Action against Fingleton over INBS collapse deferred to March

Former Irish Nationwide Building Society chief executive has appealed refusal to halt case

The hearing of an action initiated more than 10 years ago against former Irish Nationwide Building Society chief executive Michael Fingleton over the collapse of the society has been deferred to next March.

The case was due to be heard on January 17th, 2023, but, at the request of lawyers for Mr Fingleton to the Commercial Court on Monday, has been deferred to open on March 7th, listed for some 16 weeks.

Following the registration earlier this year of an enduring power of attorney, the defence of the case on behalf of Mr Fingleton has been taken over by his wife Eileen and son Michael jnr in a representative capacity.

The liquidators of State-owned Irish Bank Resolution Corporation (IBRC), which took over INBS after it collapsed, initiated the case in 2012 against Mr Fingleton over alleged negligent mismanagement of the society’s affairs.

It is alleged, among various claims, the society’s €6 billion losses from 2008-2010 arose from development loans made when Mr Fingleton was chief executive, he had excessive control over the society’s business and flouted its lending rules.

Had the true picture of INBS’s affairs been disclosed, IBRC claims Mr Fingleton would have been summarily dismissed for breach of duty by 2007 at the latest and not paid expenses allegedly inappropriately incurred, plus some €1.2m in performance bonuses for 2008 and 2009 when he left.

Mr Fingleton has denied the claims.

On Monday, a deferral of the January trial was sought in the context of a pending appeal, to be heard at the Court of Appeal in December, against a May 2021 High Court decision refusing a bid by Mr Fingleton (84) to halt the case on grounds including ill-health.

The High Court’s Mr Justice Tony Hunt accepted Mr Fingleton’s deteriorating health meant he could not participate meaningfully in the case but concluded, for reasons including the resolution of IBRC’s claims depended substantially on objective evidence, factors and standards, rather than subjective evidence from Mr Fingleton, the balance of justice “lies firmly on the side of permitting the proceedings to continue”.

It was “impossible” to conclude, at this stage of the proceedings, it would be fundamentally unfair to allow them continue, he said.

On Monday, Niall Clerkin, solicitor for Mr Fingleton, said that leaving the January date intact would put a lot of pressure on the appeal court to give judgment before the trial opened.

His side’s view is the case can never be fairly heard and should be resolved as soon as possible and hopefully within Mr Fingleton’s limited lifespan, Mr Clerkin said.

The High Court had indicated the issue of whether it should proceed could be re-examined at a later stage, he added.

Lyndon MacCann SC, for IBRC, initially opposed deferral of the hearing but, in response to interventions by Mr Justice Denis McDonald, including concerning the best use of court time and resources, indicated his side would not object to a limited deferral.

This litigation and the liquidation of INBS had gone on some time and no blame attached to his side for the delay in having the case heard, counsel said.

IBRC is anxious to have the trial proceed, all the more so as Mr Fingleton is getting more frail as time passes, he said.

Mr Justice McDonald said he was deferring the trial to March 7th.

Mary Carolan

Mary Carolan

Mary Carolan is the Legal Affairs Correspondent of the Irish Times