The courts have the power to allow existing actions against Irish Bank Resolution Corporation, including that by the family of bankrupt businessman Seán Quinn, to proceed, the High Court has ruled.
Confusion had arisen as to whether the courts had jurisdiction to lift the “immediate stay” in the new IBRC Act halting all proceedings against the bank. About a third of existing cases before the Commercial Court are against IBRC and the stay has caused uncertainty about whether any steps may be taken in relation to them, with several judges raising the issue since the Act came into force.
When lawyers for the Quinns applied last month for the stay on their case to be lifted, the issue about whether the court could do so was referred to Mr Justice Sean Ryan for clarification. Lawyers for the Quinns and for IBRC both argued the court could lift the stay and it was never intended to be permanent.
Judgment
In his judgment yesterday, Mr Justice Ryan said it was "impossible to conceive" the Oireachtas had, via the stay in Section 6.2.a of the Act, terminated the Quinns' case "in an instant" and deprived them of the right to apply to court.
Any such interpretation would involve “extensive and substantial interference with constitutional rights in modes that are discriminatory and unjustified and unnecessary in the circumstances”.
The decision means the action by Mrs Patricia Quinn and her children can proceed once the criminal proceedings against former Anglo Irish Bank chairmam Sean FitzPatrick and two senior Anglo executives are concluded. The Quinns allege they have no liability for some €2.34 billion of loans advanced by Anglo to Quinn companies on grounds those loans were unlawfully made to prop up the bank’s share price.
Pre-trial applications can, however, proceed and the Quinns are expected to apply shortly for permission to join the Department of Finance and Central Bank, as regulator, as co-defendants with IBRC to their case.
'Great urgency'
Mr Justice Ryan noted the IBRC Act was passed "with great urgency over the course of one night", with the effect of putting IBRC into liquidation. It empowered the Minister for Finance to make a special liquidation order and Section 6 dealt with some of the consequences of that procedure.
However, he also found there was nothing in that section to indicate the court’s jurisdiction was excluded. If it was intended the stay was to be permanent, that would come “with heavy baggage”.
