Accountancy firm Ernst and Young has been refused permission by the High Court to bring a challenge to an investigation into its conduct as auditors of Anglo Irish Bank.
The company wanted to stop the inquiry by special investigator John Purcell, who was appointed by the Chartered Accountants Regulatory Board of the Institute of Chartered Accountants of Ireland.
Ernst and Young claimed no actual complaint had been made against it as was required under bylaws governing the board's process.
But Ms Justice Mary Irvine ruled firstly that Ernst and Young were out of time in looking for an order quashing the appointment of Mr Purcell. An application for such an order has to be made within six months and the time can only be extended at the court's discretion. Mr Purcell was appointed in February 2009.
She said that the firm was seeking an extension of time to enable it to effectively torpedo and fatally terminate an investigative process which has been ongoing for two years and which has involved substantial time and expense for both parties.
She said the onus was on the firm to provide a cogent, weighty and meritorious explanation for the delay in seeking to quash the appointment of the special investigator. And she said this had not been provided.
The judge also ruled that Ernst and Young was relying on a definition of 'complaint' which was wholly different and substantially more demanding than the definition in the bye laws governing the appointment of a special investigator. She said it was not possible to argue in any rational way that there was no 'complaint' before the complaints committee.
She also ruled that the special investigator was conducting a preliminary investigation to see if on the face of it there was a case to be answered by Ernst and Young. She said there was no legal authority supporting the firm's claim that it has certain rights in relation to this stage of the process.
In a statement, Ernst and Young said it was disappointed by the High Court's decision.
The firm said it had a genuine concern over the process being followed by the Chartered Accountants Regulatory Board and believes it was right to seek the court's permission for this challenge.
The statement said the firm had no issue with active, constructive and comprehensive participation in any investigation of its work as statutory auditors to Anglo Irish Bank.
It said it had co-operated fully with CARB's investigation to date and supported its desire to maintain high standards within the accountancy profession.
It said the firm would now take time to review the terms of the judgment.
