In re Bovale Developments DCE v Bailey & anor, [2011] IESC 24 (2011)

Docket Number:25 & 26/08
Judge:Hardiman J.
 
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THE SUPREME COURT

Denham J. 25 & 26/2008

Hardiman J.

Fennelly J.

Macken J.

Finnegan J.

IN THE MATTER OF

BOVALE DEVELOPMENTS

IN THE MATTER FOR THE COMPANIES ACTS

1963 to 2006

IN THE MATTER OF AN APPLICATION PURSUANT TO S.160(2) OF THE COMPANIES ACT, 1990 Between:THE DIRECTOR OF CORPORATE ENFORCEMENT

Appellants/Respondentsand

MICHAEL BAILEY and THOMAS BAILEY

Respondents/Appellants

JUDGMENT of Mr. Justice Hardiman delivered the 14

th

day of July, 2011.

This case features an application, brought by Notice of Motion dated the 8th August, 2006, seeking a disqualification order pursuant to the Companies Act, 1990 against Michael Bailey and Thomas Bailey, which would preclude them inter alia from acting as Directors of a company. The grounds of this application were set out in affidavits sworn by Peter Lacey, a partner in PricewaterhouseCoopers and by Dermot Madden, an accountant in the office of the Director of Corporate Enforcement.

The applicants brought a Notice of Motion dated the 22nd November, 2006, seeking an order striking out various paragraphs of the said affidavits and were in part successful in this in the High Court. The Baileys’ appealed this order which refused them relief on eight specific grounds, set out in the judgment of Denham J. in the present case and the Director of Corporate Enforcement filed a Notice of Cross-Appeal on the grounds also set out in the judgment of Denham J. The two appeals were heard together.

In relation to the contentions raised in the Baileys’ appeal, I am in agreement with the judgment of Denham J. and need say no more about it. I am also in agreement with the order proposed by Denham J. in relation to the Cross-Appeal but I desire to give my own reasons for this.

The Tribunal Issue.

The Director of Corporate Enforcement appealed, inter alia, those parts of the judgment of the High Court which ruled that:

- The Director of Corporate Enforcement could place no reliance on hearsay evidence in his grounding affidavits in the disqualification proceedings.

- The report of a Tribunal of Inquiry has no evidential value in disqualification proceedings but can merely be used as a source to assist in the finding of other evidence.

The Baileys were the subject of serious allegations made against them before a Tribunal of Inquiry, namely the Mahon Tribunal formerly the Flood Tribunal. Certain of the findings of the Tribunal were set out or summarised in the Affidavits filed in the disqualification proceedings, and the Baileys took exception to this. This objection is based very largely on the characterisation of the Tribunal of Inquiry as a legal entity contained in the judgments in the High Court and in this Court in the leading case of Goodman International and Lawrence Goodman v. The Honourable Mr. Justice Liam Hamilton, Ireland and the Attorney General [1992] 2 IR 542.

Significance of Goodman.

I wish to repeat what I said in the course of my judgment in Murphy and Ors. v. Flood (Supreme Court, unreported 21st April, 2010) in relation to the context and significance of Goodman:

“… certain persons have in the past been heard to complain, and to take their complaint to the courts, that the enormous prerogatives of a Tribunal of Inquiry is capable of destroying them, financially and in terms of reputation, much more obviously than even a criminal court could do, but that the tribunal’s procedures afford them few or none of the protections which would be available to them in the court forum. This contention has always been rejected. It was rejected in strong terms by this Court in Goodman v. Hamilton. This decision is now the foundation, in Irish law, of the constitutionality of the Tribunal of Inquiry, as known in our law. But since that judgment was given, the nature of tribunals in themselves has been altered by legislation, by parliamentary resolution… and by the exponential, and wholly unpredicted, expansion in the length of Tribunals of Inquiry and in the costs of them. It would be wholly unrealistic not to acknowledge that these costs can only be described as truly enormous”. (Emphasis added)

I also said, and also wish to reiterate, from my judgment in the Murphy case the following:

“Goodman is a decision of this Court, a case of high authority which we have not been asked to disapprove and which I propose to follow. It is true to say that Mr. Michael Collins S.C. who appeared for the Tribunal on this appeal said he would ask the Court “if necessary” to depart from Goodman. I take it however, that this is a reference solely to the dictum of McCarthy J. to be discussed below and not to the principal thrust of Goodman, which has been for almost twenty years every Tribunal of Inquiry’s title to constitutionality. No argument was directed against any finding in Goodman except the dictum of McCarthy J. Nevertheless, it must be acknowledged that, in distinguishing the findings of a tribunal from the verdict of a court, the judges were obliged to make some rather subtle distinctions which one may take leave to doubt would count for much in the minds of ordinary people. I have to some extent explored this topic in my judgment in Maguire v. Ardagh [2002] 1 I.R. 385 at 669”.

Despite these acknowledgments of the canonical status of Goodman, it must equally be recorded that this is the second attempt in just over a year, Murphy being the first, to gloss, or to relegate to the status of mere obiter, or if necessary to overrule a portion at least of the findings of Goodman. In the Murphy case, this portion was a dictum of McCarthy J. in relation to the Tribunal’s powers to award costs. In the present case it is a portion of the judgment of Finlay C.J., to be considered below.

In Goodman, the former Chief Justice said at p.590:

“With regard to the suggestion that the findings of the Tribunal if not an impermissible administration of justice by a body other than a court, is a usurpation of the activities of courts in cases where either civil cases are pending or may be instituted, it seems to me that again this submission arises from a total misunderstanding of the function of the Tribunal. A finding by this Tribunal, either of the truth or of the falsity of any particular allegation which may be the subject matter of existing or potential...

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