A senior Allied Irish Banks official has told the High Court she knew from personal experience that it was "the culture of the time" in the mid-1980s to permit and encourage bogus foreign residents' accounts.
But she had not, in her naivety, thought of it as tax evasion, said Ms Norrie O'Sullivan, assistant manager of AIB's Cashel branch.
Ms O'Sullivan was answering questions from Mr David Hardiman SC, for Mr Michael Gayson (67), a farmer, of Racecourse House, Racecourse Cross, Cashel, Co Tipperary who is suing the bank, claiming that he got bad advice in 1988 and was told by Ms O'Sullivan not to avail of a Government tax amnesty. Ms O'Sullivan claims she never spoke to Mr Gayson or advised him about the amnesty.
Mr Gayson is suing the bank for damages and claims that had he availed of the amnesty he would have paid £84,000 rather than the £175,000 (including £60,000 penalties) which he had paid to the Revenue. Mr Gayson has told Mr Justice Geoghegan that a retired manager of the Cashel branch, Mr Denis Murphy, had advised him to put any spare money into a trust fund for his seven children which he could not touch and which would not be subject to tax. The court was told Mr Murphy suffered from a heart condition and would not be giving evidence.
Mr Gayson claimed he was shocked when in 1991, the new manager told him that he would have to pay DIRT which was introduced in 1986. During yesterday's hearing, Mr Hardiman put it to Ms O'Sullivan that in 1986 the bank's policy was to permit and encourage bogus foreign residents' accounts. Ms O'Sullivan said she could not say it was "encouraging" but she knew from personal experience it was the culture of the time and she did not, in her naivety, think of it as tax evasion.
Ms O'Sullivan said Mr Gayson did not ask about the tax amnesty. She would not have been in a position to discuss it with him. They had had a direction from head office to refer anyone asking about it to see an accountant or tax adviser. Staff were not to give any advice, good, bad or indifferent.
In reply to Mr Hardiman, Ms O'Sullivan agreed she was aware from Mr Gayson's account cards that among them was a foreign resident's account and that he was not a foreign resident.
Mr Hardiman said the account appeared to have been "closed" on July 17th 1982 and another account dated June 4th 1982 had the words "no return". Ms O'Sullivan said this meant that bank staff would know that no return was being made to the Revenue. "No return" would be normal on a foreign resident's account.
Mr Hardiman said there appeared to be two cards stapled together in relation to the June 1982 account in the names of Mr Gayson and his wife. The top sheet had a false address of Glebe Hotel, Epson Downs, Epson. Ms O'Sullivan said the writing was hers but she did not know where the address originated from or whether it was an imaginary address. She did not know if it was a false address.
Mr Hardiman said Ms O'Sullivan knew in June 1984 that Mr Gayson's address was in Cashel and that giving an address at the Glebe Hotel, Epson would have been a false address. Ms O'Sullivan said it would not have been his residence. She knew he did not live at that address.
Mr Hardiman asked if, when writing in the names of Mr Gayson and his wife and an English address, Ms O'Sullivan had any qualms about putting in a false address. She replied: "No." Was this the only account completed with a false address for any customer of the Cashel branch at that time, he asked. Were there any completed by her or, to her knowledge, by others? Ms O'Sullivan said there could have been.
The hearing continues on Tuesday.