The multimillionaire businessman, Mr Denis O'Brien, has lost a Supreme Court application to have heard in private proceedings aimed at preventing publication of a newspaper article alleging he was facing a claim for €55 million by the Revenue Commissioners who had investigated his tax residency in Portugal.
The three-judge court was told yesterday that, since the Sunday Business Post article was written, there had been a hearing relating to Mr O'Brien's tax affairs before the Revenue Appeals Commissioners last month, and a determination had been reached. No details of that determination were given.
The Supreme Court yesterday granted a stay preventing publication of the article until Mr O'Brien's appeal to the Supreme Court against the High Court's refusal to prevent publication was determined.
The Supreme Court refused to grant a stay preventing publication of the proceedings. But, while directing that proceedings taken by Mr O'Brien in the High Court and the Supreme Court might be reported, Mrs Justice McGuinness, presiding at the Supreme Court, said the court could not accept submissions on behalf of the newspaper to the effect that there was no right of confidentiality between a citizen and the Revenue.
She said there was no evidence or suggestion that Mr O'Brien's dealings with the Revenue were not being conducted with honesty.
If there were any insinuations in publicity after the court hearing, these could involve a grave breach of the law. Mr O'Brien had raised a serious and far-reaching issue regarding his civil rights in relation to his dealings with the Revenue, especially relating to the confidentiality of those dealings.
This was an issue of considerable importance which might have to be determined by a five-judge Supreme Court.
Yesterday's proceedings arose after the High Court on September 30th refused Mr O'Brien's application for an interlocutory injunction restraining the newspaper from publishing an article relating to his tax affairs. The article was initially to have been published on September 17th.
In the High Court Mr Justice Abbott was told by Mr Michael Cush SC, for Mr O'Brien, that the proposed article stated that Mr O'Brien was facing a claim for €55 million by the Revenue Commissioners who had investigated his tax residency in Portugal.
The judge heard that the article made reference to "a detailed probe" which the paper claimed was being conducted by the Revenue into Mr O'Brien's tax residency in Portugal and said that "informed sources" claimed the Revenue believed it could identify weaknesses in the tax agreement between Ireland and Portugal.
The core statement of the article was that Mr O'Brien was in trouble with the tax man, Mr Cush said.
Mr Eoin McCullough, for the newspaper, said the only significant difference between the proposed article and one published on May 24th, and against which no attempt had been made to restrain publication, was that the proposed article stated that a claim had been made against Mr O'Brien for about €55 million.
He said the new article was basically a rehash of the May 24th story with that particular added point of information. Ninety per cent of the contents of the proposed article was already in the public domain.
There had been dozens of other articles appearing in the Sunday Business Post and the media generally about Mr O'Brien. The media had widely speculated that he had moved to Portugal for tax purposes and no one had ever denied it, counsel said.
Mr McCullough said the May 24th article had said the Revenue had started an investigation into the tax affairs of Mr O'Brien, who had become one of the country's highest-profile tax exiles when he had moved to Portugal, having sold his interest in Esat Telecom for about €292 million three years ago.
That article stated: "Well-placed sources have said the tax authorities are examining O'Brien's compliance with rules governing tax residence.
"It is reckoned O'Brien saved and the Irish exchequer lost almost €63.5 million in capital gains tax when he left Ireland for the Portuguese Algarve. There was no capital gains tax in Portugal when O'Brien moved there."
Counsel said the May 24th article also went on to say that Mr O'Brien was expected to argue strenuously that he had complied with Irish tax law concerning residency.
It also said Mr O'Brien had benefited from a tax treaty between Ireland and Portugal and claimed he was entitled to be treated as a Portuguese resident for tax purposes as his main residence was the Quinta do Lago estate on the Algarve.
Mr Cush said the May 24th article had not been caught in time to restrain its publication. He said Mr O'Brien had complained to the Revenue on grounds of a breach of confidence relating to his tax affairs. At the time it was thought the Revenue might have been the source of information used by the newspaper.
"At the time of the May 24th article, we saw off two other parties who had been considering publication of similar information, but the Sunday Business Post was not so easily dissuaded," Mr Cush said.
Mr Justice Abbott refused, on grounds of delay, Mr O'Brien's application for an interlocutory order restraining the newspaper from publishing the proposed article. He said the basic complaint was that the article transgressed the confidentiality that arises in respect of tax appeals before the Appeals Commissioners.
The judge said there was a quantum difference between the specific nature of the information in the proposed article and the information in the May 24th article.
He considered that when the May 24th article was published, the cat was well and truly out of the bag as far as Mr O'Brien was concerned regarding his tax affairs.
If he had been worried about anything further happening, he could have gone into the High Court almost blindfold and looked for an injunction relating to that article or any further inquiry into his tax affairs.
The judge said Mr O'Brien had an obligation to act in a timely manner and, notwithstanding the merit of his application for an interlocutory injunction, he was refusing it.
The judge added that he was not expressing a final view regarding the matter. It may well be that relief would be granted by way of damages and injunctive relief after the full trial of the action.
While refusing the injunction, the judge warned the newspaper it was still bound by the law. If it entered into publication of confidential matters engaged in or discussed or argued or litigated between a member of the public and the Revenue, it did so at its peril and should not take too much comfort from his refusal of the injunction.
Mr Cush said Mr O'Brien intended to appeal the injunction refusal to the Supreme Court. Mr Justice Abbott said he would discharge an interim order restraining publication of the article but would stay implementation of that discharge order for two weeks. He also continued the in-camera prohibition on publication of the court proceedings for two weeks.
When the matter came before the Supreme Court yesterday, Mr Cush asked the court to continue both stays and hear his application in private.
After considering submissions on whether the application could be heard in private, Mrs Justice McGuinness, presiding, said the court had determined it must be heard in public or be withdrawn.
Mr Cush then outlined what had happened in the High Court. While he had been refused an injunction restraining publication, the High Court had ruled he had established an arguable case in relation to rights of confidentiality under the tax laws and in relation to the balance of convenience, he said.
The application was refused only on grounds of delay, and this was unusual in that his client had moved to prevent publication of an unpublished article. There was a quantum difference between the Sunday Business Post article of May 24th and the article it proposed to publish.
Mr Cush said his side had lodged a notice of appeal against the injunction refusal and were anxious for an early hearing of that appeal. In the intervening period, he wanted the court to continue the stay on publication of the court proceedings. He also wanted the court to stay the order refusing to prohibit publication of the article.
He agreed with Mr Justice Hardiman that the cause of his client's proceeding was a breach of confidentiality. The truth or otherwise of what was said in the article was irrelevant, he agreed.
He also argued that if the court proceedings were published, the appeal against the injunction refusal would be nugatory (futile). There was a significant legal issue regarding the in-camera point.
Mr McCullough said he would be filing a cross-appeal against the High Court findings that there was an arguable issue in relation to confidentiality of dealings between the Revenue and Mr O'Brien and against the finding that the balance of convenience lay in preventing publication. The issues to be determined at the appeal were not restricted to delay.
Counsel said the newspaper had intended to publish the article on September 14th, and the delay in publication was affecting the topicality of the story. This was illustrated in that the court had been told there had been a hearing before the Revenue Appeals Commissioners and a determination of that appeal. The story was now becoming out of date.
Mr McCullough also argued that Mr O'Brien had a remedy in damages. On the issue of whether the proceedings could be heard in public, Mr McCullough argued that Article 34 of the Constitution stated clearly that justice must be administered in public save for certain statutory exceptions. This case did not constitute such an exception.
After considering the submissions, Mrs Justice McGuinness, sitting with Mr Justice Hardiman and Mr Justice McCracken, said the court accepted that if a stay was not granted on the High Court order which had the effect of permitting publication of the article, Mr O'Brien's appeal would be futile. The court would stay publication of the article pending the outcome of Mr O'Brien's appeal. However, she said the court would not continue the stay restraining publication of the legal proceedings in the High and Supreme Courts.
The Supreme Court had determined earlier yesterday that it had no power to hear the proceedings in private and the High Court equally had no such power.
