Monday 24 September 2018

Judge decides INM chairman has privilege over 10 documents submitted to watchdog

INM chairman Leslie Buckley
INM chairman Leslie Buckley
Shane Phelan

Shane Phelan

THE President of the High Court has ruled that Leslie Buckley, the outgoing chairman of Independent News & Media, is entitled to claim privilege over 10 documents sought by the State's corporate enforcement watchdog.

The documents were part of a large tranche of material handed over by Mr Buckley after the Office of the Director of Corporate Enforcement (ODCE) began investigating a protected disclosure made by former INM chief executive Robert Pitt.

Mr Buckley supplied 275 documents to the ODCE, but claimed privilege over 11 of them.

Today, High Court President Peter Kelly decided that privilege attached to 10 of those documents, which largely related to correspondence between Mr Buckley, his solicitor Kenan Furlong and IT expert Derek Mizak.

The ODCE sought a range of documents from Mr Buckley as part of its investigation into a protected disclosure by Mr Pitt, made under whistleblowing legislation.

The disclosure arose out of an aborted bid for Newstalk, which is owned by INM’s largest shareholder Denis O’Brien.

Mr Buckley is a nominee of Mr O’Brien on the INM board. He is due is to step down from the board at an extraordinary general meeting on March 1.

Mr Pitt and Mr Buckley were reported to be at odds over the valuation of Newstalk, with Mr Pitt said to have attached a lower value to the radio station than Mr Buckley.

Since the ODCE began investigating the protected disclosure last year, its inquiry has reportedly widened to take in the handling of a “potential personal data breach” at the company.

In a ruling today, Mr Justice Kelly said the ODCE had requested the material from Mr Buckley on October 27 last year under section 780 of the Companies Act 2014, which gives the director the power to require the production of any books or documents from a company.

The judge said the ODCE had been involved over the last number of months in what is described as “a detailed engagement with INM”.

Mr Justice Kelly said this has given rise to a lengthy exchange of correspondence, the detail of which had no relevance to matters arising for the determination in the ODCE's application.

On November 17 last, the ODCE received documents it had sought from Mr Buckley, but these included eleven in respect of which privilege was claimed. These were handed over in a sealed envelope.

Mr Justice Kelly’s ruling went on to summarise the key points of an affidavit Mr Buckley filed in support of his claim of privilege.

In the affidavit Mr Buckley said the documents sought in the director’s request related to “a cost reduction exercise”.

“That exercise necessitated the engagement of external technical expertise,” said Mr Buckley.

He said the assistance was provided by Mr Mizak, an IT expert.

Mr Buckley said Mr Mizak, in turn, recommended the engagement of a specialist IT company to perform certain work.

“That cost reduction exercise, in particular the engagement of the specialist IT company, was the subject matter of a separate request made by the director under section 778 of the Companies Act 2014 on August 11, 2017,” said Mr Buckley.

“It is in this context that the documents, over which I have claimed privilege, were generated.”

Mr Buckley went in to say the documents at issue were correspondence to and from his solicitors relating to the preparation of his response to the ODCE’s statutory request.

He said Mr Mizak provided expert technical advice and assistance in the cost reduction exercise to which the documents sought by the ODCE on October 27 relate.

“When explanations were sought from me by the director in August 2017, certain technical questions arose which were outside my expertise and which Mr Mizak was best placed to answer,” Mr Buckley’s affidavit said.

“Accordingly, his assistance was sought in those respects. The documents furnished to him were furnished by my solicitors with an express statement that the documents were privileged and confidential and were being provided to him without any waiver of privilege.”

Mr Buckley went on to say that John Henry of Specialist Security Services provided certain security services to him.

He said Mr Henry was the person who initially introduced him to Mr Mizak in order to assist with the cost reduction exercise.

“He made contact with Mr Mizak at the outset of the cost reduction exercise and I forwarded to him an initial email communication from my solicitors concerning the director’s request of August 11, 2017.”

In a further affidavit, sworn on January 9, Mr Buckley said the ODCE had been engaged with INM “in the context of an existing dispute between certain executives at INM”.

He said there was “a resolution process” in place in relation to this dispute, but added that “litigation was also contemplated” in respect of it.

In the affidavit Mr Buckley went on to say he believed and was advised litigation privilege attached to the eleven documents.

He said his solicitors had detailed engagement with the ODCE to ensure full compliance with various statutory requirements that had been made of him.

He added that he believed both himself and INM had provided all documentation and information requested by the ODCE.

In his ruling, Mr Justice Kelly considered each of the eleven documents.

He found only one was not privileged. This was a letter from the ODCE which was attached to an email from solicitor Kenan Furlong to Mr Buckley.

The other ten documents were all privileged, the judge found.

These included emails from Mr Furlong to Mr Buckley and to Mr Mizak and emails back in response. The emails were exchanged last August.

Also deemed privileged was a draft statement composed as part of Mr Buckley’s preparation for responding to ODCE.

Mr Justice Kelly made no order regarding costs.

Counsel for Mr Buckley, Brian Gageby BL, said: “Mr Buckley has been happy to assist the ODCE throughout this process and notes that the application made by the ODCE was mandatory. In the circumstances, Mr Buckley is making no application in respect of costs.”

A spokesman for Mr Buckley told he welcomed the ruling but said that as there is an ongoing process, it would not be appropriate to comment further.

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