Irish Bank Resolution Corporation Ltd & Ors -v- Quinn & Ors, [2012] IEHC 510 (2012)

Docket Number:2011 5843 P & 2012 120 COM
Party Name:Irish Bank Resolution Corporation Ltd & Ors, Quinn & Ors
Judge:Kelly J.
 
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THE HIGH COURT

COMMERCIAL[2011 No. 5843 P]

[2012 No. 120 COM]

BETWEEN

IRISH BANK RESOLUTION CORPORATION LIMITED,

QUINN INVESTMENTS SWEDEN A.B. AND LEIF BAECKLUND PLAINTIFFSAND

SEÁN QUINN, CIARA QUINN, COLETTE QUINN,

SEÁN QUINN JR., BRENDA QUINN, AOIFE QUINN, STEPHEN KELLY, PETER DARRAGH QUINN, NIALL MCPARTLAND, INDIAN TRUST A.B., FORFAR OVERSEAS S.A., LOCKERBIE INVESTMENTS S.A., CLONMORE INVESTMENTS S.A., MARFINE INVESTMENTS LIMITED, BLANDUN ENTERPRISES LIMITED, MECON FZE, CJSC, VNESHKONSALT, OOO STROITELNYE TECKNOLOGH, RLC-DEVELOPMENT AND KAREN WOODSDEFENDANTS

JUDGMENT of Mr. Justice Kelly delivered on the 11

th

day of December, 2012

Introduction

  1. The sole relief which is sought on this application is an order requiring the attendance of the second, third, fourth, fifth, sixth, ninth and twentieth defendants for cross examination in respect of affidavits sworn by them on foot of orders of the court made on 25th July, 2012 and 31st July, 2012. The order is sought pursuant to the provisions of O. 40, r. 1 of the Rules of the Superior Courts (RSC) or, alternatively, pursuant to the inherent jurisdiction of the court.

  2. In the motion paper grounding this application there is a second relief sought. It is sought in addition to or in the alternative and without prejudice to the first. It is for an order requiring each of the said defendants to make full and proper disclosure and/or further and better disclosure of the matters required at paras. 4, 5 and 6 of the orders of the court of 25th July, 2012 and 31st July, 2012.

  3. That second relief was not and is not being pursued at this time.

    Background

  4. These proceedings concern an alleged conspiracy on the part of the defendants to wrongfully convert and appropriate assets, details of which are set out in the first schedule to the amended plenary summons.

  5. In addition to seeking declaratory relief and damages, the plaintiffs sought and were granted injunctions at an earlier stage in the proceedings. These injunctions were granted in June and July 2011 by Clarke J.

  6. It was alleged that a number of the defendants had breached those injunctions. Dunne J. heard and determined an application in respect of that alleged contempt of court in June 2012. She found that a contempt of court had been committed. In addition to dealing with that issue, she made a number of other orders, one of which involved the appointment of a receiver over the assets of certain of the defendants. She also made disclosure orders requiring information to be furnished on affidavit of all assets of whatever nature or kind situate in Ireland or worldwide and all documents relating to the material which was specified in her order.

  7. Subsequently, the plaintiffs applied to transfer the litigation into the Commercial List. That order was granted. An application was then made seeking Mareva type injunctions restraining the second to the ninth defendants from reducing their assets below the sum of €50m. I granted those orders and also appointed receivers over the assets of these defendants. Those orders were made on 25th July, 2012. On 31st July, I made similar orders against the twentieth defendant, Karen Woods.

  8. It is important to set the context in which the orders of 25th July and 31st July, 2012, were made.

  9. Prior to 25th July, 2012, the Mareva type orders had been granted by me on an interim basis. The hearing of the application for similar orders on an interlocutory basis was fixed for 25th July, 2012 and three days were set aside for that hearing. The application was grounded upon extensive affidavit evidence which set out in great detail very serious allegations of wrongdoing on the part of the relevant defendants. Despite ample opportunity being given to the defendants to respond to those allegations, no replying affidavit of any sort was filed by any of the defendants. The orders sought were not resisted by the defendants.

  10. I gave judgment ex tempore on 25th July, 2012. In the course of that ruling, I pointed out that I had already granted freezing orders on an interim basis and that I was now asked to do so on an interlocutory basis. I recounted that since the granting of the interim orders, a number of things had happened. This is what I said:-

    “First, Dunne J. has delivered judgment on a contempt application heard by her in this litigation. In the course of her judgment, she said the following:-

    ‘What has never been in dispute is the fact that a sum of €455 million approximately is due to Anglo. Instead of trying to repay the admitted debt due, the Quinn family and in particular the respondents have taken every step possible to make it as difficult as can be to recover any amount due. They have engaged in a complex, complicated and, no doubt, costly, series of steps designed to put the assets of the IPG beyond the reach of Anglo, in a blatant, dishonest and deceitful manner. They have consciously misled courts here and elsewhere. They have sought to deprive Anglo of the assets which would go some way to discharging an admitted indebtedness. The behaviour of the respondents outlined in evidence before me is as far removed from the concept of honour and respectability as it is possible to be.’

    As a result of the findings in that judgment one of the defendants has been sent to jail and the other is now a fugitive from justice.

    The second matter that has occurred is that further evidence has been put before me by the bank. In the case of one of the defendants it shows a willingness on his part to lie about his activities, even to a court and under oath. I quote from the transcript which has been extracted from the video which had been put in evidence where that defendant laughingly said ‘I would have to lie. That wouldn’t overly worry me.’ That is in the context of a lie being told to the court.

    The third development which has taken place is that in the most recent evidence one finds payments of extraordinary sums of money, just short of €2.8m, paid to a number of the defendants and that is dealt with at paragraph 10 of the second supplemental affidavit of Mr. Woodhouse…‘this occurred after the order of Clarke J. made on 27th June, 2011. Peter Quinn specifically avers that he personally received €474,974.84 by way of net salary from Finanstroy in the period 1st April, 2011 to 15th February, 2012’.

    And he then quotes from what had been said by Mr. Quinn, that this had fairly recompensed him for the work he actually undertook. Mr. Woodhouse says this is an extraordinary statement given the facts that have now emerged regarding the steps he was taking in furtherance of the scheme during this period. Mr. Woodhouse says:-

    ‘I am not aware of any work done by Karen Woods in relation to the various companies, for example, to justify a salary of €320,297.22 after tax. The total extracted is a very substantial sum, but accounts for just a small proportion of the total rent rolls. The balance of in or around $32m is unaccounted for and its whereabouts remain unexplained. Significantly, Seán Quinn Jr. himself describes the withdrawal of these salaries as a ‘cash extraction mechanism’ at para. 63 of his affidavit.’

    There is a further significant element in the matters before me. The defendants have chosen not to file any replying affidavits at all. They were given ample opportunity to do so. They did not avail themselves of it. Thus, there is no denial, refutation or explanation of the large volume of evidence and exhibits which have been put before the court. Whilst the court does not and cannot at this stage of the proceedings make any final or binding determinations, it has to be said that all of the evidence before the court points in one direction.

    That is itself somewhat unusual in applications of this type. Normally the court has to deal with disputed facts and disputed evidence and has to adjudicate in the light of such disputes. On the evidence which is before me and which is not controverted, it appears that the Quinn family have created and operated a scheme of mesmeric complexity on a deliberate and premeditated basis which has cynically sought to achieve a twofold purpose. I regret to say that the scheme reeks of dishonesty and sharp practice. Its first object is to place assets which should be available to the plaintiff bank beyond that bank’s reach. Its second is to feather the Quinns own nest.

    Faced with this kind of conduct, any court worthy of the name and worth its salt would, if asked, make whatever orders it could legitimately make in order to bring an end to such wrongdoing and to frustrate the intentions of the wrongdoers.”

  11. That is the context in which the orders came to be made.

    The Orders

  12. The relevant part of the orders of 25th and 31st July, 2012...

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