Dunnes Stores Ireland Company v Ryan

• Jurisdiction: Ireland
• Judge: Mr. Justice Kearns
• Judgment Date: 05 June 2002
• Neutral Citation: [2002] IEHC 61
• Court: High Court
• Date: 05 June 2002

[2002] IEHC 61

THE HIGH COURT

33 J.R./1999

DUNNES STORES (IRL) CO & HEFFERNAN v. RYAN & MINISTER FOR ENTERPRISE

BETWEEN

DUNNES STORES (IRELAND) COMPANY DUNNES STORES (ILAC) CENTRE LIMITED

AND

MARGARET HEFFERNAN

APPLICANTS

AND

GERARD RYAN

AND

THE MINISTER FOR ENTERPRISE, TRADE AND EMPLOYMENT

RESPONDENTS

AND

IRELAND AND THE ATTORNEY GENERAL

NOTICE PARTIES

Citations:

COMPANIES ACT 1990 S19(5)

CONSTITUTION ART 38.1

CONSTITUTION ART 40.1

COMPANIES ACT 1990 S19(6)

COMPANIES ACT 1990 S19(4)

TRIBUNALS OF INQUIRIES ACTS 1921 – 1998

COMPANIES ACT 1990 S19(2)(a)

COMPANIES ACT 1990 S19(2)(b)(ii)

COMPANIES ACT 1990 S19(2)(b)(iii)

COMPANIES ACT 1990 S19(2)(d)

COMPANIES ACT 1990 S19(2)(f)

COMPANIES ACT 1990 S19

COMPANIES ACT 1990 S21

DUNNES STORES IRL CO & ORS V MALONEY & ANOR 1999 3 IR 543

COMPANIES ACT 1990 S19(2)

COMPANIES ACT 1990 S10

COMPANIES ACT 1990 S10(5)

COMPANIES ACT 1990 S10(6)

DESMOND V GLACKIN & ORS 1993 IR 67

COMPANY LAW ENFORCEMENT ACT 2001 S29

COMPANY LAW ENFORCEMENT ACT 2001 S29(7)

COMPANY LAW ENFORCEMENT ACT 2001 S29(6)

COMPANY LAW ENFORCEMENT ACT 2001 S29(8)

CONSTITUTION ART 40.6.1(1)

HEANEY V IRELAND & AG 1996 1 IR 580

R V DIRECTOR OF SERIOUS FRAUD OFFICER EX PARTE SMITH 1993 AC 1CONSTITUTION ART 38

HEANEY V IRELAND 1994 3 IR 607

TIMES NEWSPAPERS LTD V UK 1979 2 EHRR 245

BANKRUPTCY ACT 1998 S21(4)

COMPTROLLER & AUDITOR GENERAL & COMMITTEES OF THE HOUSES OF OIREACHTAS (SPECIAL PROVISIONS) ACT 1998 S5

COMMITTEES OF THE HOUSES OF THE OIREACHTAS (COMPELLABILITY, PRIVILEGES AND IMMUNITIES OF WITNESSES) ACT 1997 S12

QUINN V IRELAND ECHR 21.3.2001

OFFENCES AGAINST THE STATE ACT 1939 S52

OFFENCES AGAINST THE STATE ACT 1939 S30

FERREIRA V LEVIN & ORS 1996 1 BCLR 1 (CC)

COMPANIES ACT 1973 S417(2)(b)

PARBHOO & ORS V GETZ NO & ANOR 1997 10 BCLR 1337 (CC)

INSPECTOR OF TAXES V ARIDA LTD 1996 1 ILRM 74

INCOME TAX ACT 1967 S429

NATIONAL IRISH BANK (No 1) 1999 3 IR 145 1999 1 ILRM 321

COMPANIES ACT 1990 PART II

AG V GILBERT 1973 IR 383

DATA PROTECTION ACT 1988

CIRCUIT COURT RULES 2001 SI 510/2001

LONDON UTD INVESTMENTS PLC, IN RE 1992 BCLC 91 CONSTITUTION ART 40

SAUNDERS V UK 1997 23 EHRR 313

ACCIDENT INSURANCE MUTUAL HOLDINGS LTD V MCFADDEN 1993 31 NSWLR 412

Synopsis:

JUDICIAL REVIEW

Investigation of companies

Company law - Constitutional law - Practice and procedure - Corporate governance - Appointment of authorised officer - Right to silence - Requirement to produce documents - Privilege against self-incrimination - Whether subsequent use of statements in prosecution infringed Constitution - Companies Act, 1990 section 19 - Bunreacht na hÉireann, 1937 Articles 38.1, 40 (1999/33JR - Kearns J - 5/6/2002) - [2002] 2 IR 101

Dunnes Stores v Ryan

The proceedings arose out of a decision by the second named respondent to appoint an authorised officer to examine the books and documents of the applicants under the Companies Act, 1990 and to institute an enquiry thereon. The applicants initiated judicial review proceedings challenging the validity of the appointment. In the High Court Butler J held that there was no evidence of complaints by members of the company. The decision to appoint an authorised officer was unreasonable, irrational and was therefore ultra vires and granted the order of certiorari sought. The respondents appealed against the judgment. The Supreme Court allowed the appeal and remitted the matter to the High Court. Keane CJ held that the Oireachtas had given the Minister a general supervisory jurisdiction over companies formed under the Acts. The inquiry instituted by the Minister was justified on the grounds that there were circumstances suggesting that the affairs of the company had been conducted in a manner which was unfairly prejudicial to some part of its members. In these proceedings it was argued in the High Court (before Kearns J) that certain provisions of the Companies Act, 1990, namely sections 19(5) and 19(6) were invalid having regard to the Constitution. Section 19(5) governed the requirement to produce documents and section 19(6) provided that statements made by persons being interviewed in conjunction with such an inquiry could be used in evidence against them. It was argued by the applicants that these sections contravened the right to silence and were unconstitutional.

Held by Mr. Justice Kearns in granting in part the relief sought. The Court must take into account that where incriminating material had an objective reality, the requirement for protection was less compelling. The public interest in good company governance could not be questioned. Parties enjoying the benefits of incorporation must also accept the concomitant duties and obligations. The requirement to produce documents and answer questions set out in section 19(5) was completely unobjectionable and did not fail the proportionality test. A difficulty lay within section 19(6) as the examinee was obliged, on pain of punishment for a refusal, to answer questions or provide explanations which might be incriminating and which might be used in subsequent criminal proceedings. There seemed to be no scope for voluntariness under section 19(6). Section 19(6) by not immunising answers given from later use in criminal proceedings infringed the "minimum invasion" test and was unconstitutional.

1 Judgment of Mr. Justice Kearns delivered the 5th day of June 2002.

2 This case is the constitutional leg of the multiple challenge launched by the Applicants against the decision of the second named Respondent whereby the first named Respondent was appointed as her authorised officer pursuant to Section 19 of the Companies Acts, 1963– 1990to examine the books and records of Dunnes Stores Ireland Company and Dunnes Stores (Ilac Centre) Limited.

3 By Order dated the 21st day of January, 1999, Budd J. gave leave to the Applicants inter alia to seek:-

4 (a) A Declaration that the provisions of Section 19 (5) of the Companies Act, 1990are in breach of the fundamental rights of the Applicants herein and are invalid and have no effect having regard to Articles 38.1 and 40.1 of Bunreacht na hEireann.

5 (b) Further or in the alternative a Declaration that the provisions of Section 19 (6) of the Companies Act, 1990are in breach of the fundamental rights of the Applicants herein and are invalid and of no effect having regard to Articles 38.1 and 40.1 of Bunreacht na hEireann.

6 (c) A Declaration that Section 19 (6) of the said Act does not permit the use of statements made by a person in evidence in any criminal prosecution against that person whether or in the alternative that Section 19 (4) thereof does not abrogate any privilege that any person would otherwise possess.

7 The grounds upon which relief was sought were stated as follows:-

8 (e) The provisions of the Companies Act, 1990which are impugned are contrary to Bunreacht na hEireann and are in breach of the rights of the Applicants in that, inter alia, they:-

9 (i) fail to have any or any due regard to the Applicants" rights to confidentiality and/or privacy,

10 (ii) fail to have due regard to the Applicants" privilege against self incrimination,

11 (iii) fail to protect and vindicate the Applicants" right to fair procedures, natural and constitutional justice and equality before the law, and

12 (iv) constitute an unwarranted and unjustified interference with the property rights of the Applicants."

BACKGROUND

13 On the 11th of September, 1997 the second named Respondent (hereafter "the Minister") wrote to the 3rd named Applicant (hereafter "Mrs Heffernan") stating:-

"The report of the Tribunal of Inquiry (Dunnes Payments) has disclosed a number of possible breaches of the Companies Acts, 1963– 1990as I have responsibility for these Acts, I have decided that my department should proceed to make inquiries of certain companies to clarify what breaches did in fact take place."

14 The report referred to was that of a Tribunal established under the Tribunals of Inquiries Acts, 1921 – 1998, of which the sole member was Mr. Justice McCracken. The remit of the Tribunal was to inquire in to certain payments alleged to have been made to Mr. Charles Haughey T.D. and Mr. Michael Lowry T.D. It is not in dispute that payments had been made by the first and second applicants (hereafter "the Companies") to the two persons concerned and to companies with which they, or members of their family were associated. This was found to be a fact by the Tribunal in its report and it is also not in dispute that the payments were made at a time when the Companies were effectively under the stewardship of Mr. Ben Dunne. The payments came to light as result of proceedings which were instituted by other shareholders and directors of the companies, including Mrs. Heffernan against Mr. Ben Dunne. These proceedings were ultimately settled between the family members. Mrs. Heffernan and her brother, Mr. Frank Dunne had also appointed the firm of Accountants, Price Waterhouse, to carry out an independent inquiry in to the manner in which the affairs of the company had been conducted under Mr. Ben Dunne's stewardship. That report was made available both to his Honour Judge Buchanan, who at the request of the Government had carried out an initial inquiry in to the question of the irregular payments, and to the Tribunal presided over by Mr. Justice McCracken.

15 Following receipt of the letter of 11th September from the Minister, Mrs. Heffernan wrote to her expressing her concern that the Company should be subjected to a further inquiry which, she claimed, was unnecessary and would result in further damaging publicity to the companies. Further correspondence followed which culminated in a letter dated 22nd July, 1998 in which the Minister wrote as follows:-

"I now write to indicate that I have decided to appoint an authorised officer to examine the books and...