A High Court judge will rule on a later date on a bid by former Irish Nationwide Building Society (INBS) chief executive Michael Fingleton to stop a case against him over alleged negligent mismanagement of the society's affairs.
Mr Justice Tony Hunt reserved judgment on Wednesday on Mr Fingleton's application to have dismissed, or permanently stayed, the action taken against him by the special liquidators of Irish Bank Resolution Corporation, which took over INBS after it collapsed.
In proceedings initiated in 2012, IBRC, among various claims, alleges the society’s €6 billion losses from 2008-2010 arose from development loans made when Mr Fingleton was chief executive, that he had excessive control over the society’s business and flouted its lending rules.
Had the true picture of INBS’s affairs been disclosed, IBRC claims Mr Fingleton would have been summarily dismissed for breach of duty by 2007 at the latest and not paid expenses allegedly inappropriately incurred, plus some €1.2 million in performance bonuses for 2008 and 2009 when he left.
Cognitively incapacitated
Mr Fingleton wants the case halted on grounds of its breadth and his ill-health.
The judge was told Mr Fingleton suffered a severe stroke in May 2018 leaving him physically and cognitively incapacitated and various assessments have shown declining cognitive ability, particularly affecting his short-term memory and ability to critically assess evidence.
IBRC does not dispute the medical evidence but maintains that is not a basis to halt the case and it can proceed and be decided on the basis of objective, documentary, witness and expert evidence.
In closing arguments on Wednesday, Mr Fingleton's solicitor, Niall Clerkin, argued his client's degree of physical and cognitive impairment and the scope of the claims is such the balance of justice means the action should be dismissed or permanently stayed.
He said Mr Fingleton's condition has significantly deteriorated since 2019 when the Central Bank permanently stayed, on grounds of his ill-health, its inquiry into his conduct of the affairs of INBS.
Punitive element
Contrary to IBRC’s insistence its case is different from the inquiry because it involves civil proceedings, Mr Clerkin said it was difficult to characterise this case as not involving a punitive element, for reasons including the seriousness of the allegations made against Mr Fingleton, calling into question “his entire professional career”.
He also disputed IBRC’s arguments the case could proceed on the basis of objective evidence, saying his testimony was necessary to address such evidence.
The balance of justice also favoured Mr Fingleton because the “power imbalance” between the two parties could not be more clear, IBRC being a “heavily resourced State plaintiff” and Mr Fingleton an “extremely vulnerable private citizen”.
The ultimate route to the court’s jurisdiction to halt a case comes from the personal rights provisions in the Constitution, he said. Mr Fingleton is an “elderly, feeble, infirm, weak man” with a significant mental impairment who is frequently in physical pain, cannot stay awake during the day, cannot read documents “and is simply not able to defend himself”.
Closing the case for IBRC, Lyndon MacCann SC argued there was no basis in law for the case to be halted. His side's rights would be "set at naught" if that was done and the court should let the case proceed as it is, he said.
