The High Court case against former Irish Nationwide chief Michael Fingleton Sr has heard that his legal team were put in an “intolerable” position by alleged changes in the approach and claims by the liquidators for Irish Banking Resolution Corporation, who are pursuing the now-incapacitated defendant for €290 million in damages.
The civil case against the former Irish Nationwide Building Society (INBS) chief alleges that he negligently mismanaged the building society and engaged in property “gambles” with high-net-worth individuals in an informal and speculative manner in the mid-2000s, leading to fatal losses.
Mr Fingleton (87), who cannot give evidence due to ill-health, joined the building lender in 1971 and retired in 2009 – he held the roles of both managing director and chief executive in that time.
At its height in 2007, INBS had reported assets of €16 billion but was a high-profile casualty of the financial crisis of 2008.
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Liquidators for Irish Banking Resolution Corporation (IBRC) have taken the case against Mr Fingleton, who denies the allegation of negligent mismanagement.
The total losses at INBS had been estimated to be €6 billion. However, only €290 million in damages is being pursued by IBRC, relating to five specific loans, allegedly approved by Mr Fingleton.
The court has been told that Mr Fingleton was allegedly “nodding through” top-ups and extensions to certain clients without the knowledge of the society’s board.
At the High Court on Tuesday, solicitor Niall Clerkin, for Mr Fingleton, said his client and their legal team were put in an “intolerable” situation due to amendments in the statement of claim against his client, and complained of missing documents and “very relevant” witnesses not being called by the plaintiffs.
Mr Clerkin said the case was now on its fifth version of a statement of claim against his client.
The solicitor also said that “generic” or “systemic” allegations in the action had been precluded from the case at a previous hearing of the Court of Appeal.
However, Mr Clerkin said the plaintiffs were still characterising the alleged negligence in general terms and describing the five loans at issue as “emblematic” or a “manifestation” of broader alleged wrongdoing.
Mr Clerkin said that the plaintiffs have said they will call two Central Bank witnesses, “who could only be giving precluded systemic evidence”, and that they could “not possibly have evidence regarding the specific five loans”.
The solicitor said the impression being given in the case against Mr Fingleton was that his client was “like a toxic agent” and that “all the problems that happened were because of him [Mr Fingleton]”.
Mr Clerkin said the defence sought “clarity” in what was alleged against his client, saying the allegations were “very confusing” to defend and “heightened the amount of prejudice that we face” in defending the case.
Mr Clerkin said the original claim against his client was for €6 billion but now only five per cent of the original claim was being pursued. He said the other 95 per cent of the claim has “fallen away in concession” and “substantial tracts” of documents were missing from the case.
The solicitor said the defence tried to engage with an expert who said he “simply would not be satisfied he had enough information to provide a proper expert opinion”.
Regarding the use of expert finance witnesses in the case, Mr Clerkin said: “We don’t have a reliable file set available, so the methodological foundation is broken. It’s corrupted from our standpoint.”
He added that expert witnesses are reliant on what is sent to them by legal practitioners.
Lyndon MacCann SC, for the plaintiffs, said any suggestion that documents were being withheld would be “scurrilous”.
Mr Clerkin responded that “massive tracts” of information were missing, that there was no allegation of bad faith towards the plaintiffs but that it was “nearly impossible” for an objective analysis of events due to missing documents.
“I can’t change the way the world is for him [Mr MacCann],” said Mr Clerkin.
Mr MacCann said that it was the plaintiff’s case that, through discovery, amendments were made to the statement of claim against Mr Fingleton.
However, he said it was “always” the plaintiff’s case that claims against the defendant could be expanded, but the five specific loans were to remain the “focus” in the case.
The case continues at the High Court.
