O’Brien claims Ganley acting spitefully in taking phone licence case against him

Telecoms and media billionaire Denis O’Brien has alleged before the High Court that businessman Declan Ganley has acted “maliciously” and out of “spite” in bringing proceedings against him over the award of the State’s second mobile phone licence to Esat Digifone.

Mr Ganley contends Cellstar, a consortium with which he was involved and which bid for the licence, lost out due to corruption in how the licence was awarded in 1996.

Mr Ganley and two of his companies will argue Cellstar would have won the licence had the process for awarding the licence not been corrupted by people including Mr O’Brien, Brian O’Moore SC, for Mr Ganley and the companies, argued.

Counsel was making submissions to Mr Justice Seán Ryan opposing an application by Mr O’Brien for orders directing two companies of Mr Ganley to provide security for costs of their action arising from the award of the licence to Esat Digifone.

The companies say they can fund the litigation via inter-company loans. While agreeing they are not able to meet any costs award that may be made to Mr O’Brien, they claim that is a result of how the licence competition was conducted.

The companies are Comcast International Holdings Incorporated, registered in the US, and Ganley International Ltd, registered in the UK. They, with Mr Ganley, have sued former Fine Gael minister for communications Michael Lowry; Esat Telecom; Mr O’Brien and the State.

Dissolved
The Comcast side has agreed a third plaintiff company, GCI Ltd, cannot remain as a plaintiff because it has been dissolved.

Persona, another unsuccessful bidder, has separately sued the State over the licence award. Both actions allege fraud, conspiracy, deceit, corruption and misfeasance in public office in relation to the licence award.

The State, in separate proceedings, is seeking to have Mr O’Brien and Mr Lowry made liable for any damages that might be awarded against it arising from the cases.

Yesterday, Jim O’Callaghan SC, for Mr O’Brien, said it was anticipated the Comcast action would run for a number of weeks and would involve considerable costs which Mr O’Brien contended the Comcast companies would be unable to pay. His side said the Comcast side had no statable cause of action and their case should be dismissed but that matter will be addressed later, counsel said.

Mr O’Callaghan said the Cellstar consortium had come sixth in the competition with the effect, even if their allegations were true, which was denied, they would not have obtained the licence.

Costs
Mr O'Brien says he has a "good defence on the merits" to the action but claims neither of the companies has the necessary resources to pay any costs awarded to him should they lose.

He has also reserved his position on “a significant issue” relating to Mr Ganley’s ability to maintain the action.

Mr O’Brien disputes Mr Ganley’s claim GCI Ltd had transferred to him all of its interest in the Cellstar consortium, including its interest in the court action.

Opposing the application, Mr O’Moore argued it was in the public interest for this case to proceed as well as the Persona case.

The licence process was conducted improperly and was distorted and it was his case Comcast would have won a sizeable income stream had that not happened.

Comcast’s 62 per cent interest in Cellstar was extremely valuable, he argued.

No issue had been raised by Mr O’Brien about Mr Ganley’s own assets or solvency, counsel added. Counsel also argued any applicant for security for costs must show they have a bona fide defence to the case but Mr O’Brien had not provided a satisfactory affidavit setting out his defence. The hearing continues today.