A High Court judge has told lawyers for the Irish Bank Resolution Corporation’s liquidators to seek clarity from the Court of Appeal regarding the scope of the civil case facing former Irish Nationwide Building Society chief executive Michael Fingleton.
Mr Justice Denis McDonald said he was put in an “impossible position” as parts of the case the IBRC liquidators are seeking to pursue are now “out” according to a recent ruling by the appeal court.
The judge said he might be misinterpreting the judgment, but the liquidators would need to get clarity from the higher court to resolve the situation.
There was “very considerable force” to submissions made by lawyers for Mr Fingleton (85) on how to interpret the judgment, but the liquidators took a different view, he added.
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Last month, the Court of Appeal dismissed an application from Mr Fingleton, acting through his wife and son under their powers of attorney, for the case to be dismissed or permanently suspended due to his severe ill-health and the passage of time.
The IBRC sued Mr Fingleton in 2012 for alleged negligent mismanagement of the building society. It was initially claiming for damages of €6 billion – the sum lost by the building society after the 2008 property crash.
In its judgment on the strike-out application, the Court of Appeal said counsel for the IBRC liquidators confirmed during the appeal hearing that they would be limiting their claim to damages arising from five series of loans spanning 2006 to 2009.
The claim was narrowed to about €290 million and no longer spans Mr Fingleton’s tenure leading Irish Nationwide from 1971 to 2009, during which he was managing director and then chief executive, the court said.
[ Michael Fingleton fails to stop trial over alleged INBS mismanagementOpens in new window ]
This “very significant change” left a case alleging negligence and/or breach of a director’s duty to exercise due skill, care and diligence in authorising and advancing these specified loans over the three-year period, the judges said.
It no longer spanned Mr Fingleton’s tenure leading Irish Nationwide from 1971 to 2009, during which he was managing director and then chief executive, they added.
On Thursday, Lyndon MacCann SC, for the IBRC’s liquidators, told Mr Justice McDonald that his client’s case had been “pleaded from the outset”.
The five series of loans are examples of the IBRC’s wider complaints of wrongdoing, but his client would need to be able to advance evidence about an alleged general unfettered authority given to Mr Fingleton, he said.
[ Mortgage holders likely to face two more rate hikes, Central Bank governor saysOpens in new window ]
He must also be able to give more general evidence to support the allegation of mismanagement of the building society.
Padraic Lyons SC, for Mr Fingleton, said the IBRC liquidators were “bound by the concessions” they made in a “casual and completely unstructured fashion” before the appeal court. The resulting “very serious confusion” had not been brought about by Mr Fingleton, who had been put in an “utterly unfair position”, he added.
Mr Lyons said there was a “profound incongruity” between the liquidators’ submissions on Thursday and the appeal court’s judgment. His client must know what case he has to meet.
Mr Justice McDonald said the “only appropriate course” was for the liquidators to seek clarity from the Court of Appeal. He adjourned the case which, he was told, would take six months to hear.
