The High Court has ordered Nalto Construction Ltd to be restored to the Register of Companies, finding it just to allow the Revenue Commissioners to pursue an alleged tax liability and the Director of Public Prosecutions to pursue criminal proceedings against the company.
Miss Justice Laffoy delivered judgment on 22 June 2011 on a petition by the Collector General of the Revenue Commissioners. The company had been struck off on 9 January 2011 after its director, Patrick Fitzgerald, requested voluntary strike-off on the basis that it was not carrying on business and had no assets or outstanding liabilities.
The Revenue Commissioners had issued a letter of no objection to the strike-off in October 2010. The petitioner said that letter was issued by mistake: the Revenue’s Investigation and Prosecution Division had already obtained DPP directions to prosecute the company for alleged Revenue offences, but the issue had not prevented the Companies Unit from sending the letter.
The proposed prosecution concerned allegations of an incorrect return, incorrect accounts and knowingly or wilfully claiming an unauthorised corporation tax repayment. The alleged offences related to the tax year ending 31 March 2000. Those criminal proceedings had been adjourned pending the restoration application.
The petitioner said the Revenue was a contingent creditor because the company allegedly owed €152,166: €49,710 in tax, a 100 per cent penalty of €49,710 and €52,746 in interest. The Revenue’s case was that the amount arose from an alleged fraudulent use of a self-administered pension scheme set up for Mr Fitzgerald’s benefit. Fitzgerald denied that there was substance to the allegations and said he intended to defend summonses issued against him personally. He also pointed out that no tax assessment or claim had been made against the company before the voluntary strike-off request, despite a Revenue investigation beginning in 2004.
The judge said it would be inappropriate to assess the Revenue’s prospects of recovering the claimed tax while related criminal proceedings were proposed. She was, however, satisfied that the Revenue was acting bona fide in pursuing its claim, and found it just to restore the company so that the tax claim and prosecution could proceed. The order does not decide whether the alleged tax liability or offences are established.
The restoration order will lapse if a copy of the perfected order is not delivered to the Registrar of Companies within three months of the order’s pronouncement. The petitioner was also ordered to pay Fitzgerald’s costs on a party-and-party basis, to be taxed if the parties cannot agree.