The recent appeal brought by Mr Michael Fingleton against the Central Bank of Ireland in judicial review proceedings provided an interesting insight into the interpretation of a provision of the Central Bank and Financial Services Authority of Ireland Act, 2004 (Act).
Mr Fingleton is a former Managing Director and Chief Executive Officer of Irish Nationwide Building Society (INBS). He left the latter of those roles in April 2009. In 2010 the Central Bank commenced an investigation of INBS and certain persons concerned in its management. That investigation related to time periods where Mr Fingleton was in a management position with INBS.
In 2015 the Central Bank issued a notice of inquiry in relation to INBS, Mr Fingleton and other parties. The Central Bank asserted that it had reasonable grounds to suspect that Mr Fingleton and others may have participated in the commission by INBS of some prescribed contraventions.
It was not disputed that INBS was a regulated financial service provider under the Act, or that Mr Fingleton was a person concerned in the management of INBS, or that he was no longer concerned in the management of INBS at the time that the Central Bank issued the notice of inquiry in 2015.
Mr Fingleton brought unsuccessful judicial review proceedings in the High Court and subsequently appealed to the Court of Appeal. He submitted that a “person concerned in the management of a regulated financial service provider”, as set out in the Act, did not include persons who were formerly concerned in such management, but are no longer concerned. He submitted that the Act applied only to persons who are concerned in the management of the regulated financial services provider at the time the Central Bank decided to hold an inquiry.
High Court decision
In dismissing the application, Judge Noonan held that;
“The expression “person concerned in the management” is in itself time neutral and is given context and meaning by the words that follow it in the subsection. It is to my mind clear beyond doubt that the time at which the person concerned in the management of a regulated financial service provider must be so concerned is the time at which the regulated financial service provider commits the prescribed contravention in which the person concerned participated. Any other construction offends common sense and gives rise to absurd results.”
This aspect of the High Court judgment was appealed by Mr Fingleton. It was submitted as part of the appeal that Judge Noonan, in error, adopted a purposive approach to the Act and that this was well illustrated in the references to offending common sense and giving rise to absurd results.
Court of Appeal
The Court of Appeal found that Judge Noonan had interpreted the Act in an appropriate manner. The Court of Appeal agreed that the phrase within the Act was time neutral and that a literal construction of the words used had been provided. It was undoubtedly a positive outcome to find that a construction that used common sense and avoided absurd results was upheld.