Media challenges McKillen moves to stop disclosure

PROPERTY DEVELOPER, Patrick McKillen’s attempts to stop disclosure of his financial affairs during a High Court case in London are “not justified”, a group of newspapers argued yesterday.

Mr McKillen alleges he was improperly prevented from buying financier Derek Quinlan’s shares in three luxury London hotels by billionaire brothers, David and Frederick Barclay.

Besides a ban on the press hearing some of the case, he also wants disclosure of some of his affairs permanently kept from the Barclays and Mr Quinlan, though available to their legal teams.

The application was opposed by The Irish Times, Independent News and Media, the Guardian, the Financial Times and the London Times Newspapers.

Counsel for the media organisations, Victoria Jolliffe said the burden falls on Mr McKillen to show that hearing evidence in private “is the only means by which justice can be done”.

“It is submitted that this burden has not been discharged,” she said, adding that “less restrictive measures”, such as the anonymisation of third parties and reporting restrictions had not been considered. “Mr McKillen has chosen to pursue this high profile litigation in his personal capacity and, it is submitted, must surely have appreciated the extent of inquiry into his personal financial affairs,” she said.

The fact that information could emerge “might be inconvenient or embarrassing, or have some commercial consequence” is something that should be taken into account before a case is taken.

“This is not a case where all the parties proceeded on the understanding that the financial information will remain confidential,” she told Mr Justice David Richards.

Mr McKillen’s decision to seek restrictions on the grounds of his rights to a private life under article 8 of the European Convention of Human Rights meant the case has wider importance, she said.

Mr Kenneth Maclean QC representing a Barclay company, Ellermans, said no evidence had been produced that agents of the Barclays improperly approached Mr McKillen’s lenders, “or were intending to do so”.

However, the information about his past affairs “are relevant to the allegation that he makes that he would have been able to obtain” money to buy out Mr Quinlan’s shares in the hotel holding company, Coroin. Having claimed that, “he has been compelled to give disclosure in relation to assets which he owns which could have been used as security”, said Mr Maclean.

However, Mr Justice Richards questioned the assertion that the Barclay side had been “open” about their efforts to buy Mr McKillen’s debts from Anglo Irish Bank, later the IBRC, Nama and Bank of Scotland Ireland.

“I do not think it is quite right to say they were quite open about it. I think it was only when Anglo Irish disclosed to Mr McKillen that they had received that approaches that it came out in the open.”

Accepting that, Barclay executive Mark Faber acknowledged the attempts to buy the debt in his witness statement for the trial, Mr Justice Richards said that fact was not known to Mr McKillen last year.

“I think Mr Faber was a little upset that Anglo Irish told Mr McKillen about the approach,” said the judge, adding that until October last year Mr McKillen “was not aware of these approaches”.

Lord Grabiner QC who represents the Barclay brothers directly, said it is “a nonsensical proposition” by Mr McKillen that his business affairs relevant in the case concern his private life.

Mr Joe Smouha QC, who represents Mr Faber and two other independent directors of Coroin, said the principles of open justice which “have always been” all “point to Mr McKillen’s application being refused”.

The implication of the application, where evidence would not be seen by some of those defending the action, is that Mr Justice Richard’s eventual ruling would equally have to avoid public reference to the same evidence.

Saying that he will deliver his judgment tomorrow, Mr Justice Richards said: “I think what is being said really, to bring it down to brass tacks here, is that what is being said on behalf of Mr McKillen is that if the Barclay interests learn of lenders whose loans are, for example, on residential properties of his, then they could seek to put financial pressure on him by purchasing those loans, seeing if at any rate they were in default or likely to become into default and seeking to enforce in order to prevent McKillen proceeding further with his proceedings.”

COURTROOM BATTLE: FIGHT FOR CONTROL OF LUXURY LONDON HOTELS

PROPERTY DEVELOPER Patrick McKillen has conducted “a full- frontal attack” on financier Derek Quinlan in his battle to win control of three luxury London hotels, the High Court in London has been told.

Quinlan’s barrister Stephen Auld rejected allegations that Quinlan had not properly disclosed his affairs to the court or that he would improperly pass on information.

The trial centres on a battle between McKillen and the billionaire Barclay brothers for control of Coroin, a holding company which owns the Connaught, Berkeley and Claridges hotels, three of London’s finest hotels.

The Barclays bought the debt on a key block of shares held by Quinlan, giving them currently majority control, although McKillen argues that he was improperly blocked from buying the Quinlan bloc.

Rejecting McKillen’s application that Quinlan and others should be barred from seeing key papers, Auld said Quinlan would be unable to give instruction to his legal team if that was allowed.

“This is a bad faith case,” he said, adding that Mr McKillen had made “very serious allegations” against Quinlan, the Barclay brothers and directors appointed by the Barclays to Coroin.

“Mr Quinlan has been open and transparent in the disclosure that he has made. He has disclosed many documents, for example, the enforceability of his securities,” the barrister told the long-running case.

“It would be Kafkaesque to have a situation where one party were, for example, hiding behind a cloak of alleged confidence documents relating to the enforceability of their securities where the other party was not able to do so and had not done so.”

He dismissed charges made by the McKillen side that Quinlan and his associate Gerry Murphy had passed on key information about the hotels’ holding company, Coroin.

Evidence already given during the trial, said Auld, clearly showed that McKillen and his associate Liam Cunningham had passed on exactly the same information to others.

Saying there was “no basis” for suggesting that Quinlan would do anything improper, Auld said Quinlan’s “openness and transparency” during the trial showed “that he would behave perfectly properly”.

Intervening, Mr Justice David Richards said the allegation made by McKillen’s legal team was that “‘Mr. Quinlan cannot be trusted not to pass it on to the Barclays”.