Re National Irish Bank Ltd, (Under Investigation)
| Jurisdiction | Ireland |
| Judge | Mr Justice Kelly |
| Judgment Date | 19 March 1999 |
| Neutral Citation | [1999] IEHC 134 |
| Court | High Court |
| Date | 19 March 1999 |
[1999] IEHC 134
THE HIGH COURT
AND
Citations:
COMPANIES ACT 1990 PART II
COMPANIES ACT 1990 S8(1)
COMPTROLLER & AUDITOR GENERAL & COMMITTEES OF THE HOUSES OF THE OIREACHTAS (SPECIAL PROVISIONS) ACT 1998
COMPANIES ACT 1990 S7(4)
COMPANIES ACT 1990 S12
COMPANIES ACT 1990 S22
CONSTITUTION ART 33
CONSTITUTION ART 33.4
GOODMAN INTERNATIONAL V HAMILTON 1992 2 IR 542
CONNELLY V DPP 1964 AC 1254
O'LEARY V CUNNINGHAM 1980 IR 367
R V BEEDIE 1998 QB 356
MCGRATH V COMMISSIONER FOR AN GARDA SIOCHANA 1991 1 IR 69
MOONEY V AN POST 1994 ELR 103
MURRAY V FITZPATRICK 1914 48 ILTR 305
DONNELLY V INGRAM 1897 31 ILTR 139
O'DONNELL V HEGARTY 1941 IR 538
MEATH CO COUNCIL V DALY 1987 IR 391
ATHLONE WOOLLEN MILLS V ATHLONE UDC 1950 IR 1
MAXWELL V DEPT OF TRADE & INDUSTRY 1974 2 AER 122
HAUGHEY, IN RE 1971 IR 217
CHESTVALE PROPERTIES LTD V GLACKIN 1993 3 IR 35
PERGAMON PRESS LTD, IN RE 1971 CH 388
Synopsis
Practice and Procedure
Commercial; banking; inspectors; duplication of process; applicant is subject to investigation by inspectors appointed pursuant to Part 2, Companies Act, 1990 and by the Comptroller and Auditor General; applicant seeks order limiting inspectors in their investigation of compliance by the bank with its obligations concerning Deposit Interest Retention Tax and an order compelling inspectors to furnish to the applicant documents relating to interviews carried out by inspectors with staff and customers of applicant; whether there is duplication of process by the two enquiries; whether principle of double jeopardy extends to fact finding investigations; whether, if there is duplication, the doctrine of res judicata applies; whether s.7(4), Companies Act, 1990 is offended by the operation of the two enquiries; whether the subject matter of the first application is res judicata; if matter not res judicata whether applicants are entitled to supply of inspector's transcripts; whether applicants are entitled to invoke the rights established in Re Haughey at the information-gathering stage of the inspector's work.
Held: Application refused.
National Irish Bank, In re - High Court: Kelly J. - 19/03/1999 — [1999] 3 IR 190 - [1999] 2 ILRM 443
While there might well be an overlap between the inquiries conducted into compliance by the bank with its obligations concerning Deposit Interest Retention Tax by the inspectors appointed by the court pursuant to Part 2 of the Companies Act 1990 and that conducted by the Comptroller and Auditor General under the Comptroller and Auditor General and Committees of the Houses of the Oireachtas (Special Provisions) Act 1998, it could not be said that there was a “duplication of process” in the sense relied on by the applicants. The applicants were not in any jeopardy as a result of these inquiries, still less in double jeopardy. It did not appear that given the nature of the inquiries that were being pursued and the status in law of the reports that would be produced that the doctrine of res judicata had any application. Criticism of the inspectors’ report were unjustified and there was no factual basis upon which on the merits the application for an order to compel the inspectors to furnish to the applicants copies of all of the transcripts and supporting documentation relating to interviews carried out by the inspectors with staff and customers of both entities. The High Court so held in refusing the relief sought.
JUDGMENT of Mr Justice Kelly delivered the 19th day of March 1999.
National Irish Bank Limited (the bank) and National Irish Bank Financial Services Limited (the company) are both under investigation by Inspectors appointed by this Court pursuant to the provisions of Part 2 of the Companies Act, 1990. They seek two orders which, if granted, will affect the conduct of those investigations.
The first order sought seeks to limit the Inspectors in their investigation of compliance by the bank with its obligations concerning Deposit Interest Retention Tax (DIRT). The second order seeks to compel the Inspectors to furnish to the bank and the company copies of all of the transcripts and supporting documentation relating to interviews carried out by the Inspectors with staff and customers of both entities.
In order to understand how these applications come to be made at this time it is necessary to set out the relevant background.
A year ago the Minister for Enterprise. Trade and Employment applied to the this Court pursuant to Section 8(1) of the Companies Act, 1990for the appointment of joint inspectors to investigate and report on the affairs of the bank.
On the 30th March, 1998 I appointed the Honourable John Blayney, a retired judge of the Supreme Court, and Thomas Grace, FCA, as Inspectors over the bank. My order of that date directed them to investigate and report on the affairs of the bank relating to:-
(i) The improper charging of interest to accounts of customers of the bank between 1988 and the 30th March. 1998
(ii) The improper charging of fees to accounts of customers of the bank between 1988 and the 30th March, 1998.
(iii) The improper removal of funds from accounts of customers of the bank between 1988 and the 30th March, 1998.
(iv) All steps and action taken by the bank, its directors and officers, servants or agents in relation to the charging of such fees or interest or the removal of any funds without the consent of the account holders and their actions arising from the issues when discovered.
(v) The manner in which the books, records and accounts of the bank reflected the foregoing matters,
(vi) The identity of the person or persons responsible for and aware of any of the practices referred to above.
(vii) Whether other unlawful or improper practices existed in the bank which served to encourage the evasion of any revenue or other obligations on the part of the bank or third parties or otherwise.
That order was not objected to nor appealed by the bank.
On the 15th June, 1998 the same Minister obtained a similar order concerning the affairs of the company from the late Shanley J. The same Inspectors were appointed and on this occasion were directed to investigate and report on the affairs of the company relating to:-
(a) The effecting of insurance policies through the company with Clerical Medical Insurance Company Limited, Scottish Provident International Life Assurance Limited and Old Mutual International (Guernsey) Limited.
(b) The role of the company, its officers, servants and employees in connection with the effecting of the said policies of insurance.
(c) The purposes behind the execution of the aforesaid policies of insurance.
(d) The knowledge of the management and board of directors of the company of the effecting of the said policies of insurance.
(e) The identity of the person or persons responsible for or aware of the effecting of or purposes behind the said policies of insurance.
The application for this Order was opposed by the bank and the company which, through the bank's chief executive, described it as "ill-conceived". Nevertheless the Order, once made, was not the subject of an appeal.
On the 13th July, 1998 the late Shanley J. delivered judgment in respect of a trial of certain issues which arose in the investigation, one of which is relevant to the matters which I have to decide on this application. He was asked inter alia to make a determination that procedures outlined by the Inspectors as ones which they would follow in the conduct of their investigation and which were set forth in letters of the 4th June, 1998 were consistent with the requirements of natural and constitutional justice.
The letter of the 4th June, 1998 insofar as is relevant recites as follows:-
" 2. Procedures to be followed.
We have explained that we consider that the first phase of interviews with witnesses will be an information gathering exercise. These interviews will be conducted in private. A transcript of the witness's evidence will be available to the witness from the stenographers on payment of the cost of the additional copy. We have no objection to any witness being accompanied by a legal adviser at such interview but, with respect, we consider that it would be inappropriate certainly premature and probably impossible to treat such interviews as approximating to a trial with an entitlement to attend and cross-examine the evidence given by other witnesses.
There can be no question of our indemnifying your clients or any of them in relation to costs whether legal or otherwise. Section 13 of the Companies Act, 1990states that the expenses of and incidental to an investigation shall be defrayed by the Minister for Justice. We have no role to play in this regard and any question of costs which you wish to pursue must be addressed to the Minister.
We do not propose to circulate lists of questions in advance of the taking of any evidence from witnesses. Given the nature of our work it would be impossible to predict with certainty what questions will or will not arise at any particular interview.
If, however, the outcome of the first phase of interviews indicates that it is possible that adverse conclusions may be drawn in relation to certain individuals dependant in whole or in part on the testimony of others then it is our intention that a hearing will be held at which such issues can be addressed, and at which persons who may be at risk of an adverse finding will be entitled to attend to hear the evidence,...
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