THE TRIBUNAL RESUMED AS FOLLOWS ON MONDAY, 29TH JULY, 2002 AT 11.00AM
OPENING STATEMENT WAS THEN DELIVERED BY MR. HEALY:
MR. HEALY: Sir, when the Tribunal resumed its opening sittings on the 22nd May, 2001, the Opening Statement dealt with aspects of the Terms of Reference which concerned both Mr. Haughey and Michael Lowry. Where Michael Lowry was concerned, the sittings focused on a number of financial and property transactions and the individuals involved in those transactions.
In the course of the Opening Statement, it was stated that the focus of the Tribunal sittings with regard to those financial and property transactions would be on what is commonly described, and as you have mentioned yourself, as the money trail. The Opening Statement at page 76 went on as follows, and I am quoting from that Opening Statement: “The information made available to the Tribunal will, however, involve examining material concerning relationships, connections, or dealings between Mr. Lowry and a number of individuals against a background in which some of those individuals and Mr. Lowry were involved in a competition to operate what has come to be known as the second GSM licence.”
At the time of the Opening Statement, the Tribunal envisaged examining a number of different matters which were at that time itemised as follows:
Firstly, the US $50,000 payment described as the Telenor/ESAT payment. Secondly, the £147,000 payment by Mr. David Austin into an account in the name of Mr. Michael Lowry in the Isle of Man, described at that time, I think, as the Carysfort Avenue/David Austin payment.
Thirdly, a property transaction involving the purchase of premises at Mansfield and described as the Mansfield transaction.
Fourthly, another property transaction involving the purchase of premises at Cheadle and known as the Cheadle transaction.
Fifthly, a number of share transactions involving the purchase of ESAT Telecom shares on the account of Mr. David Austin with Donaldson Lufkin & Jenrette, a company within the Credit Suisse First Boston group.
Evidence was heard in connection with these matters over a period between May and November of 2001. The matters described in the Opening Statement at that time, and in respect of which evidence was heard, all occurred between in or about June 1995 and March of 2001. In the course of the Opening Statement, the Tribunal drew attention to the fact that although prima facie clearly of relevance to the Tribunal’s Terms of Reference, the ESAT/Telenor payment had not been drawn to the attention of the Tribunal, and it appears that it would not have come to the attention of the Tribunal but for the fact that it came into the public domain by way of press comment.
The remainder of the itemised matters which I have mentioned above would not have come to the attention of the Tribunal but for the fact that inquiries by the Tribunal prompted by information made available to the Tribunal by Investec Bank resulted in their disclosure to the Tribunal.
It will also be recalled that, as I think has been pointed out in an earlier Opening Statement, it was not until after the resumption of those sittings in May of 2001 that the Tribunal learned from Mr. Barry Maloney of the conversations he had had with Mr. Denis O’Brien in which reference was made to two £100,000 payments in the context of the payment of success fees in connection with the winning of the competition for the second GSM licence.
In the course of that May 2001 Opening Statement, the Tribunal indicated that the concealment, or at least the apparent concealment of what was described as the loan of £147,000 by Mr. David Austin to Mr. Michael Lowry was a factor to be considered by the Tribunal in determining whether that money paid into an offshore bank account in Mr. Lowry’s name was in truth a loan or a payment within the Terms of Reference.
With regard to the Mansfield and Cheadle transactions, the Tribunal indicated that it wished to inquire into the circumstance that up to that time those transactions had not been brought to the attention of the Tribunal, and furthermore, that steps appeared to have been taken as part of the transactions to conceal the identities of the true parties, and most specifically, as the evidence at those sittings unfolded, the involvement of Mr. Michael Lowry.
The Mansfield transaction, it will be recalled, involved the purchase of a property at Mansfield for £250,000 sterling. The Cheadle transaction involved the purchase of a property for £445,000 sterling. Mr. Lowry has informed the Tribunal that he was introduced to those properties by a Mr. Kevin Phelan, who seems from the evidence to have been performing the role of a property consultant.
A deposit of £44,500 was paid on the 8th September, 1999, on the signing of the contract for the purchase of the Cheadle property. The funds for that deposit were made available by Mr. Aidan Phelan from the surplus of £300,000 transferred from Mr. Denis O’Brien’s account to Mr. Christopher Vaughan’s client account after paying the balance of the purchase price on the Mansfield property.
You will recall that evidence was given in relation to the detail of all those transactions at earlier sittings.
The balance of the purchase price on the Cheadle property was raised by way of a loan from GE Capital Woodchester, the bank which we now know as Investec. From what the Tribunal was informed prior to the resumption of sittings in May of 2001, Mr. Aidan Phelan was instrumental in arranging this loan. It will be recalled that the Tribunal, in terms of the information made available prior to the resumption of the sittings and from the evidence heard at the sittings, was given a number of different versions of this transaction. It has proved difficult to obtain all of the evidence of the true nature of this transaction.
It will be recalled that when the Tribunal first investigated the matter, it learned that the original loan file in Woodchester Bank or Investec Bank could not be found, and to date, this file has not been located. Indeed, it was as a result of attempts by officials of Investec Bank to reconstitute the true nature of this transaction that the matter was referred to the Tribunal.
From Investec Bank’s inquiries, it appeared that the loan transaction suggested a connection between Mr. Michael Lowry and Mr. Denis O’Brien. You will recall that evidence was given by Mr. Phelan, Mr. Aidan Phelan, that it was he who negotiated the loan with Michael Tunney, a senior official of Investec Bank. Mr. Aidan Phelan informed the Tribunal and in evidence stated that he had made it absolutely clear that the loan was to be taken by Mr. Michael Lowry, and that for that purpose a corporate vehicle, Catclause, would be used. Mr. Tunney, on the other hand, informed the Tribunal and stated in evidence that Mr. Lowry was not involved.
However, a number of other bank officials informed the Tribunal and stated in evidence that Mr. Denis O’Brien did appear to be involved in the transaction. Mr. Morland informed the Tribunal that he had been informed by Mr. Tunney that although the property was being purchased for Mr. Denis O’Brien, Mr. O’Brien did not want his name associated with it. It’s only fair to point out at this stage that Mr. O’Brien at the time informed the Tribunal, and has since stated in evidence, that he knew nothing of either the loan or the property transaction.
It will also be recalled from the evidence that Investec Bank encountered real difficulty in ascertaining the true nature of this transaction, and in particular the true identities of the individuals involved. It was with a view to endeavouring to ascertain the true nature of the transaction and the true nature of the individuals involved that the Tribunal embarked on the inquiries carried out in the course of those resumed sittings between May and November of last year.
Much of the information available to the Tribunal in connection with that investigation came in the form of documentation provided by Mr. Christopher Vaughan. Mr. Vaughan is a solicitor practicing in Northampton and was the solicitor involved in both the Mansfield and the Cheadle transactions, and indeed was the solicitor acting in relation to a number of other property transactions which involved Mr. Denis O’Brien and to some degree, in a ministerial capacity, Mr. Aidan Phelan, and also with which Mr. Kevin Phelan was involved.
Prior to the resumption of the Tribunal’s sittings in May of last year, Mr. Vaughan met with members of the Tribunal legal team in the course of the private investigatory stage of its work. You will remember from the evidence that Mr. Vaughan also attended a meeting at the office of Mr. Aidan Phelan on the 15th March, 2001, a meeting attended by Mr. Michael Lowry, Mr. Aidan Phelan, Ms. Helen Malone, and Mr. Kevin Phelan.
It also was stated in evidence that some short time later Mr. Vaughan attended another meeting, this time at the Regency Airport Hotel. Mr. Lowry, Mr. Aidan Phelan, and Ms. Helen Malone attended that meeting. Mr. Denis O’Connor, an accountant, also attended the meeting. From the evidence, it would appear that while Mr. Kevin Phelan was in the Regency Airport Hotel for some reason connected with the meeting, he may not have attended for the entirety of the meeting or may not have attended at the same time as all of the other participants.
From the evidence to date, it would appear that none of these meetings had anything to do with the processing, either from a legal point of view or otherwise, of any of the two property transactions in question.
According to the evidence of Ms. Helen Malone, the first meeting, at Mr. Aidan Phelan’s office, was held for the purpose of briefing those persons present with regard to the transactions. Ms. Malone has given similar evidence in relation to the purpose of the meeting at the Regency Airport Hotel, as has Mr. Denis O’Connor.
While Mr. Vaughan was prepared to attend these meetings and indeed, as I have said, to attend a private meeting of the Tribunal, he declined to give evidence at the Tribunal’s public sittings. As Mr. Vaughan was out of the jurisdiction, he could not be compelled to give evidence; and while this matter was drawn to the attention of both Mr. Lowry and Mr. Aidan Phelan, both of whom gave evidence that he had encouraged him to attend, he persists in his refusal.
In the course of the evidence, it became clear that although the two meetings at the offices of Mr. Phelan and at the Regency Hotel respectively were held ostensibly for the purpose of briefing the participants or were held ostensibly for the purpose of briefing the participants, no notes appear to have been kept, although taking part in the meeting were a number of professionals to whom the taking of a note would be a matter of ordinary professional practice.
Now, this evidence concerning these meetings and the non-attendance of Mr. Christopher Vaughan, and to date Mr. Kevin Phelan, may now need to be revisited in the context of the events to which I will refer in a moment concerning Mr. Vaughan’s attitude to the Tribunal.
Before dealing with this material, it will be useful to refer to the Tribunal’s efforts to persuade Mr. Vaughan to give evidence. Before referring to those efforts, I should say that in the ordinary course, whether in a forensic or any other inquiry, where there was any uncertainty whether a bona fide uncertainty or otherwise concerning the true nature of a conveyancing or a property transaction, the Tribunal has proceeded on the basis that one would expect that a solicitor’s file would contain an accurate reflection of the course of any such transaction.
What is more, the Tribunal has always proceeded as it would seem reasonable to do, on the basis that in the ordinary way a solicitor performing a professional duty where any obligation of confidentiality had been waived by his clients would be only too happy to make himself available to explain the contents of his file, and indeed we have had examples of that in the context of other evidence given to this Tribunal.
On the 19th June, 2001, following a lengthy meeting with Mr. Vaughan on the 30th May, the solicitor to the Tribunal, Mr. John Davis, requested Mr. Vaughan to give evidence at the sittings resumed in May of 2001. Mr. Vaughan replied on the 27th June indicating that he could not accede to the Tribunal’s request that he give evidence at its public sittings. His reasons for not attending were as follows, and I’m quoting from his letter:
“As you will appreciate, I am a practicing solicitor and a notary public in this country. I am not familiar with the laws of Ireland and in particular the workings and objectives of the Tribunal. Therefore, purely from a professional point of view, I cannot expose myself to a public matter in the context of the past professional representation of my clients, as I believe I could find myself in a totally impossible position.”
On the 16th July, 2001, the Tribunal replied to Mr. Vaughan explaining the workings and objectives of the Tribunal. In particular, the Tribunal pointed out that the inquiry upon which it was engaged had been established under an Act the Tribunals of Inquiry Evidence Act of 1921, an Act of the English parliament, an Act which, as the Tribunal pointed out, governed Tribunals of Inquiry appointed to carry out inquiries in England and Wales and which, along with other UK legislation, was carried over into Irish law at the foundation of the State. The Tribunal also pointed out that as far as it was aware, the conduct of the business of the Tribunal did not differ significantly from the conduct of the business of similar Tribunals in the United Kingdom.
In response to Mr. Vaughan’s statement that he was concerned and feared that he might be exposed in giving evidence to the Tribunal, formal waivers of confidentiality were obtained from Messrs. A & L Goodbody, solicitors for Aidan Phelan, and Messrs. Kelly Noone, solicitors for Michael Lowry.
By letter of the 24th July, 2001, Mr. Vaughan wrote again stating that he would not be attending the Tribunal notwithstanding the Tribunal’s further correspondence and the provision of waivers.
On the 23rd October, 2001, the Tribunal again wrote to Mr. Vaughan recording that the Tribunal had been left with the impression that notwithstanding that he appeared to have been exhorted to do so by Mr. Phelan and Mr. Lowry, he was still not prepared to attend at the sittings of the Tribunal for the purpose of giving evidence concerning his dealings on their behalf. The Tribunal wrote formally so as to put him on notice that his stated reasons for non-attendance might be insufficient to convince the Tribunal that it would be inappropriate to draw unfavourable conclusions concerning his conduct of the affairs of his clients.
In a letter of the 24th October, 2001, in which Mr. Vaughan provided the Tribunal with information on a number of other matters, he stated that he had been contacted by both Mr. Michael Lowry and Mr. Aidan Phelan and their representatives and that he had indicated to them that although he would be as helpful as possible, he would not attend before the Tribunal in public session. He repeated that he was prepared to continue to assist the Tribunal but that his assistance would not extend to attendance at the Tribunal’s public sittings. Despite further correspondence from the Tribunal along similar lines, Mr. Vaughan was unwilling to attend to give evidence.
As a result of information made available to the Tribunal in March of this year, the Tribunal raised a number of new matters with Mr. Vaughan with a view to persuading him once again to give evidence to the Tribunal. The information in question was made available to the Tribunal on the 21st March, 2002 by Mr. Colm Keena, a journalist with the Irish Times. Mr. Keena contacted Mr. John Davis, the solicitor to the Tribunal, indicating that he had certain information which might be relevant to the Tribunal’s Terms of Reference. At a private confidential meeting with Mr. Davis, Mr. Keena handed over four documents.
Firstly, a copy of a letter which appeared to be on the notepaper of Mr. Christopher Vaughan, solicitor, notepaper with which Mr. Davis was familiar. The letter was dated the 12th July, 2000, and was addressed to Mr. Kevin Phelan of 106, Gillygooley Road, Omagh, County Tyrone.
Secondly, a copy of a letter, which again appeared to have been written on the notepaper of Mr. Christopher Vaughan, dated 5th September, 2000, and again addressed to Mr. Kevin Phelan.
Mr. Keena also provided Mr. Davis with two file copies of what appeared to be letters written on the same date by Mr. Christopher Vaughan to Mr. Kevin Phelan at the same address. The first one is dated 12th July, 2000. The second one is dated 5th September, 2000.
I want to deal firstly with the two letters written on the headed notepaper of Mr. Christopher Vaughan dated respectively the 12th July, 2000, and the 5th September, 2000. These letters were of interest to the Tribunal because they appear to be different to copies of letters of the same date between the same parties copies of which have been furnished to the Tribunal had been furnished by Mr. Christopher Vaughan, Mr. Kevin Phelan, and Mr. Aidan Phelan.
Under cover of a letter of the 26th April, 2001, Mr. Christopher Vaughan furnished the Tribunal with a file copy, or an office copy, if you like, of a letter from his office to Mr. Kevin Phelan at 106, Gillygooley Road, Omagh, County Tyrone. The letter was dated 12th July, 2000, and was written in connection with Saint Columba’s Church; that is to say in connection with the Cheadle property.
Some time later, on the 23rd May, 2001, Mr. Kevin Phelan provided the Tribunal with a copy of his file. The documents provided by Mr. Kevin Phelan included a photocopy of what appeared to be the original of a letter of the 12th July, 2000, from Mr. Christopher Vaughan, addressed to Mr. Kevin Phelan. It became apparent to the Tribunal that there were marked differences between the two versions of this letter of the 12th July, 2000, between on the one hand the short form file copy initially provided by Mr. Christopher Vaughan and the photocopy of the short form original of the same letter subsequently provided by Mr. Kevin Phelan, and on the other hand the photocopy of the long form letter provided to the Tribunal by Mr. Colm Keena.
Whilst I don’t propose in the course of the Opening Statement to go into the many differences between these two documents, it will suffice at this stage to emphasise the differences between the second paragraph in the short form letter as compared to the second paragraph in the long form letter.
Now, if I could put the short form letter on the overhead projector, the short form letter of the 12th July.
You will see that it’s from Mr. Vaughan to Mr. Kevin Phelan, it’s re Saint Columba’s Church — that’s the Cheadle property. It says:
“Dear Kevin, I enclose copy letter and policy schedule relating to this property which has only just been sent to me.
You will recall that this property was purchased in I… in my name as trustee for Aidan Phelan. I have only appreciated upon reading the policy schedule the conditions as to the property whilst it is unoccupied.
Can you please let me know as a matter of urgency
1. Have you managed to find a purchaser? 2. If not, is there now a tenant in the house as discussed with you recently? 3: Could you please ensure that the conditions be complied with immediately, as the policy could be null and void and I could be personally liable for losses.”
Then it signs off, “Yours sincerely, C.J. Vaughan”, and it’s signed with what appears to be Mr. Christopher Vaughan’s signature.
If we just go to the top of that letter again, please. That is the letter — that is a photocopy of a letter which was made available to the Tribunal by Mr. Kevin Phelan, Mr. Christopher Vaughan, and Mr. Aidan Phelan, and which was used in investigating the Cheadle transaction in the course of the Tribunal’s sittings which commenced in May of last year.
Now, I have called that the short form of that letter. It is in the same form as the file copy of that letter provided to the Tribunal by Mr. Christopher Vaughan, and I’ll just put the file copy on the overhead projector.
If you go to the top of that document, you’ll see it’s blank, because it’s an office copy. It’s again addressed to Mr. Kevin Phelan, dated 12th July; it is in the same form as the photocopy of the original which we had on the projector a moment ago.
Now, the photocopy provided to the Tribunal by Mr. Colm Keena, of the same date, between the same parties, I have decided to call the long form of that document; and if I could put that on the overhead projector, I’ll draw attention to the differences.
Again it’s from Christopher Vaughan to Kevin Phelan, dated 12th July, 2000. It’s re Saint Columba’s Church, which is the Cheadle property. It begins: “I enclose copy letter and policy schedule relating to this property which has only just been sent to me”.
It goes on: “You will recall that this property was purchased I” — “I” I think should be in “my name as trustee for our client. I have only appreciated upon reading the policy schedule the conditions as to the property whilst it is unoccupied”.
In the course of these sittings, the Tribunal will endeavour to address the question whether it would be appropriate to interpret the long form document and the reference to “our client” in the second paragraph which I have just read out as a reference to Mr. Michael Lowry, and whether it would be appropriate also to draw the inference that the short form letter was intended to conceal the true identity of the parties to the transaction, namely Mr. Michael Lowry, and to suggest that in fact Mr. Aidan Phelan was the purchaser of the Cheadle property.
I want to compare now the two forms, the long form and the short form of the letter of the 5th September. Firstly, if I could put the short form of that letter on the overhead projector. Again, this is the document relied on by the Tribunal in the course of its investigation of this matter last year. It’s from Christopher Vaughan to Kevin Phelan, dated 5th September.
“Dear Kevin, I faxed through to you on the 4th September the letter from Thistlewood Estates. This was waiting for me when I returned from holiday. This looks to be excellent news, depending on whether the conditions can be satisfied.
“Could you therefore let me know: 1. What is the current situation with regard to the granting of planning consent for the proposed residential scheme? Who is going to submit and pay for the planning application, and when will it be done?
2. Presumably the access will be dealt with at the same time as the planning application is submitted?
3. Are Thistlewood undertaking a soil survey at the present time?
“Do you know the identity of Thistlewood Estates’ clients? I have done a company search against Thistlewood, and I enclose a copy herewith which says very little. Do you know who their actual clients are?”
Now, the Tribunal was also provided with an office copy of that letter, an office copy of the short form of that letter, which I’ll just put on the overhead projector just for a moment. And as you can see, that is in the same form as the photocopy of the original, except of course that it doesn’t have Mr. Christopher Vaughan’s letterhead.
I now want to turn to the long form of that document, the photocopy of the letter of the 5th September provided to the Tribunal by Mr. Colm Keena.
Again it’s on the headed notepaper of Mr. Christopher Vaughan, dated 5th September, addressed to Mr. Kevin Phelan. It begins:
“Dear Kevin, I faxed through to you on the 4th September the letter from Thistlewood Estates that was waiting for me when I returned from holiday. This looks to be excellent news, depending on whether the conditions can be satisfied.”
Then it goes on in a paragraph which is not contained in the short form of that letter, which is as follows:
“What I would like to do is set up a timetable bearing in mind that Michael wants to own the property in his own name for a month prior to the sale to Thistlewood Estates.” Then it goes on:
“Could you therefore let me know”, and again the same three questions are asked as are asked in the short form of the letter.
It then goes on: “Do you know the identity of Thistlewood Estates’ clients? I have done a company search against Thistlewood, and I enclose a copy herewith which says very little. Do you know who their actual clients are?”
Again this appears in the short form and it’s the final paragraph in the short form letter.
In this long form letter there is a further paragraph, which is as follows:
“I have not written to Michael about this, as I get concerned about correspondence going to him, but a copy has been sent to Aidan as he needs to keep the mortgage lender happy as to the loan that Michael took out.”
Now, it should be borne in mind that from the evidence given to the Tribunal by Mr. Phelan, and also from information gleaned by the Tribunal from other documentation provided by Mr. Christopher Vaughan in the course of the May 2001 sittings, the Tribunal was led to believe that Mr. Aidan Phelan had taken over this transaction from January of the year 2000 and that Mr. Lowry had completely ceased to be involved in the transaction, and that was Mr. Lowry’s own evidence also.
The Tribunal will now wish to consider whether the short form of this letter was generated so as to exclude in the second paragraph a reference to Mr. Michael Lowry as the owner of the property, a reference, which as I have said, would be inconsistent with all of the evidence given to the Tribunal to date.
So far as the last paragraph is concerned, the Tribunal will wish to consider whether it was excluded from the short form of the letter so as to obscure the anxiety and concern Mr. Vaughan, and perhaps a number of other individuals connected with the transactions, may have had that Mr. Michael Lowry could be identified as the purchaser or owner of the property and/or as the person ultimately liable to Woodchester/Investec Bank as the borrower.
The Tribunal will also wish to consider why these documents were not brought to the attention of the Tribunal and whether in fact they were concealed from the Tribunal so as to obscure the true identity of the purchaser of the Cheadle property and the true nature of the relationship between Mr. Aidan Phelan and Mr. Michael Lowry, the true role of Mr. Christopher Vaughan and of Mr. Kevin Phelan, and the true identity of the borrower of the funds.
And I now want to refer to some of the steps taken by the Tribunal on receipt of these documents.
Firstly, the Tribunal decided that it should endeavour to establish whether these documents had in fact been generated by Mr. Christopher Vaughan and whether they had in fact been sent by him to Mr. Kevin Phelan, as on their faces they purported to have been.
Mr. Davis, solicitor to the Tribunal, contacted Mr. Vaughan on the afternoon of the 21st March, 2002, and spoke to Mr. Vaughan on the telephone. He had already furnished Mr. Vaughan with Mr. Vaughan’s own file copies of the letters respectively of the 12th July and the 5th September, 2000, together with the copies of the long form of those letters on Mr. Christopher Vaughan’s own notepaper. Mr. Vaughan, in the course of a telephone conversation, indicated that he had no comment to make in relation to the letters which had been forwarded to him and that he had no instructions in relation to the matter. However, he speculated that the discrepancies between the short form file copy letters from his own file and the long form letters provided to him for comment by Mr. Davis might have been explicable on the basis that the short form file copies consisted of drafts which he later expanded on and forwarded to Mr. Kevin Phelan. He was satisfied that the long form letters on his headed notepaper and which bore his name were in fact his letters.
By fax of the same day he stated in reply to Mr. Davis as follows:
“Thank you for your fax of this afternoon. I have no immediate comment to make on the points raised in the fax, and so far as I am aware, I am no longer instructed by any of the parties in respect of those matters before the Tribunal. However, if you wish, I could write to the relevant parties to see if they wish to instruct me further.
“I would also need to be sure that any previous waiver of client confidentiality is still applicable to me. Yours sincerely.”
The Tribunal again wrote to Mr. Vaughan on the 25th March, 2002, enclosing another set of the same four documents. Mr. Davis in that letter stated: “You will recall that we discussed the divergence between the office copy and the final issued letter in each of these cases.” That’s referring to the July and September letters. “You felt that the differences were probably due to the fact that you had expanded on the drafts when issuing the final letter. I would be much obliged if you could examine your file so as to clarify the position, since I am sure you will agree that it is unusual that a solicitor would not retain an office copy of the final draft of a letter issued on behalf of a client.”
Having received no response from Vaughan, the Tribunal letter of the 12th April 2002 forwarded to Mr. Vaughan by fax for Mr. Vaughan’s comments further copies of the same four letters together with two additional copies, namely, top copies of the short form of Mr. Vaughan’s letters dated 12th July, 2000, and the 5th September, 2000. So that what Mr. Davis had now given to Mr. Vaughan under cover of this letter was all of the documents to which I have referred you, Sir, on the overhead projector.
Mr. Davis said in his letter:
“Dear Mr. Vaughan.
“I refer to my letter of the 25th March, 2002, to which I have not had a reply.
“I am now writing to seek once again your comments on the matters raised in my letter and in our telephone conversation of Thursday, 21st March, 2002. With this letter I am enclosing not just the material to which I drew your attention in my letter of the 25th March, but all the relevant documents to hand concerning this matter, including documents recently supplied to the Tribunal by another party.
“1. Office copy of the letter of the 12th July, 2000 from your office to Mr. Kevin Phelan.”
That is the document which we have been referring to as the short form office copy.
“2. Top copy of the same letter issued by you to Mr. Kevin Phelan and also dated 12th July 2000.” That is the doucment we been calling the short form original of the letter of the 12th July.
“3. Top copy of another letter issued by you to Mr. Kevin Phelan and also dated 12th July.” That is the document we have been referring to as the long form of the letter of the 12th July.
“4. Office copy letter of the 5th September, 2000, from your office to Mr. Kevin Phelan.” This is an office copy of the short form of the letter of the 5th September.
“5. Top copy of the same letter issued by you to Mr. Kevin Phelan and also dated 15th September, 2000.” This is the top copy of the short form of the letter of the 15th September — the letter on the overhead projector says the 15th; that should be the 5th September. It’s a typographical error.
“6. Top copy of another letter issued by you to Mr. Kevin Phelan also dated 5th September, 2000.” This was the long form of the letter of the 5th September.
Documents numbers 3 and 6 were the documents, copies of which were provided to the Tribunal by Mr. Colm Keena; they were, in other words, the long form of the letters which the Tribunal already had copies of, both the file copy and the original provided to the Tribunal by Mr. Christopher Vaughan on an earlier occasion.
Mr. Davis went on: “You will recall that when we spoke on the phone on Thursday 21st March, 2002, and as I state in my letter of the 22nd March, 2002, you indicated that letter number 3 above probably differed from letter number 1 above because you had expanded on the draft when issuing the top copy from your office. Likewise you indicated that the same was the position in relation to letters numbered 4 and 6.
“You will see from the copies enclosed that firstly it would appear that letter number 3 is not in fact an enlargement of letter number 1, and secondly, that letter number 6 is similarly not an enlargement of letter number 4. ”
Mr. Davis was obviously able to make that point because letters numbers 2 and 5 were in fact the enlargements, if you like, of letters — of the office copies provided to the Tribunal and itemised at numbers 1 and 4 of Mr. Davis’s letter.
Mr. Davis went on: “From the foregoing, a number of reasonable inferences that could be drawn are (a), that you generated two separate sets of correspondence concerning this matter; (b), that only one set was made available to the Tribunal on foot of its original request for assistance; (c), that a separate set of documentation was obscured from the view of the Tribunal; (d), that two files appear to have been kept in connection with this matter, one for disclosure and one to be obscured from disclosure; (e), that, as appears from letter number 6, this concealment may be related to the involvement of Mr. Michael Lowry.
“As these are obviously matters of the most serious nature and could ultimately lead to conclusions which might have an adverse impact on your clients and on the conduct of your practice as a solicitor, I would be much obliged if you could let me have your comments on the foregoing as a matter of the utmost urgency and certainly by no later than twelve noon on Wednesday next, 17th April.”
In this letter the Tribunal was mindful of the fact, as the last paragraph of the letter shows, that on the face of it, Mr. Vaughan’s role in these matters may have been a purely ministerial one, and that he appeared to be acting as an agent only, and that therefore he should be given every opportunity to account for the state of this documentation, having regard to the impact which any one of a number of reasonable inferences could have on his professional standing.
Mr. Vaughan replied by letter dated 16th April, 2002, to the effect that he had taken advice on the points raised by the Tribunal but that he was unable to respond without instructions from his clients, and he indicated that he was actively seeking instructions. After some further correspondence from the Tribunal, Mr. Vaughan wrote to the Tribunal by letter of the 29th April, 2002, as follows:
“Thank you for your letter of the 17th April 2002. I am sorry that I have been slow in response to your inquiries, but I have been seeking instructions from my clients.
“I am enclosing copies of an exchange of correspondence between myself and Kevin Phelan for your information.”
Mr. Vaughan enclosed a letter from Mr. Kevin Phelan where, with reference to the documents queried by the Tribunal, Mr. Phelan stated that — that is, Mr. Kevin Phelan stated, and I quote: “I recall on some occasions in the past you issued correspondence to me outlining incorrect details following our prolonged and detailed meetings. I know on occasions you have confused clients and projects, which resulted in corrections having to be made and a new correspondence to be issued. I believe the documentation you have forwarded has probably arisen for this reason. In any event, as stated, I have letters marked ‘July A’ and ‘September A’ on my files which I hold as originals.
“I have no idea where the documents marked ‘July B’ and ‘September B’ have come from.”
The references in that letter to the “A” documents are in reference to the short form letters. The references to the “B” documents are references to the long form letters.
It will be obvious that the Tribunal regarded Mr. Kevin Phelan as a person likely to be able to give evidence or provide the Tribunal with information relevant to the inquiries being conducted in relation to these documents. In the past Mr. Kevin Phelan has declined to attend the Tribunal as a witness, or for that matter to attend private meetings with members of the Tribunal legal team. As he currently resides outside the jurisdiction, he cannot — as long as he remains outside the jurisdiction, in any case — be compelled on foot of a summons to attend as a witness at the Tribunal sittings.
When requested by letter of the 12th July of this year to attend as a witness in connection with these documents, he indicated by letter of the 18th July that he intended to take legal advice on the matter and promised to respond to the Tribunal without delay. To date the Tribunal has not heard from him.
In addition to taking this matter up with Mr. Vaughan and Mr. Kevin Phelan, the Tribunal also took the documents up directly with Mr. Michael Lowry and Mr. Aidan Phelan. Mr. Aidan Phelan, through his solicitors, has informed the Tribunal that he was not in a position to explain the apparent discrepancy between the long form and short form documents comprising the correspondence between Mr. Christopher Vaughan and Mr. Kevin Phelan. Mr. Aidan Phelan also indicated that he had again urged Mr. Vaughan to deal with the Tribunal’s inquiries.
Mr. Lowry, by letter of the 30th April, 2002, from his solicitors, indicated that he was at a loss to understand the documents in question. Through his solicitors he has stated that he had no knowledge whatsoever of the long form letters of the 12th July or the 5th September.
In light of the responses from Mr. Kevin Phelan, Mr. Aidan Phelan, and Mr. Michael Lowry, the Tribunal, by letter of the 1st May, once again sought the assistance of Mr. Vaughan and requested him to address the issues identified in the Tribunal’s letter of the 17th April; that is to say, the possibility that negative inferences could be drawn concerning the manner in which he conducted his clients’ affairs.
He replied to the Tribunal by letter of the 7th May 2002 as follows:
“I do not think there is anything further I can do to assist the Tribunal”.
In view of the seriousness of the inferences that could be drawn from the existence of these documents and the fact that they had only recently come to the attention of the Tribunal, the Tribunal renewed its efforts with solicitors for both Mr. Michael Lowry and Mr. Aidan Phelan with a view to encouraging them to obtain from Mr. Vaughan a comprehensive explanation for the existence of these documents, in particular, in light of the potential for negative conclusions affecting Mr. Vaughan and also the potential that Mr. Vaughan’s actions in relation to these documents would reflect on his clients with whom, in certain circumstances, it might be appropriate to identify him in connection with the documents.
Specifically the Tribunal requested both Mr. Phelan and Mr. Lowry to request that Mr. Vaughan, as their solicitor, provide an explanation for the manner in which he appeared to have conducted his practice in relation to their affairs, and also drew their attention to the fact that in the event of not obtaining the assistance to which it would appear they were entitled, they should consider bringing the matter to the attention of the Law Society of England and Wales with a view to requesting the Society to carry out such inquiries as it might deem appropriate to ascertain why Mr. Vaughan was conducting his practice in this way.
Mr. Phelan, through his solicitors, by letter of the 13th June, 2002, took the view that the Tribunal was suggesting that he, Mr. Phelan, should take it upon himself to litigate a complaint against a solicitor before a regulatory authority in another jurisdiction, and that this was unreasonable and went well beyond the scope of cooperation which the Tribunal was entitled to expect from him.
Mr. Lowry’s solicitors informed the Tribunal that they had written to Mr. Vaughan and furnished the Tribunal with a copy of their letter of the 12th July, 2002, addressed to him in which they drew his attention to the inquiries being made by the Tribunal, and in that letter, after describing the nature of their client’s dealings in connection with the Cheadle property, stated as follows:
“Leaving aside the fact that there appears to be two versions of each letter in existence, we would request that you let us have a full explanation as to why reference was made in the letter of the 5th September, and we quote, ‘Michael wants to own the property in his own name for a month prior to the sale’, and furthermore, why in the letter of the 12th July one version records ‘This property was purchased in my name as trustee for Aidan Phelan” and the other version records ‘was purchased in my name as trustee for our client.'”
By letter of the 17th June 2002, Mr. Vaughan replied to Mr. Lowry’s solicitors as follows: “I shall need to do a certain amount of research before being able to reply to your letter in full.”
On the 4th July, 2002, in a lengthy letter, Mr. Vaughan, writing to Mr. Lowry’s solicitors with regard to the matter at issue, namely the fact that there appeared to be in existence two different versions of the same letters concerning Mr. Vaughan’s conduct of the affairs of Mr. Lowry and Mr. Phelan, and I quote:
“Because Kevin Phelan acted for both Aidan Phelan and Michael Lowry and was involved in other matters as well, it was very difficult when speaking with Kevin Phelan over the telephone to know whom he was representing at any one time, especially as any one telephone conversation would cover a number of different matters. This certainly caused confusion on various occasions, which was why there may have been more than one version of the document prepared by me, because the first may have been prepared by me following a misunderstanding of my instructions.
You indicate that I have confused Aidan Phelan and Michael Lowry. This is not unexpected, bearing in mind what I have written above.
However, I was instructed that the Revenue would expect that any site should (be) owned by an investor personally to minimise any Capital Gains Tax liability. Therefore, the objective was correct but the name was stated incorrectly by me. I would put this down to either a simple error or lack of concentration. Kevin Phelan complained to me over it and I simply corrected it. With regard to your reference to the duplicate letters as mentioned above I regularly faxed transmissions to Kevin Phelan throughout our whole working relationship.
If he then corrected something on receipt of a fax, I would have sent him the amended version and kept that hard copy on my file but probably not the first version of the fax. Kevin Phelan would therefore have two versions of the same letter, and I would only have the final version.
“I have already explained this to the Tribunal clerk, and Kevin Phelan has confirmed my view of what I think occurred.”
Mr. Vaughan went on to say that having given the matter considerable thought and having taken advice, he was firmly of the opinion that as a witness before the Tribunal, his evidence would be totally and completely worthless. He said that while he would genuinely like to assist the Tribunal, he knew that his evidence would be of no value. He stated that he was suffering from an inherited serious heart problem and that he had had heart surgery, that he had been on regular medication, and that he felt that — and I am quoting: “Appearing before the Tribunal in opening session and submitting himself to cross-examination would be an extremely stressful experience and that there was absolutely no doubt that his health was far more important than the wishes of any client.”
That letter, written by Mr. Vaughan to Mr. Lowry’s solicitor, was provided to the Tribunal by Mr. Lowry’s solicitors. The Tribunal then wrote to Mr. Vaughan by letter of the 15th July referring to that letter and repeated the view that Mr. Vaughan’s evidence would be of real value to the Tribunal’s deliberations, and stressed once against that in the absence of any meaningful explanation as to the manner in which he kept his file concerning these matters, negative conclusions could be reached with respect to his conduct of his professional practice.
The Tribunal went on to state that in light of Mr. Vaughan’s assertion that he did not think that his health would permit him to attend in open session, the Tribunal would be prepared to consider taking his evidence otherwise than in open session, and the Tribunal requested him to indicate whether he would be prepared to give evidence in what has colloquially been called “a closed session”.
Mr. Vaughan replied on the 17th July and expressed surprise that Mr. Lowry’s solicitors had sent the Tribunal a copy of his letter to Mr. Lowry. He went on to say that nothing in the Tribunal’s letter of the 15th July persuaded him in the slightest that his evidence would be of any value to the Tribunal and that in no circumstances would he be attending either in public or closed session. He went on to say: “So far as I am concerned, that is the end of this correspondence.”
In view of the fact that the Tribunal, as I mentioned in this Opening Statement and as was stated in earlier Opening Statements, is examining a number of overlapping relationships between a number of individuals, including Mr. Denis O’Brien, this correspondence and this documentation was brought to the attention of Mr. O’Brien’s solicitors. Mr. O’Brien has stated that he had no knowledge of any correspondence that passed between Mr. Vaughan and Mr. Kevin Phelan, let alone any knowledge as to why different copies of that correspondence might exist and that he was unable to make any comment on the subject matter of the correspondence.
Now, as I indicated at the outset of this statement, when the Tribunal first embarked on examining the money trail in connection with the five itemised matters to which I have already referred, in May of this year, one of the lines of inquiry upon which the Tribunal focused was the fact that none of the information which appeared on any view to be prima facie relevant to the Tribunal’s Terms of Reference had not, until then, been brought to its attention. In assembling information in connection with these transactions prior to the resumption of sittings in May of 2000, and in leading evidence in connection with those transactions between May 2000 and November 2001, the Tribunal, as I have said, sought to establish the true nature of the transactions and the true identity of the parties to the transactions and also whether attempts had been made to obscure from the Tribunal the true substance of the transactions.
All of this evidence will clearly now have to be reviewed and some of it revisited in the light of the additional information to which I have just referred, and in particular, in the light of the documents provided by Mr. Colm Keena and the responses by various individuals connected with those documents to the Tribunal’s requests for information. The Tribunal will have to consider whether, in particular, if it is accepted that the true nature of these transactions is reflected in the long form letters respectively, of the 12th July and the 5th September 2000, there wasn’t a resolve on the part of certain persons to deprive the Tribunal of access to those documents.
Ultimately, the Tribunal will have to determine how to approach the evaluation of the evidence concerning these documents, and especially what account ought to be taken of the fact that the person primarily responsible for generating the documents, namely Mr. Christopher Vaughan, has refused to attend; the fact that the apparent addressee of the documents, Mr. Kevin Phelan, has yet to indicate his willingness to attend; and whether any other person connected with the documents or the transactions to which they refer ought to be identified with the actions of Mr. Christopher Vaughan.