The Irish Permanent's action against former chief executive Dr Edmund Farrell and his wife Zora was settled in the High Court yesterday after lengthy legal discussions.

Mr Justice Geoghegan was told that Dr Farrell's claim against Irish Permanent, alleging unfair dismissal in 1993, had also been settled. The settlement terms were not disclosed.

Irish Permanent plc had sued Dr and Mrs Farrell, of Grasmere, Westminster Road, Foxrock, Co Dublin; Mr Kelvin Smythe, a financial consultant, of Sydney Avenue, Blackrock, Co Dublin; and Quasar Corporation, which is incorporated in Delaware and was described as a financial consultant to Irish Permanent.

It was stated that the conversion of Irish Permanent to a plc post-dated the events with which the court was concerned.

Irish Permanent's actions against the defendants other than Dr and Mrs Farrell have not been resolved and are to come before the court again today.

In court yesterday, Mr Paul Gallagher SC, for Irish Permanent, said that as far as Dr and Mrs Farrell were concerned, the case had been settled. He added that during the proceedings, the society had made certain allegations against Dr Farrell.

Counsel said that Dr Farrell categorically denied any wrongdoing.

The settlement was to the satisfaction of both parties, Mr Gallagher said.

Mr Gallagher said the Irish Permanent claim against Dr and Mrs Farrell could be struck out with no order. The case is to be mentioned in court again on December 18th next.

Mr James Nugent SC, for Dr Farrell, said the case in which his client was suing the society and its directors could also be struck out with no order.

Yesterday was the third day of the action which had been forecast to last for at least 12 weeks. Lawyers spent most of yesterday in consultation trying to resolve the case and the settlement was announced shortly before 5 p.m.

When the case came before the court briefly earlier in the day, Mr Nugent sought an adjournment of the hearing. The application was rejected by Mr Justice Geoghegan.

Mr Nugent said Dr Farrell was absolutely denying any wrongdoing on his part. A number of allegations had been made against his client during the opening of the case on Wednesday to which he had not immediately had an opportunity of replying.

Mr Nugent said he understood the case against his client was that he had obtained money wrongfully from the building society. They understood that the central issue of fact in the case would be whether or not the board of the society had approved of the transactions in which Dr Farrell had entered.

It would seem from the statement of claim that there was no suggestion of any connivance or collusion between Dr Farrell and the board of the society as it then existed, counsel said.

Mr Nugent said his side was not making any allegations against members of the board. But if the case against his client was one of conspiracy, he was entitled to have that case made against him.

Mr Nugent said the case made against Dr Farrell as painted in the opening was not made in the statement of claim. His client was taken by surprise. He was entitled to know in advance and not be "ambushed".

Mr Gallagher, for Irish Permanent plc, said he could not accept that there was any question of ambush involved. Apart from the statement of claim, he had indicated each step involved in the transactions they now sought to impugn. His clients claimed each step involved in the transactions was a decision taken by the board at the instigation of Dr Farrell.

Mr Justice Geoghegan rejected the application for an adjournment. He said he did not accept that Dr Farrell had been taken by surprise by the opening submissions.