Byrne v Judge O'Leary and Others

Court:Supreme Court
Docket Number:[S.C. No. 49 of 2007]
Judge:Mr. Justice Hardiman
Judgment Date:10 Oct 2011
Jurisdiction:Ireland
Neutral Citation:[2011] IESC 38

[2011] IESC 38

THE SUPREME COURT

Hardiman J.

Fennelly J.

Macken J.

049/2007
Byrne v Judge O'Leary & Ors

Between:

JOHN J. BYRNE
Applicant/Appellant

and

HIS HONOUR JUDGE SEAN O'LEARY, NOREEN MACKEY, PAUL ROWAN and MICHAEL CUSH (INSPECTORS APPOINTED BY ORDER OF THE HIGH COURT TO ANSBACHER (CAYMAN) LIMITED
Respondents

COMPANIES ACT 1990 S8

COMPANIES ACT 1990 S17

COMPANIES ACT 1990 S7(4)

COMPANIES ACT 1990 S7

CONCISE OXFORD ENGLISH DICTIONARY 10ED REV 2002

OXFORD ENGLISH DICTIONARY 2ED 1989

AG, PEOPLE v CASEY (NO 2) 1963 IR 33

COMPANY LAW

Investigation

Report - Evidence - Interview - Inspectors - Not all inspectors present at interview of witness - Court order requiring re-interview by all inspectors if veracity of evidence in dispute - Whether veracity of evidence given in interview in dispute - Meaning of veracity - Whether statements of fact or belief - People (AG) v Casey (No 2) [1963] IR 33 considered - Companies Act 1990 (No 33), ss 7(4), 8 and 12 - Applicant's appeal allowed (49/2007 - SC - 10/10/2011) [2011] IESC 38

Byrne v Judge O'Leary

49/2007 - Hardiman Fennelly Macken - Supreme - 10/10/2011 - 2011 3 IR 667 2011 7 1512 2011 IESC 38

Facts Inspectors had been appointed under the Companies Act to inquire into the affairs of Ansbacher (Cayman) Ltd. The Inspectors in their report had investigated certain trusts involving the applicant and had contended that the control of the trusts had rested with the applicant and the trusts were a sham. The applicant had brought an application for judicial review against the respondents which had been refused and the applicant appealed to the Supreme Court. Where a witness's evidence was being heard by fewer than all inspectors and veracity of that evidence was in dispute, the interview of that witness would have to be conducted in full again with the attendance of the previously absent inspectors. The applicant had been interviewed by only two of the four Inspectors. The respondents submitted that the veracity of the appellants' evidence at the interview was not in dispute. On behalf of the applicant it was contended that the veracity of the applicant's evidence was in dispute so that his evidence, which was given on oath, should have been heard again before all four Inspectors. The respondents, contended that "veracity" related solely to the subjective internal belief of a person. If that person gave evidence in accordance with that subjective belief, he was considered to be "truthful". The applicant contended that "veracity" meant objective conformity with fact.

Held by the Supreme Court (Hardiman J. delivering judgment) in allowing the appeal, granting judicial review and quashing the report. As two of the inspectors were not present, they could only join in the making of the report to the court on the basis that the veracity of the evidence given by that witness during the said interview was not in dispute. The Inspectors submissions equated veracity with truthfulness and with "credibility", quite independent of objective reality. In their view, a witness could be "truthful and reliable" although his evidence was totally false in fact. What was relevant in this case was the veracity, which was the factual accuracy of the evidence rather than the veracity or truthfulness of the witness. The conclusions of the Inspectors plainly contradicted the evidence of the applicant. Despite this, the Inspectors maintained, the veracity of his evidence was not in dispute. The veracity of the applicant's evidence was manifestly in dispute and, in order to comply with the relevant High Court order that evidence should have been heard again before all four Inspectors.

Reporter: R.F.

Mr. Justice Hardiman
1

JUDGMENT DELIVERED BY HARDIMAN, J.

2

This is an appeal from the order of the High Court of the 19th December, 2006, whereby the applicant's application for judicial review of the order of the respondents as Inspectors appointed under the Companies Act were refused on all grounds. The reasons for this order was set out in the judgment of the High Court (Gilligan J.) delivered on the 7th December, 2006.

3

The Inspectors were appointed pursuant to Sections 8 and 17 of the Companies Act,1990, for the purpose of investigating and reporting to the High Court on the affairs of Ansbacher (Cayman) Ltd., (previously known as Guinness and Mahon Cayman Trust Limited) in relation to four specific matters set out in the judgment of the High Court and "any related matters". The specific matters included the question of:

"…whether the affairs of the Company were conducted with intent to defraud its creditors or the creditors of any other person or otherwise for a fraudulent or unlawful purpose and if so to identify the statutory provisions involved and the persons in default in each case…".

4

Under the terms of a High Court Order of the 22nd September, 1999, the late Mr. Justice Declan Costello, Noreen Mackey, Barrister, and Paul Rowan FCA were appointed Inspectors. Subsequently, the Honourable Mr. Justice Costello resigned from this position and, according to the affidavit of the first-named respondent, his Honour Judge O'Leary and Mr. Michael Cush S.C. were appointed additional Inspectors pursuant to an order of the 8th December, 2000.

5

This staggered process of appointment, and perhaps other factors, led to a position in which a very relevant part of the proceedings of the Inspectors were conducted by two only, and not by all four, of them. Specifically, the applicant, now the appellant, was interviewed by the Inspectors once only. This occurred on the 24th January, 2001. Two only of the Inspectors were present, His Honour Judge O'Leary and Mr. Rowan FCA.

th
6

Four monthsafter the interview with the appellant, an order of the High Court (Finnegan J.), was made pursuant to s.7(4) of the Companies Act, 1990. This order appears to have been made ex parte and insofar as relevant it provided as follows:

"Where it has not been found practical for all four inspectors to be present at an interview at which a witness's evidence has been taken under oath or where that witness has been interviewed prior to the appointment of a particular inspector, the inspector or inspectors who was/were absent from that interview shall not be precluded from further examining that witness or reporting to the Court on that witness subject to the following:"

7

That the veracity of the evidence given by that witness during the said interview is not in dispute or if the veracity of the evidence given by that witness during the said interview is in dispute that the said interview is conducted in full again with the said inspector or inspectors in attendance".'

8

Section 7 and 8 are the Sections of the Companies Act,1990 which permits the Court to "appoint one or more competent Inspectors to investigate the affairs of a company in order to enquire into matters specified by the Court".

9

Section 7(4) provides that:

"Where the Court appoints an Inspector under this Section…it may, from time to time, give such directions as it thinks fit, whether to the Inspector or otherwise, with a view to ensuring that the investigation is carried out as quickly and as inexpensively as possible".

10

The application under s.7(4) for the Order which was made on the 25th May, 2001, appears to have been made ex parte. On the hearing of this appeal, the affidavit on which the application was grounded was not produced. It is also notable that the application was made some four months after Mr. Byrne had been examined on oath. It was therefore designed retrospectively to rectify any difficulty or weakness arising from the fact that only two of the four Inspectors had participated in that exercise. This was so, even though the last two Inspectors to be appointed (Judge O'Leary and Mr. Cush S.C.) had received their appointments in December, 2000. One can only suppose that this rectificatory order was made on the basis that it would have added to the length and expense of the Inquiry if the evidence of Mr. Byrne had to be reheard. But that might have been a cheaper option in the end. It must also be doubtful if a provision aimed at ensuring speed and cheapness can authorise persons to form a view of and report on oral testimony which they have not heard but which has previously been heard by others. But that question does not immediately arise.

11

Mr. Byrne was only interviewed once. Neither Ms. Mackey nor Mr. Cush S.C. were present at that interview. Accordingly, these two Inspectors could only join in the making of the report to the Court on the basis that "the veracity of the evidence given by that witness during the said interview is not in dispute".

12

This interpretation of the Order of the 25th May, 2001, appears to be undisputed. In the Inspectors' submissions to this Court, at p.4, it is said that:

"It is not disputed that the result of the order of the High Court dated the 25th May, 2001, pursuant to s.7(4) of the Companies Act, 1990 was that where:"

(a) A witness's evidence was being heard by fewer than all four inspectors on the basis that it was not practical for all four inspectors to be present; and

(b) The veracity of that evidence was in dispute;

(c) The interview of that witness would have to be conducted in full again with the attendance of the previously absent inspectors. It is the respondents' submission that the veracity of the appellants' evidence at the interview of 24 January, 2001, by the first and third-named respondents was not in dispute."

13

Based on the foregoing, the issue between the parties can be very simply expressed. The applicant/appellant, Mr. Byrne, says that "veracity" means objective conformity with fact. The respondents, the Inspectors, say that "veracity" "must relate solely to the subjective internal belief of a person. If that person gives his evidence in accordance with that subjective belief, he is considered to be "truthful"...

To continue reading

Request your trial