The President of the High Court yesterday criticised the Revenue Commissioners for allowing companies to incur substantial tax debts before initiating proceedings for payment. Mr Justice Costello said the Revenue was leaving the collection of its debts "much too late".
He was speaking after granting an application to Mr Martin Lyons, acting Collector General of the Revenue Commissioners, for the winding up of Ormond Inns Ltd, with a registered office at the Ormond Hotel, Ormond Quay, Dublin.
The judge also granted an application to have Mr William O'Riordan, of chartered accountants Coopers & Lybrand, appointed liquidator to the company. The court was told Ormond Inns owed more than £400,000 to the Revenue Commissioners.
Mr Justice Costello asked: "Why was this debt allowed to go on without any proceedings being taken?" He said the Revenue was coming before his court on a weekly basis making applications to recover debts ranging from £300,000 to £400,000.
"I don't think they ever get paid," the judge said. "The Revenue is leaving the collection of debts much too late."
Mr Pat Quinn, counsel for the Commissioners, said he would take instructions in relation to the judge's comments about the delay in seeking payment of the debt owed by Ormond Inns and would convey the judge's remarks to the Commissioners.
He said Ormond Inns was incorporated on March 23rd, 1995, and had its registered office at Ormond Hotel, Upper Ormond Quay. The sole shareholder, director and secretary of the company was Mr Desmond John Coffey, of Lower Churchtown Road, Dublin.
He said the nominal share capital of the company was £1 million and the company was in debt to the Revenue Commissioners for £419,686 in respect of unpaid VAT, PAYE and interest. A further sum was due as continuing interest.
Mr Quinn said a letter was issued to the company last August 12th seeking payment of £347,787 within seven days. That amount was not paid. A receiver was appointed to Ormond Inns last September 15th on the instructions of Anglo Irish Bank, believed to be then owed £1,852,000, the court was told. It also heard that the Ormond Hotel, the sole property of Ormond Inns, was sold for £2.3 million on September 17th.
Mr Quinn said a statement of affairs in respect of the company was prepared on August 31st. It showed that prior to the hotel sale the company's liabilities were £2,495,798 and after sale there was a net deficit of £195,798. Mr O'Riordan had been appointed provisional liquidator to the company on September 26th.
Counsel said in those circumstance the Revenue Commissioners were seeking an order winding up the company.
Mr Justice Costello granted the application and appointed Mr O'Riordan as liquidator.
