MR DERMOT O'Leary is challenging the decision of the Minister for Transport, Mr Lowry, to dismiss him as chairman of CIE last April, the High Court was told yesterday.

Mr O'Leary was given leave by Mr Justice McCracken to seek an order quashing the Minister's decision and reinstating him as chairman of the company. He is also seeking damages for wrongful dismissal.

Mr O'Leary, whose proceedings are against the Minister, Ireland and the Attorney General, was given leave to seek the orders by way of judicial review on the application of Mr Michael Conlon, counsel for Mr O'Leary, instructed by Dublin solicitors Smithwick & Co.

He is seeking the orders on grounds that the respondents failed to comply with the principles of constitutional or natural justice and basic fairness of procedures. It is also claimed they acted ultra vires (outside the powers) of the Transport Act.

Mr O'Leary, in an affidavit read by his counsel, said his business was in crane hire, He was a former chairman of CIE and currently a director of Aer Rianta and Aer Rianta International. He was appointed to the CIE board in June 1994. He was entitled to an annual stipend of £7,500 during the term of his chairmanship.

Mr O'Leary said the Minister made the Government's views known to him for the first time on April 25th. He gave no other reason apart from what was told to him at the meeting in the Minister's office (see story below) for the fact that his appointment was to be terminated forthwith.

Nor did he give him a chance to put his own views forward on the question of the most effective way of running the CIE board or the question of whether his appointment should be terminated.

He was not allowed time which to consider resigning.

Mr O'Leary referred to the Dail Debates for October 10th, 1995, which reported the Minister as saying "The Government's decision to remove, Mr O'Leary as chairman of CIE was based on a report I had received on the future requirements of the company..."

At no time, said Mr O'Leary, was he aware of such a report and at no time was he afforded an opportunity to comment on such a report or respond. He believed that since November last the Government reverted to the practice of appointing a part time chair man. Mr Brian Joyce was appointed non executive chairman.

Mr O'Leary's affidavit said that when his appointment was terminated he was under severe pressure personally as a result of allegations of various wrongdoing during the period of his chairmanship, allegations which he believed to be unjustified and untrue. These unfounded allegations imposed an intolerable pressure on his wife, children and entire family.

As a result of that pressure his initial concern was to vindicate his character and good name through the institution of a number of defamation writs against various national newspapers.