High Court rules existing IBRC actions can proceedFriday 15 March 2013 17.56
The High Court has ruled that the courts can allow existing actions against the Irish Bank Resolution Corporation, including by the family of bankrupt businessman Seán Quinn, to proceed.
Confusion had arisen whether the courts had jurisdiction to lift the "immediate stay" in the new IBRC Act halting all proceedings against the bank.
The Act provides for no stay on proceedings by the bank against others.
About one third of existing cases before the Commercial Court are against IBRC.
The stay had caused uncertainty whether any steps at all may be taken in relation to them, with several judges raising the issue since the Act came into force last month.
In his decision today, Mr Justice Seán Ryan said it was "impossible to conceive" the Oireachtas had, via the stay in Section 6.2.a of the Act, terminated the Quinns' case "in an instant" and deprived them of the right to apply to court.
Any such interpretation would involve "extensive and substantial interference with Constitutional rights in modes that are discriminatory and unjustified and unnecessary in the circumstances".
There was an "undoubtedly puzzling" distinction between the "immediate stay" in Section 6.2.a and the wording of Section 6.2.b, which states " ... no further actions or proceedings can be issued against IBRC without the consent of the court", he noted.
Having analysed the provision, he concluded it was manifest that "a fair, proper and constitutional interpretation", and a similar approach based on common law, lead to the "inevitable conclusion" the stay in the Quinn case was intended to be subject to being lifted on application to the court.
To say every existing proceeding, but not any future action against the bank, whatever its circumstances or consequences was forever prevented from proceeding and without access to the court would be "an astonishing consequence" of the "mere 11 words" of 6.2.a, he said.
The decision means the action by Patricia Quinn and her children can proceed once the criminal proceedings against former Anglo Irish Bank chairman Seán FitzPatrick and two senior Anglo executives are concluded.
The Quinns allege they have no liability for some €2.34bn loans advanced by Anglo to Quinn companies on grounds those loans were unlawfully made to prop up the bank's share price.
Pre-trial applications can proceed and the Quinns are expected to apply shortly for permission to join the Department of Finance and Central Bank, as regulator, as co-defendants with IBRC to their case.
When lawyers for the Quinns applied last month for the stay to be lifted, the issue whether the court could do so was referred to Mr Justice Ryan for clarification.
Lawyers for the Quinns and for IBRC both argued the court could lift the stay and it was never intended to be permanent.
In his decision today, the judge noted the IBRC Act was passed "with great urgency over the course of one night", with the effect of putting IBRC into liquidation.
It empowered the Minister for Finance to make a special liquidation order and Section 6 dealt with some of the consequences of that procedure.
The distinction between Section 6.2.a and Section 6.2.b was "undoubtedly puzzling".
The words in Section 6.2.a were not unclear but their consequence was unspecified.
There was no specific mention of the court's function in 6.2.a and, if that omission was considered to be a deliberate withholding of the right to apply to have the stay lifted, it would have serious repercussions for the Quinns' case.
It was possible the omission was "a result of haste and urgency" but he could not lightly infer that, he added.
He found the literal wording of Section 6.2.a - "there shall be an immediate stay on all proceedings against IBRC" - meant it was uncertain whether the stay was temporary or permanent.
However, he also found there was nothing in that section to indicate the court's jurisdiction was excluded.
If it was intended the stay was to be permanent, that would come "with heavy baggage", including interference with property rights, access to the courts, separation of powers, invidious discrimination and other issues, he said.
In his view, "no sensible draftsman or legislator" would simply provide for such deprivation of rights without providing any justifying context or circumstances or without establishing a basis of distinction between existing and future litigants.
IBRC staff urged to step up lobbying over redundancies
The Irish Bank Officials Association has told members at the former Anglo Irish Bank to step up political lobbying in pursuit of better redundancy payments and clarity about future job prospects.
After the bank, which merged with Irish Nationwide to become Irish Bank Resolution Corporation, was put into liquidation last month it emerged that employees - including the outgoing chief executive - would only receive statutory redundancy of two weeks’ pay per year of service capped at €600 per week.
Staff were put on temporary contracts, with the possibility that some will transfer to NAMA.
In an update to members, IBOA General Secretary Larry Broderick said special liquidator Kieran Wallace had confirmed that the deadline for completion had been extended.
He said that would allow more concrete discussions to take place on business plans, extension of employment contracts, future jobs, pensions and severance terms.
Mr Broderick also said Mr Wallace had confirmed that the issue of the three-month contracts currently applying to IBRC staff since their permanent employment was terminated was being reviewed in the context of the business needs of the liquidation with a view to extending contracts further.
Mr Broderick told staff he will be scheduling meetings with the liquidator over the coming weeks.
However, he says members should "continue to maintain the political pressure ".
He also states he will communicate the next phase of political lobbying to all members by the end of the week, as well as details of its campaign of resistance to any proposed pay cuts.
The IBOA is also seeking an early meeting with pension trustees, and has appointed specialist pension advisors to evaluate all aspects of members' pension entitlements.