Dunnes Stores claims appointment of officer is unconstitutional

In a final legal bid to prevent the appointment of an authorised officer to two of its companies, Dunnes Stores has argued that provisions of the Companies Act 1990 relating to the powers of such officers are unconstitutional.

Mr Justice Kearns yesterday became the fourth High Court judge to deal with legal proceedings taken by Dunnes following the appointment of the authorised officer in 1998 by the Minister for Enterprise, Trade and Employment, Ms Harney.

After publication of the McCracken report on payments to politicians, the Minister appointed the officer to examine the books and records of Dunnes Stores Ireland Company and Dunnes Stores (Ilac Centre) Limited.

The McCracken report concluded payments had been made by Mr Ben Dunne to former Taoiseach Mr Charles Haughey, former Fine Gael minister Mr Michael Lowry and two companies with which Mr Lowry was associated.

The companies and Ms Margaret Heffernan, chief executive of the Dunnes group, initiated legal proceedings in summer 1998 challenging the appointment. The matter has, to date, involved four High Court hearings and two Supreme Court appeals.

Last February, the Supreme Court allowed Ms Harney's appeal against a High Court decision upholding Dunnes' challenge to the officer's appointment. However, the Supreme Court also returned a constitutional issue in the case to the High Court for determination.

In his Supreme Court judgment, the Chief Justice, Mr Justice Keane, said the Minister was entitled to appoint the officer on the grounds there were circumstances suggesting the affairs of the companies had been conducted in a manner unfairly prejudicial to some of the members.

In light of the findings of the inquiries by Mr Justice McCracken and Judge Buchanan, the payments made by the Dunnes companies referred to in the reports of both judges could not be regarded as having any possible legal justification, he said.

The court also concluded the Minister was entitled to have an authorised officer examine the books and records of the companies with a view to seeing how it was possible for the payments to be made without the knowledge or approval of the other directors and the companies' auditors.

In the proceedings, Dunnes raised the constitutionality of those parts of Section 19 of the Companies Act 1990 related to the powers of an authorised officer but the issue was not determined in light of other findings made by the High Court. The hearing before Mr Justice Kearns is to determine the constitutional issue.

Yesterday, Mr Dermot Gleeson SC, for Dunnes, said he was challenging the constitutionality of Section 19.5 and 19.6 of the Companies Act. These empower the authorised officer to ask questions of company officers and employees, to require the production of documents, and provide for a maximum £1,000 (€1,270) fine or 12-month term of imprisonment in the event of a refusal to answer or to produce documents.

Mr Gleeson argued these provisions were inconsistent with the constitutional right to freedom of expression and its corollary, the privilege against self-incrimination. They were also in breach of the right to privacy and to protection of private property. The hearing continues today.