A High Court judge will rule next week whether Sean Quinn’s children can pursue a key claim their father unduly influenced them to sign securities for loans of hundreds of millions by Anglo Irish Bank to Quinn group companies.
Mr Justice Garrett Simons’ ruling next week on their application, strongly resisted by Irish Bank Resolution Corporation, could significantly affect the conduct of the marathon litigation by the five children, dating back to 2011, denying any liability for a total €415m under guarantees.
The judge will also rule on their objection to being cross-examined about an alleged conspiracy to remove assets from the Quinn international property group beyond the reach of Anglo, since nationalised as IBRC.
It also emerged today, former Anglo CEO David Drumm is no longer listed as a witness in the children’s case.
The Quinns had planned to call 49 witnesses, including Mr Drumm, but a list of witnesses provided today to the judge, in compliance with a direction by him, listed 20 people and did not include Mr Drumm.
The 20 include several former senior officers of Anglo, including Lar Bradshaw, Tom Browne, and Lorcan McCluskey, and an economist, Dr Constantin Gurdgiev.
After Bernard Dunleavy SC, for the Quinns, said they are still trying to persuade some reluctant persons to give evidence, the judge said they could seek permission to add others if necessary.
Brenda Quinn was due to begin her evidence on Friday but that was deferred after the judge was asked to hear procedural applications.
Mr Dunleavy asked the judge to permit the children to claim undue influence by their father, either by accepting the claim exists within the existing pleadings or permitting them to amend their case.
It was already clear the children are alleging undue influence by their father and IBRC could not be surprised by that, he said.
The children will say that when they signed documents, they operated under their father’s influence, that they should not be precluded giving such answers and that they would be "seriously prejudiced" if they could not.
The way the children grew up, their father “took every decision”, he said. This was not a complicated version of events and did not require the level of additional detail IBRC contended for, he said.
They are not maintaining a claim of undue influence by the bank, he confirmed.
Brian Murray SC, for IBRC, strongly objected to the proposed amendment of the claim, saying it would prejudice the bank as it would have to meet an “entirely different” case.
The children had known about their father's alleged undue influence for 10 years, never sought to join him as a defendant, and, until the case opened, their claim was Anglo exercised undue influence over them in relation to the signing of the securities, he said. Permitting them now allege their father was the “primary wrongdoer” radically changed the case to be met.
IBRC may also have to consider the implications for Sean Quinn Senior’s post-bankruptcy status and whether to bring a claim against Mr Quinn’s post-bankruptcy assets, he outlined.
Ciaran Lewis SC, also for the Quinns, asked the judge to direct the children cannot be cross-examined by IBRC concerning its claims of a conspiracy to place assets in the Quinns' international property group beyond the bank’s reach. Those matters are not issues in this case, he argued.
Paul Gallagher SC, for IBRC, disputed those were “collateral” issues and said they were central, including to the children's credibility, and will show they are not, as they claimed, ignorant and unsophisticated in relation to the Quinn businesses.
IBRC’s evidence will show, inter alia, the children’s willingness to be parties to the fabrication of documents and to obstruction of Anglo’s efforts in several countries to recover assets, he said.
In their action, the children dispute the validity of various guarantees and share pledges signed by them.
They claim the guarantees were required by Anglo for loans advanced by it to Quinn companies in 2007 and 2008 to unwind Contracts for Difference (CFD) positions held by their father in the bank.
They claim the securities are invalid on grounds including "unconscionable bargain", negligence and breach of duty by the bank to them, especially to advise them. They dispute the bank’s counterclaim seeking to hold them liable for some €83m each under the guarantees.
Sean Quinn senior and two former Quinn Group executives – Dara O’Reilly and Liam McCaffrey – were joined by IBRC as third parties for the purpose of claiming an indemnity against them should the children win their case.
Arising from the bankruptcy of Mr Quinn senior, which he has since exited, IBRC previously got liberty to enter final judgment against him should that situation arise. Mr McCaffrey and Mr O’Reilly deny they acted as agents for the children concerning the disputed securities and deny any liability.