Dublin father and son lose London appeal over share dealing losses

Pair tried to overturn court order to pay over €2m plus interest to cover losses

 


A Dublin father and son have lost an appeal in London to overturn an order last year that they pay more than €2 million plus interest to cover major losses on contracts-for-difference share dealings by the son.

Declan Crinion had a judgment awarded against him in January 2012 at the Mercantile Court in Birmingham for €1.385 million in favour of IG Markets, while his father, Tommy Crinion, Sutton Castle, Sutton, Dublin, suffered a judgment of €825,000.

Mr Crinion jnr opened three accounts with IG Markets, including one in the name of his father, for contract-for-difference (CFD) trading over several months from late 2008 to early 2009, but he ran up “very substantial debts”.

CFD trading – where a buyer and seller agree to pay each other the change in price of an underlying asset, such as traded stocks – offers high rewards and a high degree of confidentiality, but also high risks.

During the Mercantile Court hearing in 2012, Mr Crinion jnr told Judge Simon Brown QC that he alone had operated the accounts, adding that IG Markets was responsible for all or part of the losses because they should have closed the accounts down when it was clear the market had crashed.

“[His] positions were unsustainable. As he put it with a humour evocative of WC Fields, ‘they should not open the bar and give an alcoholic the opportunity to drink more than was good for him’,” Judge Brown said in a judgment in April 2012.

Mr Crinion snr argued his son had had no authority to set up and operate the account on his behalf, but eventually there was common ground that a signature on a power of attorney document granting his son such powers had been forged.


Express authority
IG Markets argued that Mr Crinion snr had, nevertheless, either given express authority to his son to submit a power of attorney on his behalf, or, alternatively, had subsequently ratified his doing so, the Court of Appeal judgment noted.

However, the Crinions’ challenge to the Mercantile Court judgment did not deal with the underlying claims in the case, but rather queried the fact that “almost all” of Judge Brown’s judgment had come from the closing submissions of counsel for IG Markets.

Whilst the Court of Appeal judges found that the Crinions’ claims did “not quite accurately describe what had happened”, they found that the judge had made only simple changes to the text, “some apparently for stylistic reasons”.

Contesting the argument that Judge Brown had made “his own proper and independent consideration”, the Crinions’ lawyers argued that “even if that is so – which is of its nature unknowable – what matters is the impression that the judgment gives”.

Lord Justice Underhill dismissed the argument that Judge Brown had not independently assessed the merits of the case, but he said “it was indeed thoroughly bad practice for the Judge to construct his judgment in the way that he did”.

Lord Justice Longmore said it was tempting for judges “in these days of written final submissions and computer literacy” to frame his judgment “by lifting large parts of the written submissions of the party he has decided should win and incorporating them in his judgment”.

However, the practice “inevitably leaves a deep sense of grievance with the losing party”, who will “understandably feel that the judge has never properly engaged with the case when forming his judgment”.