Dunnes Stores Ireland Company Ltd -v- Ryan & anor., [2002] IESC 7 (2002)

Docket Number:280 & 291/00
Party Name:Dunnes Stores Ireland Company Ltd, Ryan & anor.
Judge:Herbert J. / Murray J. / Keane C.J.






280 & 291/00









JUDGMENT delivered the 1st day of February 2002 by Keane C.J.


The facts in this case are largely not in dispute and can be summarised as follows. On the 11th September, 1997, the second named respondent/appellant (hereafter "the Minister") wrote to the third named applicant/respondent (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 - 1990. As I have responsibility for these Acts, I have decided that my department should proceed to make enquiries of certain companies to clarify what breaches did in fact take place ..."

The report referred to was that of a tribunal established under the Tribunals of Inquiries Acts, 1921 to 1998, of which the sole member was Mr. Justice McCracken. The remit of the Tribunal was to enquire into 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 named 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 a result of proceedings which were instituted by other shareholders and directors of the companies, including Mrs. Heffernan, against Mr. Ben Dunne. Those proceedings were ultimately the subject of a settlement between the parties. Mrs. Heffernan and her brother, Mr. Frank Dunne had also appointed a firm of accountants, Price Waterhouse, to carry out an independent inquiry into 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 carried out an initial inquiry into the question of the irregular payments, and to the tribunal presided over by Mr. Justice McCracken.

Following the receipt of the letter of 11th September from the Minister, Mrs. Heffernan wrote to her expressing her concern that the companies should be subjected to a further inquiry which, she claimed, was unnecessary and would result in further damaging publicity to the companies. There followed further correspondence between the companies and the Minister's officials concerning her request, in which the companies, while indicating their willingness to co-operate with the Minister and furnishing her with any documents she required, expressed their anxiety at the wide ranging nature of the requests emanating from the Minister and the difficulties facing the companies in meeting her requests. Ultimately on the 22nd July, 1998, the Minister wrote as follows:-"I now write to indicate that I have decided to appoint an authorised officer to examine the books and documents of (the companies) and to provide such explanations as are appropriate. The legal basis for the appointment to Dunnes Stores Ireland Company is paragraphs (a), (b)(ii), (b)(iii), (d), (f) of s.19 (2) of the Companies Act 1990, while that for the appointment to Dunnes Stores (Ilac Centre) Limited is paragraphs (a), (b)(ii), (f) of s.19 (2) of the 1990 Act. You may know that s. 21 of the 1990 Act contains very strict limitations on the publication or disclosure of any information obtained by me on foot of a s.19 examination of books and documents."

The letter went on to state that the authorised officer was Mr. George Maloney, FCCA.

Mrs. Heffernan replied on the 22nd July expressing her surprise at the proposal to appoint an authorised officer, but on the same day, Mr. Maloney wrote to her informing her that he had been so appointed by warrants signed by the Minister on that day. The warrants were in the following terms:-"Companies Acts, 1963 - 1990

Warrant of appointment of authorised officer

I, Mary Harney, T.D., Tanaiste and Minister for Enterprise, Trade and Employment, pursuant to the powers vested in me under s. 19 of the Companies Act, 1990, and every other power me thereunto enabling, considering that there is good reason so to do, do hereby authorise George Maloney to require the company listed hereunder, being a body as defined in s. 19 (1) of the Companies Act, 1990, to produce the books and documents specified by him forthwith and to exercise all the necessary powers under the said Companies Act 1990.

Dunnes Stores Ireland Company.

Mary Harney T.D.

Tanaiste and Minister for Enterprise, Trade and Employment.

22 July, 1998"Mr. Maloney wrote again on the 24th July, to Mrs. Heffernan enclosing a schedule of documentation which he said he required for the purposes of his examination.

On the 4th August, 1998, the companies were given leave by the High Court to apply by way of judicial review for orders of certiorari quashing the decisions of the Minister to appoint Mr. Maloney as an authorised officer pursuant to s. 19 of the 1990 Act on two principal grounds, i.e.

(a) the failure of the Minister to give any or any adequate reasons for the purported appointment of the authorised officer;

(b) an alleged conflict of interest which in any event vitiated the appointment of Mr. Maloney as the authorised officer.

Mr. Maloney at a later date resigned and was replaced as the authorised officer by the first named respondent, Mr. Gerard Ryan, and the alleged conflict of interest accordingly ceased to be of any relevance.

A statement of opposition having been filed on behalf of Mr. Maloney and the Minister, the hearing of the substantial issues came on before Laffoy J. In a reserved judgment, reported sub nom Dunnes Stores Ireland Company and Others -v- Maloney and Anor at (1999) 3 I.R. 543, Laffoy J granted the relief sought on the ground that the companies were entitled to be informed of the reasons which formed the basis of the Minister's decision to appoint an authorised officer, saying:-"In my view, this is a case in which procedural fairness requires that the Minister give reasons for her decision. The applicants have demonstrated a bona fide belief that the Minister has misused her powers in appointing an authorised officer. Whether that belief is well founded or not, they are entitled to explore the possibility of obtaining redress by way of judicial review. They have made a bona fide request for reasons. In the absence of reasons, they cannot explore the possibility of, or pursue redress by way of judicial review."Laffoy J. also held that the extent of the demand for documents made by the authorised officer was excessive and unreasonable, saying:-"Without knowing the reasons why the Minister thought it appropriate to appoint an authorised officer, it is impossible to form any view as to whether even the categories of documents sought which are specific fall within the ambit of the entitlement to seek documents under s. 19. The inclusion of the categories which are of a general nature gives the demand as a whole the hallmark of a trawl. That being the case, the only reasonable inference is that the demand was excessive in content."While concluding that the companies were entitled to the relief which they claimed, Laffoy J. placed a stay on the orders until a specified date in order to enable the Minister, if so minded, to give reasons for her decision. On the 27th November, 1998, Mr. Paul Appleby, Principal of the Company Law Administration Section of the Minister's department swore an affidavit, the Schedule to which set out the purported reasons for the appointment of the authorised officer.

Under the heading, "Dunnes Stores Ireland Company s.19 (2)(a)", the Schedule stated:-"The circumstances outlined under the following headings give substantial cause for concern as to the standards of corporate governance operating in Dunnes Stores Ireland Company and suggest that it is necessary to examine the books and documents of the company to determine whether an inspector should be appointed to conduct an investigation of the body under the Companies Acts."

Under the heading "s. 19 (2)(b)(ii) of the 1990 Act", the Schedule states:-"There are circumstances suggesting that the affairs of the body have been conducted with intent to defraud the creditors of any other person, in this case the Revenue Commissioners, as follows ..."There follow details of two payments of £395,107 from Dunnes Stores Ireland Company to finance improvements to Mr. Lowry's house at Holycross and of £27,502.75 from the same company via the Bank of Ireland Marino to Mr. Lowry. In both cases, the report of Mr. Justice McCracken is cited as indicating that these payments were made to assist Mr. Lowry evade tax. It is then stated that:-"In the circumstances, it is necessary to examine the books and documents of Dunnes Stores Ireland Company to determine whether or not payments by or on behalf of the company were made for the purpose of further defrauding the Revenue Commissioners or the creditors of any other person."

Under the heading "s. 19(2)(b)(iii), s. 19(2)(d) (of the 1990 Act)", the Schedule states:-"There are circumstances suggesting that the affairs of Dunnes Stores Ireland Company have been conducted with intent to defraud its members or in a manner which is unfairly prejudicial to some part of its members."There follow references to passages in the report of Mr. Justice McCracken disclosing that a large number of payments were made to various parties from an account in the Marino branch of the Bank of Ireland, which...

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