Dunnes Stores Ireland Company v. Maloney [1998] IEHC 165; [1999] 3 IR 542; [1999] 1 ILRM 119 (18th November, 1998)

JUDGMENT of Miss Justice Laffoy delivered on the 18th November 1998 . BACKGROUND 1. On 22nd July, 1998 the second named Respondent (the Minister) appointed the first named Respondent (Mr.. Maloney) to be an authorised officer for the purposes of Section 19 of the Companies Act, 1990 (the Act of 1990) in relation to the first named Applicant (Dunnes) and the second named Applicant (Ilac). On the same day the Minister wrote to the third named Applicant (Mrs Heffernan) apprising her of the appointment and stating that the legal basis for the appointment in the case of Dunnes was paragraphs (a), (b)(ii), (b)(iii), (d) and (f) of Section 19 (2) and in the case of Ilac paragraphs (a), (b)(ii) and (f) of the same provision. Mrs Heffernan wrote to the Minister on the same day seeking an explanation of the basis of the Minister's decision, motivation and objectives. The Minister responded on 23rd July, 1998 stating that the appointment had been made after lengthy and detailed consideration, that she had before her the McCracken Tribunal Report and reports of authorised officers investigating other companies, which were subject to the very strict limitations of Section 21 of the Act of 1990 in relation to disclosure, and that "the ongoing ICAI Blayney enquiry" had yielded further material. Two further letters from Mrs Heffernan to the Minister dated respectively 27th and 28th July, in one of which Mrs Heffernan took issue with the Minister's interpretation of Section 21 , elicited no further information. The correspondence closed with the Minister's letter of 31st July, 1998 in which the Minister stated that the failure by Dunnes and Ilac to comply with Mr. Maloney's requests could constitute offences under the Act of 1990. 2. There had been earlier correspondence between the Minister and Mrs Heffernan following the publication of the Report of the Tribunal of Inquiry (Dunnes Payments), which has become colloquially known as the McCracken Tribunal Report. This correspondence opened with a letter of 11th September, 1997 from the Minister to Mrs Heffernan seeking co-operation in connection with inquiries being made by the Minister's Department in relation to certain companies, which co-operation would involve examining the books and documents of certain companies within the Dunnes Stores Group. That co-operation was forthcoming and there followed in the ensuing months a considerable amount of communication and passing of information and documentation from the Dunnes Stores Group to the Minister's Department and to Peter Fisher (Mr. Fisher), who had been appointed an authorised officer in relation to Garuda Limited (trading as Streamline Enterprises) and Gerard Ryan (Mr. Ryan), who had been appointed authorised officer in relation to Celtic Helicopters Limited. In February 1998 Mr. Fisher sought a copy of a report prepared by Price Waterhouse for Dunnes Stores Group in connection with legal proceedings initiated by Bernard Dunne concerning companies in the Dunnes Stores Group, which were compromised in November 1994. The request was not acceded to on the basis that the Report was a private Report, which was prepared for the purposes of litigation then in being, the vast bulk of which dealt with matters of no concern to the two companies being investigated. This position was adopted in a letter dated 5th March, 1998 to Mr. Fisher. It was not challenged. 3. Following his appointment, Mr. Maloney wrote to Dunnes on 22nd July, 1998 seeking a meeting with Mrs Heffernan and her fellow officers on 27th July, 1998 at 2.30 p.m. On 24th July, 1998, which was a Friday, Mr. Maloney sent to Dunnes and Ilac two schedules of "initial documentation required" and requested that the documentation should be available for inspection and removal following the meeting on the following Monday, 27th July, 1998. 4. Eleven categories of documents were itemised in the two schedules. Some of the categories were of a general nature. For instance, one category related to all financial statements of the relevant company, including draft financial statements and correspondence with the auditors. Another category sought details of all directors', senior staff and employees' remuneration packages, to include details of all benefits in kind, incentive schemes and bonus schemes operated in the relevant company. Other categories were quite specific. For instance, all documentation and records relating to accounts in the Marino branch of the Bank of Ireland, including a specific account, to include statements, cheque book stubs, copy mandates, correspondence and file memoranda, were sought. Another category related to all documentation recording the relationship between Dunnes and two named companies, including purchases transactions, pricing policy, correspondence, invoices, payments and receipts. The schedules also covered the statutory returns which Dunnes and Ilac were obliged to make and the statutory registers of the companies. A copy of the Price Waterhouse Report was also demanded. In the case of all of the categories, other than the category dealing with the statutory registers, the documentation was sought for a period of ten years ending on 31st December, 1997. A general note at the end of each schedule stipulated that all books, records and documents in writing or other form were covered, including internal memoranda relating to telephone conversations. 5. Following the appointment of Mr. Maloney, he was informed on behalf of Dunnes and Ilac that he might have or might be believed to have a conflict of interest, stemming from the fact that the accountancy firm in which he is a partner, O'Hare and Associates, had acted in a private capacity for Mrs Heffernan's daughter, a beneficial shareholder and a potential beneficial shareholder, as the object of a discretionary trust, in certain companies in the Dunnes Stores Group. LEAVE TO APPLY BY WAY OF JUDICIAL REVIEW 6. By Order of this Court (O'Higgins J.) made on 4th August, 1998 the Applicants were granted leave to seek various reliefs, which I will outline later, by way of Judicial Review. It was further ordered that the grant of leave would act as a stay on any further proceedings by the Respondents until the determination of the application for Judicial Review or until further Order. SUBSEQUENT EVENTS 7. By letter dated 10th August, 1998, Mr. Maloney tendered his resignation as authorised officer to the Minister. By Order of this Court (Smith J.) made on 13th August, 1998, the Order of 4th August, 1998 was varied to allow the Minister appoint Mr. Ryan as an authorised officer in place of Mr. Maloney, who had resigned. Subject to that variation, the stay contained in the Order of 4th August, 1998 was to continue. Mr. Ryan's appointment was effected on 13th August, 1998. 8. In an affidavit subsequently sworn by her on 15th September, 1998, Mrs Heffernan queried whether it was the view of the Respondents that the demand issued by Mr. Maloney survived his resignation. In an affidavit sworn by him on 16th September, 1998 in reply, Paul Appleby (Mr. Appleby), the Principal in the Company Law Administration Section of the Minister's Department, averred as follows:- "In due course it is intended that Mr. Gerard Ryan will issue his own instructions to the first and second named Applicants as to what documents he requires to see and as to what explanation of them he needs". 9. During the course of the opening of the Applicants' case in this Court on 5th November, 1998 by Mr. Hardiman, Mr. Fitzsimons, on behalf of the Respondents, indicated that the Respondents' position is that the demand issued by Mr. Maloney is no longer extant and is no longer being relied upon by the Respondents. RELIEF CLAIMED/GROUNDS 10. The relief which the Applicants seek, having regard to supervening events, is as follows:- (a) Orders of certiorari quashing the decisions of the Minister purporting to appoint authorised officers to examine the books and records of Dunnes and Ilac; (b) Orders of certiorari quashing the decisions of the Minister purporting to appoint Mr. Maloney as her authorised officer in relation to Dunnes and Ilac; (c) an Order of certiorari quashing the demand contained in the letters/schedules dated 24th July, 1998 issued by Mr. Maloney; (d) An Order of mandamus directing the Minister to furnish the reason for the appointment of Mr. Maloney pursuant to Section 19 of the Act of 1990. 11. The Applicants' claim is grounded on the contention that the Minister has acted unreasonably, irrationally and in a manner which is ultra vires and has failed to have any, or any due regard for the principles of natural and constitutional justice and fairness on various bases which can be summarised as follows, namely:- (i) failure to give any or any adequate reasons for the purported appointments; (ii) failure to identify the information or matters of fact relied upon to form the opinion that circumstances suggesting that the criteria set out in the relevant paragraphs of subsection (2) of Section 19 existed; (iii) reliance on an erroneous interpretation of Section 21 of the Act of 1990; (iv) that the demand issued by Mr. Maloney for documentation was excessive and unreasonable; (v) failure to afford the Applicants any adequate opportunity to put forward reasons as to why the appointments should not be made; (vi) the existence of bias and conflict of interest in the appointment of Mr. Maloney. GROUNDS OF OPPOSITION 12. In outline the Respondents' answer to the Applicants' claim, as pleaded in the notice of opposition filed on behalf of the Respondents, is as follows:- (1) The Minister is not obliged to give reasons for the exercise of the power to appoint an authorised officer pursuant to Section 19 of the Act of 1990. (2) A company to whom such an appointment relates has no entitlement to be heard in relation to such appointment. (3) No issue has been raised by the Applicants that - (a) there was an insufficiency of material upon which to found the opinion of the Minister set out in Section 19 (2) of the Act of 1990, (b) the Minister failed to exercise the power under Section 19 (2) in accordance with the terms thereof, or (c) the Minister failed to act in good faith. (4) Mrs Heffernan has no locus standi in the proceedings. (5) The Minister is precluded by Section 21 of the Act of 1990 from supplying information to the Applicants which has been obtained pursuant to an appointment under Section 19 (2). (6) The request for documentation made by Mr. Maloney was neither excessive nor unreasonable. (7) There was no conflict of interest such as would render an action by Mr. Maloney an infringement of natural or constitutional justice, but, in any event, any point made to this effect was moot because Mr. Maloney's resignation had been accepted. 13. In the notice of opposition filed on behalf of the Respondents, it was pleaded that the exercise of a power to appoint an authorised officer pursuant to Section 19 of the Act of 1990 "is not subject of any judicial, or quasi-judicial debate whereby the company must be heard, either in the manner alleged, or at all" . At the hearing of the application, Mr. Fitzsimons, on behalf of the Respondents, acknowledged that the power conferred on the Minister by Section of the Act of 1990 is judicially reviewable. I will return to this aspect of the matter later. MATTERS ARISING ON AFFIDAVIT EVIDENCE 14. It is convenient to record certain matters which arose on the Affidavits filed in the proceedings and to deal with the issues to which they give rise at this juncture. 15. First, Mr. Appleby, in an affidavit sworn by him on 4th September, 1998 averred that the Minister, when she made her decision, had certain information available to her, namely:- (a) information presented to her arising from investigations under Section 19 in relation to Garuda Limited, Guinness & Mahon (Ireland) Limited and Celtic Helicopters Limited which impacted on Dunnes and Ilac; (b) information contained in the McCracken Tribunal Report; (c) information contained in the Buchanan Report; and (d) relevant information made available by an observer from her Department who attended the Committee of Enquiry set up by the Institute of Chartered Accountants in Ireland under the chairmanship of Mr. Justice Blayney. 16. It is clear from the context in which that averment was made that it was not being advanced as a reason or reasons for the appointment of the authorised officer. However, earlier in his affidavit Mr. Appleby had quoted liberally from the McCracken Tribunal Report, ostensibly in reply to an averment in the grounding affidavit sworn by Mrs Heffernan on 4th August, 1998. He also averred to a finding made in the Buchanan Report, ostensibly for the same purpose. He had also amplified a statement in the Minister's letter of 23rd July, 1998 to Mrs. Heffernan to the effect that "the financial and management structures of the two companies require examination" and "the matters do not appear of merely historical effect but raise current concerns", by averring to what the "current concerns" related. 17. In an affidavit sworn by her on 15th September, 1998, Mrs Heffernan addressed the averments contained in Mr. Appleby's affidavit. Moreover, she analysed the paragraphs of Section 19 (2) relied on by the Minister "to test the assertion by the second named Respondent that the provisions of Section 19 have been invoked in appropriate circumstances". 18. In a further affidavit sworn by him on 16th September, 1998, Mr. Appleby declared his perception of Mrs Heffernan's affidavit as being "designed to provoke the second named Respondent into giving reasons for her decision" . 19. The final affidavit filed in this matter was sworn by the Applicants' solicitor, Boyce Shubotham (Mr. Shubotham) on 3rd November, 1998. In that affidavit, while adopting the stance that the Applicants' grounds for review encompass the adequacy or sufficiency of reasons, it was stated that, for the avoidance of doubt, the Applicants would, if necessary, seek an order at the hearing adding an additional ground to support their claim, namely, that in making the appointment the Minister acted in a manner which was irrational, took irrelevant considerations into account, failed to take relevant matters into account and acted contrary to law and statutory duty. 20. I find that it is unnecessary to make any ruling on the application for an amendment. The whole thrust of the Respondents' case was that there is no duty on the Minister to give reasons either prior to an appointment of an authorised officer or after such appointment in response to a request for reasons and that in the instant case no reasons had in fact been given. The disclosures made in the Respondents' affidavits, while creating the impression of a type of evidential "shadow-boxing" , were represented as being expositions of the material on which the Minister's decisions were based. In my view, this is not an accurate representation of the disclosures, because in the case of the material garnered from the previous Section 19 enquiries, all that was disclosed was the source of the material not the material itself, in respect of which the Minister regarded herself as being constrained by Section 21 . In any event, having regard to the position (evinced) by the Respondents, the issues which arise on this application will be determined on the basis that no reasons whatsoever have been given by the Respondents for the decisions sought to be impugned. 21. Secondly, the issue of the Applicants' entitlement to information under the Freedom of Information Act, 1997 (the Act of 1997) was raised in Mr. Shubotham's replying affidavit. Mr. Shubotham disclosed that in a fax communication dated 16th September, 1998 from his firm, William Fry, to the office of the Chief State Solicitor, the Applicants' entitlement to access records in relation to the Minister's decisions under the Act of 1997 was raised. The response from the office of the Chief State Solicitor was that the request should be addressed to "the head" of the Minister's Department in accordance with the provisions of the Act of 1997. On 23rd October, 1998 an itemised request for access to various records was sent by Dunnes and Ilac to the Minister. This elicited a standard acknowledgement dated 9th November, 1998 from the Minister's Department, but no further response. 22. At the hearing it was submitted on behalf of the Applicants that the Minister's refusal to accede to the Applicants' request for reasons, which commenced with the letter dated 22nd July, 1998 from Mrs Heffernan to the Minister, contravened the Act of 1997 and was a matter to which the Court should have regard in exercising its discretion whether to quash the Minister's decisions. 23. In response, it was submitted on behalf of the Respondents that, as a matter of statutory construction, the Act of 1997 applies only to persons who are individuals and not to bodies corporate. An alternative proposition advanced was that it was not until 23rd October, 1998 that a proper request was made under the Act of 1997, there has been no contravention of the Act, and, in the event of a contravention, the review procedure provided for in the Act is available. 24. The application of the Act of 1997, which was not relied on by the Applicants in their grounds for relief, is peripheral to the issues to be determined on this application. In the circumstances, in my view, it would be entirely inappropriate to pronounce on such a fundamental issue as whether such a recently enacted and innovative statute applies to bodies corporate in this judgment. In any event, I am not satisfied that the evidence discloses any disregard by the Minister of her obligations under the Act of 1997 such as would have a material bearing on the determination of the issues which arise on this application. PROVISIONS OF THE ACT OF 1990 25. Section 19 of the Act of 1990 is contained in Part II of that Act, which deals with investigations. Subsection (1) provides:- "The Minister may, subject to subsection (2), give directions to any body being - (a) a company formed and registered under the Companies Acts; ..... requiring the body, at such time and place as may be specified in the directions, to produce such books or documents as may be so specified, or may at any time, if he thinks there is good reason so to do, authorise any officer of his, on producing (if required so to do) evidence of his authority, to require any such body as aforesaid to produce to him forthwith any books or documents which the officer may specify". 26. Subsection (7) empowers the Minister to authorise a person other than an officer of his to exercise the functions exercisable under Section 19. 27. Insofar as it is relevant for present purposes, subsection (2) provides as follows:- "Directions may be given by the Minister if he is of the opinion that there are circumstances suggesting that - (a) it is necessary to examine the books and documents of the body with a view to determining whether an inspector should be appointed to conduct an investigation of the body under the Companies Acts; or (b) that the affairs of the body are being or have been conducted with intent to defraud - (i) ..... (ii) the creditors of any other person, or (iii) its members; or (c) ..... ; or (d) that the affairs of the body are being or have been conducted in a manner which is unfairly prejudicial to some part of its members; or (e) .....; or (f) that any actual or proposed act or omission or series of acts or omissions of the body or on behalf of the body are or are likely to be unlawful; ....." 28. Subsection (4) empowers an authorised officer to take copies of or extracts from books or documents which are produced and to require any person who is a present or past officer of, or is or was at any time employed by, the body in question to provide an explanation of any of them. Subsection (5) provides that failure to comply with the requirement to produce books or documents or to provide an explanation or make a statement required by the section is an offence. Subsection (6) provides that a statement made by a person in compliance with a requirement imposed by the section may be used in evidence against him. 29. Section 21 deals with security of information and subsection (1) thereof provides:- "No information, book or document relating to a body which has been obtained under Section 19 or 20 shall, without the previous consent in writing of that body, be published or disclosed, except to a competent authority, unless the publication or disclosure is required....." 30. There follows an enumeration of five circumstances in which disclosure is permissible. In summary the circumstances relate to - (a) criminal proceedings under the Companies Acts or otherwise in relation to the affairs or property of the body, or under the Exchange Control Acts, 1954-1986 or the Insurance Acts, 1909 to 1990, or regulations on insurance made under the European Communities Act, 1972 , (b) reports by inspectors appointed under Part II of the Act of 1990 by the court or by the Minister, (c) proceedings to wind up the body under the Companies Act, 1963 , and (d) proceedings for the purposes of obtaining a search warrant under Section 20 . 31. The expression "competent authority" is defined in subsection (3) as including, inter alia, the Minister and any court of competent jurisdiction. 32. The basis of the Applicants' contention that the Minister is persisting in reliance on an erroneous interpretation of Section 21 is traceable back to a letter dated 28th July, 1998 from Mrs Heffernan to the Minister. In that letter, having taken issue with the Minister's assertion that she was precluded by Section 21 from divulging the information which informed her opinion, Mrs Heffernan went on to say:- "Even if information relating to Dunnes Stores company has been obtained in the course of enquiries into other companies, the section makes it clear that Dunnes Stores companies can consent to the provision of information concerning themselves and, in case you have any doubt on this point, on behalf of the Dunnes Stores group of companies I now consent to the provision of this information to me but not to any other person or entity". 33. In my view, the construction of Section 21 contended for in the foregoing passage of Mrs Heffernan's letter is not correct. When subsection (1) of Section 21 is read in the context of the preceding sections, Sections 19 and , it becomes quite clear that the "body" referred to in subsection (1) is the body which was the subject of the directions given under Section 19 and it is the consent in writing of that body which is required to obviate the strictures imposed by Section 21 . The clear intention of Section 21 is to safeguard the body which is the subject of directions under Section 19 . To interpret the word "body" in Section 21 as meaning any third party implicated in the information or documentation uncovered in pursuance of directions given under Section 19 , which itself happens to be a "body" within the meaning of subsection (1) of Section 19 , would be to frustrate that intention. Section (1) provides as follows:- "Nothing in this Part shall compel the disclosure by any person of any information which he would, in the opinion of the court, be entitled to refuse to produce on the grounds of legal professional privilege or authorise the taking of possession of any document containing such information which is in his possession". 34. The expression "the court" means the High Court (Section 2 of the Companies Act, 1963 ). 35. On behalf of the Applicants, Mr. Hardiman submitted that Section 23 is of significance, in that in February 1998 the Applicants had asserted legal professional privilege in relation to the Price Waterhouse Report and the Minister had not challenged the assertion. Nonetheless, Mr. Maloney had sought production of a copy of it. It was submitted that in doing so the authorised officer acted in total disregard of Section 23 . Mr. Fitzsimons, on the other hand, submitted that the Applicants have not grounded their claim for relief on the alleged legal professional privilege attaching to the Price Waterhouse Report and, accordingly, the issue as to whether it is privileged or not is not in issue on this application. If the issue of privilege were to be determined, he argued, there would have to be a full hearing of the issue conducted in the manner in which a hearing on the issue of a claim to privilege in discovery is conducted. In my view, Mr. Fitzsimons submission is well founded. The issue as to whether the Price Waterhouse Report is privileged does not arise on this application and I express no view whatsoever on the issue. THE ISSUES 36. As I have already indicated, in the course of the hearing, Mr. Fitzsimons, on behalf of the Respondents, acknowledged that the power conferred on the Minister by Section 19 is judicially reviewable. Some controversy arose subsequently as to the import of that acknowledgement, in particular, as to the scope of the review. My understanding is that it was acknowledged that the Minister's decision is reviewable in accordance with this Court's established jurisdiction to review ministerial decisions. If my understanding is incorrect, I so hold. This means that, first, having regard to the nature of the power conferred on the Minister by Section 19 , the Court is entitled to review the formation of the opinion which must precede the Minister's decision under Section 19 on the same basis as the Supreme Court held that the opinion which precedes a decision under Section 31 (1) of the Broadcasting Authority Act, 1960 is reviewable in The State (Lynch) -v- Cooney [1982] I. R. 337. Delivering the judgment of the Court in that case, O'Higgins C. J. stated as follows at page 361:- "The Court is of the opinion that S. 31 , Sub-s. 1, of the Act of 1960, as amended, does not confer on the Minister the wide, unfettered and sweeping powers which have been alleged by the prosecutor. The Court is satisfied that the sub-section does not exclude review by the Courts and that any opinion formed by the Minister thereunder must be one which is bona fide held and factually sustainable and not unreasonable." 37. The underlying rationale for that basis of review is to be found in the following passage from the judgment of Henchy J. at page 380:- "It is to be presumed that, when it conferred the power, Parliament intended the power to be exercised only in a manner that would be in conformity with the Constitution and within the limitations of the power as they are to be gathered from the statutory scheme or design. This means, amongst other things, not only that the power must be exercised in good faith but that the opinion or other subjective conclusion set as a precondition for the valid exercise of the power must be reached by a route that does not make the exercise unlawful - such as by misinterpreting the law, or by misapplying it through taking into consideration irrelevant matters of fact or through ignoring relevant matters. Otherwise, the exercise of the power will be held to be invalid for being ultra vires ." 38. Secondly, while the power conferred by Section 19 is a discretionary power, its exercise is subject to constraints similar to the constraints which the Supreme Court held in East Donegal Co-Operative -v- Attorney General [1970] I. R. 317 fettered the exercise of the power to grant a licence under the Livestock Marts Act, 1957. These constraints were identified by Walsh J. in the following passage from his judgment at page 343:- "All the powers granted to the Minister by S. 3 which are prefaced or followed by the words 'at his discretion' or 'as he shall think proper' or 'if he so thinks fit' are powers which may be exercised only within the boundaries of the stated objects of the Act; they are powers which cast upon the Minister the duty of acting fairly and judicially in accordance with the principles of constitutional justice, and they do not give him an absolute or an unqualified or an arbitrary power to grant or refuse at his will." 39. Accordingly, the exercise of the power conferred on the Minister by Section 19 is reviewable for compliance with the requirement of fair procedures. 40. The remaining principal issues which fall to be considered in determining the Applicants' entitlement to the relief they claim are:- (1) Whether the Applicants were entitled to prior notice of the Minister's intention to appoint an authorised officer and of the demand for documents, coupled with an entitlement to make representations in relation to the proposed appointment and demand to the Minister. (2) Whether the Minister is obliged to give reasons for her decision to the Applicants. (3) Whether the demand for documents contained in Mr. Maloney's letter and enclosed schedules of 24th July, 1998 was excessive or unreasonable. (4) Whether the appointment of Mr. Maloney was tainted by bias or conflict of interest. 41. I will deal with each issue in turn. ENTITLEMENT TO MAKE REPRESENTATIONS 42. The Applicants contended that the requirement that the Minister follow fair procedures in the exercise of the power conferred by Section 19 necessitated the giving of advance notice to the Applicants before the Minister appointed an authorised officer, so as to enable the Applicants to make representations to the Minister as to why the appointment should not be made. In support of this proposition they relied on the decision of the Supreme Court delivered on 28th July, 1998 in Haughey -v- Moriarty (as yet unreported) and, in particular, the following passage from the judgment of Hamilton C. J. at page 173:- "While the Tribunal is entitled to conduct the preliminary stage of its investigation in private and to make such orders as it considers necessary for the purposes of its functions, that does not mean that in making such orders, it was not obliged to follow fair procedures. In the making of such orders the Tribunal had in relation to their making all such powers, rights and privileges as are vested in the High Court or a judge of that Court in respect of the making of orders. Fair procedures require that before making such orders, particularly orders of the nature of the orders made in this case, the person or persons likely to be affected thereby should be given notice by the Tribunal of its intention to make such order and should have been afforded the opportunity prior to the making of such order, of making representations with regard thereto. Such representations could conceivably involve the submission to the Tribunal that the said orders were not necessary for the purpose of the functions of the Tribunal, that they were too wide and extensive having regard to the terms of reference of the Tribunal and any other relevant matters. Such a procedure was not adopted in this case and the learned trial judge held that in the making of such orders, the Tribunal did not act in accordance with the requirements of fair procedures. The Court is satisfied that the learned trial judge was correct in his findings that the orders sought to be impugned herein made by the Tribunal were made in contravention of the requirements of constitutional justice and that fair procedures were not adopted by the Tribunal in the making of such orders." 43. The text of one of the impugned orders had been set out earlier in the judgment of Hamilton C. J. It was an order made on 20th November, 1997 directed to the Secretary of Anglo Irish Bank Corporation Plc. It ordered the addressee to make discovery on oath on or before 5 p.m. on 26th November, 1997 of all documents within the power, possession or procurement of the bank relating, inter alia, to accounts held with the bank in the name of or for the benefit of Mr. Haughey and in the name of and for the benefit of any person connected with Mr. Haughey as defined by Section 2(2) of the Ethics in Public Office Act, 1995, including persons named in the schedule thereto. No notice of the intention to make the order was given to the person to whom it was directed or to the persons thereby affected. The order was served only on the person to whom it was directed and not on the persons thereby affected. 44. In my view, the factual circumstances of the Haughey case - requiring a financial institution to make discovery of documents held by it in relation to a customer or a possible customer, without giving any notice of the requirement to the person affected - are not at all analogous to the situation which arises when an appointment is made under Section 19 and a demand for documentation ensues. Under Section 19 the Minister is required to form an opinion that there are circumstances suggesting that one at least of the states of affairs catalogued in paragraphs (a) to (h) of Sub-section (2) exists in relation to a body. When that opinion is formed the Minister may require the body to produce specified books or documents. Alternatively, the Minister may authorise an officer of her department, or as happened here, a person other than an officer, to require the body to produce specified books or documents. The demand is made to the person affected by the requirement to produce. On receipt of the demand the person on whom it is made, and who is the person who is thereby affected, has an opportunity to make representations including the type of representations exemplified in the passage from the judgment of the Chief Justice quoted above. 45. Mr. Hardiman itemised, in ascending order of importance, the representations which the Applicants might have made had they had notice of the Minister's intention to appoint an authorised officer under Section 19: representations as to the scope of the demand, its breadth and the fact that it covered the Price Waterhouse Report in respect of which privilege is claimed; representations that, in any event, there was no necessity to appoint an authorised officer having regard to the co-operation, which was both extensive and expensive which the Applicants had already given to the Minister. Such representations could have been made when the demand was made and, in my view, could have been as effectively made after the demand as before the appointment of the authorised officer. That they might be ignored, and in this case were ignored does not strengthen the Applicants' case, because, if appropriate, redress by way of judicial review can be availed of. The fundamental distinction between the factual situation in the Haughey case and the factual situation in this case is that the orders for discovery in the Haughey case might have been complied with by the bank and discovery made which might have included discovery of matters to which the Tribunal had no entitlement before the persons affected became aware of the discovery orders, whereas the Applicants' property and their rights of privacy and confidentiality in relation to their books and documents could not be interfered with without their knowledge on the invoking of the Section 19 procedure. 46. Mr. Hardiman submitted that the appointment of an authorised officer of itself was detrimental to the Applicants, in that it was of necessity preceded by the formation of an opinion as to the existence of one of the states of affairs catalogued in Sub-section (2). It was submitted that it would be deleterious to the reputation of the Applicants if knowledge of the making of the appointment came into the public domain. Fair procedures require that the Applicants should have been given advance notice of the appointment and an opportunity to make representations to obviate that detriment, he argued. 47. Notwithstanding the safeguard contained in Section 21 and the fact that officers in the Minister's department are bound by the Official Secrets Act, 1963 , no one can guarantee that the existence of an authorised officer appointed under Section 19 will not become public knowledge. An obvious source of a leak could be sub-section (4) of Section 19, which empowers an authorised officer to seek an explanation from any person who is or was a present or past officer or employee of the body in question. Be that as it may, in my view, the possibility of public exposure of the existence of an authorised officer does not give rise to a detriment the nature of which requires that notice of an intended appointment and an opportunity to argue against such appointment be given. I accept the argument advanced by Mr. Fitzsimons that with the privilege of incorporation comes obligations and duties and statutory impositions and that the impositions embodied in Part II of the Act of 1990 become, in effect, part of the constitution of the company, which the company has to endure. The Minister is the regulator of companies and, given that the privilege of incorporation is open to abuse in myriad of ways, the Minister's investigative role is essential. When that investigative role is performed by an authorised officer under Section 19, he merely investigates and obtains information. He makes no finding or decision in relation to the company or its officers which is final or conclusive or could be detrimental in any real sense. All he does is procure and inspect documents and obtain explanations. The risk that his investigation will become public knowledge and that the company may be perceived as being "tarred with the same brush" as other companies which have been subject to the Section 19 procedure, which is the gist of the Hardiman's argument, is part of the price which the company's proprietor pay for the benefits of incorporation. 48. There are no doubt ministerial powers which can only be exercised if advance notice and an opportunity to make representations is given to the person affected. The power contained in Section 31 (1) of the Broadcasting Authority Act, 1960 may be such a power, as the judgment of Walsh J. in The State (Lynch) -v- Cooney at page 372 suggests. However, an order under that section is directed to a third party, Radio Telefis Eireann, not to the person affected, so that there are strong parallels between that case and the situation which arose in the Haughey case. In my view, the power conferred on the Minister by Section 19 is not a power the exercise of which requires advance notice or the giving of an opportunity to make representations. OBLIGATIONS TO GIVE REASONS 49. On behalf of the Applicants, Mr. Hardiman submitted that the Minister's decision being of a nature that it is reviewable, there must be an obligation on the Minister to give reasons for her decision. Mr. Hardiman argued that there is a strong line of authority to support this proposition starting with The State (Lynch) -v- Cooney and encompassing the decision of this Court (Barron J.) in The State (Daly) -v- The Minister for Justice [1987] I. R. 165, the decision of the Supreme Court in The State (Creedon) -v- Criminal Injuries Compensation Tribunal [1988] I. R. 51 and culminating with the decision of this Court (Blayney J.) in International Fishing Vessels Limited -v- The Minister for the Marine [1989] I. R. 149. 50. Mr. Fitzsimons, on the other hand, submitted that the decision of Costello P. in McCormack -v- Garda Siochana Complaints Board [1997] 2 ILRM 321 contains a definitive statement of the law on the necessity to give reasons for an administrative decision. It was urged that that decision should be followed. It has been followed by this Court on two occasions recently: by McGuinness J. in Maigueside Communications Limited & Others - v - The Independent Radio and Television Commission & Another in which judgment (as yet unreported) was delivered on 18th July, 1997; and by Kelly J. in Flood -v- the Garda Siochana Complaints Board [1997] 2 IR 321 . 51. In his judgment in McCormack -v- The Garda Siochana Complaints Board , Costello P. stated as follows at page 332:- "Constitutional justice imposes a constitutional duty on a decision making authority to apply fair procedures in the exercise of its statutory powers and functions. If it can be shown that that duty includes in a particular case a duty to give reasons for its decision, then a failure to fulfil this duty may justify the court in quashing the decision as being ultra vires. It is not the law of this country that procedural fairness requires that in every case an administrative decision making authority must give reasons for its decisions. Where a claim is made that a breach of a constitutional duty to apply fair procedures has occurred by a failure to state reasons for an administrative decision, the court will be required to consider (a) the nature of the statutory function which the decision maker is carrying out (b) the statutory framework in which it is to be found and (c) the possible detriment that the complainant may suffer arising from the failure to state reasons. To give an example of a possible detriment; if a statute permitted an appeal to the court from the decision of an administrative authority on a point of law the failure to give reasons for a decision may well amount to a breach of a duty to apply fair procedures if it could be shown that their absence rendered ineffectual a statutory right of appeal. There may also be circumstances in which (a) no unfairness arose by a failure to give reasons when the decision was made but (b) the concept of fair procedures might require that reasons should subsequently be given in response to a bona fide request for them. Therefore, in such cases the court would not grant an order of certiorari (because the decision itself was not an ultra vires one) but it would have jurisdiction to grant an order of mandamus directing the decision making authority to carry out its constitutional duty (which the court had found existed) to provide reasons when asked. Finally, there may be circumstances in which the duty to apply fair procedures may not oblige a decision making authority to state reasons for its decision at the time or after it has made it but which might oblige the authority to explain to an affected person the material on which the decision was based." 52. I pause there to comment that I assume that the disclosures made in the affidavit of Mr. Appleby in relation to the material which was before the Minister when she was making her decision, to which I have referred earlier, were included for the purpose of bringing the case within the ambit of the last proposition quoted above, although, as I have already indicated, to some extent it is the source of material, rather than the material itself, which has been disclosed. 53. Later in his judgment Costello P. stated as follows at page 334:- "But a person aggrieved by a decision has no right to obtain reasons for it merely for the purpose of seeing whether or not the decision maker had erred and I do not think that the judgment in that case is to be so construed. In this case the absence of reasons does not deprive the court of an ability to exercise its supervisory jurisdiction. This is clear from the nature of the statutory function which the court has jurisdiction to supervise... In reality [the reasons] are being sought in this case to enable the applicant to see whether or not the board made an error in the carrying out of its functions and there is no duty imposed on administrative decision-makers by the Constitution to comply with a request made for this purpose." 54. The case referred to by Costello P. in the above quotation was the decision of this Court (Blayney J.) in International Fishing Vessels Limited -v- The Minister for the Marine . At issue in that case was the failure of the Minister for the Marine to give reasons for his refusal to grant a licence for sea fishing under the Fisheries (Consolidation) Act, 1959 . Having stated that the Minister in deciding to grant or refuse the licence was obliged to act fairly and judicially in accordance with the principles of constitutional justice, Blayney J. stated that, unless the Minister gave reasons, it could not be said that the procedure he adopted in giving his decision was fair. He outlined two facts in particular which led him to that conclusion. He set out the first fact in the following passage in his judgment at page 155:- "It is common case that the Minister's decision is reviewable by the court. Accordingly, the applicant has the right to have it reviewed. But in refusing to give his reasons for his decision the Minister places a serious obstacle in the way of the exercise of that right. He deprives the applicant of the material it needs in order to be able to form a view as to whether grounds exist on which the Minister's decision might be quashed. As a result, the applicant is at a great disadvantage, firstly, in reaching a decision as to whether to challenge the Minister's decision or not, and secondly, if he does decide to challenge it, in actually doing so, since the absence of reasons would make it very much more difficult to succeed. A procedure which places an applicant at such a disadvantage could not in my opinion be termed a fair procedure, particularly where the decision which the applicant wishes to challenge is of such crucial importance to the applicant in its business...." 55. The second fact was that the giving of reasons by the Minister might enable the applicant to meet the grounds on which the licence had been refused and, having done so, reapply. The Order made by Blayney J. was a declaration that the applicant was entitled to be furnished by the Minister with a statement in writing setting out his reasons for his decision. 56. In this case, the Minister's position is that, on the basis of the material available to her, she formed the opinion that there are circumstances suggesting that the affairs of Dunnes and Ilac have been and are being carried out in a manner which, in broad terms, may be described as unlawful and improper. The Minister has represented that she has disclosed the material upon which her opinion was based but, as I have already indicated, as regards three sources of material, the previous Section 19 investigations, there has been no real disclosure of information. The Minister's opinion and the exercise by her of the power conferred by Section 19 are reviewable. In my view, in adopting the stance which has been adopted, the Minister has, in effect, rendered her decision unreviewable. It is true, as submitted by Mr. Fitzsimons, that the Applicants are not entitled to a review of the Minister's decision merely on the basis that it is wrong; they are not entitled to an appeal on the merits. However, they are entitled to have the decision reviewed on the lines indicated above and, in my view, they are utterly stymied in the exercise of that right by reason of the refusal to give reasons for the decision. 57. In my view, this is a case in which procedural fairness requires that the Minister give reasons for her decision. The Applicants have demonstrated that they bona fide believe that the Minister has misused her power in appointing an authorised officer. Whether that belief is well founded or not, they are entitled to explore the possibility of obtaining redress by way of judicial review. They have made a bona fide request for reasons. In the absence of reasons, they cannot explore the possibility of or pursue redress by way of judicial review. Consequently, they are suffering a significant detriment. I consider that the Minister is obliged to give reasons. Following the approach adopted by Blayney J. in the International Fishing case I propose giving declaratory relief rather than quashing the Minister's decision on making an order of mandamus and in doing so and I adopt the reasoning of Blayney J. at page 157. I must, however, have regard to the provisions of Section 21 of the Act of 1990 and I will deal with the form of the order later. THE DEMAND: EXCESSIVE/UNREASONABLE 58. Mr. Fitzsimons submitted that, in determining whether the demand for documents issued by Mr. Maloney was excessive or unreasonable, three questions fall to be considered. The first is whether the demand was within Section 19 . Mr. Fitzsimons submitted that no case had been made that the documents sought fell outside the section. Mr. Hardiman's response was that to make this case one needs to know to what purpose the demand was made, and, as no reasons have been given, it is not possible to ascertain the purpose. The second question is whether the demand was reasonable in content. In relation to this question, Mr. Fitzsimons submitted that, while the case had been made that the demand was excessive in content in that too many documents had been sought, particularly, in the context of the amount of information which had already been furnished, only a broad case has been made and no effort had been made to analyse the content to show that it goes beyond what is normal and reasonable. Mr. Hardiman's response was that the demand for documents was near total; in totality it could probably never have been complied with. The third question is whether it was reasonable in terms of the time allowed for compliance. Mr. Fitzsimons submitted that it was, that no assertions had been made by the Applicants as to what would have been a reasonable time and that, in absence of such evidence, the claim must fail. 59. In my view, the Applicants' criticisms of the demand are well founded. Without knowing the reasons why the Minister thought it appropriate to appoint an authorised officer, it is impossible to form any view as to whether even the categories of documents sought which are specific fall within the ambit of the entitlement to seek documents under Section 19 . The inclusion of the categories which are of a general nature gives the demand as a whole the hallmark of a trawl. That being the case, the only reasonable inference is that the demand was excessive in content. I have the evidence of Patrick O'Donoghue, the Group Financial Controller of the Dunnes Stores Group, who has averred as follows:- "The width of the demand can only be appreciated by a close reading of its terms. It would be necessary for me to divert a significant number of my staff members from their normal important work for a considerable period of time. This would cause severe disruption to the business of Dunnes Stores. It is very hard to quantify the number of documents that the notice would require to be produced, but my best estimate is that many thousands of documents would have to be retrieved and examined for relevancy." 60. Even without that evidence, common sense indicates that the demand could not be complied with between Friday and Monday afternoon. 61. Although the point is academic in the light of the Respondents' stance that Mr. Maloney's demand is no longer extant, in my view, the Applicants have established that it was both excessive and unreasonable. BIAS/CONFLICT OF INTEREST 62. Although Mr. Maloney tendered his resignation when the allegation of conflict of interest was made and it was accepted by the Minister, the Applicants were not prepared to concede that the issue as to whether his appointment was tainted by bias or conflict of interest is moot. The stance adopted by the Respondents at the hearing was to deny that Mr. Maloney's appointment was invalid on the ground of conflict of interest or on any ground, while asserting that the evidence adduced by the Applicants did not bear out the Applicants' allegation. In my view, the Respondents' assertion is correct and the allegation has not been established. LOCUS STANDI 63. There remains the issue as to the locus standi of Mrs. Heffernan to maintain this application. This issue, which was raised by the Respondents, is very much a subsidiary issue. Nonetheless, I consider that, for completeness, I should indicate my view on it. 64. Mrs. Heffernan is a director of Dunnes and of Ilac. As a current officer of both companies she is liable to be required by the authorised officer to provide an explanation of any of the books or documents which the authorised officer requires to be produced by virtue of subsection (4) of Section 19 . Failure by her to provide the explanation sought would expose her to criminal sanction. Even though Mrs. Heffernan's exposure to criminal sanction is, as it were, doubly hypothetical in that it is dependent on the authorised officer requiring her to give an explanation and her refusal to do so, nonetheless, in my view, on the authority of the decision of the Supreme Court in Desmond -v- Glackin (No. 2) [1993], 3 I. R. 67, she has locus standi to challenge the validity of the appointment of the authorised officer and any action on foot thereof. THE ORDER 65. The only order I propose making is a declaration that the Applicants are entitled to be furnished by the Minister with a statement in writing setting out her reasons for the appointment of an authorised officer in relation to Dunnes and Ilac pursuant to Section 19 . In so far as the reasons would otherwise involve disclosure of information which was obtained under Section 19 or Section 20 in breach of Section 21 , I propose adopting Mr. Fitzsimon's suggested possible way out of the dilemma created by Section 21 . The order will direct that the Minister swear an affidavit setting out in full the reasons for her decision. The affidavit should be lodged with the Chief Registrar of the High Court not later than 4 p.m. on Friday, 27th November, 1998. The Chief Registrar will be at liberty to furnish a certified copy of the affidavit to Mr. Shubotham on production of:- (a) An affidavit sworn by Mr. Shubotham identifying the directors of Dunnes and Ilac and the chief executive officer and the chief financial officer of each company and undertaking not to furnish the affidavit or any copy thereof or disclose its contents to any person other than the foregoing officers of the companies except by leave of the court; and (b) Affidavits from each of the said officers containing undertakings in similar terms. 66. The parties will have liberty to apply. © 1998 Irish High Court BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII