Members of businessman Sean Quinn's family have been refused permission by the High Court to make a crucial amendment to their case aimed at avoiding liability for €2.34 billion loans made to Quinn companies by the former Anglo Irish Bank.
Mrs Patricia Quinn and her five adult children sought to amend their case, due to open on June 3rd, to argue they were "innocent parties" in relation to how they provided guarantees and securities concerning the loan transactions and thus, they argued, were not caught by a recent Supreme Court decision on a key preliminary issue in the case.
Irish Bank Resolution Corporation, in opposing the proposed amendment, disputed the Quinns' interpretaiton of the Supreme Court decision, issued last March, and argued that decision meant the family cannot avoid liability for the €2.34 billion loans even if those were found to be unlawfully made.
That Supreme Court ruling was to the effect, even if the loans were unlawfully advanced by Anglo, as the Quinns allege they were, they are still enforceable.
In a unanimous decision, the five-judge court granted an appeal by IBRC against a High Court decision that the Quinns could rely on alleged serious breaches by Anglo of the Companies Act and EU Market Abuse Regulations in their case denying liability.
The Supreme Court said the contracts entered into by the Quinns, even if found to breach the law and regulations, are still enforceable. It said Section 60 of the 1963 Companies Act implies that contracts, although unlawful, can only be regarded as void in law if the relevant company decides to treat them as such while the Eu Market Abuse Regulations were not designed to protect parties such as the Quinn Group companies which were involved in the alleged abuse.
Given the case made by the Quinns to date, they were not entitled to rely on the alleged breaches in aid of their claims concerning invalidity of guarantees given by them, the Supreme Court held.
In the High Court on Thursday, Mr Justice Robert Haughton, who is to hear the family's case, refused permission for the Quinns' proposed amendment to their case and said he would give written reasons for that refusal later.
The judge indicated some of his reasons for refusing the amendment arose from delay in seeking it and his view that a plea in relation to common law illegality was unenforceable and the amendment was “a bid to recast the wrongdoing of the underlying lending”.
Martin Hayden SC, for the Quinns, said he anticipated a “futher step” would be taken arising from the judge’s decision but he needed to take instructions from his clients once the written ruling becomes available.
The family's case is against State-owned IBRC, Anglo's successor in title, and its special liquidator Kieran Wallace. They previously joined Sean Quinn Senior and two former senior Quinn Group executives, Liam McCaffrey and Dara O'Reilly, as third parties to the case.
The Quinns initiated their case in May 2011 but two hearing dates were deferred at the request of the Director of Public Prosecutions due to separate criminal proceedings against some former executives of Anglo.
Mr Justice Haughton will deal next week with various preparatory matters for the hearing of the case at the Commercial Court which is likely to run for several months.
The judge said, after the case is formally opened on behalf of the Quinns, the defendants should outline their case. The issues concerning the third parties would be tried at the same time as the action and not afterwards, he added.
