Desmond v Moriarty

• Jurisdiction: Ireland
• Judge: Mr. Justice William M. McKechnie
• Judgment Date: 27 July 2018
• Neutral Citation: [2018] IESC 34
• Date: 27 July 2018
• Court: Supreme Court
• Docket Number: [Appeal No. 119/2012]

Between /

DERMOT DESMOND

Plaintiff/Appellant

-AND-

MR. JUSTICE MICHAEL MORIARTY (SOLE MEMBER OF THE TRIBUNAL OF INQUIRY INTO PAYMENTS TO MESSRS CHARLES HAUGHEY AND MICHAEL LOWRY)

Defendant/Respondent

[2018] IESC 34

McKechnie J.

McKechnie J.

MacMenamin J.

O'Malley Iseult J.

[Appeal No. 119/2012]

[High Court Record No. 2010/5159 P]

THE SUPREME COURT

Fraud – Breach of fair procedures – Jurisdiction – Appellant seeking to set aside a judgment of the High Court and the subsequent judgment of the Supreme Court on appeal on the grounds that they were obtained by fraud – Whether a judgment may be set aside for a breach of fair procedures by another party to the proceedings

Facts: The plaintiff/appellant, Mr Desmond, instituted proceedings with a view to setting aside a judgment of the High Court and the subsequent judgment of the Supreme Court on appeal, delivered on the 8th August, 2003, and the 20th January, 2004, respectively, on the grounds that they were obtained by fraud. In response the defendant, Moriarty J, brought an application by way of notice of motion seeking, on a number of different bases, to strike out or dismiss the plaintiff’s claims. That application was successful before Dunne J in the High Court, with the result that the plaintiff’s proceedings seeking to set aside the earlier judgments were struck out. The plaintiff appealed to the Supreme Court from that decision. Two core legal issues arose for consideration. The first related to the proper meaning of the term “fraud” as understood in the set aside jurisprudence, and specifically whether a plaintiff must allege “deliberate and purposeful dishonesty, knowing and international deceit” in order to successfully set aside a judgment on grounds of fraud. The second issue arose out of the exceptional jurisdiction of the courts to set aside a final order or judgment where necessary to protect constitutional rights, and it asked whether it was necessary, in order for a judgment to be set aside for breach of fair procedures, that the lack of fair procedures or breach of constitutional rights arises out of the conduct of the court itself, rather than by any other party.

Held by McKechnie J that, concerning the first issue, Dunne J correctly applied the case of Kenny v Trinity College Dublin [2008] IESC 18, in that a plaintiff must allege deliberate and purposeful dishonesty in order for the exceptional jurisdiction to be invoked; recklessness as to the truth or falsity of one’s statements is insufficient. McKechnie J concluded that the alleged erroneous statements and omissions in question were not such as to affect the judgments in the 2003 proceedings in a fundamental way. Concerning the second issue, though clearly there exists a jurisdiction to set aside for breach of fair procedures on the part of the court or tribunal hearing the proceedings, McKechnie J formed the view that such jurisdiction cannot be extended in the manner urged by the appellant so as to cover so-called breaches of fair procedures by the other party. McKechnie J therefore upheld the decision of the High Court on that point also.

McKechnie J held that he would dismiss the appeal.

Appeal dismissed.

JUDGMENT of Mr. Justice William M. McKechnie delivered on the 27th day of July, 2018

Introduction

1 The immediate legal context underlying this appeal is rather procedural and technical. The plaintiff instituted the within proceedings with a view to setting aside a judgment of the High Court and the subsequent judgment of this Court on appeal, delivered on the 8th August, 2003, and the 20th January, 2004, respectively, on the grounds that they were obtained by fraud. Those judgments are reported at [2004] 1 I.R. 334 and are collectively referred to in this judgment as ‘the 2003 proceedings’. In response the defendant brought an application by way of notice of motion seeking, on a number of different bases, to strike out or dismiss the plaintiff's claims. This application was successful before Dunne J. in the High Court, with the result that the plaintiff's proceedings seeking to set aside the earlier judgments were struck out ( [2012] I.E.H.C. 202). This judgment concerns the plaintiff's appeal from that decision.

2 Of course, it is not possible to address the legal issues presenting on this appeal in a vacuum, and so regard must be had to the complex factual background and procedural history of the 2003 proceedings and, at some level, to the work of the respondent generally. The terms of reference of the Tribunal of Inquiry into Payments to Politicians and Related Matters (‘the Tribunal’) are by this stage well known, as is the vital importance of its work for our society as a whole. So too, from the appellant's perspective, do the instant proceedings raise matters of fundamental concern, as he contends that he was not afforded fair procedures by the Tribunal, with the consequence that his ability to defend his good name was compromised.

3 In essence, two core legal issues arise. The first relates to the proper meaning of the term ‘fraud’ as understood in the set aside jurisprudence, and specifically whether a plaintiff must allege ‘deliberate and purposeful dishonesty, knowing and international deceit’ in order to successfully set aside a judgment on grounds of fraud. The second issue arises out of the exceptional jurisdiction of the courts to set aside a final order or judgment where necessary to protect constitutional rights, and it asks whether it is necessary, in order for a judgment to be set aside for breach of fair procedures, that the lack of fair procedures or breach of constitutional rights arises out of the conduct of the court itself, rather than by any other party. The parties have also raised a number of ancillary points, which are addressed below as they arise. Before turning to such issues, however, I will first set out the factual and procedural backdrop against which the plaintiff's application to set aside and the defendant's subsequent application to strike out must be considered.

Background

4 Fuller details of the background to the case can be found in the judgments in the 2003 proceedings ( [2004] 1 I.R. 334) and the judgment of the High Court in this case. The plaintiff/appellant is a well-known and successful businessman. The defendant/respondent is the sole member of the Tribunal. The Tribunal was established pursuant to the Tribunals of Inquiry (Evidence) Acts 1921 and 1979 (No. 2) Order 1997. By its Terms of Reference, the Tribunal was to ‘inquire urgently into and report to the Clerk of the Dáil and make such findings and recommendations as it sees fit’ in relation to certain definite matters of urgent public importance. The relevant matters for present purposes were those reflected at paragraphs (e), (f) and (g) of the Terms of Reference:

‘(e) Whether any substantial payments were made directly or indirectly to Mr Michael Lowry […] during any period when he held public office in circumstances giving rise to a reasonable inference that the motive for making the payment was connected with any public office held by him or had the potential to influence the discharge of such office.

(f) The source of any money held in the Bank of Ireland, Thurles branch, Thurles, Co. Tipperary, the Allied Irish Bank in the Channel Islands, the Allied Irish Banks, Dame Street, Dublin, the Bank of Ireland (I.O.M.) Limited in the Isle of Man, the Irish Permanent Building Society, Patrick Street branch, Cork or Rea Brothers (Isle of Man) Limited, in accounts for the benefit or in the name of Mr Lowry or any other person who holds or has held Ministerial office or in any other bank accounts discovered by the Tribunal to be for the benefit or in the name of Mr Lowry or for the benefit or in the name of a connected person within the meaning of the Ethics in Public Office Act, 1995, or for the benefit or in the name of any company owned or controlled by Mr Lowry.

(g) Whether Mr Lowry did any act or made any decision in the course of any Ministerial office held by him to confer any benefit on any person making a payment referred to in paragraph (e) or any person who was the source of any money referred to in paragraph (f) or on any other person in return for such payments being made or procured or directed any other person to do such act or make such decision.’

Mr Lowry is, of course, a T.D. for the Tipperary constituency, and served as Minister for Transport, Energy and Communications (‘the Minister’) from the 15th December, 1994 to the 30th November, 1996.

5 As part of its work, the Tribunal inquired into the circumstances surrounding, inter alia, the competition for the second GSM mobile phone licence in this State. The competition was announced on the 2nd March, 1995. Six applications were assessed by an evaluation team established by the Department of Transport, Energy and Communications (‘the Department’). The licence was ultimately awarded to a consortium (herein referred to as ‘the ESAT Digifone consortium’) consisting of Telenor (the Norwegian State telephone company), ESAT Telecom Limited (a company representing the interests of Mr Denis O'Brien) and IIU Nominees Limited (‘IIU’), a company beneficially owned by the appellant.

6 During this consortium's oral presentation to the competition evaluators, it was asserted that Telenor and ESAT Telecom each had a 40% interest, with the remaining 20% interest divided equally among four financial institutions. The appellant subsequently became involved in negotiations in August and September, 1995 with a view to becoming a member of the consortium. Neither the evaluation team nor the Department were notified of these negotiations. He became a member on the 29th September of that year, on terms that Telenor and ESAT Telecom would have their interests reduced to 37.5% each and that the appellant would become the owner of the remaining 25% interest...