Re Bovale Dev: Director of Corporate Enforcement v Bailey
| Jurisdiction | Ireland |
| Judge | Mr. Justice Hardiman,Denham J. |
| Judgment Date | 14 July 2011 |
| Neutral Citation | [2011] IESC 24 |
| Court | Supreme Court |
| Docket Number | [S.C. Nos. 25 & 26 of 2008] |
| Date | 14 July 2011 |
and
[2011] IESC 24
Denham J.
Hardiman J.
Fennelly J.
Macken J.
Finnegan J.
THE SUPREME COURT
COMPANY LAW
Director
Disqualification - Practice and procedure - Evidence - Application to strike out evidence from affidavits - Whether Director of Corporate Enforcement impermissibly delegated investigative function - Whether finding of report of tribunal of inquiry admissible - Whether hearsay evidence permissible at initial stage of disqualification proceedings - Right to cross-examine - Goodman International v Mr Justice Hamilton [1992] 2 IR 542 applied - Companies Act 1990 (No 33), s 160 - Company Law Enforcement Act 2001 (No 28), ss 3 and 12(6) - Rules of the Superior Courts 1986 (SI 15/1986) O 40, r 4 - Respondent's appeal dismissed (25 & 26/2008 - SC - 14/7/2011) [2011] IESC 24
Re Bovale Developments Ltd: Director of Corporate Enforcement v Bailey
Facts: The director of Corporate Enforcement sought to disqualify the respondents/ appellants grounded on affidavits deposed by an officer of the Director, a partner in PricewaterhouseCoopers (PwC), It was alleged that the trial judge had erred in law and/ or fact in finding that the documentation provided by the Director to PwC was lawfully in its possession and that the Director had lawfully delegated his functions under the Company Law Enforcement Act 2001 to PwC. The question arose as to the lawfulness of reliance by the Director on paragraphs contained in an Interim Report of the Tribunal of Inquiry into Certain Planning Matters.
Held by Denham J. (Hardiman, Fennelly, Macken, Finnegan JJ. concurring) in dismissing the appeal and the cross appeal. The terms "person" and "function" as defined under the Act of 2001 had to be broadly construed. The Director had not impermissibly delegated his function under the Act of 2001 to PwC. The two extracts from the tribunal report could not be admitted in evidence by the Director. Hardiman J.: that a company director simply cannot be put to answer. His right to have only admissible evidence deployed against him did not depend on what answer he made. The concerns expressed by other members of the Court were not shared on account of the most unusual circumstances of the case. The Director filed affidavits which contained factual material which the witness was not able of his own knowledge to assert. This was done for litigious advantage to himself which he was not entitled to do. There would be injustice if there was no machinery for the excision of materials which were clearly hearsay or otherwise clearly inadmissible. Fennelly J.: that concern had to be expressed at the procedures employed in the proceedings and their capacity to delay the substantive hearing of the applications.
Reporter: E.F
COMPANIES ACT 1990 S160(2)(A)
COMPANIES ACT 1990 S160(2)(B)
COMPANIES ACT 1990 S160(2)(D)
COMPANY LAW ENFORCEMENT ACT 2001 S14
COMPANY LAW ENFORCEMENT ACT 2001 S42
COMPANY LAW ENFORCEMENT ACT 2001 S12(6)
COMPANY LAW ENFORCEMENT ACT 2001 S3(1)(C)
COMPANY LAW ENFORCEMENT ACT 2001 S12
COMPANY LAW ENFORCEMENT ACT 2001 S13
COMPANY LAW ENFORCEMENT ACT 2001 S160
COMPANY LAW ENFORCEMENT ACT 2001 S3
COMPANIES ACT 1990 S202
INTERPRETATION ACT 2005 S18
INTERPRETATION ACT 2005 18(C)
GOODMAN INTERNATIONAL v JUSTICE HAMILTON 1992 2 IR 542
CONSTITUTION ART 34
MCDONALD v BORD NA GCON 1965 IR 217
MURPHY v JUSTICE FLOOD & ORS 2010 3 IR 136
WILLIAMS LEISURE PLC, IN RE 1994 CH 1
SECRETARY OF STATE v ASHCROFT 1998 CH 71
BARINGS PLC & ORS (IN ADMINISTRATION) (NO.2) 1998 1 BCLC 590
SECRETARY OF STATE v AARON 2009 1 BCLC 55
COMPANIES ACT 1990 S160(2)
GOODMAN INTERNATIONAL v HAMILTON & ORS 1992 2 IR 542
MURPHY & ORS v FLOOD UNREP SUPREME 21.4.2010 2010/38/9563 2010 IESC 21
O'CALLAGHAN v MAHON 2008 2 IR 514
MAGUIRE v ARDAGH 2002 I IR 385
KELLY IRISH CONSTITUTION 4ED DUBLIN 2003 1040
VICTORIA v AUSTRALIAN BUILDING CONSTRUCTION EMPLOYEES FEDERATION 1982 152 CLR 25
COX v IRELAND 1992 2 IR 503
HAUGHEY, IN RE 1971 IR 217
RSC O.40 r4
RSC O.40 r12
RSC O.40 r27
SUPREME COURT PRACTICE 1979 O.41 r6
DELANY & MCGRATH CIVIL PROCEDURE IN SUPERIOR COURTS 2005 18-61 449
RSC O.125 r1
Judgment delivered on the 14th day of July, 2011 by Denham J.
Judgment delivered by Denham J. - [Fennelly J, Macken J & Finnegan concur.]
Judgment delivered by Hardiman J. - [Macken J, & Finnegan J. concur.]
Judgment delivered by Fennelly J. - [Hardiman J Dissenting. Denham J., Macken J., & Finnegan J. concur.]
1. The Director of Corporate Enforcement, the applicant/respondent in this appeal, who is referred to as "the Director", brought a notice of motion dated the 8 th August, 2006, seeking a disqualification order pursuant to s.160(2)(a) and/or s.160(2)(b) and/or s.160(2)(d) of the Companies Act, 1990, (as amended by s, 14 and s.42 of the Company Law Enforcement Act, 2001) against Michael Bailey and Thomas Bailey, the respondents/appellants, referred to as "the appellants", on grounds set forth in affidavits deposed by Peter Lacy, a partner in PricewaterhouseCoopers, "PwC", and Dermot Madden, an accountant and officer of the Director, sworn on the 30 th June, 2006 and the 8 th August, 2006, respectively.
2. The appellants brought a notice of motion dated the 22 nd November, 2006, seeking an order striking out paragraphs 9 to 10, 17, 27 to 28 and 32 of the said affidavit of Mr. Madden and paragraph 8 of the said affidavit of Mr. Lacy.
3. The motions were heard by the High Court and on the 1 st November, 2007 Irvine J. delivered judgment. By order of 18 th December, 2007, the High Court ordered that paragraphs 9,10,13,17,27 and 28 of the said affidavit of Mr. Madden be removed; that portion of paragraph 32 of the said affidavit of Mr. Madden be removed; and that paragraphs 17,18 and 19 of the said affidavit of Mr. Lacy be removed.
4. The appellants appealed the order of the High Court, filing eight specific grounds of appeal, being:-
(i) The learned trial judge erred in law and/or in fact in finding that the documentation provided by the Director to PwC was lawfully in its possession.
(ii) The learned trial judge erred in law and/or in fact in finding that the Director lawfully delegated his functions under the Company Law Enforcement Act 2001 to PwC.
(iii) The learned trial judge erred in law and/or in fact in finding that the investigation by PwC of suspected offences under the Companies Acts did not involve the exercise by it of the powers of the Director.
(iv) The learned trial judge erred in law and/or in fact in finding that an instrument of delegation of the powers of the Director to PwC was not required.
(v) The learned trial judge erred in law and/or in fact in finding that PwC was an officer of the Director within the meaning of section 12(6) of the Company Law Enforcement Act 2001.
(vi) The learned trial judge erred in law and/or in fact in finding that PwC was a person within the meaning of section 3(1)(c) of the Company Law Enforcement Act 2001.
(vii) The learned trial judge erred in law and/or in fact in finding that it was lawful for persons other than the partners of PwC to have participated in the preparation of the reports.
(viii) The learned trial judge erred in law and/or in fact in that she misconstrued the provisions of sections 12 and 13 of the Company Law Enforcement Act 2001.
5. The Director filed a cross appeal from the part of the order of the High Court which ruled that:-
(i) The challenge to the admissibility of evidence was not premature.
(ii) The admissibility of evidence could be challenged before the appellants disqualification proceedings had put in any replying affidavits.
(iii) The Director could place no reliance on hearsay evidence in its grounding affidavits in disqualification proceedings.
(iv) The report of a tribunal has no evidential value in disqualification proceedings but can merely be used as a source to assist in the finding of other evidence.
(v) The Director could place no reliance on the opinion of the Revenue Commissioners in its grounding affidavits in disqualification proceedings.
(vi) The Director could place no reliance on the hand-written memos by the auditor of the company in its grounding affidavits in disqualification proceedings.
6. By letter dated the 24 th March, 2011 the Director informed the Court that he was proposing to restrict the ambit of his cross appeal to the extent set out. It was stated:-
(i) The Director will no longer seek to rely upon paragraphs 14-43 to paragraphs 14-63 inclusive in the Second Interim Report of the Tribunal of Inquiry into Certain Planning Matters and Payments as referred to in paragraph 10 of Mr. Madden's affidavit dated the 8th August, 2006.
(ii) The Director will no longer seek to rely upon paragraphs 17-21 and 17-22 in the Second Interim Report of the Tribunal of Inquiry Into Certain Planning Matters and Payments as referred to in paragraph 27 of Mr. Madden's affidavit dated the 8th August, 2006.
(iii) The Director will no longer seek to rely upon paragraphs 8.04 of the Third Interim Report of the Tribunal of Inquiry into Certain Planning Matters and Payments as referred to in paragraph 28 of Mr. Madden's affidavit dated the 8th August 2006.
(iv) The Director considers that the material at paragraph 18.09 of the Second Interim Report of the Tribunal of...
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