Quinns take case against department, Central Bank
Action of regulators over €2.34bn Anglo loans will be scrutinised by courts
The family of Sean Quinn is to bring a separate legal action against the Department of Finance and the Central Bank over alleged conspiring with Anglo Irish Bank in advancing € 2.34bn unlawful loans to Quinn companies. Photograph: Niall Carson/PA Wire
The family of bankrupt businessman Sean Quinn is to bring a separate legal action against the Department of Finance and the Central Bank over alleged conspiring with Anglo Irish Bank in advancing €2.34bn unlawful loans to Quinn companies.
The move means the actions of the regulators relating to the loans will now be subject to scrutiny by the courts.
The Quinns today withdrew their application to joint the Department and Central Bank, in their capacity as regulators, to their action against Irish Bank Resolution Corporation, formerly Anglo, on which they allege they are not liable for the loans.
The Quinns will now issue separate proceedings against the Department and Central Bank and will apply to the Commercial Court to have that case fast-tracked. They will then apply to have similar fact issues in that case, and in their case against Anglo heard together while the different legal issues arising in both cases will be addressed in those separate cases.
Martin Hayden SC, for the Quinns, said they were taking this course in light of indications today from Paul Gallagher SC, for IBRC, the bank would not object to similar fact issues arising in the Quinns case against IBRC - and their planned case against the regulators - being heard and decided together. That avoided the possibility of two different decisions on such issues, counsel said.
Earlier, Mr Justice Peter Kelly had noted, if the Quinns application to join the regulators to their case against Anglo was refused, they had indicated they might bring a separate action against the regulators. He put to Mr Gallagher that could lead to different decisions on similar facts which the courts discouraged.
After Mr Gallagher indicated IBRC could not object if there were an application to have similar fact issues in the two cases heard together, Mr Hayden indicated that might address his side’s concerns and asked for time to take instructions. After a short adjournment, counsel said they were not proceeding with their joinder application.
Earlier, Mr Gallagher said he was not representing the regulators but his client, IBRC special liquidator Kieran Wallace, was not conceding the Quinns had any valid claims against the regulators.
In seeking the join the regulators, the Quinns had alleged they had conspired with Anglo in its advancing more than €2.34bn loans to Quinn companies for the unlawful purpose of propping up its share price.
That alleged conspiracy involved the Department arranging for documents from Anglo to be “significantly amended” to disguise the true extent of its knowledge about what was happening in relation to the loans, they claimed. Had the regulators done their duty and not encouraged Anglo’s actions, these illegal loans would not have been advanced and Anglo “would have gone to the wall” much more quickly, Mr Hayden submitted.
In a plenary summons put before the court, the Quinns indicated they were alleging conspiracy, breach of duty and misfeasance in public office against the regulators
IBRC had argued the joinder application was misconceived and, if granted, would fundamentally alter the Quinns case against the bank and make that action even more complex and lengthy.
The Quinns contend documents discovered by Anglo and other material showed officials in the Department were aware at “every step of the way” from October 2007 of the difficulties being experienced by Anglo in dealing with the Contract for Difference positions built up by Sean Quinn in the bank from 2005.
They claim the Department, Financial Regulator, Central Bank and Anglo were all aware the bank was loaning huge sums to Quinn companies to meet margin calls on the CFD positions. They are relying on various documents to support their claims,including transcripts of phone calls and emails between various Anglo executives; the “O’Connor Report” of January 2009 reviewing transactions concerning the Quinn group; communications between her father and the bank and communications with the Department and Minister of Finance.
The Quinns say the documents have increased their concerns that the Department, knowing what went on in Anglo, “actively engaged in seeking to cover up the true state of affairs in the knowledge of likely further legal proceedings”.