Dermot Desmond cannot proceed with action linked to Moriarty Tribunal

The Supreme Court has ruled that businessman Dermot Desmond cannot proceed with a legal action aimed at overturning court decisions rejecting his complaints about certain conduct of the Moriarty tribunal.

In his action, Mr Desmond wanted declarations that the High Court, in a 2003 decision and the Supreme Court, in a judgment on a 2004 appeal, were misled by reason of fraud on behalf of the tribunal.

The tribunal was set up to to inquire into payments to the late former taoiseach Charles Haughey and to former Fine Gael minister Michael Lowry, now an Independent TD.

It had applied to have Mr Desmond’s action struck out on grounds it was frivolous, vexatious, bound to fail and an abuse of court process.

In 2012, then High Court judge Ms Justice Elizabeth Dunne said she was not satisfied Mr Desmond's case, taken at its height, had alleged fraud in the true sense or that his statement of claim disclosed a reasonable cause of action.

A three judge Supreme Court, in a 92 page judgment delivered on Friday by Mr Justice William McKechnie, upheld her decision.

‘Dishonesty’

Before a plaintiff can invoke the exceptional jurisdiction to have a court judgment set aside on grounds of fraud, they must allege “deliberate and purposeful dishonesty”, he said.

He agreed with the High Court that Mr Desmond had not pleaded the requisite degree of fraud to have the judgments set aside. He also rejected arguments Mr Desmond was entitled to have the disputed judgments set aside on grounds of a breach of constitutional rights and/or fair procedures.

Mr Desmond’s proceedings arose out of earlier and separate judicial review proceedings brought by him against the tribunal over its use of the 1993 Glackin report concerning the ownership of the Johnston Mooney and O’Brien site in Ballsbridge, Dublin. The Glackin report made findings critical of Mr Desmond.

When dealing with the matter of the awarding of the State's second mobile phone licence to ESAT Digifone, as it related to Mr Lowry, the tribunal heard evidence from John Loughrey, secretary of Department of Communications at the time. He said he had read the Glackin report and was aware of its criticisms.

Arising out of the use by the tribunal of the Glackin Report, Mr Desmond claimed the tribunal had not afforded him fair procedures. He argued the contents of the report were not relevant and inadequate notice about the likelihood of witnesses being examined about it meant his ability to defend himself was compromised.

The High Court dismissed those proceedings, saying the tribunal was entitled, if not obliged, to investigate how the evaluation team for the mobile phone licence was under the erroneous impression as to the true ownership of the consortium behind ESAT.

The evaluation team was under the impression certain financial institutions owned part of ESAT when Mr Desmond had actually acquired that particular interest just a month before the licence was issued in October 1995, the High Court noted in its judgment.

Investment firm

The tribunal therefore had to investigate whether Mr Desmond, or an investment firm, IIU, which was beneficially owned by him, had avoided the evaluation process, it held.

The tribunal was also required to inquire into whether this was the result of any intervention by, or exertion of influence by, the then minister, Mr Lowry, the court said.

The Supreme Court, on appeal in 2004, agreed with the High Court and dismissed Mr Desmond’s appeal. Mr Desmond then brought a new challenge to have both the High and Supreme Court decisions declared a nullity.

He alleged, among other claims, the tribunal permitted misleading evidence from tribunal solicitor John Davis to go before both courts. Ms Justice Dunne dismissed his case after finding he had not pleaded the statements made by Mr Davis, relating to evidence given to the tribunal by Mr Loughrey, were made fraudulently.

Mr Desmond had said he was contending the High and Supreme Courts were presented with misleading evidence by the tribunal, she noted.

There was no material to suggest “deliberate and purposeful dishonesty” by the tribunal in putting forward Mr Davis’ evidence to the High and Supreme Courts and “simply nothing” in Mr Desmond’s pleadings such as alleged fraud in the true sense to satisfy the first requirement for setting aside the judgments on grounds of fraud.

There was nothing to suggest the courts relied on the disputed evidence of Mr Davis in reaching their decisions, she added.