Anglo Irish Bank Corporation Ltd v Quinn Investments Sweden AB and Others
| Jurisdiction | Ireland |
| Judge | Ms. Justice Dunne, |
| Judgment Date | 26 June 2012 |
| Neutral Citation | [2012] IEHC 379 |
| Court | High Court |
| Date | 26 June 2012 |
[2012] IEHC 379
THE HIGH COURT
BETWEEN
AND
Banking - Loans - Security - Plaintiff holding security over assets held by defendants - Plaintiff contending defendants seeking to deprive plaintiff of benefit of security - Application for committal of number of defendants for breach of court order
Facts: The facts of the case were now infamous. The plaintiff had loaned substantial sums to the defendants, and held security over the defendants' property portfolio and the companies used to manage the portfolio. The plaintiff contended the defendants were seeking to prevent the enforcement of that security by transferring the portfolio's value from the existing management structure.
An injunction was granted in July 2011 prevented the defendants from taking certain steps which would weaken the plaintiff's security. The plaintiff contended the terms of this order had not been complied with and accordingly sought the committal of three defendants ("the respondents") for contempt of court.
Held by Dunne J, that three issues were central to the application. Firstly, the payment of $500,000 to a former director of an Ukrainian related company. Secondly, the assignment of debts owed to a Russian subsidiary. Finally, the assignment of debt by a Northern Ireland related company. For each of these issues, the Court would have to be satisfied beyond reasonable doubt that the allegations of contempt were made out.
In respect of the first issue, the Court considered the evidence in the matter demonstrated the respondents had clearly brought about the payment to the former director. The Court found the respondent's evidence evasive and in parts clearly unbelievable. As such the allegation of contempt was made out on this issue.
Turning to the second issue, the plaintiff contended the assignment of the debts was again designed to frustrate the plaintiff's security. Considering the assignments, and the use of a "man of straw" in Russia by the respondents, the Court accepted the respondents' evidence on the matter to be lacking in truth. Two of the respondents were therefore in breach of the orders on this point.
In respect of the final issue, the Court again accepted that the respondents' conduct was designed to frustrate the plaintiff's lawful security. This involved backdating documents to before the issue of the injunction by the Court in this matter.
The Court in conclusion commented on the lack of candour on the part of the respondents, and therefore held them in contempt of court. The parties were invited to make submissions on the steps to follow as a result of this ruling.
JUDGMENT of Ms. Justice Dunne, delivered the 26th day of June 2012
This is an application for the committal and/or attachment of the second, fifth and ninth defendants for contempt of court for alleged breaches of the order of this Court of the 27 th June, 2011, and confirmed on the 20 th July, 2011.
An overview of the background to these proceedings can be found in the judgment of Clarke J. delivered in these proceedings on the 13 th September, 2011. As he pointed out the backdrop to these proceedings relates to "a part of the Quinn family empire which derived from the acquisition of a significant property portfolio largely based outside Ireland". It is alleged in these proceedings by the plaintiff (hereinafter referred to as "Anglo") that members of the Quinn family have been involved in a conspiracy to alter the way in which the property portfolio is held. Anglo has security over the property portfolio and over various companies which hold the property portfolio. The essence of these proceedings is a contention by Anglo that the defendants are seeking to remove the value of the portfolio away from the existing structure in which it is held and into a separate structure, the ultimate beneficial owner of which would be members of the Quinn family, with a view to depriving Anglo of the benefit of its security over the property portfolio.
The proceedings herein were commenced by a plenary summons issued on the 28 th June, 2011. On the 27 th June, 2011, Anglo obtained an interim ex parte injunction against the defendants. The matter was returned for the 29 th June, 2011. At that stage there was representation before the courts on behalf of the defendants; the interim orders made on the 27 th June, 2011, were continued and the matters were adjourned on a number of dates with the interim orders continued by consent. The application for interlocutory relief commenced on the 19 th July, 2011 and concluded on the 20 th July, 2011, when the defendants consented to the injunction sought by Anglo.
The injunction granted by the Court on the 20 th July, 2011, was in the following terms:-
"The Defendants be restrained forthwith whether by themselves or by their respective employees, servants, officers or agents or otherwise howsoever from:"
1. inducing or procuring or otherwise facilitating any person or corporate entity to breach share pledges entered into by the International Property Group of Quinn companies as referred to in the Affidavit of Richard Woodhouse with the Plaintiff or any guarantees given to or for the benefit of the Plaintiff in respect of the indebtedness of the International Property Group of Quinn companies as referred to in the affidavit of Richard Woodhouse;
2. taking any step directly or indirectly that may have the effect of transferring any of the assets of Quinn Holdings Sweden AB, Quinn Park Sweden AB, Quinn Buildings Sweden AB, Quinn Logistics Sweden AB, Quinn Way Sweden AB, Quinn Assets Sweden AB, Quinn Management Sweden AB, Quinn Interests Sweden AB, Quinn Services Sweden AB, Quinn Voyage Sweden AB, Quinn Investments Sweden AB, Kompania Finansstroy Investments LLC to any third party save to the extent that same may be done in the ordinary course of business;
3. Directly or indirectly exercising or purporting to exercise any rights that attach to any shares that have been pledged to the Plaintiff save to the extent that such actions are consistent with the interests of the Plaintiff;
4. Directing advising or causing the company Indian Trust AB (registration number 556837-0695) to take any steps in respect of a purported shareholding or any other purported interest in the companies Quinn Holdings Sweden AB, Quinn Park Sweden AB, Quinn Buildings Sweden AB, Quinn Logistics Sweden AB, Quinn Way Sweden AB, Quinn Assets Sweden AB, Quinn Management Sweden AB, Quinn Interests Sweden AB, Quinn Services Sweden AB, Quinn Voyage Sweden AB, Quinn Investments Sweden AB, Carcer Management Limited, Kompania Finansstroy Investments LLC, Krostein Investments Limited, CJSC Logistica, Samonaca Holding Limited and LLC Krasniy Sektor without the prior written consent of the Plaintiff;
5. Taking any steps to implement or to progress proposals or to put into operation proposals that a corporate structure be established which mirrors the corporate structure of the Quinn family's International Property Group."
On the 13 th February, 2012, Anglo brought a motion returnable for the 17 th February, 2012, alleging that the second, fifth and ninth defendants were in breach of the orders dated the 27 th June, 2011, and 20 th July, 2011, ("the Orders"), and seeking their attachment and if necessary committal, for breach of the Court Orders. The allegations made against the second and ninth defendants are identical and the application in respect of the fifth named defendant is confined to an allegation in common with the second and ninth defendants in relation to matters alleged to have occurred on the 30 th August, 2011, on foot of which some US$500,000 held in a bank account of a Quinn International Property Group ("IPG") subsidiary company was paid into the personal bank account of the general director of that company contrary to the interests of Anglo and other than in the ordinary course of business.
Anglo's motion was grounded on the affidavit of Richard Woodhouse, group head of specialised asset management of Anglo, sworn on the 10 th February, 2012. In the course of this application, further affidavits were sworn on behalf of Anglo and Anglo relies on those affidavits together with their exhibits. Further, Anglo relies on various admissions made by the second, fifth and ninth defendants on affidavit and in their oral evidence.
For ease of reference I will refer to the second, fifth and ninth defendants herein as "the respondents" save where the context otherwise requires. Anglo, in the course of these proceedings has changed its name to Irish Bank Resolution Corporation Limited, but, again for ease of reference, I will continue to refer to the plaintiff in these proceedings as Anglo.
Mr. Woodhouse, in the first of the affidavits sworn by him grounding this application averred that Anglo became aware of actions of the respondents which were in breach of the Orders and demonstrated a continuation of a coordinated strategy before and after the Orders to place the assets within the IPG beyond the reach of Anglo, to undermine its validly held security in respect of those assets and to damage Anglo's interests.
Mr. Woodhouse, in paragraph 11 of his affidavit of the 10 th February, 2012, outlined specific actions taken by the respondents which he alleged were breaches of the Orders made herein, namely the assignment by the second and ninth defendants of US$163 million worth of loans to a Belize entity...
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