Noel Smyth's fees and taxes in Haughey case

Noel Smyth was paid legal fees in excess of £7,000,000 in the case that led to the humiliation of Charles Haughey. There was a half million pound tax dispute over those fees.
Noel Smyth, solicitor, was paid fees well in excess of £7m in return for his services, in the case that led to the humiliation of Charles Haughey. That was the case taken by Ben Dunne against his siblings and the Dunne family trust and it resulted in a settlement of £125m for Mr Dunne.

The fees, in excess of £7m, subsequently became the subject of a tax dispute with the Revenue Commissioners and, following an audit of the accounts of Noel Smyth's firm, he was obliged to pay £500,000.
In an interview with Magill, Noel Smyth has acknowledged the dispute with the Revenue Commissioners. He said: “It's always embarrassing when you have to pay money to the Revenue Commissioners and the actual amount involved was more than £500,000” (see interview).

Magill understands that an offshore company, Livingston Properties Ltd, in which Noel Smyth is a shareholder, is also the subject of investigation by the Revenue Commissioners. That company was involved in a legal dispute with Dunnes Stores last year over an aborted deal on a land sale in north Dublin in 1991. Dunnes Stores had sold the land to Livingston for £1.8m. A portion of that land, which was zoned for residential development, was sold to Manor Park Homes for £5m.

It was in the course of his work on the Ben Dunne case against the Dunne family trust that Noel Smyth became involved in the unraveling of payments made to Mr Haughey by Ben Dunne. It was he more than any other person who uncovered the payments to Mr Haughey. Apart from Ben Dunne himself, he was the crucial witness at the McCracken Tribunal.

Noel Smyth first met Charles Haughey when the latter was Taoiseach. Smyth, Ben Dunne and their wives had been guests at Kinsealy and later Smyth and Dunne had called in on Mr Haughey one afternoon after a game of golf.

During the period between March 1994 and January 1997 Noel Smyth met Mr Haughey on a total of eight occasions, all in connection with payments made to Mr Haughey by Ben Dunne. There were countless phone calls during this period between the two and, indeed, it was the log of Mr Haughey's calls to Mr Smyth's office that was the lever that forced Mr Haughey to admit to the McCracken Tribunal that up to then he had lied about the payments.

The first meeting between the two occurred in March 1994 at Mr Haughey's home at Kinsealy. At the behest of his client, Ben Dunne, Noel Smyth told Mr Haughey that Ben Dunne was going to reveal that he had made payments to him (Mr Haughey) from 1987 to 1991, in his court pleadings in the case he was taking against his siblings and the Dunnes' family trust.

Noel Smyth told Mr Haughey that he himself had traced the route of the payments and was satisfied that Mr Haughey was the beneficiary of £1.1m from Dunnes Stores. Mr Haughey said: “I never received those payments”.

The second meeting occurred within a week of the first. Mr Haughey telephoned Noel Smyth and asked for an urgent meeting the following morning at 7.00am. According to Noel Smyth, Mr Haughey was “very agitated” at this meeting. Mr Haughey said he had considered their first meeting and thought that the planned disclosure was an attempt to destroy him. He said he had been in public life for many years and this would certainly be devastating were the legal proceedings to go ahead. Mr Haughey made several telephone calls over the following months to Noel Smyth's office in Fitzwilliam Square, Dublin.

In November 1994 Noel Smyth contacted Mr Haughey to inform him that the information about the payments was going to be particulars in pleadings in the case of Ben Dunne's and Dunnes Stores and that several solicitors and barristers would become aware of them.

The third meeting between Mr Haughey and Noel Smyth occurred in November 1994, after the proceedings between the Dunnes were settled out of court. Mr Haughey had received a letter from solicitors representing Dunnes Stores demanding the repayment of the £1.1m. Mr Haughey had denied to the Dunnes solicitors receiving any payments and he wanted to know from Noel Smyth what attitude Ben Dunne would take if there were legal proceedings between him and Dunnes Stores. Smyth said that Dunne would be forced to give evidence. In the event, there were no further demands for repayment and the matter seemed closed.

Two years later the whole affair resurfaced when it was disclosed that Michael Lowry, then Minister for Transport and Communications, had received improper payments from Dunnes Stores. This was followed by revelations that an unnamed politician had received £1.1m also from Dunnes Stores, according to a report commissioned from Price Waterhouse by Dunnes Stores.

Charles Haughey telephoned Noel Smyth and asked for a meeting. This, their fourth meeting in this series, took place at the home of a mutual friend to avoid the danger of the media getting to know of their encounter.

Mr Haughey wanted to know what Ben Dunne's attitude would be if called before a Dail Committee to answer questions about the alleged payments to politicians. Noel Smyth said that he believed that Ben Dunne would wish to avoid giving evidence but, if called, he would appear. The meeting was inconclusive but they agreed to stay in touch.

The fifth meeting took place on December 14, 1996. By this time, the inquiry, headed by Judge Buchanan, was underway and Mr Haughey was concerned that this inquiry was going to investigate payments. Noel Smyth told him that the Buchanan inquiry appeared limited to the Price Waterhouse report revelations and, as this report made no mention of the larger payments to Mr Haughey(it did refer to a number of relatively small payments to members of the Haughey family), there was nothing to worry about.

The sixth meeting was on January 2nd 1997. Mr Haughey asked Noel Smyth to bring with him a copy of the Price Waterhouse report. This time they met in Mr Haughey's home. Smyth took Mr Haughey through the references to him in the Price Waterhouse report – they were innocuous. Again, he was relieved and confident that the Buchanan enquiry would be the end of the investigations.

Following that meeting, Ben Dunne recalled making a further payment to Mr Haughey of £210,000 sterling, in the form of three bank drafts made out to fictitious names for £70,000 each. Ben Dunne asked Smyth to contact Mr Haughey to enquire if he had any recollection of getting these payments. Smyth telephoned Mr Haughey who denied any knowledge of the drafts but asked for details of them. Noel Smyth supplied the details.

Mr Haughey telephoned Mr Smyth a few days later and asked to meet him at his home.

At this the seventh meeting, Smyth showed Mr Haughey copies of the bank drafts. He asked Mr Haughey if he had lodged them to his account. Mr Haughey said he had not but went on to say, “But they could be a source of some embarrassment to me.”
Smyth enquired “Well if you did not lodge them to your account, whose account were they lodged to”? Mr Haughey said that he thought they had been lodged to an account in the Irish Intercontinental Bank, owned by Des Traynor. Traynor had died in May 1994.

Smyth said this was very serious for Mr Haughey as it established a connection between the earlier payments and Mr Haughey. Mr Haughey replied that this was “a disaster”. Mr Haughey's demeanour was one of panic. Smyth left with the impression that Mr
Haughey thought that the bank drafts were “lethal”, although he had never explicitly acknowledged that he had got the bank drafts.

When Smyth reported back to Ben Dunne, Dunne offered to make a further payment of £1m to Mr Haughey to clear off his tax liabilities. Arising from this, the eighth and final meeting occurred.

Noel Smyth went to Mr Haughey's home. He reported the offer of £1m and urged Mr Haughey to make a full disclosure to the Tribunal. Mr Haughey declined the offer and the advice.

When Ben Dunne was informed that the offer of £1m had not been accepted he asked Smyth to phone Mr Haughey and make it clear that the offer was withdrawn. There was no further contact between Noel Smyth and Mr Haughey.

Noel Smyth detailed in a document all his contacts with Mr Haughey and sealed it in a registered letter addressed to himself. This enabled him to be in a position to claim to the Tribunal (once he had got authority to make a full disclosure), that his account of his dealings with Mr Haughey predated his evidence.

That, and the log of his phone contacts with Mr Haughey, forced the former Taoiseach to make a full disclosure of the payments he received from Ben Dunne.

Now aged 46, Noel Smyth is one of the country's best known solicitors and most successful businessmen. He has been a close advisor to Ben Dunne not just in relation to the case against Dunnes Stores but also in handling the fall out from the charges of drug dealing that Mr Dunne faced in 1993.

He also advised Bishop Brendan Comiskey in 1996 on his homecoming from a psychiatric home in the United States.

He was involved with his close associate, Dermot Desmond, in the purchase of the Johnston, Mooney and O Brien site in Ballsbridge in 1991. He advised on a tax-efficient system for part of the transaction that involved offshore companies.

Recently he has put together one of the largest property companies on the island. He has become the major shareholder of Dunloe House, the property company in which Ben Dunne was formerly the major shareholder. Through Dunloe he has recently taken over the Belfast property company, Ewart.

He was born in Galway in 1962, the son of a professional golfer. He studied law at UCD (see panel) and qualified as a solicitor in 1973. He became a partner in Michael Fitzsimons and Co, solicitors in 1977 and established his own practice in 1981.

Smyth first came to the attention of the media in 1987 following the sale of the former H Williams stores in a £14m deal. He was part of the consortium that bought the supermarket chain and sold it off at a substantial profit. The buyers at the time included Quinnsworth, Dunnes Stores and Musgraves. According to a business source, Smyth did well out of the deal: ‘It gave him the bounce to go on and do more deals'.

He is married with four children. He is reputedly a devout Catholic (see interview). His home in Sandyford, Co Dublin is called Lisieux, after the home of St Therese. In 1995, he was reported to be involved with Don Tidey in setting up a 13-part film on the life of Jesus Christ using Section 35 finance.

Additional reporting by Ursula Halligan and Vincent Browne