The Court of Appeal has rejected an attempt to stop a civil case proceeding against former Irish Nationwide Chief Executive Michael Fingleton.
The special liquidators of Irish Bank Resolution Corporation who took over Irish Nationwide after its collapse, claim that losses of €6bn between 2008 and 2010 arose from loans for development made when Mr Fingleton was CEO.
They allege he had too much control over the business of the society and that he flouted its lending rules.
The case against Mr Fingleton is for €290 million involving a series of loans between 2006 and 2009.
In 2021, the High Court refused to stop Irish Nationwide's case against Mr Fingleton over the alleged negligent mismanagement of its affairs.
Mr Fingleton appealed the High Court’s decision through his wife, Eileen and son, Michael Junior, who have enduring powers of attorney because of his ill health.
Their lawyers told the Court of Appeal that the purpose of the case against Mr Fingleton was to "put a sick elderly man in the stocks" and it would be unjust and unfair to allow it to proceed.
However the Court of Appeal this morning ruled that it had not been established that there was real or serious risk of an unfair trial or unjust result.
At a hearing last December, the Court of Appeal was told Mr Fingleton has suffered a devastating stroke in 2019 and as result suffered cognitive impairment and lacked capacity to conduct his own affairs.
The court was told his short-term memory was virtually gone and communication with family was very difficult. He uses a wheelchair and relies on 24-hour care.
His lawyers said he was physically feeble and unable to stay awake for more than a few hours at a time and would not be in a position to provide instructions to his solicitors or provide any evidence at trial.
The court of Appeal said the case concerns the allegation of gross negligence or negligence in respect of five series of loans approved and advanced by INBS between 2006 and 2009 while Mr Fingleton was Chief Executive and the losses flowing form the loans for it is alleged he is responsible.
It is alleged that had he not "intervened" the loans would not have been made nor the losses incurred.
Among the issues to be examined are whether or not the loans complied with lending policy, were properly risk assessed, if there were proper valuations and security adequately assessed and if the credit worthiness of the borrowers was adequately assessed.
The Court of Appeal said it was accepted that Mr Fingleton can no longer give instructions to lawyers or assist in the preparation of his defence during the case but had been able to give instructions prior to his ill health.
The court found it had not been established that the inability of Mr Fingleton to give instructions or give evidence in relation to the loans gives rise to a degree of prejudice adding that the case had become "more rather than less document dependent" and the application for the loans and their terms would be recorded in documents.
"While the documents relating to the five series of loans may not be as complete as one might expect from a financial institution of the nature of INBS, despite the fact that discovery was made some considerable time ago, there is no evidence of any prejudice….there is no evidence in relation to these loans that the documentary evidence is so incomplete that the continuation of these proceedings…would amount to a clear, patent unfairness.." the judgement continued.
The court also found that many "crucial matters are objectively provable" without the need for Mr Fingleton’s testimony and could be found in documentation.
The question of whether the authorisation of the loans amounted to negligence would largely be dealt with by expert testimony, the court said, adding that that the arguments advanced at the appeal "fall short, and considerably so, of the threshold required to be met by a defendant who invokes this exceptional jurisdiction to dismiss proceedings in advance of a trial on the merits."
The court dismissed the appeal saying it was of the view that Mr Fingleton had "not established that there was a risk of an unfair trial or an unjust result or that there was a clear, patent injustice in asking him to defend the proceedings or that to do so would place upon him an inexcusable and unfair burden."
