The High Court has refused Ernst & Young leave to seek judicial review of an investigation into its work as auditor of Anglo Irish Bank, including its handling of directors’ loans.
In a judgment dated 13 May 2011, Ms Justice Mary Irvine ruled that the firm had not justified extending the time limit to challenge the appointment of John Purcell as a Special Investigator. She also found no arguable case for the other relief sought. The decision was at the judicial review leave stage; it did not determine whether the firm had committed professional misconduct.
The Institute of Chartered Accountants in Ireland appointed Mr Purcell under its disciplinary procedures. Its regulatory board had raised concerns about directors’ loans at Anglo Irish Bank and the role of members of the Institute. The investigation was expanded in 2009. Ernst & Young participated in the process, providing documents and witnesses and attending meetings.
The firm sought to quash Mr Purcell’s appointment, arguing that the reports underlying it did not contain valid complaints. It also sought access to proposed findings and a wider set of investigative materials, and an opportunity to make submissions on those findings. Alternatively, it asked the court to rule that a report prepared by forensic accountants FTI could not be sent to the Institute’s Complaints Committee if the investigator found a prima facie case.
On the appointment challenge, the judge said the six-month time limit began when Ernst & Young received the appointment instruments in February and March 2009. The firm did not seek the underlying reports until March 2011, and its evidence did not explain why it had waited. The court refused an extension. The judge also said the broad definition of “complaint” in the Institute’s bye-laws could cover expressions of concern about a member’s conduct; she found no arguable basis to say the committee lacked authority to appoint the investigator.
The investigator had sent the firm a synopsis of the issues and material considered, along with the FTI report and exhibits, and invited written submissions. The judge held that the firm had no arguable entitlement at this preliminary stage to the proposed findings or every document and transcript it requested. She also rejected the claim that the process had created a legitimate expectation of those materials. The FTI report, she said, could form part of the evidence, facts and matters supporting a prima facie case.
The court refused the application in full. The judgment did not decide whether a prima facie case existed; that assessment remained with the investigator and Complaints Committee.