Business Irish

Sunday 17 June 2018

Court dismisses action against Revenue in decade-long wine dispute

'The case arose from an incident in 2006 after the Finglas-based company imported a quantity of wine that was then lodged in a bonded warehouse. ' Stock photo
'The case arose from an incident in 2006 after the Finglas-based company imported a quantity of wine that was then lodged in a bonded warehouse. ' Stock photo

Fearghal O'Connor

Proceedings taken against Revenue over its seizure of a bonded warehouse full of French wine a decade ago have been struck out by the High Court.

Mr Justice Seamus Noonan ruled against a claim made by Arnaud Gaultier, a former director of Irish-registered Loire Valley Ltd, an importer of French wine into Ireland. Gaultier had pursued the case on his own behalf, even after Loire Valley went out of business five years ago.

Revenue had brought a motion seeking an order to strike out the proceedings on the grounds they were "frivolous and vexatious and bound to fail".

The case arose from an incident in 2006 after the Finglas-based company imported a quantity of wine that was then lodged in a bonded warehouse. But a dispute arose between Loire Valley and Revenue arising from the closure of the warehouse, resulting in Revenue detaining the wine and issuing a seizure notice.

The company claimed the detention and seizure of the wine was effected unlawfully and entered into discussions with Revenue, according to the ruling.

This resulted in a payment of €25,000 by Revenue to the company. After further discussions, a further sum of €80,000 was paid to the company by cheque, but this was never cashed.

"The action of detaining and seizing the wine was taken with the bona fide intent of protecting revenue that was perceived to be at risk," Revenue subsequently wrote in a letter to Loire Valley, stating the money was paid as recompense to the company. But in 2012, the company was struck off the Register of Companies for failing to file annual returns, according to the High Court judgment.

Arising from this, Gaultier brought judicial review proceedings in the High Court against the Registrar of Companies "alleging misfeasance, malfeasance and breach of duty against the Registrar in relation to the manner in which the company was dissolved", said the judgment.

"In particular, the plaintiff alleged that because the effect of the dissolution was that the property of the company vested in the Minister for Finance, the Registrar had colluded with the minister to bring about this result," it said.

In her judgment dismissing that application in March 2013, former High Court judge Ms Justice Elizabeth Dunne, who has since been elevated to the Supreme Court, described this allegation as "one which was unsupported by any evidence and was disgraceful and scurrilous".

Following the dissolution of the wine import company, Gaultier commenced proceedings on his own behalf, preparing a plenary summons that listed Revenue, the Minister for Finance, Ireland and the Attorney General as defendants, later adding the Courts Service and the Minister for Justice.

He later served a statement of claim on Revenue, but not on any other defendant, said the judgment. This claim, said the ruling, was based on the fact that Gaultier owned the company "and wrongs done to the company are wrongs done to him".

"The claim being maintained by the plaintiff in these proceedings is clearly a claim that could only have been maintained by the company if it existed, but of course it had ceased to exist before these proceedings were ever instituted, as the plaintiff must have known," wrote Mr Justice Noonan's ruling.

"It is, of course, settled law since the middle of the 19th century that a member or director of a company cannot maintain a claim on behalf of the company," it said.

The court ruled that the rationale for the rule was straightforward: "A party cannot bring proceedings in respect of a wrong suffered by another party."

Mr Justice Noonan said that "the court is required to strike the proceedings out, since to do otherwise would be to impose a considerable injustice on the defendants who have, to date, had to expend considerable time, effort and money on defending vexatious claims by the plaintiff now some 11 years after the events complained of".

He was also critical of what he said was a lengthy submission by Gaultier "concerning the impartiality of the Irish judiciary towards litigants in person in general and towards him in particular".

Gaultier had been warned that he would be held in contempt of court, said the ruling, because of suggestions in his written submission that "were in my view scandalous, gratuitously offensive to the judiciary of the State and constituted a contempt of court", said the court ruling.

"It became necessary during the course of the plaintiff's submissions for me to warn him that his behaviour was contemptuous and I would have to hold him in contempt if he did not desist. Only then did the plaintiff cease this behaviour and because he offered an apology to the court, I determined to take no further action."

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