A High Court judge yesterday declared that the Tanaiste and Minister for Enterprise, Trade and Employment, Ms Harney, is obliged to give reasons to Dunnes Stores for the appointment of an authorised officer to investigate two of its companies.
In a reserved judgment, Miss Justice Laffoy rejected an application by Dunnes for an order quashing the decision of the Minister purporting to appoint an authorised officer to examine the books and records of Dunnes Stores (Ireland) and Dunnes Stores (ILAC Centre) Ltd.
But she ruled that this was a case in which procedural fairness required that the Minister give reasons for her decision. Dunnes had demonstrated that it bona fide believed that the Minister had misused her power in appointing an authorised officer.
"Whether that belief is well founded or not, they are entitled to explore the possibility of obtaining redress by way of judicial review. They have made a bona fide request for reasons", the judge said. "In the absence of reasons, they cannot explore the possibility of, or pursue, redress by way of judicial review. Consequently, they are suffering significant detriment. I consider that the Minister is obliged to give reasons."
Miss Justice Laffoy said she proposed giving declaratory relief rather than quashing the Minister's decision.
She directed that the Minister swear an affidavit setting out in full the reasons for her decision and directed that the affidavit should be lodged with the High Court Chief Registrar by 4 p.m. on November 27th.
The Chief Registrar would furnish a certified copy of the affidavit to Dunnes' solicitor on production of an affidavit by that solicitor identifying the directors, chief executive and chief financial officer of the two companies, and of an undertaking not to furnish the affidavit or any copy to anyone other than those officers, except by court leave.
Miss Justice Laffoy recalled that the managing director of Dunnes Stores, Mrs Margaret Heffernan, had written to the Minister last July seeking an explanation of the basis of the Minister's decision, motivation and objectives in appointing the authorised officer.
The Minister had responded that the appointment had been made after detailed consideration and that she had before her the McCracken Tribunal reports and reports of authorised officers investigating other companies.
There was correspondence between the Minister and Mrs Heffernan following the McCrack en report, the judge said. On September 11th last, in a letter to Mrs Heffernan, the Minister sought co-operation in connection with inquiries being made by her Department in relation to certain companies, which co-operation would involve examining books and documents within the Dunnes Stores Group.
That co-operation was forthcoming and there followed considerable communication and passing of information and documentation from the group to the Department and to Mr Peter Fisher, authorised officer, in relation to Garuda Ltd, trading as Streamline Enterprises; and to Mr Gerard Ryan, authorised officer, in relation to Celtic Helicopters Ltd.
In early 1998, Mr Fisher sought a copy of a report prepared by Price Waterhouse for the Dunnes Group in connection with legal proceedings initiated by Mr Bernard Dunne concerning companies in the group. The request was not acceded to on the basis that the report was a private one prepared for the purposes of litigation then in being, the vast bulk of which dealt with matters of no concern to the two companies being investigated. This position, adopted in a letter last March to Mr Fisher, was not challenged.
Following his appointment as authorised officer to the two Dunnes companies last July, Mr George Moloney had written seeking a meeting with Mrs Heffernan and her fellow officers. On July 24th - a Friday - Mr Moloney sent Dunnes and ILAC two schedules of "initial documentation required" and requested that it be available for inspection and removal on the following Monday.
Miss Justice Laffoy said 11 categories of documents were itemised. Some were of a general nature. For instance, one category related to all financial statements of the relevant company, including draft financial statements and correspondence with the auditors.
Another category related to all documentation recording the relationship between Dunnes and two named companies. A copy of the Price Waterhouse report was demanded. Documentation was sought for the 10 years to December 31st, 1997.
Miss Justice Laffoy said that, following the appointment of Mr Moloney, he had been informed on behalf of Dunnes and ILAC that he might have, or might be believed to have, a conflict of interest stemming from the fact that the accountancy firm of which he was a partner, O'Hare and Associates, had acted in a private capacity for Mrs Heffernan's daughter, a beneficial shareholder and potential beneficial shareholder, as the object of a discretionary trust, in certain Dunnes Group companies.
Mr Moloney had tendered his resignation as authorised officer and had been succeeded by Mr Gerard Ryan.
Miss Justice Laffoy said Dunnes' entitlement to information under the Freedom of Information Act had been raised. The Minister's side had stated that the Act applied to individuals and not bodies corporate. This issue did not need to be decided now.
Costs of the three-day hearing were awarded to Dunnes, with a stay in the event of an appeal.