The liquidators of the Irish Bank Resolution Corporation (IBRC) are attempting to pursue an “impermissible” broad claim of systemic mismanagement against former Irish Nationwide Building Society (INBS) chief executive Michael Fingleton, the High Court has been told.
Mr Fingleton (85), acting through his wife and son under their powers of attorney due to his severe ill health, is asking the High Court to find that many of the allegations against him can no longer stand due to concessions made by the IBRC liquidators before the Court of Appeal.
That court, in ruling last May that Mr Fingleton had not established the civil case against him would be unfair, said the IBRC, which took over the failed lender in 2011, had narrowed its 2012 claim from more than €6 billion to about €290 million.
The appeal court’s judgment said “whole swathes of issues will no longer feature in the case”, which now comprises a claim of negligence and/or breach of a director’s duty to exercise due skill, care and diligence in authorising and advancing a series of five loans issued between 2006 and 2009.
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The court said the case no longer spans Mr Fingleton’s tenure leading INBS from 1971 to 2009, during which he was managing director and then chief executive.
The Supreme Court will this week consider Mr Fingleton’s request for a further appeal against the Court of Appeal’s central decision in that ruling: that he did not establish a clear injustice in asking him to defend the proceedings.
On Wednesday, Mr Fingleton’s lawyers said that, contrary to the Court of Appeal ruling, the IBRC liquidators now seek to place Mr Fingleton on the hook for the full €6 billion losses suffered by the building society after the 2008 property crash.
Padraic Lyons SC, said the IBRC has pitched its case at “the highest possible level of generality” with the hope the court will find that the five series of loans are “emblematic” of wider alleged mismanagement by Mr Fingleton.
This formulation of a “very broad” case of systemic mismanagement that is not time-limited “cannot be permitted to proceed”, he told the court.
Even if the court finds it is permissible for these matters to remain in the case when considering the appeal court’s judgment, they should be struck out because they are so vague, he added.
Contesting the application, Lyndon MacCann SC, for the IBRC liquidators, urged the court not to strike out sections of the claim.
He queried the Court of Appeal’s jurisdiction to make these comments about a narrowing of the case but accepted that was not a question for the High Court.
In so far as any concession was made before the appeal court, he said, it was that the IBRC would “further particularise” the claim.
“We were still reserving our right to claim for potentially up to the full €6 billion,” he added.
