The Court of Appeal has asked Michael Fingleton to file an affidavit on his financial means after his lawyer raised concerns about the former Irish Nationwide Building Society (INBS) head’s ability to cover the cost of his defence in a lengthy trial on his management of the now-defunct lender.
Ms Justice Caroline Costello, one of the three judges presiding over a hearing this week into Mr Fingleton’s appeal against a trial going ahead, said on Tuesday that “it would be of assistance if the attorneys of Mr Fingleton were to prepare an affidavit of means”.
She said it should be along the lines of disclosures that a person entering into a personal insolvency arrangement would make.
While lawyers representing Mr Fingleton initially said that such an affidavit could be completed by the close of business on Tuesday, they subsequently told the court they would submit it by the end of the week.
Irish Bank Resolution Corporation (IBRC), which took over Irish Nationwide in 2011, sued Mr Fingleton the following year for alleged negligent mismanagement of the failed lender, and put its statement of claim at €6 billion, the amount lost by the building society after the 2008 property crash.
However, it emerged in court on Tuesday that IBRC is now chasing a much smaller claim, of between €220 million and €552 million, relating to a group of specific loans. IBRC was put into liquidation in early 2013.
A civil trial, set to take place next year, would be expected to last at least six months.
Mr Fingelton led Irish Nationwide between 1971 and 2009, holding the role of managing director for much of the period, though his title was changed to chief executive close to the end of his time in charge. The High Court last year rejected a challenge by Mr Fingleton aimed at stopping a trial going ahead.
Mr Fingleton’s wife and son took charge of his appeal earlier this year, after they secured enduring power of attorney due to the fact that the now-84-year-old is mentally incapacitated after suffering a stroke in 2019.
Micheál P O’Higgins SC, representing Mr Fingleton, told the Court of Appeal on Monday that the facts that Irish Nationwide removed Mr Fingleton in 2011 from an insurance policy indemnifying directors and that he represented himself during a previous Central Bank investigation means “it’s a reasonable inference he is unable to pay” for his defence during a long trial.
Ms Justice Costello said that legal costs if the case comes to trial “are going to be astronomical” and going to amount to “seven-figure” sums, “not six figures”.
The judges raised questions about why IBRC was continuing to pursue the case, if it may not be able to recover any money from Mr Fingleton if it wins.
However, Lyndon MacCann SC, for the plaintiff, said “it would be wrong for the court to second guess” the special liquidators or the Government, which owns IBRC, in terms of why the action is continuing, even if it comes at a financial cost to taxpayers.
“It can’t just be about matters of pounds, shillings and pence,” Mr MacCann said. Adding that “it is in the public interest” that individuals “should be brought to book” if they were “involved in negligence, which has brought about the collapse of a financial institution, which has, in turn, damaged the finances of the State”.
Mr O’Higgins also told the court on Monday that Mr Fingleton faced the “serious risk of an unfair trial”, as he is incapacitated and unable to contribute to his defence.
However, Mr MacCann said: “I’m not suggesting cognitive impairment is not a handicap, but the fact that he may be cognitively impaired does not automatically mean that the case cannot be defended.”
The Court of Appeal has reserved judgment on the appeal. The case will come up for mention after the Christmas break and may require a further short hearing.
