High Court intervenes in bitter Cork City Council row over finance director's role

Seán McCárthaigh

The High Court has directed that Cork City Council should not go ahead with assigning any of the current duties of its finance director to any other employee following a bitter row with its chief executive against a background of the council’s worsening financial position.

Judge Micheál O’Connell granted an application by the finance director, John Hallahan, for an injunction against the council over transferring his duties like overseeing its annual budget to its newly appointed head of cost transformation, Jeremy Canty.

The judge said Hallahan had raised “a fair question to be tried” over whether the council’s chief executive, Valerie O’Sullivan, had properly exercised her discretion when she moved to remove several of Hallahan’s key responsibilities earlier this year.

He said a fair question had also been raised over whether the council’s failure to recognise the plaintiff had invoked a grievance procedure was “unduly formalistic and incorrect".

Judge O’Connell said it was clear the process which led to the present impasse, if implemented, would have a humiliating and degrading effect on Hallahan, which was intensified by O’Sullivan’s negative assessment of him, which was “unmistakeably clear".

Hallahan had originally sought an injunction seeking to halt his proposed transfer to the newly created post as head of cost transformation.

The court heard that Cork City Council had confirmed since Hallahan first sought an ex parte application on May 19th, 2026, that it no longer intended to transfer him as initially proposed.

Instead, the council appointed Canty as the person previously selected to replace the plaintiff as head of finance to the new role.

However, it also signalled it would reorganise its finance department to create a new directorate that would come under the head of cost transformation, to which some of Hallahan’s functions would be transferred.

The court heard that the plaintiff has worked with Cork City Council since 2010 and in his role as head of finance since 2016, where he oversees a staff of 68.

It was also informed that the local authority had reported a small surplus on its budget every year until 2025, when it incurred a deficit of just over €2.75 million, which Hallahan pointed out was less than 1 per cent of its annual budget.

He explained the deficit arose from compensation payments due to Cork County Council as a result of boundary changes between the two local authorities in 2020 and the fiscal challenge posed by housing maintenance costs.

The court heard that O’Sullivan informed the plaintiff at a meeting on May 11th, 2026, that she wanted him to assume the new role of head of cost transformation.

O’Sullivan provided Hallahan with a memo that related to the council’s precarious financial position, which stated that “the current situation cannot continue.”

Hallahan said he expressed reluctance to take on the role and suggested two other individuals, one of whom was Canty, who might be better suited for it.

The court heard there was a dispute between the parties over whether O’Sullivan said that neither of them was suitable for the role and whether Hallahan was given time to think about the appointment.

O’Sullivan informed her senior management team the following day via email that Canty – who previously worked as acting finance director with Cork County Council – was being appointed as head of finance.

Hallahan replied the same day to express surprise and disappointment at what he regarded as “a very significant change to [his] contracted role".

O’Sullivan responded promptly to say she was at a loss to understand the plaintiff’s surprise, as she had checked his contract before making her decision, which allowed the council to alter the department to which he was assigned.

Lawyers for Hallahan wrote to her the next day to complain there was no identifiable structure in place for the new role with no indication how its service was going to be resourced or funded.

They also claimed the issue gave “rise to a general suspicion of wrongdoing” and notified the council that Hallahan wished to activate its grievance procedure.

The court heard of an exchange of correspondence in which both parties held to their position before what Judge O’Connell said was an “ostensible volte face” by the council when O’Sullivan rescinded the plaintiff’s appointment to the new role.

In an affidavit, O’Sullivan said the proceedings had at least the positive outcome that Hallahan was “not the man for the job".

She said it “clearly would have made a desperate situation even worse had the plaintiff accepted his transfer and taken up the role.”

O’Sullivan continued: “He lacked the foresight and drive to make a success of the position, and we would have had to appoint someone else when these shortcomings became apparent, and circumstances began to unravel.”

The chief executive pointed out that she had started a major restructuring process within Cork City Council since the first day of her appointment, including the creation of two new directorates and the reorganisation of several others, which had involved the reassignment of seven senior managers.

She claimed Hallahan was the only senior executive who had not accepted a reassignment because he prioritised “his own comfort and convenience over and above the good of the organisation".

Council lawyers claimed the injunction sought by the plaintiff would stymie the process and pace of change “needed to address the existential crisis” faced by the local authority.

They pointed out that if Hallahan did not consent to the transfer of certain of his functions to Canty, including the preparation of the council’s annual budget, then O’Sullivan would act as arbiter over opinions and recommendations of both directorates, while acknowledging that such “doubling-up” was “both highly unusual and undesirable".

They said it would also only result in “sub-optimal and costly outcomes which the council can ill afford in circumstances where the council is in the midst of an unprecedented deficit crisis".

In his ruling, Judge O’Connell accepted that the functions of the two roles concerned related areas of responsibility.

Nevertheless, the judge said removing the plaintiff from his position as head of finance and assigning him to a new role of uncertain scope would have represented “a change of very considerable significance” for someone who had held his position for the previous ten years.

Applying the so-called “Braganza principle", which requires employers to exercise contractual discretion honestly, rationally and in good faith, the judge said it was “readily foreseeable” that presenting Hallahan with such a fundamental change to his role, without any prior consultation, would cause him “considerable surprise".

The judge noted that the fact O’Sullivan had reviewed his contract in advance suggested she anticipated her proposal might raise contractual concerns.

He also observed that Hallahan had gone in the space of just over three weeks from being selected by O’Sullivan for the new role to being described as lacking “the foresight and drive to make a success of the position".

Granting the injunction, the judge said reversing the proposed changes if implemented now, and Hallahan succeeded at trial, would create considerable practical and organisational difficulties.

He remarked that the resulting workplace and reputational harm would be difficult to quantify and damages would not provide an adequate remedy.

The judge said the council had not demonstrated that the immediate transfer of particular functions to Canty was of such necessity or urgency that it outweighed the likely harm to Hallahan.