of Hunter’s Moon, Kilquade, Co Wicklow.
The decision means any VAT refund deemed due will be paid directly to the receiver but, if the Revenue wants a set-off, that issue will be determined at a later stage.
The application arose after Ulster Bank in May 2008 secured orders on consent in other proceedings requiring Mr Kelly to repay some €2.9 million to it.
In late January, the bank secured conditional orders of garnishee – charging orders – on any VAT refund payments apparently due to Mr Kelly from the Revenue.
The bank made the application on foot of information from Mr Kelly’s auditors relating to a possible VAT credit.
Because the Revenue had not yet made a decision on whether Mr Kelly was entitled to the refund, the judge said yesterday he could not make the charging orders absolute.
In those circumstances, the bank sought appointment of a receiver over any refund payments and the judge ruled the bank was entitled to that appointment.
Mr Justice Kelly also noted that the Revenue required certain information from Mr Kelly before deciding whether to pay the refund, but had yet to get that information despite communications with “no less than four tax agents” for Mr Kelly.
Louis McEntagart, for Mr Kelly, had opposed appointment of a receiver on grounds including that the bank was not entitled to apply on the basis of the information about the possible tax credit.
The judge said there was no bar to the bank using the information, and also awarded costs against Mr Kelly.
