Probets v Glackin

• Jurisdiction: Ireland
• Judgment Date: 01 January 1993
• Date: 01 January 1993
• Docket Number: [S.C. No. 112 of 1992]
• Court: Supreme Court

High Court

Supreme Court

[S.C. No. 112 of 1992]

Probets v. Glackin

Colin Probets and Freezone Investments Ltd.

Applicants

and

John A. Glackin, The Minister for Industry and Commerce, Ireland and The Attorney General, Respondents

Case mentioned in this report:—

Desmond v. Glackin (No. 2) [1993] 3 I.R. 67

Company law - Inspector - Statutory powers - Scope - Investigation - Applicant questioned in relation to personal business affairs and affairs of third parties not under investigation - Whether questions ultra vires - Companies Act, 1990 (No. 33), s. 14, sub-s. 1.

Company law - Inspector - Warrant of appointment - Appointment by Minister - Inquiry stated to be "in the public interest" - Whether warrant invalid for failure to specify nature of public interest - Companies Act, 1990 (No. 33), s. 14, sub-s. 2 (c).

Central Bank - Whether inspector appointed pursuant to Companies Act, 1990, entitled to use information emanating from Central Bank for purposes of investigation - Whether breach of duty of confidentiality - Central Bank Act 1989 (No. 16). s. 16. sub-s. 1.

Judicial Review

The facts are summarised in the headnote and are fully set out in the judgments, post.

On the 16th January, 1992, on the ex parte application of the applicants, leave was given by the High Court (O'Hanlon J.) to apply by way of judicial review for the reliefs similar to those applied for by the applicants in Desmond v. Glackin (No. 2) [1993] 3 I.R. 67 and set out at p. 74 of the report, with the following additional reliefs:—

• 1. An order prohibiting the first respondent from purporting to carry out an investigation into the membership or ownership or control of the second applicant, and

• 2. A declaration that the first respondent was acting in excess of his powers in seeking information in relation to:—

  • (a) securities given by Dermot Desmond on behalf of the second applicant;

  • (b) a loan given by the second applicant in April, 1988, to Dedeir;

  • (c) all transactions effected between the second applicant and Dedeir and/or Dermot Desmond;

  • (d) all transactions effected between the first applicant and Dedeir and/or Dermot Desmond;

  • (e) all transactions involving the second applicant where the permission or consent of the Central Bank was required for exchange control;

  • (f) transactions in which the applicants were involved in relation to a firm known as R. & J. Emmett plc.

Section 14 of the Companies Act, 1990, provides:—

"(1) The Minister may, subject to subsection 2, appoint one or more competent inspectors to investigate and report on the membership of any company and otherwise with respect to the company for the purpose of determining the true persons who are or have been financially interested in the success or failure (real or apparent) of the company or able to control or materially to influence the policy of the company.

(2) An appointment may be made by the Minister if he is of the opinion that there are circumstances suggesting that it is necessary - . . .

• (c) in the public interest."

Section 16, sub-s. 1 of the Central Bank Act, 1989, provides, inter alia:—

"A person who, at the commencement of this section is, or at any time thereafter is appointed, Governor or a Director, officer or servant of the Bank or who is employed by the Bank in any other capacity, shall not disclose, during his term of office or employment or at any time thereafter, any information concerning -

• (a) the business of any person or body (whether corporate or unincorporate) which came to his knowledge by virtue of his office or employment . . ."

The applicants appealed the judgment and order of the High Court (O'Hanlon J.) to the Supreme Court by notice of appeal dated the 8th April, 1992. The appeal was heard by the Supreme Court (Finlay C.J., Hederman, McCarthy, O'Flaherty and Egan JJ.) on the 13th, 14th, 15th and 16th July, 1992.

In 1989 a site in Ballsbridge, in the city of Dublin, was purchased from a company, J.M. ‡ O'B., for a price of £4 million, and was sold the following year to Telecom Éireann éireannfor £9 million. The identities of the persons who had profited from the transactions were unknown and the affair led to grave public concern.

The first respondent was an inspector appointed by the second respondent pursuant to the provisions of s. 14, sub-s. 1 of the Companies Act, 1990, for the purposes of investigating the affairs of two companies, C. Ltd. and H. Ltd., who had been involved in transactions leading up to the sale of the site. The warrant of appointment dated the 9th October, 1991, stated that the second respondent was of the opinion that there were circumstances suggesting that the investigation was necessary "in the public interest".

In the course of his investigation the inspector found that the site had been bought from J.M. & O'B. by U.P.H. Ltd. The site became vested in its subsidiary, C. Ltd., and was then sold to P.D. The sale was effected by way of the sale of the entire shareholding of C. Ltd. to D. Ltd., a company registered in Cyprus and owned and controlled by P.D. The site was subsequently sold to Telecom Éireann éireann through H. Ltd., a company also owned by P.D. Finance for the purchase of the site by P.D. was provided by the applicants; the monies advanced were repaid promptly, together with a profit of £1.3 million. The first respondent formed the opinion that D.D., a close associate of the first applicant, who held a power of attorney on his behalf and who had acted as guarantor for certain debts of the second respondent, had had a central involvement in the chain of transactions and had been instrumental in arranging the finance.

The first applicant was a businessman resident in the Channel Islands, and the second applicant was a company owned and controlled by him, and registered in the Isle of Man. The first applicant made an unsolicited statement to the first respondent by way of a statutory declaration dated the 23rd October, 1991, in which he averred that he was the sole and absolute beneficial owner of the second applicant; that he was the sole beneficiary of the monies invested by the second applicant in the purchase of the site by P.D.; and that no payment had been made either by him or on his behalf to D.D. or any company associated with him in relation to the profits arising out of the advance. The first respondent, having considered the contents of the statutory declaration, informed the first applicant through his solicitors that he required to examine him on oath, and informed him further that he required documentary evidence to corroborate the first applicant's averment that he was the sole beneficial owner of the second applicant.

The applicants applied to the High Court by way of judicial review for, inter alia, an order of certiorari quashing the warrant of appointment of the first respondent on the grounds that the second respondent had failed to recite therein the nature of the public interest justifying the appointment; declarations that the first respondent's inquiries into (i) the ownership or control of the second applicant, (ii) the business activities of the applicants or either of them save and insofar as such investigation related to the provision of finance to P.D. or to companies under his control for the purposes of the acquisition of the site, and (iii) transactions effected between the applicants and D.D., were ultra vires; and a declaration that the first respondent acted ultra vires in making use of certain information obtained by the second respondent on his behalf from the Central Bank concerning exchange control transactions. The affidavit grounding the application for relief was sworn by the applicants' solicitor, and exhibited the statutory declaration sworn by the first applicant.

In the High Court, it was submitted on behalf of the applicants, inter alia, that the first respondent had acted ultra vires in requiring evidence to corroborate the averments made by the first applicant in his statutory declaration.

Held by O'Hanlon J., in refusing the relief sought, and affirmed on appeal to the Supreme Court (Finlay C.J., Hederman, McCarthy, O'Flaherty and Egan JJ.), 1, that neither the procuring of the information from the Central Bank, nor its use by the first respondent, were tainted with illegality of any kind.

Desmond v. Glackin (No. 2) [1993] 3 I.R. 67 applied.

2. That the validity of the warrant of appointment of the first respondent was not dependent upon a recital therein of the nature of the public interest relied upon by the second respondent in making the appointment.

Desmond v. Glackin (No. 2) [1993] 3 I.R. 67 applied.

Per curiam: That whilst it might in many cases be desirable that the nature of the public interest justifying the appointment of an inspector be recited in the warrant, it was unnecessary in the instant case, having regard to the wide publicity already given to the matters of public interest which had led up to the appointment of the first respondent, and to the absence of any indication by the first applicant, in the...