Fingleton v The Central Bank of Ireland

• Jurisdiction: Ireland
• Judge: Ms. Justice Irvine,Ms. Justice Finlay Geoghegan
• Judgment Date: 24 April 2018
• Neutral Citation: [2018] IECA 105
• Date: 24 April 2018
• Court: Court of Appeal (Ireland)
• Docket Number: Neutral Citation Number: [2018] IECA 105 Record No. 2016/076

[2018] IECA 105

COURT OF APPEAL

Finlay Geoghegan J.

Irvine J.

Finlay Geoghegan J.

Peart J.

Irvine J.

Neutral Citation Number: [2018] IECA 105

Record No. 2016/076

Between

Michael P. Fingleton

Applicant/Appellant

and

The Central Bank of Ireland

Respondent/Respondent

Settlement – Delay – Judicial review – Appellant seeking judicial review – Whether there had been undue delay by the respondent

Facts: The appellant, Mr Fingleton, by letter dated the 9th July, 2015, was notified that the respondent, the Central Bank of Ireland, had decided to hold an inquiry under part IIIC of the Central Bank Act 1942 to determine whether Irish Nationwide Building Society (INBS) had committed a number of prescribed contraventions, and to determine whether certain persons concerned in the management of INBS, including himself, had participated therein. On the 15th July, 2015, the Central Bank entered into a settlement with INBS. As part of the settlement, INBS acknowledged having committed multiple breaches of the financial services law with the result that it was reprimanded by the Central Bank and the maximum available sanction, namely a fine of €5m, was imposed. In its publicity statement of the 15th July, 2015, the Central Bank advised, under a heading entitled "Next Steps," that it would proceed in the following manner, namely: "The Central Bank will be holding an Administrative Sanctions Inquiry to establish whether certain persons who were concerned in the management of INBS during the Relevant Period participated in the commission by INBS of the above breaches. This Inquiry will be held in accordance with the Central Bank's powers under Part IIIC of the Act." Mr Fingleton, in his affidavit dated the 7th September, 2015, supporting his application for judicial review, deposed to the fact that he was concerned as to the impact of the aforementioned settlement upon his ability to defend himself against the charges in the notice of inquiry, and made a complaint about the fact that it was made without him being afforded an opportunity to make submissions concerning same. He also maintained that, having regard to the adverse publicity to which he had been subjected, he would not be in a position to obtain a fair hearing before the inquiry. In the High Court, Noonan J rejected the appellant's submissions. The appellant pursued his appeal to the Court of Appeal on three distinct grounds: (1) the jurisdiction ground; (2) the settlement ground; and (3) the delay ground. Finlay Geoghegan J rejected the jurisdiction ground.

Held by Irvine J, in a judgment supplemental to that Finlay Geoghegan J, that, concerning the settlement ground, she rejected the submission made on behalf of Mr Fingleton that the Central Bank was not obliged to accept the acknowledgments made by INBS of the prescribed contraventions. Irvine J rejected as legally incorrect the submission made on behalf of Mr Fingleton that the Central Bank was not obliged to publish the fact of the settlement and the sanction imposed. Irvine J was satisfied that the submission made that the High Court judge ought to have concluded that objective bias was to be inferred from the failure of the Central Bank to postpone acceptance of the acknowledgment and from its unnecessary publication of the details of the settlement and sanction was without foundation. Irvine J could not see how Mr Fingleton could maintain that the publication of the settlement with INBS and of the sanction so imposed could be considered to be evidence of prejudgment of the inquiry pending against him. Concerning the delay ground, Irvine J was fully satisfied that the trial judge's finding that there had been no undue delay by the Central Bank, still less any delay that was blameworthy, was unchallengeable.

Irvine J held that she would reject the appeal upon the settlement and delay grounds. She agreed that the entire appeal should be dismissed.

Appeal dismissed.

Judgment delivered by Ms. Justice Finlay Geoghegan on the 24th day of April 2018

1 The appellant is the former Chief Executive Officer of Irish Nationwide Building Society ('INBS') from which position he retired in April, 2009. This appeal is against the order of the High Court (Noonan J.) made on the 14th January, 2016 refusing relief by way of judicial review seeking an order of certiorari of a notice of inquiry served by the Central Bank of Ireland, the respondent, pursuant to part IIIC of the Central Bank Act, 1942 as amended ('the Act'). The order was made for the reasons set out in a written judgment delivered on the 4th January, 2016, IEHC 1.

2 The appellant pursued his appeal on three distinct grounds: (1) the jurisdiction ground; (2) the settlement ground and (3) the delay ground.

3 This judgment is concerned with the jurisdiction ground alone. I have had the opportunity of reading in draft the judgment of Irvine J. on the settlement and delay grounds and I am in agreement with same.

Background Facts

4 The appellant joined INBS in 1971; he became Chief Executive Officer and Managing Director in 1974; he ceased to be Managing Director in January, 2008 when he retired as a director and continued to be Chief Executive Officer until 30th April, 2009.

5 INBS collapsed in the wake of the global economic crisis. On the 24th February, 2011 all deposits of INBS were transferred to Permanent TSB and on the 1st July, 2011 all remaining assets and liabilities of INBS were transferred to the Irish Bank Resolution Corporation ('IBRC'). Since that date, at latest, INBS has not carried on the business of providing financial services.

6 In 2010 the respondent commenced an investigation of INBS and of certain persons concerned in its management. The investigation related to the period from 1st August, 2004 to the 30th September, 2008 ('the review period'). During this period it is not in dispute that INBS was a regulated financial service provider ('RFSP') for the purposes of part IIIC of the Central Bank Act, 1942, as amended. In January, 2012 correspondence commenced between the respondent and the appellant in relation to suspected prescribed contraventions by INBS during the period in question for the purposes of s.33AO of the Act and what were termed 'reasonable grounds to suspect that as a person concerned in the management of INBS between the 1st August, 2004 and 30th September, 2008' the appellant may have participated in the commission of the suspected prescribed contraventions within the meaning of s.33AO(2) of the Act. The detail of that correspondence is not relevant to the jurisdiction ground of appeal.

7 On the 9th July, 2015, the respondent issued a notice of inquiry pursuant to part IIIC of the Act concerning INBS, the appellant and a number of other named individuals. In it the respondent stated that it had determined that it had reasonable grounds to suspect that INBS committed certain prescribed contraventions within the meaning of part IIIC of the Act during the review period and that it had reasonable grounds to suspect that the appellant and other named persons, being persons concerned in the management of INBS during the review period, participated in the commission of some or all of the prescribed contraventions by INBS.

8 The notice also stated that the respondent would hold an inquiry to determine whether or not INBS committed prescribed contraventions and whether or not the persons concerned participated in the commission of some or all of the prescribed contraventions. The appellant was invited to attend the inquiry to commence on the 1st February, 2016 and further details were given of the persons appointed to act as members of the inquiry.

9 On the 15th July, 2015 the respondent published the document entitled 'Settlement Agreement between the Central Bank of Ireland and Irish Nationwide Building Society'. This is primarily relevant to the settlement ground of appeal and referred to in greater detail in the judgment of Irvine J. It is not relevant to the jurisdiction ground of appeal.

10 Leave to seek judicial review was granted by the High Court (White J.) on the 8th September, 2015 to seek the reliefs identified in the statement of grounds upon the grounds set out therein. Affidavits and a notice of opposition were exchanged in the usual way. The facts deposed to are not relevant to the jurisdiction ground of appeal as the essential facts relied upon for that ground are not in dispute and are as set out above.

Statutory Framework

11 The Central Bank and Financial Services Authority of Ireland Act, 2004 inserted a new part IIIC in the 1942 Act. This introduced an Administrative Sanctions Procedure ('ASP') with effect from the 1st August, 2004. Chapter 2 concerns the power of the respondent to hold inquiries. The jurisdiction to do so is set out in s.33AO which provides:

'33AO.—(1) Whenever the Regulatory Authority suspects on reasonable grounds that a regulated financial service provider is committing or has committed a prescribed contravention, it may hold an inquiry to determine whether or not the financial service provider is committing or has committed the contravention.

(2) Whenever the Regulatory Authority suspects on reasonable grounds that a person concerned in the management of a regulated financial service provider is participating or has participated in the commission of a prescribed contravention by the financial service provider, it may hold an inquiry to determine whether or not the person is participating or has participated in the contravention. Such an inquiry may form part of an inquiry held under this section in relation to the suspected commission of a prescribed contravention by the financial service provider.

(3) Without prejudice to the exercise of the Bank's powers under subsection (2), an inquiry referred to in that subsection may form part of an inquiry held under this section in relation to the suspected...