John Purcell, a former executive director of Irish Nationwide Building Society, has launched a High Court challenge to the constitutionality of the Central Bank's inquiry into alleged regulatory breaches at the financial institution.
Mr Purcell, along with several others, is the subject of an inquiry into allegations that certain proscribed contraventions were committed by INBS, and certain persons concerned with its management, between August 2004 and September 2008.
Irish Nationwide was nationalised in 2010 after receiving a €5.4 billion bailout. It was folded into Irish Bank Resolution Corporation in 2011, alongside Anglo Irish Bank, for wind down. IBRC was liquidated by the State in February 2013.
Mr Purcell, who resigned as a director of INBS in 2010, is due to give evidence before the Oireachtas Committee Inquiry into the banking crisis next week, the High Court heard on Thursday.
In his High Court proceedings against the Central Bank and the State, Mr Purcell contends that the inquiry, and the powers it purports to exercise, are unconstitutional.
Article 34
Barrister Reg Jackson, counsel for Mr Purcell, told Ms Justice Mary Faherty the inquiry would act in a manner that is expressly reserved for the courts. This was in contravention of Article 34 of the Constitution.
Mr Jackson said the inquiry would usurp the function of the court which it is not allowed to do. In addition the proposed inquiry would not be bound by the rules of evidence.
He said the inquiry would have powers to impose penal sanctions including a fine of up to €1 million or disqualifying a person from having a role in the management o a regulated service provider.
Mr Jackson said the prospective inquiry breached Mr Purcell’s constitutional right to a trial, under Article 38 of the Constitution, and his rights under the European Convention on Human Rights.
He told the court that Mr Purcell was one of a number of former directors who were sued by IBRC over alleged breach of contract, breach of duty and negligence over the alleged delegation of the Board's powers to INBS former chief executiver Michael Fingleton from 1997 to 2009.
The claims had been denied and those proceedings had been settled following a mediation.
Mr Purcell, of Fortfield Park, Terenure, Dublin 6W,is seeking an injunction restraining the Central Bank from proceeding to hold the inquiry until his constitutional challenge has been determined by the High Court.
Mr Jackson said Mr Purcell’s solicitors, Comyn Kelleher Tobin, had asked the Central Bank not to proceed with the inquiry until the constitutionality aspect had been dealt with but the bank had stated it intended to proceed with the inquiry.
Judge Faherty granted Mr Purcell permission to serve short notice of the application for an injunction on both the Central Bank and the State. The application was made ex parte, with only one side present in court. She adjourned the matter to Thursday of next week.
