Dunnes records challenge dismissed by court

The High Court has dismissed another challenge by Dunnes Stores to efforts to have certain books and records of two of its companies inspected by an authorised officer.

The decision marks the latest stage of a five-year legal battle by Dunnes following the appointment in 1998 by the Minister for Enterprise and Employment, Ms Harney, of an authorised officer to Dunnes Stores Ireland and Dunnes Stores (Ilac Centre) Limited.

The appointment was made after the McCracken Tribunal report concluded that 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.

Yesterday's judgment by Mr Justice O'Neill means Dunnes, unless it successfully appeals to the Supreme Court, has to comply with a demand to produce some books and records of the two companies. On the undertaking of Mr John McBratney SC, for the Director of Corporate Enforcement, Mr Paul Appleby, that demand will not be implemented for 28 days to allow Dunnes time to lodge an appeal.

In his reserved judgment, Mr Justice O'Neill rejected arguments by Dunnes that Mr Appleby had no power to delegate to Mr Cyril Houlihan powers to inspect the books and records of the companies.

The judge held that the regulator had the legal power to continue the process begun by Ms Harney in 1998 via the delegation to Mr Houlihan of the regulator's functions and powers.

The case had centred on construction of sections of the Company Law Enforcement Act 2001 and of the Companies Act 1990. Dunnes had claimed that, in the absence of regulations prescribing the continuation of the appointment of the authorised officer, the latter's appointment was terminated by the Corporate Law Enforcement Act.

Mr Justice O'Neill held that the functions of the Minister under the old Section 19 of the Companies Act 1990 had been transferred to the regulator. He also held that the regulator had capacity to delegate his powers to Mr Houlihan so the latter could make the demand of the two companies that Dunnes sought to impugn.

The judge said it was his view, from the coming into force of the Corporate Law Enforcement Act of 2001, that the status of the authorised officer altered to the extent that, whereas before he was authorised by the Minister, he came to be regarded as, or indeed to be, authorised by the Director of Corporate Enforcement. He held the latter had a discretion to carry on or complete the direction given by the Minister, initially under Section 19 of the 1990 Act, to examine certain books and records of the two firms.

After the resignation of Mr Gerard Ryan as authorised officer in June 2002, the director was entitled to make a positive exercise of his discretion under Section 14.2 of the Corporate Law Enforcement Act to carry on and complete the process, the judge found.

Mr Houlihan had asked the firms to produce the records by the evening of September 27th last year, but a stay on implementation of that demand was granted by the High Court to the firms just hours before that deadline. The court also granted leave to Dunnes to take the judicial review proceedings, which culminated in yesterday's judgment.