The High Court has reserved judgment on an application by property developer brothers Michael and Thomas Bailey to have certain documents excluded from a forthcoming action by the Director of Corporate Enforcement aimed at restraining them from involvement in the management of any company.
The four-day hearing of the application concluded yesterday. Ms Justice Mary Irvine said she hoped to be in a position to deliver judgment before the end of this legal term on July 31st.
The preliminary application relates to forthcoming proceedings under section 160 of the Companies Act against Thomas Bailey, Coolcommon, Batterstown, Co Meath, and Michael Bailey, Killamonan House, The Ward, Co Meath.
The director, Paul Appleby, wants the brothers disqualified from involvement in the management of any company on grounds of alleged serious misconduct and fraud in the conduct of the affairs of their company, Bovale Developments Ltd.
He is also seeking that the brothers pay the costs of the four-year investigation by his office into the Bovale company's affairs.
Mr Appleby claims both brothers are directly responsible for breaches of law and duty in the conduct of the affairs of Bovale.
Reports from PricewaterhouseCoopers (PwC) and the planning tribunal, in addition to a €22 million settlement by the company with the Revenue Commissioners, made clear the misconduct was of a very serious character and extended over a prolonged period, Mr Appleby claims.
The alleged misconduct includes failure to keep proper books and records of the company.
The director claims the company's books of accounts failed to give a true and fair view of the state of affairs of the company and failed to explain its transactions.
In their preliminary application, the brothers say the director cannot introduce the reports of the planning tribunal relating to the affairs of Bovale because such material is legally inadmissible.
They also want the court to order the exclusion of documents of the auditors of Bovale, the Revenue report, material in the report of PwC and material in certain affidavits submitted on behalf of the director for the section 160 hearing.
They have contended that some of the documents they want excluded are based on information in documents unlawfully seized by gardaí from various financial institutions under section 63 of the Criminal Justice Act.
During exchanges with Ms Justice Irvine yesterday, Denis McDonald SC, for the director, agreed that if the judge was required to decide the section 63 issue at this stage, then, based on a High Court judgment by Mr Justice Frank Clarke in another case, the warrants issued under section 63 were invalid.
However, Mr McDonald said he disagreed with the argument by Donal O'Donnell SC, for the brothers, that the section 63 issue should be decided at this stage.
He said the issue should be addressed at the trial, when there could be cross-examination relating to the extent to which returned cheques and other material obtained under the section 63 warrants were relied upon.
The director has contended that the cheques and other materials were properly obtained at a later stage under provisions of the Companies Law Enforcement Act and that such evidence is admissible in the section 160 proceedings.
Earlier, Mr O'Donnell said that if the judge upheld his side's claim that the director was not entitled to delegate his "extraordinary and extensive" powers to an unidentified group of persons in PricewaterhouseCoopers for the purposes of investigating the affairs of Bovale, then the effect of that would be that the PwC report was inadmissible and the report would have to be compiled by "properly appointed" officers of the director.
