Anglo Irish Bank is incorrect to insist bankrupt businessman Seán Quinn has no legal right to defend himself in proceedings which could result in judgment of more than €2.3 billion being entered against him, the Commercial Court heard today.
Counsel for Mr Quinn, Brian Cregan SC, said it cannot be the case that Mr Quinn has no right to defend the very serious claims against him, which include“corporate fraud on an enormous scale”.
Anglo contends that because Mr Quinn is a bankrupt and the Official Assignee in Bankruptcy has decided not to participate in the Quinn family's action to avoid liability for loans from Anglo to the Quinn group, he has no entitlement under law to personally defend claims against him in the proceedings.
Anglo also contends, if it ultimately secures a judgment against Mr Quinn in circumstances where he was not permitted defend the case, that it would not amount to "findings" by a court against him.
The bank has claimed Mr Quinn conspired to obtain loans of up to €2.8billion for an illegal purpose but Mr Quinn has delivered a full defence denying all those claims and alleging Anglo at all times knew the real purpose of the loans was to meet margin calls on Contract for Difference positions in the bank, counsel said.
Mr Quinn maintains Anglo had insisted margin calls be met and that the Anglo share price would not be affected by such calls, he said. Mr Quinn contends Anglo insisted upon, and facilitated, the very conduct it has alleged against him, counsel added.
Mr Quinn was entitled to defend on grounds including that his rights under the Constitution and European Convention on Human Rights to vindication of his good name, access to court, fair trial, equality before the law and fair procedures, counsel argued.
The fact Mr Quinn has been declared a bankrupt and the Official Assignee is not taking part in the case does not deprive Mr Quinn of rights which are personal rights, not property rights vested in the Official Assignee, counsel argued.
The Bankruptcy Act, he submitted, does not expressly prevent a bankrupt defending themselves in any court proceedings.
It was not tenable for Anglo — having joined Mr Quinn to the proceedings to claim judgment of up to €2.8 billion against him and having secured his adjudication as a bankrupt — to now argue he cannot defend the case because he is bankrupt, counsel said.
It was also "risible" to suggest any entry of judgment against Mr Quinn would not be adversely publicly perceived, he said.
Mr Cregan will continue his arguments tomorrow before Mr Justice Peter Kelly in the application by Mr Quinn to be permitted to defend the claims against him in the proceedings brought against the bank by Mr Quinn's wife Patricia and their five adult children.
The family are seeking to avoid liability for loans of some €2.34 billion on grounds that the loans were issued for the unlawful purpose of propping up Anglo's share price. Anglo denies the claims but last year joined Mr Quinn and two former Quinn Group senior executives- Liam McCaffrey, former Quinn Group finance director and Dara O'Reilly, chief executive of Quinn Group (NI) Ltd — as third parties.
The bank contends, if the family wins their case, it is entitled to be indemnified by the three in relation to the loans. It alleges the three were central to the management of the Quinn group and an alleged strategy to make investments to fund Contract for Difference (CfD) positions in Anglo before the end of 2007.
After the Official Assignee told Mr Justice Kelly last month he was not participating in the case, Anglo applied for judgment in default of defence effectively seeking to have Mr Quinn bound by any judgment made at the end of the case.
When that application came on for hearing late last month, Mr Quinn appeared before the judge and said he wanted to be permitted personally defend the claims against him.
Today, Mr Quinn was again in court but was represented by solicitors and counsel. Mr Cregahn said he, along with Eoin McGonigal SC and junior counsel, were representing Mr Quinn on a "pro bono" basis for this application only.
Asked by the judge whether that meant, if Mr Quinn was permitted defend, he would be defending himself, Mr Cregan said he could not say what would happen This was the third set of different counsel to represent Mr Quinn at various stages, the judge said. "It's a bit like a legal Lanigan's Ball," he remarked.
Anglo, now Irish Bank Resoltion Corporation, was also represented by senior and junior counsel.
In submissions for Anglo, Brian Murray SC argued the situation under English law is that a bankrupt cannot defend proceedings where an Official Assignee chooses not to defend. The same situation applies here, he argued.
Mr Murray also argued that any judgment obtained against Mr Quinn will relate to property once owned by him but of which ownership was now vested in the Official Assignee. In that situation, Mr Quinn had no legal standing to defend, he said.
Counsel also argued any judgment would not amount to "findings" against Mr Quinn in relation to allegations made in the case. He agreed Anglo has alleged fraud and conspiracy by Mr Quinn but said a situation where judgment was entered in default of defence involved no adjudication or findings by the court on such claims.
