The Flood tribunal had no adequate explanation for the role played by Mr John Finnegan, a Dublin estate agent and auctioneer, in the sale of land at Monkstown, Co Dublin, in 1976 to a company controlled by developers Brennan and McGowan, the High Court was told yesterday.
Mr Michael Collins SC, for the tribunal, was reviewing evidence given to the tribunal to show why a tribunal lawyer had asked a question of Mr Tom Brennan relating to Mr Finnegan's part in that transaction.
Mr Finnegan, of Seapoint House, Monkstown, is asking the court to rule that the tribunal is exceeding its powers if it inquires into matters other than the "authorisation of the payment to Mr Raphael Burke and Canio Ltd".
He is asking the court to prohibit any examination of his business affairs "not the subject of payments to Mr Raphael Burke" or his companies except for the purpose of segregating such payments as outside the scope of the tribunal.
Lawyers for Mr Finnegan claim "allegations" were made by the tribunal chairman and counsel during questioning of Mr Brennan to get Mr Brennan to say Mr John Finnegan acted for both sides in the Monkstown sale.
The hearing concluded yesterday.
Mr Collins said Mr Finnegan had acted for Sacred Heart nuns who had a leasehold interest in land at Monkstown in 1976. He did not put the property up for public auction but approached Brennan and McGowan.
Mr Finnegan sold the nuns' leasehold interest in 1976 for £210,000 to a Brennan and McGowan company, which bought in trust for Greenisle Holdings Trust Co. Greenisle was owned by Lansdowne Construction, and among the shareholders were Brennan and McGowan. There were other shareholders but not Mr Finnegan.
In 1977 a "prearranged scheme" was prepared by an accountant, Mr Hugh Owens. The de Vesci estate owned the freehold interest in the land. It was not clear why the nuns were involved or the role played by Mr Finnegan but the nuns entered into a contract with the de Vesci estate in June 1997, and paid £10,000 to acquire the freehold. They then assigned it to a Jersey company, Bouganville, for £10,500, making a £500 profit.
Mr Owens had set up Bouganville and another Jersey company, Rapallo, in June 1977. The beneficial owners were Brennan and McGowan and Mr Finnegan. The object of the exercise was to merge the freehold title with the leasehold title. A debt was created by Rapallo by a supposed management agreement totalling £350,000.
Fictitious correspondence was prearranged and put in place between Bouganville and Green isle. The shareholders in Bouganville agreed to sell their shares and become a subsidiary of Greenisle. The consideration was £12 and a discharge of the debt of £350,000, which it was alleged Bouganville owed to Rapallo.
The £350,000 was paid to Rapallo and distributed to Brennan and McGowan and their companies which got £100,000; another company, Foxtown Investments, got £100,000; and Mr Finnegan got £5,000. Bouganville then went into liquidation, and the freehold transferred to Greenisle.
Mr Collins said the interest of the tribunal was to try to find out if there was any reality about what had happened the money which Foxtown Investments got in these transaction and whether any went to Mr Burke.
He said the tribunal was hampered because Mr Finnegan had supplied a detailed statement in relation to the Canio transaction but had described only in the most general terms what had happened in the other five transactions. The purpose of the payment to Mr Finnegan was not clear.
The tribunal was unhappy as it did not have an account from Mr Finnegan about the Monkstown transaction or the purpose of that transaction in so far as Mr Finnegan and Foxtown were concerned. That was why Mr Brennan was being asked the question: "Why would you, Mr Brennan, a shrewd builder, give away money, apparently for nothing?"
Mr Dominic Hussey SC, for Mr Finnegan, said there was an innocent explanation of which tribunal counsel had been aware but he had chosen not to vindicate or uphold his client's good name and integrity as he was obliged to do.
He had instead alleged that Mr Finnegan had made a secret profit from the Monkstown land deal. Unless the tribunal could prove he was a wrongdoer, it had a duty to protect Mr Finnegan.