THE High Court has ordered there should be further limited disclosure of documents to property investor Paddy McKillen by the billionaire Barclay brothers in advance of next month's hearing of a challenge to the sale of hundreds of millions worth of Mr McKillen's loans by Irish Bank Resolution Corporation (IBRC).
Mr Justice Michael White today said Mr McKillen's lawyers must be provided with discovery of communications between David and Frederick Barclay, a number of their companies, and the Department of Finance, IBRC and NAMA..
These communications, between any person or entity on behalf of the Barclay interests, or any of the trustees of their family settlements, relate to the proposed acquisition by Barclays of Mr McKillen's loans with IBRC.
Mr Justice White said he was concerned to safeguard the bid process for sale of IBRC loans next month and if any issue arises in relation to the discovery orders he was making, the court retained the discretion to examine those documents and if necessary refuse to include them as part of discovery.
It was also essential that next month's High Court trial date (March 4) of Mr McKillen's challenge is kept in place, he said.
Mr McKillen, who last year lost his UK court battle against the Barclays for control of three luxury London hotels in the Maybourne group, seeks declarations that the Barclays are not entitled to acquire his loans personally or indirectly through other entities and that IBRC is not entitled to sell them to the Barclays.
He also seeks damages for breach of contract, conspiracy and intentional interference with his economic interest.
The claims are denied. The Barclays also opposed his application for further discovery saying it would be unduly oppressive as full disclosure had already been made as part of last year's case in London.
Belfast-born Mr McKillen drew down a number of property loans from the former Anglo Irish Bank, now IBRC, part of which were secured on his shares in an England registered company called Coroin Ltd, the judge said. Part of the loan facility, of around €300m, was secured on Mr McKillen's shares in Coroin, which was the company at the centre of last year's London High Court case.
Mr Justice White said while there was substantial court-ordered discovery during the London case, the reliefs sought by Mr McKillen in Ireland are different. The focus of this case is the attempt by the Barclay interests to acquire Mr McKillen's loans with IBRC.
However, the judge said, Mr McKillen seeks to introduce into the Irish proceedings matters which were the focus of extensive evidence and argument during the English case.
In relation to the claim against the Barclays of wrongdoing in their efforts to acquire the McKillen loans prior to the appointment of the special liquidators to IBRC in February 2013, there is an overlap between the English and Irish cases, the judge said.
There had been some discovery of communications between the Barclay interests and the Department of Finance, NAMA and IBRC but the court accepted this was not the primary focus of the English case.
An issue in relation to the deletion of material, including text messages, by both the McKillen and Barclay sides had been raised during this discovery application and which were the subject of considerable attention in the English case. While there should be no further issue about this for next month's hearing, the court would expect that any deleted emails could be recovered.
In relation to allegations by Mr McKillen over the Barclays’ obligations under the shareholders agreement, and that the Irish court should interpret that agreement in the context of Irish law, the judge was satisfied that discovery provided under this heading during the English case had been sufficient.
The judge said it was appropriate for him to consider the claim that further discovery by the Barclays would be unduly oppressive. However, he said, the order for discovery he was making was aimed specifically at the Barclays' efforts to acquire the McKillen loans.
It was therefore appropriate for the court to draw the inference, based on information already disclosed, that this was under the control of senior Barclay executives.
It “should not be an unduly difficult task to trace any relevant documentation and communications" between the various Barclay defendants in relation to "the determination of the Barclay interests to acquire these loan facilities", he said.