Two developers must pay own costs of €2.6m

Mahon Tribunal: The chairman of the planning tribunal, Judge Alan Mahon, has ruled that the State should not have to pay over €2.6 million in legal costs sought by two developers who were found by the tribunal to have made corrupt payments to former cabinet minister Mr Ray Burke.

In a ruling delivered yesterday, Judge Mahon rejected the application for costs made by Mr Tom Brennan and Mr Joseph McGowan.

The tribunal chairman found that Mr Brennan and Mr McGowan had shown a lack of co-operation which was "extensive, effectively unrelenting and affected all the tribunal's inquiries relating to the applicants and Mr Burke".

He found that the tribunal "was being knowingly misdirected and misled as to the fundamental thrust of its inquiries - namely the source and purpose of payments made to Mr Burke".

The judge said the extent of Mr Brennan's and Mr McGowan's lack of co-operation challenged the purpose of the creation of the inquiry. This non-co-operation had affected all the tribunal's inquiries relating to the applicants and Mr Burke.

He said the collusion found by the tribunal against both developers had been "widespread and clearly designed to conceal the true nature of their relationship with Mr Burke and misdirect the tribunal in its inquiries".

Two years ago in its second interim report the tribunal found that Mr Burke did not purchase his former home, Briargate, in Swords in north Co Dublin in a normal commercial transaction from one of companies owned by Mr Brennan and Mr McGowan.

The report also detailed payments of about £125,000 made to the former minister by the two developers.

The report found that accounts opened for Mr Burke in the Isle of Man and in Jersey in the early 1980s were to receive payments from Mr Brennan and his associates.

The tribunal found that this money was not the proceeds of political fundraising or donations. It constituted payments to ensure that the politician continued to act in the best interests of those who paid him when performing his duties as a member of Dublin County Council or as a member of the Dáil.

In his ruling on costs yesterday Judge Mahon said: "The applicants' non-co-operation directly and significantly touched upon the substantive issues relating to the investigation into payments made or favours granted to Mr Burke and the reasons for same. Furthermore, this fact was at all times known to the applicants.

"In the course of both the private and public inquiries there certainly were occasions when the applicants co-operated with the tribunal and provided the tribunal with truthful information.

"But such co-operation and such truthful information was provided in circumstances in which the tribunal was being knowingly misdirected and misled as to the fundamental thrust of its inquiries, namely the source and purpose of payments made to Mr Burke."

He said that, given the underlying and collusive attempts by the two developers to mislead the tribunal, any contention that such episodes of co-operation and truthfulness justified the award of costs was unsustainable.

Judge Mahon said that Mr Brennan and Mr McGowan had provided false and misleading information and evidence on crucial issues to the tribunal in circumstances where they knew this to be false and misleading.

The judge said yesterday that, as in the case of Mr Burke, the effect of Mr Brennan's and Mr McGowan's non-co-operation on the work of the tribunal was damaging.

"I repeat a sentiment expressed in the ruling on Mr Burke's costs as it applies equally to Mr Brennan and Mr McGowan.

"The effect of the non-co-operation of Mr Brennan and Mr McGowan on the work of the tribunal relevant to the module in question, while impossible to measure in absolute terms, is nevertheless clearly of such a magnitude that it fundamentally challenged the very purpose of the creation of the tribunal and for this reason must be viewed with the utmost seriousness."

As in his ruling on the application for costs by Mr Burke, the tribunal chairman indicated that he accepted that the rejection of evidence by the inquiry should not in itself disqualify a party from securing their costs.

"I do not have any particular difficulty with the contention that this should be a matter for consideration, to be taken into account when determining an entitlement of that party to costs," Judge Mahon said.

"But I do want to emphasise that, in the case of the applicants, the tribunal did not merely reject the important parts of their evidence, it went much further. It found that the applicants had knowingly given false evidence and had colluded with others to mislead the tribunal.

"These are significantly more serious matters than a mere rejection of their evidence," the judge said.

The tribunal chairman said that in determining the application for costs he had not taken into account the substantive findings against one or both of the developers relating to the transfer of Briargate to Mr Burke in 1973 and the payment of money to the former minister.

"I regarded it as unnecessary to do so given the fact that the tribunal's other findings to which I have extensively referred, and the background to such findings as evidenced in the documentation, correspondence and transcripts, demonstrate by themselves a clear disentitlement to costs by either applicant."

Mr Brennan and Mr McGowan have already initiated legal proceedings against the findings of the tribunal in its second interim report.

At an application hearing for costs before Judge Mahon early in the summer, counsel for the two developers, Mr Martin Hayden SC, argued that the tribunal had provided inadequate detail about the extent of his clients' claimed failure to co-operate with the inquiry.

He said that "substantial expenditure" had been incurred by Mr Brennan and Mr McGowan because of the complex nature of the financial inquiries undertaken by the tribunal.

He said that many of these inquiries were highly time-consuming but had nothing to do with the terms of reference of the tribunal.

However, Mr Des O'Neill, for the tribunal, had argued that Mr Brennan and Mr McGowan had concealed the existence of their offshore accounts from their legal team for up to two years.

In his ruling yesterday Judge Mahon said he was making no criticism of the developers' lawyers.

There was no reason to doubt that information given by them to the inquiry had been done so in the belief that their clients were providing them with truthful information.

"However, the application for costs is the applicants' application and not the application of their legal representatives.

"It is the behaviour of the applicants in their dealings with the tribunal and the tribunal's findings relating to them that ultimately must determine the outcome of the costs application," Judge Mahon said. ...