In her judgment of 20 May 2011, Judge Mary Irvine refused Ernst & Young’s application for leave to seek judicial review of an inquiry by John Purcell, a Special Investigator appointed in early 2009 by the Chartered Accountants Regulatory Board of the Institute of Chartered Accountants of Ireland, into Ernst & Young’s conduct as auditors of Anglo Irish Bank. The court had ordered that the leave application be made on notice and the judgment deals with standard of proof to be applied by the court in dealing with an on-notice leave application.
The main relief sought by Ernst & Young in respect of its application for judicial review was to quash the decision to appoint Mr Purcell as Special Investigator. Judge Irvine refused the application for leave, holding that Ernst & Young were over two years out of time to bring the application.
Judge Irvine further refused to exercise the court’s discretion to extend the time limit provided to bring the leave application as to do so would be “manifestly unjust” to the respondents. Moreover, the Judge held that Ernst & Young had failed to provide the required “cogent, weighty and meritorious explanation” required in circumstances where it was applying for an extension of time in order to pursue a relief designed to “effectively torpedo and thus fatally terminate an investigative process which has been ongoing for over two years and which investigation has undoubtedly involved both parties in substantial time and expense”.
Judge Irvine held that irrespective of the issue of delay, that Ernst & Young had failed to make out an arguable case that the appointment of Mr Purcell as Special Investigator was ultra vires the powers of Chartered Accountants Ireland. In this regard, she stated that Ernst & Young were in effect seeking leave of the court to pursue a claim to quash the appointment of Mr Pucell by relying on a definition of "complaint" which was “wholly different and substantially more demanding than the definition in the Bye-Laws which govern the appointment.” She was satisfied that there was no rational argument, having regard to “the very broad definition of complaint within the relevant Bye-Laws” that there was no complaint before the Complaints Committee such as to contend that the appointment of Mr Purcell could be ultra vires.
Emphasising that the disciplinary process against Ernst & Young was at a preliminary stage, the Judge further refused the application for leave in respect of the reliefs sought concerning the procedures adopted by the Special Investigator, holding that he had afforded Ernst & Young rights significantly beyond those to which it was entitled either under the relevant Bye-Laws or as a matter of natural justice and fair procedures. Judge Irvine relied heavily on the decision in O’Callaghan v Disciplinary Tribunal, Ireland and Attorney General in which Judge Geoghegan concluded that the rights to be afforded to a party under investigation at the prima facie stage of the disciplinary process were minimal.
This very comprehensive judgment is a warning to applicants for leave to seek judicial review to act in a timely manner and is also a useful guide on the fair procedures that are appropriate to a preliminary investigative phase of an inquiry.