IBRC fails to have Quinns secure costs of discovery
THE FORMER Anglo Irish Bank has failed in its bid to get court orders requiring the family of bankrupt businessman Seán Quinn to provide security for the cost of discovering documents as part of the family’s legal challenge aimed at avoiding liability for loans of some €2.34 billion.
The bank, now Irish Bank Resolution Corporation (IBRC), had argued the costs of making the “vast” discovery sought by the family could be as high as €1 million, while the costs of discovery to which the bank had agreed would be about €600,000.
Mr Justice Michael Moriarty ruled yesterday IBRC was not entitled to an order requiring Patricia Quinn and her five children to provide security for costs of discovery. They allege they have no liability for the €2.34 billion loans because Anglo had engaged in illegal conduct to prop up its share price.
The judge said he was providing an outline of his findings only and a full written judgment would be delivered next week. He said his refusal was based on the relevant legislation and jurisprudence, including a recent Supreme Court judgment on principles governing security for costs applications.
Also yesterday, the judge made various rulings as to what documents must be discovered by the sides for the family’s action, a date for which has yet to be set.
The sides had agreed on most categories of discovery. Some contested issues relate to time periods over which discovery will extend.
In opposing the bank’s application during the hearing last April, Rossa Fanning, for the family, said the bank was trying to “bleed” the family dry to prevent them exposing the “biggest corporate scandal in the history of the State”.
The dogs in the street knew Anglo had engaged in “grotesquely illegal” conduct, advancing loans of more than €2.34 billion to prop up shares and deceiving shareholders about their value, counsel argued.
IBRC’s approach was “bizarre” in circumstances where, in other litigation, it had “vituperatively derided” the conduct of ex-Anglo executives, Mr Fanning added.
The judge was also told former senior Anglo executives, including ex-chairman Seán Fitzpatrick, ex-chief executive David Drumm and former head of lending Pat Whelan, had refused to answer inquiries from the new management on dealings with the Quinns.
Brian Murray SC, for IBRC, argued the Quinns, while opposing security for costs, had “tellingly” not said they could not pay the money and were able to lodge some €500,000 in the courts in Cyprus last year when seeking injunctions against the bank.
Based on the bank’s experiences with the family, the bank would have to chase Quinn assets “round the globe” and discovery costs should be “ring-fenced” and available to the bank, he urged.