Business Irish

Saturday 24 March 2018

Supreme Court to test legality of Anglo wind-up


Dearbhail McDonald Legal Editor

THE Supreme Court will hear a case on the constitutionality of the emergency law liquidating the former Anglo Irish Bank next week.

The IBRC Act 2013 has been dogged by controversy because it places an "immediate" stay on all existing legal actions against the bank, a section lawyers say could be unconstitutional.

Future litigants are also barred from taking any fresh actions, but they will be allowed to sue the IBRC if they get permission from the courts.

The Irish Independent has learnt that the Supreme Court has asked Century Homes co-founder Gerry McCaughey and the special liquidator of the IBRC for legal submissions on the "implications" of the IBRC Act 2013.

Two years ago, Mr McCaughey lost a High Court action against Anglo Irish Bank over a high-risk investment project involving the purchase and renovation of two New York hotels.

The Supreme Court heard the appeal last January and reserved its judgment.

Days after the appeal, the Government introduced emergency legislation to appoint special liquidators to the IBRC.

Yesterday, the High Court reserved judgment in an action taken by members of the Quinn family, who have applied for a stay on their civil action against the IBRC to be lifted.

That ruling will be issued next Friday by High Court judge Mr Justice Sean Ryan.

But the Supreme Court will hear submissions from Mr McCaughey and the IBRC on Wednesday and may form its own views on the constitutionality of section 6.2.a. The High Court heard yesterday that "everything stopped dead" the night the IBRC Act was passed.

Senior Counsel Maryin Hayden, for the Quinns, told Judge Ryan that a huge body of litigation had been put on hold as a result of the emergency law.

The IBRC Act was enacted last month following a late-night sitting of the Dail and Seanad.

Section 6.2.a of the Act provides for an immediate stay on all "existing" proceedings against IBRC, but does not mention consent of the courts.


This compares with Section 6.2.b, which says no further actions can be taken against the IBRC without the consent of the courts.

"Did somebody forget?" asked Judge Ryan.

Lawyers for the family of bankrupt businessman Sean Quinn applied to the court last month to lift the stay on their proceedings against the bank, alleging they are not liable for €2.34bn loans made to Quinn companies on grounds those loans were unlawfully made by Anglo to prop up its share price.

They argued the court could lift the stay, and their lawyers also made clear, if the stay was not lifted, they would challenge the constitutionality of the relevant provision in the Act.

The IBRC special liquidators later indicated they agreed with the Quinns that the court had power to lift the stay, but Mr Justice Peter Kelly ruled there would have to be a hearing to decide that issue in circumstances including where the Act disapplies the normal provisions relating to the courts' ability to lift a stay.

Irish Independent

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