RE National Irish Bank Ltd (No 2)

• Jurisdiction: Ireland
• Judgment Date: 19 March 1999
• Date: 19 March 1999
• Docket Number: [1998 No. 132 Cos]
• Court: High Court

High Court

[1998 No. 132 Cos]

Re National Irish Bank Ltd. (No. 2)

In the matter of National Irish Bank Limited (Under investigation) [1998 No. 89 Cos], and in the matter of National Irish Bank Financial Services Limited (Under investigation) (No. 2)

Cases mentioned in this report:-

Athlone Woollen Mills Co. Ltd. v. Athlone Urban District Council [1950] I.R. 1.

Chestvale Properties Ltd. v. Glackin [1993] 3 I.R. 35; [1992] I.L.R.M. 221.

Donnelly v. Ingram (1897) 31 I.L.T.R. 139.

Goodman International v. Mr. Justice Hamilton [1992] 2 I.R. 542; [1992] I.L.R.M. 145.

In re Haughey [1971] I.R. 217.

McGrath v. Commissioner of An Garda Síochána [1991] 1 I.R. 69.

Maxwell v. Dept. of Trade [1974] Q.B. 523; [1974] 2 W.L.R. 338; [1974] 2 All E.R. 122.

Meath County Council v. Daly [1987] I.R. 391; [1988] I.L.R.M. 274.

Mooney v. An Post [1994] E.L.R. 103; (S.C.) [1998] 4 I.R. 288.

Murray v. Fitzpatrick (1914) 48 I.L.T. 305.

O'Donnell v. Hegarty [1941] I.R. 538.

O'Leary v. Cunningham [1980] I.R. 367.

In re Pergamon Press Ltd. [1971] Ch. 388; [1970] 3 W.L.R. 792; [1970] 3 All E.R. 535.

R. v. Beedie [1998] Q.B. 356.

Reg. v. Connelly [1964] A.C. 1254; [1963] 3 W.L.R. 839; [1963] 3 All E.R. 510.

Company - Investigation - Inspectors - Duties of inspectors - Rights of first applicant to see transcripts of evidence taken by inspectors - Res judicata - Similar inquiries taking place concurrently - Whether two inquiries necessary - Whether applicants entitled to see transcripts of evidence at preliminary stage of the investigation - Whether application res judicata - Companies Act, 1990 (No. 33), ss. 7 (4), 8(1), 12, Part II - Comptroller and Auditor General and Committees of the Houses of the Oireachtas (Special Provisions) Act, 1998 (No. 47) - Constitution of Ireland, 1937, Article 33.4.

Motion on notice.

The facts of the case and the relevant statutory provisions have been summarised in the headnote and are fully set out in the judgment of Kelly J.,infra.

The applicants, by notice of motion dated the 5th February, 1999, sought to limit the investigation by two court-appointed inspectors into their affairs. They further sought production to them of all transcripts of evidence taken by the inspectors from the employees of both applicants. By notice of motion dated the 3rd March, 1999, the applicants sought to amend the reliefs sought in their original notice of motion in order to limit further the investigations of the inspectors into their affairs.

The motions were heard by the High Court (Kelly J.) on the 3rd and 4th March, 1999.

Section 7(4) of the Companies Act, 1990, provides:-

"Where the court appoints an inspector under this section orsection 8, it may, from time to time, give such directions as it thinks fit, whether to the inspector or otherwise, with a view to ensuring that the investigation is carried out as quickly and as inexpensively as possible."

Pursuant to the provisions of the Comptroller and Auditor General and Committees of the Houses of the Oireachtas (Special Provisions) Act, 1998, the Comptroller and Auditor General was asked to investigate the banking industry in Ireland in relation to compliance with the deposit interest retention tax ("D.I.R.T.") laws.

Both of the applicant companies were already under investigation by two court appointed inspectors. The appointment of the inspectors was not appealed by either of the applicants. Both applicants sought to limit the inspectors' investigation into allegations that the first applicant had failed to collect and pay D.I.R.T. to the State. Furthermore, the applicants both sought to obtain copies of any statements which the inspectors had taken from staff and customers of both applicants.

The applicants further sought orders pursuant to s. 7 (4) of the Act of 1990, restricting the inspectors from investigating the same matters as were being covered by the Comptroller and Auditor General in his investigation. The applicants objected to a duplication of process and a resulting threat of double jeopardy. The applicants further contended that as there were two essentially similar inquiries taking place, that the work of the inspectors was not taking place as quickly or as cheaply as possible, as required by s. 7 (4) of the Act of 1990.

Held by the High Court (Kelly J.), in refusing the reliefs sought, 1, that the investigation been carried out by the Comptroller and Auditor General was an industry-wide investigation and did not single out any particular institution.

2. That, while there was an overlap between the two inquiries, there was not a duplication of process, as the purpose and object of each exercise was dissimilar and distinct.

3. That the concept of double jeopardy did not apply to investigations of inspectors, such as in this case.

4. That a decision as to the production of documents by the inspectors to the applicants had already been made by the High Court, and as that decision had not been appealed, the matter wasres judicata and could not now be reopened.

5. That, if any right existed for the applicants to see the transcripts of its staff members, then such a right derived from the contractual relationship between employer and employee and was enforceable in private law, but not in the current proceedings.

6. That there was no factual basis upon which the applicants' criticism of the inspectors' interim report could be sustained, nor to allow them copies of the transcripts of the evidence of their employees.

7. That there was no entitlement to invoke the panoply of rights established in the case ofIn re. Haughey[1971] I.R. 217, at the information gathering stage of the inspectors' work.

Cur. adv. vult.

Kelly J. 19th March, 1999

Introduction

National Irish Bank Limited (the first applicant) and National Irish Bank Financial Services Limited (the second applicant) are both under investigation by inspectors appointed by this Court pursuant to the provisions of Part II 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 first applicant with its obligations concerning Deposit Interest Retention Tax ("D.I.R.T."). The second order seeks 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.

In order to understand how these applications come to be made at this time it is necessary to set out the relevant background.

Background

A year ago the Minister for Enterprise, Trade and Employment applied to this Court pursuant to s. 8(1) of the Companies Act, 1990, for the appointment of joint inspectors to investigate and report on the affairs of the first applicant.

On the 30th March, 1998, I appointed the Honourable Mr. John Blayney, a retired Judge of the Supreme Court, and Mr. Thomas Grace, F.C.A., as inspectors over the first applicant. My order of that date directed them to investigate and report on the affairs of the first applicant relating to:-

• (i) the improper charging of interest to accounts of customers of the first applicant between 1988 and the 30th March, 1998;

• (ii) the improper charging of fees to accounts of customers of the first applicant between 1988 and the 30th March, 1998;

• (iii) the improper removal of funds from accounts of customers of the first applicant between 1988 and the 30th March, 1998;

• (iv) all steps and action taken by the first applicant, 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 first applicant 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 first applicant which served to encourage the evasion of any revenue or other obligations on the part of the first applicant or third parties or otherwise.

That order was not objected to nor appealed by the first applicant.

On the 15th June, 1998, the same Minister obtained a similar order concerning the affairs of the second applicant 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 second applicant relating to:-

• (a) the effecting of insurance policies through the second applicant with Clerical Medical Insurance Company Limited, Scottish Provident International Life Assurance Limited and Old Mutual International (Guernsey) Limited;

• (b) the role of the second applicant, 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 second applicant 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 applicants which, through the first applicant'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 (Re National Irish Bank Ltd. [1999] 3 I.R. 145) 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...