Banks tell High Court that Bula still owes £60m

Three banks which loaned money to Bula Ltd (in receivership) to exploit the lead and zinc ore body adjoining Tara Mines claim they are now owed more than £60 million (€76.18 million), the High Court was told yesterday.

Dublin chartered accountant Mr Laurence Crowley, who was appointed by the banks as receiver over Bula Ltd in 1985, applied to the court to strike out as frivolous and vexatious the proceedings brought against him by directors of Bula.

The court was told of some 13 years of litigation involving the ore body at Nevinstown, Co Meath. Claims on behalf of two directors of Bula Ltd - Mr Michael Wymes and Mr Richard Wood - and by others had failed.

Mr Ian Finlay SC, for the receiver, said there had been vast sums in legal costs incurred. The litigation had taken a large amount of the court's time and had delayed the receiver's work.

He referred to proceedings by the Bula directors against Tara Mines and the State, which were dismissed by Mr Justice Lynch in the High Court in 1997. The Bula directors subsequently pursued claims against Northern Bank Finance Corporation, Ulster Investment Bank and Allied Irish Investment Bank before Mr Justice Barr in 1997. Mr Finlay said Mr Justice Barr had decided at a preliminary stage in the banks' proceedings that the challenge by Mr Wymes and others to the appointment of the receiver must fail.

Counsel said that when the main action against the banks had come up for hearing, Mr Wymes, described as "the critical moving force behind all the litigation", had applied for an adjournment.

Counsel said those proceedings had begun 11 years before, thus preventing the disposal of the ore body and the payment of the banks. In June 1997, Mr Justice Barr had agreed, on certain terms, to an adjournment of the action against the banks until the Supreme Court had heard an appeal by Mr Wymes against Mr Justice Lynch's findings in the Tara/State case.

Mr Finlay said the receiver and banks were aware at the time of the adjournment that if Mr Justice Lynch's judgment was upheld by the Supreme Court, the receiver would be free to release the ore body. When the Supreme Court dismissed in its entirety the appeal by Mr Wymes, this meant that all the substantial claims mounted by Mr Wymes against Tara and the banks had failed.

The receiver had then advertised the sale of the ore worldwide, receiving some 40 replies. In April this year, he had written to Mr Wymes stating that he was in the process of marketing the ore body.

Mr Wymes had then replied that it appeared there were alleged links between two Supreme Court judges who had heard the appeal and the Tara and State defendants. Mr Wymes appeared to believe that, because of the alleged links, the judgment in the Tara case was subjudice and therefore the effect of Mr Justice Barr's decision regarding the appointment of the receiver had not come into effect.

Remarkably, Mr Wymes had also claimed no monies were due to the banks - an extraordinary suggestion that had never been made in 13 years, Mr Finlay added. The receiver had responded that he was proceeding with the sale of the ore body.

A summons had been issued in 1997 by Mr Wymes stating he was bringing proceedings against the receiver. Following two years of inactivity, the proceedings were then reactivated in May this year.

Mr Finlay said these were the proceedings which the receiver was asking the High Court to strike out on the grounds that they disclosed no reasonable cause of action, and were frivolous and vexatious.

The hearing before Miss Justice Carroll continues today.