MR HAUGHEY tried to persuade Mrs Heffernan to settle the legal action with her brother out of court, the tribunal was told.
Mrs Heffernan said she had had a second meeting with Mr Haughey, again in his house, after legal proceedings began between her brother and the other members of the family. Mr Ben Dunne was seeking the break up of the trust, and claimed in documents that he had given over £1 million to Mr Haughey.
She was "very wary" going to the meeting. It was close to the proceedings being heard, and she was aware Mr Haughey was in close contact with her brother. "The conversation was as a family could we not come to a settlement and not fight it out in the courts."
Asked if Mr Haughey seemed to have knowledge of the fact that the making of the alleged payments had been revealed she said: "My own feeling was that there was nothing Bernard was doing that Mr Haughey would not have been aware of. I was also very conscious that anything that was said at the meeting would be reported back."
She said she told Mr Haughey she thought there would not he a settlement.
Asked by Mr Denis McCullough SC, for the tribunal, what steps had been taken when she knew this money was for the benefit of Mr Haughey, she said the company's solicitors wrote to him.
The first letter said it had come to the company's attention that funds had been "improperly diverted and paid to you by Mr Bernard Dunne. These monies must he recovered".
Mr Haughey's reply, on November 8th, 1994, said: "As no such monies have been received there is no question of repayment ... I take great exception to the phrase `improperly diverted'."
In a further letter, Dunnes' solicitors said their information was that this money "has been paid to your benefit ... by various devised strategies without the knowledge or agreement of the hoard".
Mr Haughey's response read: "I have nothing to add to my previous letter.
A further letter asked Mr Haughey to resolve this "in an amicable and constructive manner". A failure to do so could only lead to proceedings, it said.
Mrs Heffernan said there had been no reply to this letter that she was aware of.