The Tanaiste at all times acted correctly and in accordance with her statutory duties in appointing an authorised officer to two Dunnes Stores companies, the High Court was told yesterday.

Ms Harney's authorised officer, Mr Gerard Ryan, said he concluded from the behaviour of Dunnes Stores Ireland Company and Mrs Margaret Heffernan, a director, that they did not intend to co-operate with him.

In an affidavit, Mr Paul Appleby, principal officer in Ms Harney's Department, said there were ample reasons for Mr Ryan's appointment and these had been disclosed in a letter to Mrs Heffernan in July 1998. They were then set out following a court order last December.

Ms Harney's concerns regarding Dunnes Stores Ireland Company and Dunnes Stores Ilac Centre Ltd arose from the findings of the McCracken Tribunal, the authorised officers appointed to investigate the affairs of other companies and from the Institute of Chartered Accountants inquiry chaired by Mr Justice Blayney.

These findings were strengthened by evidence to the Moriarty Tribunal from Mr Matt Price, former manager of Dunnes Stores (Bangor) who said Mr Ben Dunne and Mr Frank Dunne requested payments of the store account. He had accepted these were "not normal".

Mr Appleby believed the Minister and her officials had observed the provisions of Section 21 of the Companies Act, which prohibits disclosure of information obtained by an authorised officer other than to certain authorities.

He said extracts from other company reports had been sent to the directors of those companies. Where information from an authorised officer was given to parties, the possibility of leaking did arise but every effort was made to observe Section 21.

He said Mrs Heffernan's complaints about Ms Harney's failure to meet her to discuss the appointment rang "somewhat hollow" since Mrs Heffernan had not responded to Mr Ryan's requests for meetings. Ms Harney believed a meeting between her and Mrs Heffernan would not be appropriate.

Mr Appleby's affidavit was read out on the fifth day of Dunnes' challenge to Ms Harney's appointment of an authorised officer to examine the books and records of two Dunnes firms.

Last November, Ms Justice Laffoy said Dunnes should be given reasons for the appointment and these were furnished. A request for clarification was then refused and in the present action Dunnes claims the reasons are inadequate to support the appointment.

Yesterday, Mr Adrian Hardiman SC, for Dunnes, said Mrs Heffernan and her brother Frank had returned Dunnes Stores to order after problems arising from its stewardship by their brother Ben Dunne. In such circumstances, to complain about delays in producing auditors certificates was disingenuous, he said.

He said Ms Harney's inquiry was not because of a breach of a section of company law but rather an attempt to get at facts which might then be leaked to the detriment of Dunnes. In an affidavit, Mr Ryan, the authorised officer, said he had received no substantive response to a request in January to meet Mrs Heffernan and other members of Dunnes and had formally requested books and documents on January 18th. He denied that request was excessive or akin to that by an inspector appointed under the Companies Act.

Included among the documents he sought were cheques similar to six cheques totalling £32,000 drawn on several Dunnes Stores bank accounts in January 1987 which were lodged to the bank accounts of Amiens Securities in Guinness & Mahon Bank in Dublin, which account was controlled by Mr Des Traynor, financial adviser to Mr Charles Haughey.

Earlier, Mr Hardiman concluded reading an affidavit from Mrs Heffernan who said Mr Ryan, had sought meetings with members of Dunnes but had refused to meet the solicitor acting for the members. She said this was not a simple appointment to investigate documents but was an investigation in which the authorised officer anticipated playing a role similar to that of a court-appointed inspector. Referring to a memorandum from the Minister's department, Mrs Heffernan said it was clear Ms Harney believed erroneously that an inspector's appointment would ultimately be necessary.

While such a move would be traumatic and costly, and Dunnes would strenuously resist it, Mrs Heffernan said it was an opportunity to have the matter determined by a court rather than in the "arbitrary and ill-motivated manner which has been operated by the Minister to date".

The hearing resumes next week before Mr Justice Kinlen.