Concerns about the capacity of former Irish Nationwide Building Society (INBS) chief executive Michael Fingleton to give instructions may lead to his wife and son taking over, in a representative capacity, his defence of an action initiated 10 years ago over the collapse of the society.
Eileen Fingleton and Michael Fingleton jnr have recently been registered as holding enduring powers of attorney in relation to Mr Fingleton, aged in his 80s and in declining health, the Commercial Court heard on Tuesday.
State-owned Irish Bank Resolution Corporation (IBRC) initiated the case against Mr Fingleton in 2012.
On Tuesday, its counsel Lyndon MacCann SC said that, because of a delay of some two years in registering the powers of attorney, his side had brought an application to have the court appoint a guardian ad litem to Mr Fingleton so the case could continue.
Because the powers of attorney have now been registered, the guardian application may not proceed if the Fingletons agree to take over the defence of the case in a representative capacity, the court heard.
Reconstituted
Counsel said the proceedings will have to be reconstituted to reflect the new situation.
Niall Clerkin, solicitor for Mr Fingleton, said agreement might be reached in correspondence concerning whether Mrs Fingleton and her son would take over the defence to the case in a representative capacity, but he needed to take instructions from the Fingletons in that regard.
He shared IBRC’s eagerness to get the case heard, he added.
Mr Justice Denis McDonald said he would adjourn the proceedings to Monday next so all the issues raised could be ironed out.
Mr Fingleton is appealing against a High Court refusal last year to halt a case against him over alleged negligent mismanagement of the society's affairs. That appeal is expected to be heard later this year.
If the appeal is dismissed, the main case is listed to proceed in early January next year and is expected to run for several months.
Mr Justice Tony Hunt had in May 2021 refused Mr Fingleton’s application to have dismissed, or permanently stayed, the action against him by the special liquidators of IBRC, which took over INBS after it collapsed.
Deteriorating health
The judge accepted Mr Fingleton’s deteriorating health meant he cannot participate meaningfully in the case but concluded, for reasons including the resolution of IBRC’s claims depended substantially on objective evidence, factors and standards, rather than subjective evidence from Mr Fingleton, the balance of justice “lies firmly on the side of permitting the proceedings to continue”.
It was “impossible” to conclude, at this stage of the proceedings, that it would be fundamentally unfair to allow them continue, he said.
IBRC, among various claims, alleges the society’s €6 billion losses from 2008 to 2010 arose from development loans made when Mr Fingleton was chief executive, he had excessive control over the society’s business and flouted its lending rules.
Had the true picture of INBS’s affairs been disclosed, IBRC claims Mr Fingleton would have been summarily dismissed for breach of duty by 2007 at the latest and not paid expenses allegedly inappropriately incurred, plus some €1.2 million in performance bonuses for 2008 and 2009 when he left.
Mr Fingleton denies the claims.
