This was the title to a newspaper article in the Irish Independent on the 9th July last, when Mr. Justice Gerard Hogan of the High Court, in the case of Mary Kelly & Declan Byrne -v- District Judge Anne Ryan [2013] IEHC 321, issued his Decision upholding the right of citizens to bring private prosecutions, after lawyers for the Irish Bank Resolution Corporation (IBRC) claimed that this right had been abolished 14 years ago.
The newspaper stated that the Judge’s decision paved the way for a hotelier to bring a private prosecution against two IBRC officials he claimed had behaved dishonestly during discussions about a rescue plan for his business, which had debts of €23m.
The newspaper believed that this could be the first case of its kind since the banking collapse and could lead to a raft of similar actions.
What was the case about?
The case related to “dishonesty” under s.6 of the Criminal Justice (Theft and Fraud Offences) Act 2001 (“the 2001 Act”).
Section 6 of the 2001 Act provides
“6(1) A person who dishonestly with the intention of making a gain for himself or herself or another or of causing loss to another, by any deception induces another to do or to refrain from doing an act is guilty of an offence.
(2) A person guilty of an offence under this section is liable on conviction on indictment to a fine or imprisonment not exceeding five years or both.”
Section 6 is an indictable offence, which normally means that it would be tried before a Jury in the Circuit Court. It is however capable of summary disposal before the District Court.
The Circumstances of the Case
A dishonest Banker?
Mr. Halpin complained that, immediately prior to the appointment of a Receiver to his two companies on 17th February, 2012, he and his accountant were asked by Mary Kelly and Declan Buckley of the IBRC to attend, at short notice, a meeting with them at the IBRC offices. According to Mr. Halpin, he says that he was advised that the purpose of the meeting was to confirm that both creditor and debtor should co-operate in relation to the sale and/or the realisation of the assets of Merrion Hall on a consensual basis for the bank. He said that it was thereby envisaged that there would be some form of constructive engagement between the lender and the debtor. On foot of that, Mr. Halpin says that he and his accountant had such a meeting with Mr. Buckley and Ms. Kelly and that they left the meeting with the impression that the matter would be considered within the higher echelons of the bank and that the bank would, in turn, revert with further proposals.
Mr. Halpin alleged however, in his District Court Summons subsequently issued by him, that both accused (Mr Buckley and Ms. Kelly) had known at the time of the meeting that a Receiver was to be installed and had deliberately concealed this knowledge from Mr. Halpin and his accountant.
The Summons issued by Mr. Halpin alleged deception by the accused with the intention of making a gain for themselves or another or of causing loss to another in falsely representing to Mr. Halpin and his accountant that they were prepared to continue a process engaged in between them.
Mr. Justice Hogan pointed out that it was important to emphasise that Mr. Buckley and Ms. Kelly (the applicants) both vigorously contested and denied the charges.
Whether the Right of Private Prosecution has been affected by the abolition of the Preliminary Examination Procedure
Mr. Halpin had issued a private prosecution, where normally prosecutions are issued by the DPP (the Gardai).
One critical feature of the applicants’ submissions is that the right of private prosecution in respect of an indictable offence of this kind had been effectively abolished by reason of the enactment of the Criminal Justice Act 1999 (“the 1999 Act”). Mr. Buckley and Ms. Kelly argued that because the Preliminary Examination procedure in the District Court had been abolished by the 1999 Act the entitlement to issue a private prosecution had also been abolished.
The Judge`s Decision
Mr. Justice Hogan stated that the right of private prosecution had not been affected by the abolition of the Preliminary Examination procedure. The right of private prosecution was still preserved.
Will aggrieved borrowers now be able to put dishonest bankers in jail?
Run on the Bank
It is important to bear in mind that, while this case related to the specific circumstances surrounding the alleged meeting in February 2012 where two employees of IBRC met with a borrower and, according to the borrower, deceived the borrower in circumstances where they already knew that a Receiver had been appointed to his company, this case has much more ramifications for business generally. Where one person is deceived by another person who “dishonestly with the intention of making a gain for himself or herself or another or of causing loss to another, by any deception induces another to do or refrain from doing an act” then that person can be prosecuted by the person deceived, in a private prosecution.
The person is not obliged to rely on the discretion of the Gardai to decide whether the case is stateable or not. This is however subject to one rider; namely that, having commenced the prosecution in the District Court, no further step in that process can be taken without the express consent of the Director of Public Prosecutions. If such positive consent is absent the prosecution must be dismissed by the District Court. Mr. Justice Gerard Hogan was very careful to point this out in the last paragraph of his Judgment!
Conclusion
Wells Fargo
What was heralded by the Irish Independent as a case which could “lead to a raft of similar actions” may not actually be such a seminal case. One is however tempted to state that the idea of an aggrieved borrower being in a position to jail a banker who has been found to have deceived him is an attractive one!