Both sides have 'questions to answer' in bank vs Quinn case

THE FORMER Anglo Irish Bank and the family of bankrupt businessman Seán Quinn both manifestly “have questions to answer” in a legal battle being fought by both sides with “extraordinary bitterness”, a Supreme Court judge has observed.

However, Anglo won’t have to answer while the legal focus remains exclusively on its proceedings to jail the Quinns, Mr Justice Adrian Hardiman said. That was “part of the litigious advantage which may derive from bringing a contempt application against one’s opponents”.

The bank, now Irish Bank Resolution Corporation (IBRC), opposed any stay on the High Court’s order jailing Seán Quinn jnr last July pending the outcome of his appeal to the Supreme Court, he noted.

Quinn jnr’s three-month sentence was served almost in full, without remission, before the Supreme Court gave its majority four-to-one decision dismissing the appeal last week, he added. The bank’s action, and the language in which it had objected to any stay, “casts considerable light on its true motivation for pursuing with avidity” the imprisonment of Quinn jnr, he said. He made the remarks in his minority Supreme Court judgment allowing the appeal by Quinn jnr against being jailed.

Mr Justice Hardiman found no direct evidence that Quinn jnr was involved in a $500,000 payment to Larissa Puga, general director of Quinn Properties Ukraine, in contempt of court orders restraining asset stripping.

Therefore, the High Court was not entitled to jail Quinn jnr for three months, he said. Nor was it permissible to jail Quinn jnr for an indefinite period over failure to reverse some 30 asset-stripping measures when there were no allegations or findings against him concerning those.

If the bank wanted to have Quinn jnr jailed over participation in an alleged wider asset-stripping conspiracy, it would have to explicitly set out such allegations, he said.

Earlier, the judge described Anglo and Seán Quinn as apparent “stars of the Celtic Tiger years” and noted, when Anglo was about to collapse in September 2008, the government, for good or ill, guaranteed it and other Irish banks at a cost likely to dominate the Irish economy for years to come.

The Quinn group also collapsed, the Quinn family were divested of control of their companies and there was extensive litigation between the bank, the companies and Quinn family members.

Both sides had questions to answer in the legal actions and Anglo also had questions to answer “in a wider form”. The Quinns may also have additional questions to answer, he added.

Each side considers the other has perpetrated grave injustices against it, he said. IBRC considered the Quinns had failed to discharge their liabilities – up to €2.8 billion – to Anglo and were significantly increasing the bank’s difficulties, while the Quinns considered Anglo had “ruined” them, particularly by inducing some of them to borrow money to try and prop up Anglo’s share price when it was “approaching freefall”.

The Quinns consider the case against them an attempt to saddle them with losses largely caused by their involvement, wittingly or otherwise, in “an Anglo-devised and Anglo-promoted scheme to save Anglo itself”, he said. They considered the loans the bank was trying to enforce were tainted with illegality by Anglo’s own actions, that the bank had acted unlawfully and destroyed the Quinn group in the process.

The Quinns did not deny that some of them had, in those circumstances, tried to remove their assets, lawfully as they saw it, beyond the reach of the bank but denied breaches of court orders, he said.

In this case, while the bank itself had said Quinn jnr seemed to be least involved, it sought to have him jailed to put pressure on his father and was not entitled to do so.