The Supreme Court has upheld the Minister for Enterprise, Trade and Employment’s power to direct an examination of books and documents belonging to two Dunnes Stores companies as a preliminary step towards deciding whether to seek a formal company investigation.
The proceedings involved Dunnes Stores Ireland Company, Dunnes Stores (Ilac Centre) Limited and Margaret Heffernan. The dispute concerned directions issued under section 19(2)(a) of the Companies Act 1990.
Mr Justice Herbert explained that the section allows the Minister to examine company records before deciding whether to ask the High Court to appoint an inspector under section 8 of the Act. Such an inspector can conduct a formal investigation into a company’s affairs and report to the court.
The judge held that the section 19 procedure is intended as a preliminary screening or verification process. The Minister does not have to prove at that stage that misconduct has occurred. Instead, she must form an opinion that identifiable circumstances suggest an examination of the records is reasonably required before deciding whether a court application should follow.
However, the court drew a limit around that discretion. Mr Justice Herbert held that a general concern about standards of corporate governance, without more, would not justify use of the power. The concerns must be linked to matters capable of suggesting fraud, misfeasance, misconduct or unlawfulness of the kind contemplated by section 8.
In this case, the Minister’s stated reasons included specific findings from the McCracken and Buchanan inquiries. The court held that those identified findings were sufficient to justify the direction, independently of the broader reference to corporate governance concerns.
The ruling therefore upheld the Minister’s entitlement to require production and examination of the relevant company records. Mr Justice Herbert also agreed with the Chief Justice that the direction was independently permissible under section 19(2)(d).