Fair Procedures as a Precondition to Confirming Central Bank Prohibition Notices (Oral Hearing and Witness Evidence Where Credibility Is in Issue)

Case: Central Bank Of Ireland v CD (Approved) (Rev1) [2026] IEHC 203
Court: High Court of Ireland (President of the High Court, Barniville J.)
Date: 31 March 2026

1. Introduction

This decision concerns the High Court’s supervisory role under s. 45 of the Central Bank Reform Act 2010 in applications to confirm a Central Bank Prohibition Notice issued under s. 43 (the “fitness and probity” regime for persons performing “controlled functions” in regulated financial service providers).

The Central Bank sought confirmation of a Prohibition Notice issued to the respondent (anonymised as CD), a former senior executive and “Designated Person” within an Irish fund management company (“EF Fund ManCo”). The underlying events arose from issues affecting certain absolute return bond sub-funds, the suspension of a portfolio manager (initialled GH), and the Central Bank’s view that the respondent’s competence and probity fell short of the Fitness and Probity Standards (2014).

The application raised two principal questions:

  • Vires: whether the Central Bank could lawfully continue an investigation and proceed to prohibition after the respondent resigned from all controlled-function roles.
  • Confirmation test: whether there was a “reasonable basis” for the Central Bank’s opinion under s. 45(5)–(6), in particular whether the opinion and process were vitiated by “significant and serious” errors, including breaches of fair procedures.

2. Summary of the Judgment

The Court:

  • Rejected the respondent’s ultra vires challenge: resignation after commencement did not terminate the Central Bank’s statutory power to continue the investigation and proceed under Chapters 3 and 4 of Part 3 of the 2010 Act.
  • Refused to confirm the Prohibition Notice under s. 45, holding that the Central Bank failed to establish a “reasonable basis” because the opinion and process were vitiated by a series of significant and serious errors amounting to serious breaches of fair procedures.
  • Set aside the Prohibition Notice and declined remittal, emphasising the unique unfairness of remitting after the respondent had already been subject to the notice for the relevant period.

Central to the refusal was the Court’s finding that, given the gravity of allegations (including findings of lack of candour/truthfulness) and the potentially career-ending consequences, basic fairness required substantially stronger procedural protections—most notably, interviewing the respondent and relevant witnesses and convening an oral hearing where credibility was at stake.

3. Analysis

3.1 The statutory architecture and the court’s confirmation role

The judgment gives rare, detailed treatment of the Part 3 regime:

  • Investigation stage (Chapter 3): commencement under s. 25; evidence-gathering via s. 32 “evidentiary notices”; discretionary oral evidence under s. 34, elaborated in Regulation 4 of the Central Bank Reform Act 2010 (Procedures governing the conduct of Investigators) Regulations 2012 (S.I. No. 56 of 2012).
  • Report stage: s. 41 report to the Central Bank, with written submissions by the subject.
  • Decision stage (Chapter 4): prohibition under s. 43, but only if conditions including s. 43(3)(b) are met (a “hearing…necessary to do justice in the circumstances”) and the necessity requirement s. 43(3)(c) is satisfied, having particular regard to s. 43(4) (systemic stability and consumer protection).
  • Judicial confirmation (s. 45): the Court may confirm only if satisfied there is a “reasonable basis” as defined in s. 45(6), including that the opinion and the process leading to it were not vitiated by significant and serious error(s), mistake of law, or evidential insufficiency.

A key interpretive outcome is the Court’s view that the burden under s. 45(6) lies on the Central Bank to show the process and opinion were not vitiated (while noting the same conclusion would follow even if the burden were otherwise).

3.2 Ultra vires: resignation does not end the Bank’s power to investigate and prohibit

The respondent argued that because he resigned (and no longer performed any controlled or pre-approval controlled function), the Central Bank could not lawfully continue the investigation or issue a Prohibition Notice. The Court rejected this as a matter of statutory interpretation:

  • The relevant time for s. 25 is when the Deputy Governor (or delegate) forms the opinion that investigation is warranted; if the person was performing controlled functions then, the investigation may be conducted and completed.
  • Nothing in Chapters 3 or 4 requires cessation of the process upon resignation; such a requirement would need clear statutory language.
  • The “close interconnection” between the investigation and later prohibition decision (including via s. 43(3)(a)) supports continuity.

The Court considered Fingleton v The Central Bank of Ireland [2016] IEHC 1 (and the Court of Appeal’s upholding of its reasoning) as instructive on avoiding constructions that allow investigated persons to defeat jurisdiction by resignation and on the limits of using later amending legislation as an interpretive aid (citing Carney v Balkan Tours Limited [1997] 1 IR 153 and Clinton v An Bord Pleanála [2006] IESC 58).

The later legislative change (now reflected in the Central Bank (Individual Accountability Framework) Act 2023) extending investigation reach to former function-holders within a defined period was held irrelevant to the respondent’s case, because the respondent was still a controlled-function holder when the investigation commenced.

3.3 “Reasonable basis” under s. 45: significant and serious procedural error vitiated the process

The judgment’s principal contribution is its application of s. 45(6)(a) (“significant and serious error or series of such errors”) to fair procedures failures at both investigation and decision-making stages.

3.3.1 The fair-procedures framework applied

The Court reiterated well-established Irish public law principles:

  • Fair procedures are context-sensitive: International Fishing Vessels Limited v Minister for Marine (No. 2) [1991] 2 IR 93, Keady v Commissioner of An Garda Síochána [1992] 2 IR 197, Mooney v An Post [1988] 4 IR 288, and Dellway Investments Limited v NAMA [2011] 4 IR 1.
  • One assesses the process as a whole: Crayden Fishing Company v Sea Fisheries Protection Authority [2017] 3 I.R. 785 and Facebook Ireland Ltd v Data Protection Commission [2021] IEHC 336.
  • Discretions in statutory schemes are presumed to be exercised compatibly with constitutional fairness: East Donegal Co-Operative Society Limited v Attorney General [1970] IR 317.
  • Where the credibility and good name of the person are centrally engaged and consequences are grave, the procedures must be correspondingly robust, drawing on Re Haughey [1971] IR 217 and the “full panoply” language cited via O'Ceallaigh v An Bord Altranais [2000] 4 IR 54 and Scariff v Taylor [1996] 1 IR 241.

The Court also drew a sharp line on statutory “deference”: while s. 45(6) requires the Court to take account of the Central Bank’s “expertise and specialist knowledge” on technical/regulatory matters, it does not justify deference on whether the Bank afforded constitutionally adequate procedural fairness (noting analogous approaches in Hyde v Financial Services Ombudsman [2011] IEHC 422, O'Neill v Financial Services Ombudsman [2014] IEHC 282, Governey v Financial Services Ombudsman [2015] 2 IR 616, and Facebook Ireland Ltd v Data Protection Commission [2021] IEHC 336).

3.3.2 Key procedural defects identified

(a) Failure to interview the respondent

  • The respondent was repeatedly described by the Investigator as the “key” or “primary” witness, yet was never interviewed.
  • The Investigator closed the information-gathering stage without notice and without following up given known medical constraints.
  • The Court treated this as materially unfair in a process where truthfulness and integrity were in issue and outcomes were potentially catastrophic.

(b) Failure to interview material witnesses identified by the respondent

  • The respondent provided names and reasons under the 2012 Regulations, yet no witness identified by him was interviewed.
  • The Investigator’s stance that the respondent should obtain “submissions” from those individuals was held unfair, particularly given the Central Bank’s statutory compulsion powers and the distinction between “submissions” and “evidence”.

(c) Wrong approach/test applied to the need for witness evidence

  • The Investigator (and later the Decision-Maker) treated the absence of “gaps in evidence” or “conflicts in evidence” as decisive.
  • The Court held this wrongly displaced the central question: whether additional evidence and testing were required to secure a fair process where credibility and serious allegations were in play.

(d) Failure to convene an oral hearing where credibility and gravity demanded it

  • Regulation 4(2) explicitly points to oral hearings where credibility needs testing, allegations are serious, or fairness requires it due to potential effects.
  • The Court found that, on the facts, an oral hearing was required at the investigation stage; it was “unfathomable” that none occurred.
  • The Central Bank’s reliance on documentary materials and transcripts did not substitute for oral testing of contested inferences and credibility.

(e) The Decision-Maker’s “meeting” did not cure the defects

  • The September 2021 meeting was neither a hearing nor an evidential interview: the respondent was not invited to give sworn evidence, no witnesses were examined, and no questions were asked.
  • The Court viewed it as a belated “box-ticking” exercise that compounded rather than remedied the earlier unfairness.
  • Critically, adverse credibility-based findings (“unconvincing”, “very hard…to understand how [he] could genuinely believe…”) were made without those concerns being put to the respondent in any meaningful oral forum.

Collectively, these failures were held to “irretrievably” taint the process, so the Central Bank could not satisfy s. 45(6). The Court therefore refused confirmation, set aside the notice, and declined remittal given the elapsed time and the respondent’s already-endured prohibition period.

3.4 Precedents cited: how they shaped the outcome

3.4.1 Public hearing/anonymity

  • Gilchrist v Sunday Newspapers [2017] IESC 16, [2017] IR 284 was invoked as a common-law foundation for departing from open justice. The Court instead relied primarily on the statutory mechanism in s. 45(3), emphasising the case-specific nature of its decision to hear otherwise than in public.

3.4.2 Presumption of constitutionality and fair exercise of discretion

  • East Donegal Co-Operative Society Limited v Attorney General [1970] IR 317 provided the presumption that statutory discretions (e.g., whether to interview witnesses or hold an oral hearing) must be exercised in conformity with constitutional fairness.

3.4.3 Process-as-a-whole and contextual fairness

  • Crayden Fishing Company v Sea Fisheries Protection Authority [2017] 3 I.R. 785 and Facebook Ireland Ltd v Data Protection Commission [2021] IEHC 336 supported the Court’s holistic assessment of fairness across stages, rejecting any attempt to treat later written submissions or the Decision-Maker’s meeting as curing foundational investigative deficits.

3.4.4 When an oral hearing is required

  • Hyde v Financial Services Ombudsman [2011] IEHC 422 and O'Neill v Financial Services Ombudsman [2014] IEHC 282 were used for the proposition that failure to hold an oral hearing where required can amount to a serious procedural defect capable of vitiating a decision.
  • The Court distinguished more limited-hearing contexts relied upon by the Central Bank (including references to J&E Davy v Financial Services Ombudsman [2008] IEHC 256, [2008] 2 ILRM 507 and J&E Davy v Financial Services Ombudsman [2010] IESC 30, [2010] 3 IR 324) by emphasising the extraordinary seriousness of credibility findings and systemic-risk language used against the respondent.
  • John Paul Construction Limited v Tipperary Cooperative Creamery Limited [2022] IEHC 3 was treated as remote from a fitness-and-probity process involving reputational destruction and credibility findings.

3.4.5 The statutory meaning of “significant and serious error”

  • The Court traced s. 45(6)(a)’s language to Orange Limited v Director of Telecoms (No. 2) [2000] 4 IR 159 and its later adoption in Ulster Bank Investment Funds Ltd. v Financial Services Ombudsman [2006] IEHC 323, framing fair procedures breaches as capable of meeting that threshold.

3.4.6 Statutory interpretation methodology

  • Fitzgibbon v Law Society of Ireland [2015] 1 IR 516 was used to underline that statutory review/confirmation tests depend on language, institutional role, expertise, and consequences for the affected person.
  • The Court applied the “language, context and purpose” approach articulated in Heather Hill Management Company CLG v An Bord Pleanála [2024] 2 IR 222 and summarised in A, B, and C v Minister for Foreign Affairs [2023] IESC 10, [2023] 1 ILRM 335, particularly in resolving the ultra vires issue.

3.4.7 Analogies with other confirmation regimes

  • The Court surveyed confirmation standards in professional discipline contexts, including Medical Council v M.A.G.A [2016] IEHC 779, Medical Council v Lohan - Mannion [2017] IEHC 401, Teaching Council Of Ireland v S.R. [2018] IEHC 582, Nursing and Midwifery Board of Ireland v Burke [2025] IEHC 557, and Veterinary Council v Brennan [2020] IEHC 655, to highlight that s. 45 is not a statutory appeal yet still demands meaningful scrutiny—especially given the absence of any statutory appeal for prohibition notices.
  • Central Bank of Ireland v Lynch [2022] IEHC 319 was used to confirm that courts, on confirmation applications, must ensure compliance with prescribed procedures and constitutional justice.

3.4.8 Constitutionalisation of quasi-judicial decision-making

  • Zalewski v Adjudication Officer [2022] 1 IR 421 supported the insistence that quasi-judicial bodies must apply fair procedures to a high standard when exercising adjudicative functions with serious consequences.

3.5 Impact

This judgment is likely to influence Irish financial regulation and administrative law in several ways:

  • Procedural recalibration in fitness and probity investigations: where allegations effectively impugn honesty or integrity, and where findings may be career-ending, the Central Bank will need to ensure evidence is fairly gathered and tested—potentially requiring interviews and oral hearings more frequently than past practice.
  • Limits of documentary-only decision-making: heavy reliance on “contemporaneous documents” and transcripts will not necessarily satisfy fairness where the real dispute concerns inferences, context, and credibility.
  • Decision-maker’s obligations under s. 43(3)(b): the “hearing…necessary to do justice” is substantive, not formal. A non-evidential meeting without questions may not cure deficiencies.
  • Confirmation applications as meaningful scrutiny: although s. 45 is not an appeal, the Court treated the “process that led to” the opinion as central. The Central Bank must be in a position to demonstrate procedural integrity, not merely defend conclusions.
  • Remedy and finality: the refusal to remit—because the respondent had already endured the prohibition period—signals that delay can shape relief, incentivising timely and procedurally robust processes at first instance.

On the other hand, the Court’s rejection of the ultra vires argument preserves the Central Bank’s ability to complete investigations notwithstanding resignation, reducing incentives for strategic exits.

4. Complex Concepts Simplified

  • Controlled function / PCF: regulated roles with defined responsibilities; “PCF” roles require Central Bank approval.
  • Fitness and probity: minimum standards of competence/capability and honesty/integrity (and financial soundness) set by Central Bank code.
  • Prohibition Notice (s. 43): an administrative measure preventing an individual from performing controlled functions for a period or indefinitely.
  • Confirmation (s. 45): the Prohibition Notice cannot effectively continue beyond a short statutory period unless the High Court confirms (or varies) it.
  • “Reasonable basis” (s. 45(6)): not simply whether the Central Bank’s view is arguable; the Bank must show its opinion and the process were not undermined by serious error(s), legal mistake, or lack of evidential support.
  • Oral hearing (s. 34 / Reg. 4): a formal evidence-taking process (with oath/affirmation and potential cross-examination) used when necessary for proper conduct and fairness, especially where credibility must be tested.
  • “Meeting” vs “hearing”: the Court treated an informal meeting allowing submissions—without evidence, questioning, or witness testing—as inadequate to satisfy fairness where credibility findings were made.

5. Conclusion

Central Bank Of Ireland v CD [2026] IEHC 203 establishes that, while the Central Bank may continue a fitness and probity investigation despite a subject’s resignation, the High Court will not confirm a Prohibition Notice unless satisfied that the process leading to the Bank’s opinion met constitutional and statutory standards of fairness.

Where allegations and findings impugn truthfulness and integrity and have profound professional consequences, fairness may require interviews, the taking of relevant witness evidence, and an oral hearing to test credibility. A documentary-only process, followed by a non-evidential “meeting”, may amount to “significant and serious” error under s. 45(6), requiring refusal of confirmation and setting aside of the notice.