The Irish Bank Resolution Corporation (IBRC) has argued the taxpayer should not have to fund the costs of property investor Paddy McKillen’s legal action aimed at preventing his loans being sold by the IBRC special liquidators to the billionaire Barclay brothers.

Mr McKillen had brought his proceedings against the liquidators and against David and Frederick Barclay, with whom he has been engaged in a long-running battle for control of three London hotels — Claridge’s, the Connaught and the Berkeley.

The case was due to be heard earlier this month but did not proceed after Mr McKillen successfully acquired the loans with the backing of private international investment firm, Colony Capital.

High Court
Yesterday, the matter was before the High Court to deal with the legal costs of several preliminary issues raised.

Michael Cush SC, for Mr McKillen, said his client believed he would have succeeded at the full hearing but that was rendered pointless because the loans had been acquired.

Counsel urged the court to make no orders concerning the IBRC legal costs (with the effect IBRC pay its own costs). Mr McKillen had alleged “no wrong” against IBRC, he said.

Counsel said it had been agreed between Mr McKillen and the Barclay brothers that they would each pay their own costs in relation to the case. Mr McKillen had incurred substantial costs in a number of pre-trial motions, including discovery.

Cian Ferriter SC, for IBRC, argued its legal costs should be paid by Mr McKillen as it had been “caught in the crossfire of two warring parties.”

Minimal participation
While it was accepted IBRC's participation had been minimal, counsel said he did not see why IRBC, "in effect the taxpayer", should incur any legal costs because Mr McKillen had decided to discontinue his action.

Mr Justice Paul Gilligan said he would rule on the matter today.