Vol. 524 No. 1
9 Mr. McDowell asked the Tánaiste and Minister for Enterprise, Trade and Employment if she will make a statement on the implications of the High Court judgment of 28 July 2000 overturning her appointment of an authorised officer to two companies (details supplied); if she will appeal the judgment; and, if so, if an appeal has yet been lodged. [21566/00]
I was disappointed with the decision of the High Court on 28 July last in this case. The immediate implications of the decision are that the examination of the books and documents of the two companies will be delayed further. At the same time, however, I had always expected that the High Court decision would be appealed to the Supreme Court, whichever side it favoured.
My legal advisers have strongly advised me to appeal and I will do so. We are currently awaiting finalisation of the High Court order in the case and when this is completed my appeal will be immediately lodged with the Supreme Court.
Has the gravamen of the rejection by the High Court to do with the fact that the inquiry overlaps existing inquiries? I ask that because I would like the Minister to comment on the very trenchant remarks of Mr. Justice Butler who said he found the Minister's appointment of authorised officers unreasonable and irrational and that it unambiguously flew in the face of fundamental reason and common sense. Mr. Justice Butler was in fighting form that morning and I would like to know the Minister's assessment of that without going into the detail of her legal advice on the matter.
As I have said, I was extremely disappointed and have been strongly advised to appeal the matter. This has been before the court on a number of occasions. In November 1998 Ms Justice Lafoy refused to quash the appointment of the officer. That decision was subsequently appealed. The High Court judgment in July 1999 of Mr. Justice Kinlan was referred to the Supreme Court. It ordered a rehearing, and that was the rehearing. Mr. Justice Butler was very strong in what he had to say. He said it was ultra vires, that I did not justify the appointment on the grounds of corporate governance, taxation, the interests of members of the public and possible illegality. It was a very strong judgment and my legal advice is equally very strong that it should be appealed. We are awaiting the High Court order. Apparently there is a dispute between the State and Dunnes Stores as to its contents. I hope that will be resolved shortly so that we can have the appeal.
A section 19 inquiry, which is what it was, is a preliminary inquiry. The Act states that if the Minister has grounds to suggest that the affairs of the company are being conducted in such a manner as to cause creditors to be ignored or not treated appropriately, the Minister has grounds to seek a section 19 inquiry. It is a very basic provision. I was surprised at the judgment but we await the finalisation of the order and, I hope, an appeal to the Supreme Court. I hope that will be the end of the matter because, as Deputies know, it has gone on for a considerable time.
Is it the case that should the decision of the High Court be upheld by the Supreme Court it would have major ramifications for the Companies Act, 1990, and the appointment of an authorised officer by the Minister or, in the future, the Director of Corporate Enforcement? What is the reason for the delay in receiving the judgment?
I do not know. I am told there is a difference of view between counsel for the State and Dunnes Stores as to its content and that is why it has not been finalised. The Deputy is correct, if this judgment stood in the Supreme Court it would have serious ramifications for all the inquiries under the Companies Act, but particularly section 19 inquiries, if it were the case that you were not entitled to take into account corporate governance, taxation and creditors being defrauded. The Act provides that if there are grounds to suggest that – it does not state it must be happening – a section 19 inquiry may be granted.
This matter was before the High Court on two occasions and it did not quash the appointment. It was before the Supreme Court in relation to particular matters, which is why that court recommended a new High Court hearing after Judge Kinlan's judgment in July last year. I hope we will have the order soon and a Supreme Court determination in this matter as quickly as possible. There are time constraints under the Companies Act that prohibit certain things happening if a particular time has passed. It is important that the inquiry is carried out as quickly as possible.
On the question of time constraints, time will soon run out. I understand from what the Minister said she is not in a position to tell the House when the Supreme Court might be seized of the matter. Without wishing to invite her to make remarks in public that might be prejudicial later, in setting out the case for the authorised officer did she allege breaches of, or non-compliance with, company law?
Deputy Rabbitte may have a copy of my affidavit which is a long one. We vigorously defended the decision to appoint a section 19 officer. Clearly it was not because of what was arising in a different forum. That would have been a waste of money. My powers are under the Companies Acts. The tribunal of inquiry is not examining any matter under the Companies Acts and there seems to have been confusion on that matter. As the Deputy knows, we changed the time constraint recently and the issue is whether it can be applied retrospectively. We have changed to "from the time the Minister becomes aware" of certain matters rather than when they occurred. Under the previous law it was when they occurred, not when the Minister or the authorities became aware of certain breaches and, therefore, you were prevented from taking action. I do not know whether it applies in this case because the appointment had been authorised in advance. Time is of the essence in regard to these matters and it is right that we would have a speedy conclusion to the legal issues involved. That is why I hope we will have an early Supreme Court hearing and that is what we will apply for.
