Monday 24 October 2016

Collins appeals over €31bn Anglo promissory note

Tim Healy

Published 19/02/2016 | 02:30

Joan Collins: legal challenge
Joan Collins: legal challenge

The issuing of €31bn in promissory notes in favour of Anglo Irish Bank by the Minister for Finance in 2010 involved an unconstitutional allocation of public money without a Dáil vote, lawyers for Joan Collins TD have told the Supreme Court.

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Ms Collins' case was an "enormous" one with "enormous implications", her counsel, John Rogers SC, said. It was about the "very hub" of the financial running of the State.

Her core argument is that the 2008 Credit Institutions (Financial Stabilisation) Act gave the minister power to decide, without Dáil approval, how much the banks needed in order to meet the regulatory requirements and so keep trading.

But Ms Collins argues that it was not constitutionally permissible for the Oireachtas to empower the minister to enter into "effectively unlimited" commitments on behalf of the State without any - or any meaningful - constraint or oversight.

This issue cannot be determined on the basis of a view, given the scale of the financial crisis facing the State from 2008, that there was "no option", Mr Rogers said in reply to Mr Justice Donal O'Donnell.

The 2010 notes were an "appropriation" of public money in breach of Article 11 of the Constitution, which deals with appropriation of public resources, he said.

Independent TD Ms Collins was in court for the opening of her appeal against the High Court's rejection of her case.

She was accompanied by several supporters, including Social Democrats TD Catherine Murphy and Independent MEP Luke 'Ming' Flanagan.

The appeal, which continues on Monday, is being heard by a seven-judge Supreme Court, presided over by Chief Justice Susan Denham, due to the importance of the issues raised.

In November 2013, a three-judge High Court ruled that the promissory notes issued in 2010 had been validly issued under the 2008 Act and also found that the Act was constitutional.

The minister's provision of financial assistance via the notes did not require either a separate Dáil vote or a defined upper limit on that assistance, it ruled.

The case concerned two promissory notes of 2010, under which the State agreed to pay some €31bn to Anglo, Irish Nationwide Building Society and Educational Building Society over 15 years to 2025.

The notes allowed the institutions to get emergency liquidity assistance from the Central Bank. After the winding-up in 2013 of IBRC, the Anglo note, on which €25bn was then outstanding, was converted into long-term Irish Government bonds.

The Supreme Court heard that following reorganisation of the finances of Allied Irish Banks (owner of EBS), the EBS note was no longer in existence.

The issuing of the promissory notes conflicted with Article 11 of the Constitution, which provides that "all revenues of the State shall, subject to such exception as may be provided by law, from one fund and shall be appropriated for the purposes and in the manner and subject to the charges and liabilities determined and imposed by law".

The court was asked to consider what is meant by the phrase "charges and liabilities determined and imposed by law".

Irish Independent

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