The family of businessman Sean Quinn cannot rely on alleged illegality by the former Anglo Irish Bank as part of their case denying liabiility for €2.34 billion in loans to Quinn Group related companies, the Supreme Court ruled.
In a unanimous decision, the five-judge court upheld an appeal by Anglo's successor, Irish Bank Resolution Corporation and its liquidator Kieran Wallace, dealing with a preliminary issue in advance of June's scheduled High Court hearing of the Quinn claim.
That issue related to what Mr Quinn’s wife Patricia, and the couple’s five children, say were statutory and regulatory breaches by the bank in relation to guarantees and security given by the Quinns in relation to the loans.
IBRC denies illegality and says even if it were established, that would not provide any legal basis for the Quinns denying liability for their security and guarantees.
Today, Mr Justice Frank Clarke, on behalf of the Supreme Court, said the High Court substantially found the Quinns could rely on alleged serious breaches of the Companies Act and EU Market Abuse Regulations in their case denying liability.
Having analysed the issues and relevant Irish and international jurisprudence, the judge found in favour of IBRC.
Appyling certain criteria to both the legislative and market abuse rules, the judge concluded the contracts entered into by the Quinns, which may breach the law and the regulations, “are nonetheless enforceable”.
Section 60 of the 1963 Companies Act implies that contracts, although unlawful, “are not to be considered void and can only be regarded as void in law if the relevant company decides to treat them as such”.
In relation to the Market Abuse Regulations, he said their purpose is to protect investors in the financial markets.
To impose an additional penalty on those investors by preventing such companies from being able to recover loaned monies would be “entirely counterproductive to the statutory end”.
Those regulations were not designed to protect parties such as the Quinn Group related companies which were invovled in the alleged abuse, he said.
Legal sources say today’s decision could shorten the Quinns’ High Court case which is due to last several weeks.
