Lowry -v- DPP & Anor, [2016] IEHC 92 (2016)

Docket Number:2015 42 JR
Party Name:Lowry, DPP & Anor
 
FREE EXCERPT

THE HIGH COURT

JUDICIAL REVIEW [2015 No. 42 J.R.]

BETWEEN

MICHAEL LOWRY APPLICANTAND

DIRECTOR OF PUBLIC PROSECUTIONSFIRST NAMED RESPONDENTAND

HIS HONOUR JUDGE THOMAS TEEHAN SECOND NAMED RESPONDENT

JUDGMENT of Mr. Justice Noonan delivered the 23rd day of February, 2016

Introduction

  1. In these proceedings, the applicant seeks an order against the first respondent (“the DPP”) prohibiting the continuation of a prosecution against the applicant in the Circuit Criminal Court, the proceedings having Bill No. TYDP0029/2014. In the alternative, the applicant seeks an order of prohibition of the continuation of these proceedings pending the publication of the findings arising from two matters, first the investigation by the Criminal Assets Bureau into the alleged disclosure of certain taxpayer information relating to the applicant and secondly, the referral of the dossier of Mr. Gerard Ryan to the Garda Bureau of Fraud Investigation. Various ancillary declarations are also sought.

    The Indictment

  2. The indictment in issue contains five counts as follows:-

    “Count 1

    Statement of Offence

    Knowingly or wilfully delivering an incorrect return, statement or account or information in connection with tax contrary to s. 1078(2)(a) of the Taxes Consolidation Act 1997.

    Particulars of Offence

    Michael Lowry, being resident at Glenreigh, Holycross in the County of Tipperary, on or about 21st October, 2003, knowingly or wilfully delivered to the Collector General of the Revenue Commissioners an incorrect income tax return for the year 2002.

    Count 2

    Statement of Offence

    Consenting or conniving the the knowing or wilful delivering an incorrect return, statement or account or information in connection with tax by a body corporate contrary to s. 1078(2)(a) and 1078(5) of the Taxes Consolidation Act 1997.

    Particulars of Offence

    Garuda Limited, a body corporate, did on or about 22nd day of December, 2003, knowingly or wilfully delivered to the Inspector of Taxes for the Thurles District, incorrect accounts in connection with corporation tax for the year ending 31st December, 2002.

    And the said offence was committed with the consent or conniving of Michael Lowry, being resident at Glenreigh, Holycross in the County of Tipperary, who was at the time a director, manager, secretary or other officer of the said Garuda Limited.

    Count 3

    Statement of Offence

    Consenting or conniving the knowing or wilful delivering an incorrect return, statement or account or information in connection with tax by a body corporate contrary to s. 1078(2)(a) and 1078(5) of the Taxes Consolidation Act 1997.

    Particulars of Offence

    Garuda Limited, a body corporate, did on or about 22nd day of December, 2003, knowingly or wilfully deliver to the Inspector of Taxes for the Thurles District incorrect information in connection with corporation tax for the year ending 31st December, 2002, to wit an incorrect corporation tax computation.

    And the said offence was committed with the consent or conniving of Michael Lowry, being resident at Glenreigh, Holycross in the County of Tipperary, who was at the time a director, manager, secretary or other officer of the said Garuda Limited.

    Count 4

    Statement of Offence

    Consenting or conniving the knowing or wilful delivering an incorrect return, statement or account or information in connection with tax by a body corporate contrary to s. 1078(2)(a) and 1078(5) of the Taxes Consolidation Act 1997.

    Particulars of Offence

    Garuda Limited, a body corporate, did on or about 3rd day of August, 2007, knowingly or wilfully deliver to the Collector General of the Revenue Commissioners an incorrect information in connection with corporation tax for the year ending 31st December, 2006.

    And the said offence was committed with the consent or conniving of Michael Lowry, being resident at Glenreigh, Holycross in the County of Tipperary, who was at the time a director, manager, secretary or other officer of the said Garuda Limited.

    Count 4 (sic)

    Statement of Offence

    Wilfully causing a company to fail to keep proper books of account contrary to s. 202(1) and 202(10) of the Companies Act 1990.

    Particulars of Offence

    Garuda Limited, a body corporate, did between 28th day of August, 2002 and 3rd day of August, 2007, both dates inclusive fail to keep proper books of account within the meaning of s. 202 of the Companies Act 1990 insofar as the said books of account did not correctly record and explain the transactions of the company.

    And the said offence was caused to be committed by reason of the wilful acts of Michael Lowry, being resident at Glenreigh, Holycross in the County of Tipperary, who was at the time a director, manager, secretary or other officer of the said Garuda Limited.”

    Background Facts

  3. The applicant was, at all material times, a director and shareholder in Garuda Limited trading as Streamline Enterprises (“Garuda”) and involved in its management. Garuda’s business involved the sale and distribution of refrigeration equipment, some of which was supplied by a Finnish refrigeration manufacturing concern, Norpe OY (“Norpe”). In August, 2002, a sum was due from Norpe to Garuda in respect of commission fees in the amount of STG£248,624, its euro equivalent being €372,000.

  4. On the applicant’s instructions, Norpe did not pay this sum to Garuda in August, 2002, but instead, paid it into a bank account in the Isle of Man controlled by a Mr. Kevin Phelan and stated to be for the benefit of the Glebe Trust, a private family trust of Mr. Phelan. This payment did not appear in the accounts of Garuda for the year 2002 and as a consequence, Garuda showed a net loss for 2002, instead of a net profit had the payment appeared in its accounts.

  5. In January, 2007, the applicant instructed Garuda’s accountants to show this payment in the company’s accounts for the year 2006. An invoice dated 31st December, 2006, was generated by Garuda in respect of this payment which purports to describe the payment as “Commission to 31/12/06 372,000”. This invoice is alleged by the prosecution to be false.

  6. The payment was then recorded in the company accounts and a sum paid in respect of tax. However, this sum was underpaid allegedly as a result of two errors. The first was that the relevant tax rate for 2006 was used instead of the higher rate applicable in 2002. Secondly, the relevant sterling to euro conversation rate for 2006 was used instead of the less favourable 2002 rate. As a result of this underpayment, additional tax and interest was paid by Garuda on 7th November, 2013, in the amount of €38,477. This comprised €13,430 for the balance of tax due with the remainder of €25,064 being interest.

  7. On the 26th January, 2013, Dr. Elaine Byrne, a journalist with the Sunday Independent, met with Mr. Phelan who gave her a tape recording. This tape recording purports to be of a telephone conversation in 2004 between Mr. Phelan and the applicant in which the applicant makes certain statements concerning this payment to Mr. Phelan. This tape recording subsequently became known as “the Lowry Tapes”.

  8. In the days following this meeting, it is alleged by the applicant that Mr. Phelan was in contact with a company in London called Pavilion Capital Partners Ltd. (“Pavilion”), which provides litigation funding. It is alleged by the applicant that Mr. Phelan entered into a contract with Pavilion whereby he agreed to provide certain assistance to parties involved in litigation against the State and the applicant, inter alia.

  9. On the 6th February, 2013, Mr. Phelan wrote a letter to the editor of the Sunday Independent. In it, he expresses dissatisfaction about the fact that a story may be published in the Sunday Independent concerning the applicant arising from material and information furnished by Mr. Phelan. In relation to the tape recording, he says:-

    “Further, I am not satisfied in the way in which a taped conversation was taken from me. I have been informed by your employee that the tape taken has been copied; this action was without my authority. I cannot confirm the accuracy of the copied version of the tape and therefore cannot authorise its use by your newspaper.”

    He goes on to request that the tape and documentation given to Dr. Byrne be destroyed.

  10. On the 12th February, 2013, Mr. Phelan emailed Dr. Byrne advising her that he had entered into a legally binding arrangement with Pavilion who were not impressed by the fact that Mr. Phelan had disclosed information to Dr. Byrne. Mr. Phelan alleges that he was told by Pavilion that he had breached their agreement thus potentially exposing himself to litigation by them. He alleges that the letter of the 6th February, sent to the Sunday Independent was drafted and put before him for signature. He concludes the email saying:-

    “At the end of the day we all have the same target and are essentially on the same side. I know Pavilion can deliver litigation funding and my files will definitely help to make that possible. Pavilion also understand that you have worked very hard on this matter and they firmly believe that the work they are doing with the assistance of a very large firm of London solicitors will make your article easier and less risky in the circumstances. I have forwarded your further questions to Pavilion for their advice and opinion as I do not want to have any further stress with them.

    I trust you understand the full background now which may go some way to explain the events of last week.”

  11. On the 23rd February, 2013, Dr. Byrne furnished a copy of the audio recording to an officer of the Criminal Assets Bureau and made a statement to the Bureau.

  12. On the 24th February, 2013, the Sunday Independent published as its lead front page story an article entitled “Revealed – Lowry Taped”, the story containing a full transcript of the tape recording. Between that date and the 12th May, 2013, the Sunday Independent published some seven leading articles critical of the applicant based on the content of “the Lowry...

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