A Supreme Court justice has questioned whether preliminary applications to remove parts of affidavits are an effective way to handle disputes about evidence in director disqualification proceedings, warning that the procedure can delay a substantive hearing.
In a judgment delivered on 14 July 2011, Mr Justice Fennelly said he agreed with Mr Justice Denham’s judgment and proposed orders, which disposed of the substantive matters on the appeals. He wrote separately about the procedures used in the case and their capacity to delay hearings.
The Director of Corporate Enforcement had issued a motion on 8 August 2006 seeking the disqualification of Michael Bailey and Thomas Bailey as directors. The appellants later sought to strike out six paragraphs from an affidavit by Dermot Madden and paragraph 8 of an affidavit by Peter Lacy, arguing that the material was scandalous, inadmissible or otherwise subject to removal under court rules or the court’s inherent jurisdiction.
The High Court heard that application over four days in June 2007 and delivered judgment on 1 November. It directed that the Director’s action proceed to a plenary hearing, with pleadings. The appellants appealed parts of the order, and the Director cross-appealed. The Supreme Court heard the appeals on 7 June 2011. Justice Fennelly said the matter would return to the High Court more than five years after the Director’s motion was issued.
Justice Fennelly noted that about 16 months passed between the motion and the High Court’s decision on the preliminary issues, while the plenary hearing remained on hold pending the appeal. He questioned whether the rules relied on provided authority to strike out affidavit material: he said the rule on scandalous material was confined to that category, the rule on pleadings applied to pleadings rather than affidavits, and the rule concerning affidavit contents did not itself provide for striking out parts.
He also recorded the High Court judge’s view that evidence supporting alleged wrongdoing in an affidavit-based hearing had to be admissible, and said she was correct on that point. But he said that did not necessarily mean a court could excise affidavit passages by preliminary application. He stressed that the jurisdictional issues had not been raised in the High Court or fully argued on appeal, and described his remarks on them as largely obiter.
The Director had argued that the procedure allowed selective challenges without identifying disputed issues and could lead to split trials focused first on admissibility. Justice Fennelly called those concerns legitimate. He said an appropriate case would need to consider the jurisdictional basis and the most efficient way to resolve admissibility disputes. The judgment did not finally determine those broader questions.