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Supreme Court: allegations of ministerial corruption should not be struck out on a technicality

Chief Justice Denham said it is a matter of public interest as to whether Michael Lowry corrupted a State process.

File photo: Michael Lowry with Denis O'Brien back in 1997
File photo: Michael Lowry with Denis O'Brien back in 1997
Image: Eamonn Farrell/Photocall Ireland

A SUPREME COURT judge has said that if the allegations contained in the report of the Moriarty Tribunal were to be established in an Irish court, they would be the most serious factual determinations since the foundation of the State.

Delivered by Justice Frank Clarke, the remarks were included in a Supreme Court ruling which will allow two unsuccessful bidders for Ireland’s second mobile phone licence to challenge the State’s decision to grant it to Esat Digifone in 1995.

The three presiding judges cleared the way for the appeals, citing public interest and the unique and distinguishable nature of the case as relevant factors.

The losing competitors allege that money was paid by Esat Digifone’s Denis O’Brien both directly and indirectly to the then-Minister for Public Enterprise Michael Lowry during the competition process.

Chief Justice Susan Denham ruled that the balance of justice is in favour of the case proceeding. She said she came to the decision after taking a number of factors into account, including the fact that “these proceedings make serious allegations of corruption by a Minister of the Government – not a matter which should be struct out on a technicality but which should be addressed in a full hearing in open court.”

“In submissions it was argued by the State that the appellants’ actions were not in the public interest, but were private commercial interests.

However, this is not a case between private companies, rather it involves allegations of corruption by a Minister of State. There is a public interest in determining such a claim of corruption in high office. It is a matter of public interest as to whether a Minister of Government corrupted a State process. This is an important aspect of the case.

Denham mention of a technicality refers to the State’s motions to dismiss the proceedings on the grounds of inordinate and inexcusable delay. Those orders were originally perfected by the High Court in 2007 but overturned by the Supreme Court in July.

Covert and concealed wrongdoing

Because of the unique nature of the case, the judges sided with Persona and Comcast who argued the delay in bringing forward proceedings was excusable and legitimate because they were waiting for developments at the Moriarty Tribunal. They believe they could not have formulated a statement of claim without the details which emerged during the nine-year probe.

The three-judge court said the case brought up a question of “covert wrongdoing”, which is unusual when compared to most other civil suits in which the plaintiff can plead their own case.

“Persons injured in accidents, whether on the roads or in the workplace, will normally be able to give a reasonable account of how the accident occurred…,” Justice Clarke said. “The problem with covert wrongdoing is, of course that it is covert. A person who suffers from covert wrongdoing may have little or no direct knowledge of the wrongdoing.”

“The allegation made is of highly covert activity,” added Clarke.

Justice Fennelly said that while ordinarily he would have been inclined to dismiss the claims of all plaintiffs on the grounds of an inordinate and inexcusable delay, the present case is distinguishable.

They have “convincingly argued” that any private litigant – without the investigative powers of the Moriarty Tribunal – would not have been able to uncover the materials necessary to make their claims.

“As Hardiman says in his judgement, ‘the corruption alleged in this case was covert, devious and concealed’.”

Chief Justice Denham added that the case provided an exception to the rule that plaintiffs should not be able to decide unilaterally not to proceed a case for a particular time and reason.

Reaction from Lowry and O’Brien

Although the Supreme Court decision was revealed during the summer, the reasoning behind it was published for the first time today.

In July, both Lowry and O’Brien welcomed the ruling.

The Tipperary deputy said that he has “always advocated” that a court of law is the “proper forum to critically probe the process” which led to the licence being granted.

“Shortly after the licence was granted and the losing consortia started a campaign to undermine the process, I as then Minister invited and encouraged the losing bidders to seek a judicial review of the process,” continued Lowry. “They declined that request.”

I welcome the fact that 17 years later the Supreme Court is granting them the opportunity to have that decision tested in law…I am happy that the losing consortia’s court challenge will be governed by strict rules of evidence where facts must be established, where the sworn evidence of those who know the facts such as more than 17 civil servants and all others involved in the process will have to be accurately adjudicated on to the exclusion of hearsay and opinion.

Lowry concluded that the claims about how the licence was awarded are “without merit or substance” and “should be vigorously defended by the State”.

In a similarly worded statement, O’Brien said he is “absolutely satisfied” that the allegations being pursued will be “demonstrated to be devoid of evidence and substance”.

He added that he welcomes the opportunity to fully defend all allegations made in relation to the licence competition process.

Esat Digifone Limited won “for the very simple reason that it submitted the best bid”, according to O’Brien.

The Moriarty Report

The circumstances of the awarding of the licence was subject to scrutiny during the nine-year Moriarty Tribunal.

In 2001, Comcast International Holdings Incorporated and Persona Digital Telephony Ltd brought actions against the State, Esat Digifone and its chairman Denis O’Brien.

In 2007, the High Court stopped the cases because of inordinate and inexcusable delay in prosecuting them. However, lawyers for both consortia argued that they were entitled to wait until the Moriarty Tribunal report before proceeding.

The Moriarty Report, published in March last year, criticised Lowry’s role in the awarding of the licence to Esat Digifone. Justice Michael Moriarty said that Lowry was far from a disinterested Minister who exerted “insidious and pervasive influence on the process”.

Lowry, O’Brien welcome court ruling allowing challenge to mobile licence decision

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