Directors win right to tribunal legal fees

A UNANIMOUS Supreme Court decision overturning a refusal of multimillion euro costs to two directors of Joseph Murphy Structural Engineers for their dealings with the planning tribunal over 163 days has set out important parameters for assessing entitlement to costs of dealing with tribunals.

The court yesterday ruled that findings by former tribunal chairman Mr Justice Feargus Flood, that two JMSE directors – Joseph Murphy jnr and Frank Reynolds – had “obstructed and hindered” its inquiries, were outside the tribunal’s terms of reference, unlawful and invalid and could not form a basis for refusing them costs of participating in the tribunal.

The court said the tribunal had been dealing only with an application by JMSE for its costs and had not addressed any applications for costs against JMSE. It also stressed a tribunal was entitled to take into account lack of co-operation by a party when addressing costs.

The court ruled that because the findings of obstruction and hindrance were inextricably linked with the tribunal’s substantial finding of corruption against the JMSE directors (which they had not appealed) and was therefore linked with a criminal offence, that those findings were unlawful as the tribunal does not constitute the administration of justice.

While a tribunal can investigate if a criminal offence has been committed, the planning tribunal’s terms of reference did not refer to hindering and obstructing. A finding of such behaviour, which this tribunal had described as a criminal offence, was not within its scope.

The tribunal appeared to have equated obstructing and hindering with the giving of evidence by the JMSE side which it disbelieved, Mr Justice Nial Fennelly said. The findings of obstruction and hindering were not validly reached.

The court also ruled that the tribunal’s decision breached fair procedures because it gave no notice to JMSE of its intention to address the issues of obstruction and hindrance and they had no opportunity to make submissions on that.

In a judgment with which the five judges agreed, Mr Justice Fennelly said that costs might be disallowed because of the conduct of a party before the tribunal but not by reference to substantive findings on the subject matter of its inquiry.

A tribunal of inquiry is established to service the public interest, he said, and it was in the public interest that all with relevant information should co-operate with it, which could expose them to substantial legal expenses. The ordinary presumption should be in favour of reimbursement of those costs.

Mrs Justice Susan Denham said the issue was whether a party who had co-operated with a tribunal was entitled to costs. A person found to be corrupt and who fully co-operated with a tribunal would be entitled to assume, unless there were other relevant factors, they would get their costs.

The tribunal, in reports by Mr Justice Flood of 2002 and 2004, had found Mr Murphy jnr and Mr Reynolds, respectively chairman and managing director of JMSE, were involved in making corrupt payments to former minister Ray Burke and former Dublin assistant city and county manager George Redmond. Mr Justice Flood found they obstructed and hindered the tribunal by giving false accounts and constructing an untrue alibi.

Dealing with costs in 2004, new tribunal chairman Mr Justice Alan Mahon said he had to have regard to the reports’ findings and was firmly of the view that meant the findings of corruption. The findings of obstructing and hindering were so serious any reasonable person was entitled to conclude they were intent the tribunal would not discover the truth, he also said. Their conduct in dealing with the tribunal was unlawful and disreputable and he would refuse them costs.

Mrs Justice Denham said the costs ruling arose from the finding of obstruction and hindrance which in turn was inextricably linked with the substantive finding of corruption against the appellants. That corrupting finding had not been appealed.

She said the tribunal did not have jurisdiction to make findings of obstruction and hindrance in the context of a reference to a criminal offence and was not entitled to determine that, in fact, criminal offences occurred.