A District  Court judge was wrong to dismiss prosecutions against seven partners of a Sligo accountancy firm that had audited the books of two companies at a time when one of the partners was a director of the same two companies, the High Court decided yesterday.

The Director of Corporate Enforcement brought prosecutions against Mr Joseph Timothy Gannon, Mr Declan Gilroy, Mr Bryan Kilfeather, Mr Alan J Palmer, Mr Cathal Antoine O'Donnell, Mr Paul G Horan and Mr Kenneth McMoreland, practising as Gilroy Gannon, chartered accountants. The proceedings arose out of directorships held by Mr Gannon in Sligo County Enterprise Fund and Brodericks Ltd.

The matter came before the High Court via a case stated from District Judge Oliver McGuinness seeking the High Court's opinion of his findings that the seven accountants had no case to answer. Judge McGuinness found that no evidence was furnished as to which of the seven accountants had acted while disqualified.

He also found there was no suggestion of financial or other impropriety and that, at best, the prosecution of the seven was highly and solely technical.

Yesterday, Mr Justice Ó Caoimh, in a reserved judgment, held that Judge McGuinness erred in law when he dismissed the prosecutions. The district judge had also erred in concluding that it was necessary to establish the state of mind in the context of the charges against the seven.

Two summonses were issued against Mr Gannon alleging that, on December 3rd, 1997, he had acted as auditor of Sligo County Enterprise Fund and Brodericks Ltd at a time when he was disqualified by Section 187 of the 1990 Companies Act in that he was a director of the same companies.

The other accountancy partners were accused of acting as auditors to Sligo County Enterprise Fund when not qualified for appointment because Mr Gannon was a director.

Mr Justice Ó Caoimh said that while the district judge was correct in stating there was no evidence as to which of the partners of Gilroy Gannon had acted as auditor, it was also clear that at the relevant dates the firm had acted as auditors to both Brodericks Ltd and Sligo County Enterprise Fund. It also showed that Mr Gannon was a director of both companies.

Given the relatively limited penalties that could be imposed in this case, the judge said he was satisfied that the statutory offences at issue could not be classified as being "truly criminal" in character. The issue was not who was appointed as auditor of the companies in question but rather whether any person had acted as auditor when they were disqualified from acting as such, he said.