Tuesday 21 August 2018

The stage has now been set – what follows could be a long and costly courtroom drama

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Stock photo
Dearbhail McDonald

Dearbhail McDonald

For all the ‘dramatis personae’ present in courtroom number four yesterday, it was an absent actor, businessman Denis O’Brien, that provided the most dramatic moment in yesterday’s highly anticipated application, by the Office of the Director of Corporate Enforcement (ODCE), to have inspectors appointed to investigate the affairs of Independent News and Media (INM). 

Shortly after Neil Steen, senior counsel for the ODCE, began to outline the reasons for director Ian Drennan’s application to appoint inspectors, INM provided a striking aside of its own.

That was when INM’s senior counsel, Shane Murphy, told High Court President Mr Justice Peter Kelly that not only was Ireland’s largest media company opposing the appointment of inspectors, but that it wanted to judicially review the very decision by the ODCE to ask the courts to appoint inspectors in the first place.

As the prospect of  an attempted “knockout” by INM of the corporate law enforcement regulator’s decision to appoint inspectors dawned in a packed courtroom number four, one by one lawyers for parties also seeking to get hold of Mr Drennan’s legal papers, rose to make their voices heard. The parties, the court heard, were largely present due to “extraordinary unremitting publicity” concerning the application which involved extracts from affidavits being published, a situation Judge Kelly described as “a dangerous exercise” as it involved navigating between contempt and defamation.

Those seeking access included the Data Protection Commissioner whose office, led by Commissioner Helen Dixon, may have a starring role in the investigation of a suspected data breach at INM. Represented, too, were Robert Pitt, INM’s former CEO and Ryan Preston, INM’s chief financial officer, both of whom made protected disclosures which in turn prompted the ODCE’s year-long investigation. 

Journalist Sam Smyth, a former INM employee and one of 19 people whose data may have been accessed as part of the alleged data breach, was present in court to hear his solicitor Simon McAleese, whose eponymous law firm formerly worked for INM, seek access to court papers on his behalf.

Access to court papers was also sought on behalf of Red Flag, the PR firm chaired by former INM CEO Gavin O’Reilly, which is being sued by Mr O’Brien. Access to court papers was sought by Red Flag, its CEO Karl Brophy, himself a former INM executive and Mandy Scott, who now works at Red Flag but who previously worked as personal assistant to Mr O’Reilly and Mr Brophy.

Leslie Buckley, INM’s former chairman who resigned last month, was not represented in court. But in advance of the hearing, Mr O’Brien’s long-term business associate said he would robustly challenge all allegations relating to his tenure as chair of INM.

Although Denis O’Brien was not present or formally represented in courtroom number four yesterday, it was a letter INM’s largest single shareholder (Mr O’Brien owns 29.9pc of the company) wrote to ODCE director Ian Drennan on April 6 last that, in many ways, dominated yesterday’s proceedings. The letter, read out in full, accused Mr Drennan of leaking details of the ODCE’s application to have inspectors appointed to INM to the media. The court heard Mr O’Brien wrote to Mr Drennan telling him he intended to hold him “fully and personally responsible” for what he alleged were “breaches of duty”. The ODCE robustly denied that it had been involved in any media leaks, stating that the papers had been served on INM and its current directors as required by the rules of court.

INM’s unexpected decision to apply for leave to judicially review the ODCE (rather than seeking to narrow the terms of reference for any inspection) could, if it succeeds, deliver a “knockout blow” to the ODCE’s application and have major implications for other regulators.

Judge Kelly was not convinced the two issues, the ODCE’s application and INM’s move to judicially review the ODCE, should travel together – INM's bid to halt the ODCE will be heard separately and by another judge. But the stage has been set for yet another court drama that looks set to run a long and costly course.

Irish Independent

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