Quinn v Irish Bank Resolution Corporation
| Jurisdiction | Ireland |
| Judge | Mr Justice Garrett Simons |
| Judgment Date | 27 March 2019 |
| Neutral Citation | [2019] IEHC 181 |
| Docket Number | 2011 No. 4336 P. |
| Court | High Court |
| Date | 27 March 2019 |
[2019] IEHC 181
THE HIGH COURT
Simons J.
2011 No. 4336 P.
Undue influence – Statement of claim – Witness statements – Plaintiffs seeking leave to amend pleadings – Whether the amendments would cause real prejudice to the defendants
Facts: The plaintiffs, the Quinns, applied to the High Court seeking a ruling as to the nature of the case which the plaintiffs were entitled to advance on the basis of the pleadings as constituted. The pleadings included a plea of undue influence, but there was a dispute between the parties as to whether the plea permitted the plaintiffs to advance an argument that the undue influence was carried out by a particular individual (Mr S Quinn Snr). A second application, which was advanced in the alternative, sought leave to amend the pleadings so as to include an express plea that the alleged undue influence was carried out by Mr S Quinn Snr. A third application was that the plaintiffs be permitted to address in their oral evidence matters which were not dealt with in their witness statements. More specifically, the plaintiffs wished to give oral evidence in respect of what they alleged was the undue influence which their father, Mr S Quinn Snr, exerted over them. It was sought to adduce this evidence in support of an argument that certain transactions said to have been entered into by the plaintiffs with Anglo Irish Bank (now the first defendant, the Irish Bank Resolution Corporation) should be set aside.
Held by Simons J that the proposed reformulation of the case so as to include an allegation of undue influence against Mr S Quinn Snr was not merely a matter of detail or a shift in emphasis. Rather, it amounted to the introduction of an entirely new claim and the identification of Mr Quinn as a principal wrongdoer. This radical change was combined with the jettisoning of the previous claim that it was the officials of the Bank who exerted undue influence. Simons J held that this was such a vastly different case that there was no realistic basis for saying that it was implicit or latent in the existing proceedings. Simons J held that he would refuse the application to amend because the amendment was not necessary to the real questions in the proceedings, and because it would cause real prejudice to the defendants. Simons J held that the plaintiffs’ application to expand on the content of the witness statements had been overtaken by his decision to refuse leave to amend the statement of claim; the effect of that decision was that a claim that Mr S Quinn Snr exercised undue influence over the individual plaintiffs did not form part of the case so any attempt to adduce evidence in that regard would be open to the objection that such evidence was not relevant to an issue in the case.
Simons J proposed to make orders along the following lines: first, an order refusing the plaintiffs’ application, brought by way of notice of motion filed in court on 22 March 2019, for leave to amend the statement of claim pursuant to Order 28, rule 1 of the Rules of the Superior Courts; second, a declaration that the pleadings to date, including the statement of claim (as amended on 14 May 2015 and 2 November 2018) and the replies to particulars, did not include a claim for undue influence against Mr S Quinn Snr; third, an order refusing the plaintiffs leave to file supplemental written statements pursuant to Order 63A, rule 22 of the Rules of the Superior Courts. Simons J held that he would hear from counsel before settling on the precise form of order.
Applications refused.
This judgment is delivered in respect of the following three applications moved on behalf of the Plaintiffs. The first application seeks a ruling as to the nature of the case which the Plaintiffs are entitled to advance on the basis of the pleadings as currently constituted. The pleadings include a plea of undue influence, but there is a dispute between the parties as to whether the plea permits the Plaintiffs to advance an argument that the undue influence was carried out by a particular individual (Mr Sean Quinn Snr).
The second application, which is advanced in the alternative, seeks leave to amend the pleadings so as to include an express plea that the alleged undue influence was carried out by Mr Sean Quinn Snr.
The third application is that the Plaintiffs be permitted to address in their oral evidence matters which are not dealt with in their witness statements. More specifically, the Plaintiffs now wish to give oral evidence in respect of what they allege was the undue influence which their father, Sean Quinn Snr, exerted over them. It is sought to adduce this evidence in support of an argument that certain transactions said to have been entered into by the Plaintiffs with Anglo Irish Bank (now the Irish Bank Resolution Corporation) should be set aside.
The Defendants resist all three applications. In brief outline, the Defendants object to what they say is an impermissible attempt by the Plaintiffs to change the nature of their case at the thirteenth hour. It is submitted that insofar as an allegation of undue influence has been pleaded, it is confined to an allegation that undue influence was exercised by officials of Anglo Irish Bank. The pleadings do not make an allegation that undue influence was exerted by Sean Quinn Snr. Nor is any such allegation made in the individual witness statements filed on behalf of each of the five Plaintiffs. The application to amend the pleadings is also resisted on the grounds that same would cause real prejudice to the Defendants.
In order to put the arguments of the parties into context, it is necessary to rehearse the procedural history of these proceedings. This is because one of the central arguments made on behalf of the Defendants is that the Plaintiffs should not be permitted to change their case more than seven years after the proceedings first issued.
These proceedings were instituted on 16 May 2011. The proceedings seek to set aside a number of transactions entered into between the Plaintiffs and the bank previously known as Anglo Irish Bank. Anglo Irish Bank was taken into State ownership pursuant to the Anglo Irish Bank Corporation Act 2009, and was subsequently renamed as the Irish Bank Resolution Corporation. I propose to use the shorthand ‘ the Bank’ to refer to the first named defendant. The Bank is now in special liquidation pursuant to the Irish Bank Resolution Corporation Act 2013. The share receiver (Mr Kieran Wallace) is the second named defendant to the proceedings (‘ the Share Receiver’).
In brief outline, the impugned transactions consist of a number of share charges and personal guarantees said to have been executed by the individual Plaintiffs in favour of the Bank. The share charges are said by the Bank to have been executed on various dates between January 2003 and March 2009. The personal guarantees are said by the Bank to have been entered in or about October 2008.
The Plaintiffs seek to impugn these transactions on a number of grounds including, inter alia, undue influence and improvident or unconscionable bargain. In the case of some of the impugned transactions, the Plaintiffs make an additional allegation of ‘signature switching’. More specifically, they allege that they had signed an earlier draft of a share charge but that this signature page was then—wrongfully they say—appended to a later revised draft of the share charge by persons within the Quinn Group of companies. In respect of the balance of the impugned transactions, the Plaintiffs appear to accept that they signed the signature pages of the documents, but maintain, for various reasons, that they are not bound by same.
For purposes of the three applications the subject of this judgment, the plea of most immediate relevance is that of ‘undue influence’. Before turning to examine the precise nature of the plea made in this regard, it may be useful to provide a very brief outline of the background to the proceedings. The purpose of this exercise is simply to assist the reader in understanding the arguments of the parties on the applications the subject-matter of this judgment. This court has, obviously, not reached any conclusion as to any disputed facts. This court has not yet had the benefit of oral evidence from any of the parties, the hearing of which evidence is scheduled to take several months.
The Plaintiffs are the adult children of Mr Sean Quinn Snr. It is common case that Mr Quinn had been an extremely successful businessman. These businesses included quarrying and the manufacturing of concrete; insurance; and hotel and hospitality. The businesses were conducted through a large number of companies.
It appears that in or about 2002, Mr Quinn transferred the beneficial ownership of the businesses to his children. (As one of the children, Brenda, was a minor at this time, her shares were held on trust until she reached the age of majority in 2005).
The ownership issue is addressed as follows by the Plaintiffs in their Statement of Claim.*
‘10. Whilst Sean Quinn Snr. was the founder of the Quinn Group, the first to fifth named Plaintiffs were, at all times material to these proceedings, the ultimate beneficial owners. Quinn Group (ROI) Limited (“ROI”) is a private limited company registered in Ireland under registration number 433246. Since 2002, the shares in ROI have been held by each of the first to fifth named Plaintiffs and Quinn Quarries Limited. Quinn Quarries Limited owns approximately 3% of the ordinary issued share capital in ROI. The fifth named Plaintiff,...
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