Peter Nowak v Irish Auditing and Accounting Supervisory Authority
| Jurisdiction | Ireland |
| Judge | Mr. Justice Noonan |
| Judgment Date | 17 February 2015 |
| Neutral Citation | [2015] IEHC 94 |
| Court | High Court |
| Date | 17 February 2015 |
[2015] IEHC 94
THE HIGH COURT
BETWEEN
AND
COMPANIES (AUDITING & ACCOUNTING) ACT 2003 S23
COMPANIES (AUDITING & ACCOUNTING) ACT 2003 S24
COMPANIES (AUDITING & ACCOUNTING) ACT 2003 S8
COMPANIES (AUDITING & ACCOUNTING) ACT 2003 S9
COMPANIES (AUDITING & ACCOUNTING) ACT 2003 S9(2)(D)
COMPANIES (AUDITING & ACCOUNTING) ACT 2003 S23(2)
ULSTER BANK INVESTMENT FUNDS LTD v FINANCIAL SERVICES OMBUDSMAN UNREP FINNEGAN 1.11.2006 2006/56/11976 2006 IEHC 323
GARDA REPRESENTATIVE ASSOCIATION v MIN FOR JUSTICE UNREP CHARLETON 25.3.2010 2010/20/4951 2010 IEHC 78
STATE (KEEGAN) v STARDUST VICTIMS COMPENSATION TRIBUNAL 1986 1 IR 642
O'KEEFFE v BORD PLEANALA 1993 IR 39
MEADOWS v MIN FOR JUSTICE 2010 2 IR 701 2011 2 ILRM 157 2010 IESC 3
LAURENTIU v MIN FOR JUSTICE & ORS 1999 4 IR 26
P (F) v MIN FOR JUSTICE 2002 1 IR 164
H (S) v DPP 2006 3 IR 575 2007 1 ILRM 401 2006/27/5802 2006 IESC 55
CAHILL v SUTTON 1980 IR 269
PROFESSIONS
Regulation
Application for judicial review - Certiorari - Mandamus - Complaint to accounting authority made by former employee - Alleged non-compliance with accounting and audit standards - Decision that further examination not required - Whether decision unreasonable or irrational - Whether error in law in failing to give reasons for decision - Statutory framework - Powers and functions of respondent - Whether claim bound to fail - Decision to initiate enquiry within discretion of respondent - Body with specialist knowledge - Whether applicant had requisite standing to seek judicial review - Ulster Bank Investment Funds Limited v Financial Services Ombudsman [2006] IEHC 323, (Unrep, Finnegan P, 1/11/2006); Garda Representative Association v Minister for Finance [2010] IEHC 78, (Unrep, Charleton J, 25/3/2010); State (Keegan) v Stardust Tribunal [1986] 1 IR 642; O'Keeffe v An Bord Pleanála [1993] 1 IR 39; Meadows v Minister for Justice, Equality and Law Reform [2010] IESC 3, [2010] 2 IR 701; Laurentiu v Minister for Justice [1999] 4 IR 26; FP v Minister for Justice [2002] 1 IR 164; SH v DPP [2006] IESC 55, [2006] 3 IR 575 and Cahill v Sutton [1980] IR 269 considered - Application dismissed (2014/542JR - Noonan J - 17/2/2015) [2015] IEHC 94
Nowak v Irish Auditing and Accounting Supervisory Authority
Facts: In this case, the applicant had been employed as a trainee accountant with the firm PricewaterhouseCoopers ("PwC"). During the course of his employment, the applicant came across what he regarded as certain irregularities in two audits and drew these to the attention of his superiors in PwC. His superiors took a different view and it would appear that this led to a degree of friction with the applicant. The applicant was ultimately dismissed from his employment and that is the subject of a claim by the applicant before the Employment Appeals Tribunal. Arising out of the foregoing, the applicant made a complaint against PwC to the Chartered Accountants Regulatory Board ("CARB"), the regulatory and disciplinary arm of the Institute of Chartered Accountants in Ireland ("ICAI"). The complaint related to alleged non-compliance with accounting and audit standards in respect of the two audits in question. In effect, it would appear that the ICAI concluded that there was no prima facie case on the evidence sufficient to warrant a formal investigation. The applicant then made a complaint to the respondent by letter dated the 7th November, 2012, which he described in his grounding affidavit as relating to possible breaches of the ICAI”s Disciplinary Bye-Laws. The letter raised a number of alleged defects in Mr. Dee”s decision which had the appearance of quasi-judicial review type grounds. They included that the decision was made by the wrong CARB official who in any event failed to give sufficient reasons, CARB erroneously concluded that there was no formal complaint in existence, an independent review was denied, the decision was not fair and impartial and PwC”s response had not been furnished to the applicant. By letter of the 1st July, 2013, the applicant made a data access request which was dealt with by the respondent. On the 26th June, 2014, the respondent gave its decision on the applicant”s complaint and concluded that there were no issues identified which would warrant further examination in the context of its function under s 23 or s 24 of the Companies (Auditing and Accounting) Act 2003 (‘The Act’). By order of Cregan J. made on the 16th September, 2014, the applicant was given leave to apply for judicial review and he sought an order of certiorari quashing the respondent”s decision, a declaration that the decision was unlawful and an order of mandamus directing the respondent to conduct a statutory enquiry pursuant to s 23 of the Act. The application was based on two grounds: (1) that the decision was unreasonable and/or irrational and; (2) that the respondent erred in law in failing to give reasons or justify its failure to do so.
Held by Justice Noonan in light of the available evidence and submissions presented that he would dismiss the application. It was determined that the applicant had failed to establish that he had the requisite standing to bring proceedings. It was further reasoned that there was no evidence of anything approaching unreasonableness or irrationality in the impugned decision, less still evidence that would satisfy the heavy burden born by the applicant. His contention that there was bad faith shown by the respondent was deemed to be manifestly groundless quite apart from the fact that this was not a ground upon which leave was granted. The applicant”s contentions were thus rejected.
JUDGMENT of Mr. Justice Noonan delivered on the 17th day of February, 2015
1. Between October 2006 and August 2009, the applicant was employed as a trainee accountant with the firm Price water house Coopers ("PwC"). During the course of his employment, he was involved in statutory audits of investment funds. In two such audits, the applicant came across what he regarded as certain irregularities which he drew to the attention of his superiors in PwC. His superiors took a different view and it would appear that this led to a degree of friction with the applicant. The applicant was ultimately dismissed from his employment and this is the subject of a claim by the applicant before the Employment Appeals Tribunal.
2. Arising out of the foregoing, on the 13 th September, 2011, the applicant made a complaint against PwC to the Chartered Accountants Regulatory Board ("CARB"), the regulatory and disciplinary arm of the Institute of Chartered Accountants in Ireland ("1CA1"). The complaint related to alleged non-compliance with accounting and audit standards in respect of the two audits in question. CARB gave its decision in an e-mail of the 14 th September, 2012, from Mr. Derek Dee, Senior Complaints Case Manager in which Mr. Dee said that having reviewed the PwC response, in both cases the accounting was in accordance with the companies' accounting policies and complied with relevant accounting standards. He went on to say that there was therefore no evidence that PwC may have been guilty of misconduct and he did not intend to open a formal complaint file in relation to the matter.
3. A further exchange of emails occurred between the applicant and Mr. Dee in which the applicant voiced his dissatisfaction with the decision and indicated that he wished to have an independent review of the decision. Mr. Dee explained that no formal complaint file was opened and there was thus no right to a review. In effect, it would appear that Mr. Dee concluded that there was no prima facie case on the evidence sufficient to warrant a formal investigation.
4. The applicant then made a complaint to the respondent by letter dated the 7 th November, 2012, which he describes in his grounding affidavit as relating to possible breaches of the ICAPs Disciplinary Bye-Laws. This letter raises a number of alleged defects in Mr. Dee's decision which have the appearance of quasi-judicial review type grounds. They include that the decision was made by the wrong CARB official who in any event failed to give sufficient reasons, CARB erroneously concluded that there was no formal complaint in existence, an independent review was denied, the decision was not fair and impartial and PwC's response had not been furnished to the applicant. By letter of the 1 st July, 2013, the applicant made a data access request which was dealt with by the respondent.
5. On the 26 th June, 2014, the respondent gave its decision on the applicant's complaint and concluded that there were no issues identified which would warrant further examination in the context of its function under s. 23 or s. 24 of the Companies (Auditing and Accounting) Act 2003 ("The Act").
6. By order of Cregan J. made on the 16 th September, 2014, the applicant was given leave to apply for judicial review and seek an order of certiorari quashing the respondent's decision, a declaration that the decision is unlawful and an order of mandamus directing the respondent to conduct a statutory enquiry pursuant to s. 23 of the Act. The application is based on two grounds, that the decision was unreasonable and/or irrational and that the respondent erred in law in failing to give reasons or justify its failure to do so.
7. The respondent is a statutory body established by the Act and is a company limited by guarantee. The replying affidavit of the respondent's chief executive officer, Ms. Helen Hall sets out the background to the respondent's role and...
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