Court freezes businessman Morrissey’s assets below €36m

AN order freezing the accounts of businessman John Morrissey below €36m has been granted by the commercial court pending his bid to overturn a judgment for that sum obtained against him by the Irish Bank Resolution Corporation.

Mr Justice Peter Kelly made the freezing order yesterday as a condition of giving Mr Morrissey a stay on registration of the €36m judgment until the hearing next month of his application to set aside that judgment.

The bank was entitled to some comfort in circumstances where Mr Morrissey had declined to provide undertakings sought by the bank not to reduce his assets below €36m or enter bankruptcy or other arrangements with his creditors, he said.

The orders restrain Mr Morrissey, of Palmerston Road, Ranelagh, reducing his assets so as to frustrate the bank’s bid to recover €36m but he is allowed €2,500 for living expenses, plus funds for reasonable legal expenses, until December 8 when the court will hear his application to set aside the judgment.

A stay on registration of the judgment and an undertaking by IBRC, formerly Anglo Irish Bank, not to bring bankruptcy proceedings against Mr Morrissey also apply until December 8.

The bank secured the €36m judgment on November 21 over failure to comply with court orders requiring delivery of Mr Morrissey’s defence and counter-claim. The defence was to be delivered in September and, when it was not, the bank sought judgment.

Mr Justice Kelly allowed more time to file the defence but made an order stipulating, unless the defence was delivered by 2pm on November 21, judgment would automatically enter. When the defence was delivered shortly after that deadline, judgment was entered.

Yesterday, Mr Justice Kelly said the history of the case from Mr Morrissey’s point of view read very badly, with a lack of compliance with court orders and no satisfactory explanation for failure to file his defence on time. Mr Morrissey had “pointed the finger” at his lawyers, which “may or may not be correct”, but was not an issue for the court to consider at this point.

Cian Ferriter SC, for the bank, indicated it would strongly resist the bid to set aside the judgment and argued Mr Morrissey had “played fast and loose” with the court’s processes. Mr Morrissey had provided no details of his assets beyond asserting all those of significant value were pledged as security to financial institutions. The bank wanted to see a statement of Mr Morrissey’s assets worldwide, he said.

Counsel for Mr Morrissey argued the freezing and other orders sought were too “restrictive” and there was no prejudice to the bank via the stay on judgment. Mr Morrissey had provided a statement of assets to NAMA, which could be made available to the bank, counsel said.

In an affidavit, Mr Morrissey said he did all he could to ensure the defence was delivered on time, met several times with his lawyers to review his defence and approved a final draft of it on the evening of November 20.

The consequence of the failure to deliver the defence by 2pm the next day was that judgment for €36.3m was entered against him when he believed he had “a good defence”.

In his initial defence and counter-claim, delivered five weeks late, Mr Morrissey denied receiving €36m loans from the bank and pleaded he did not have to repay due to the bank’s conduct in collapsing the Irish property market and economy.

He also claimed €140m damages from the bank on grounds including suffering a brain haemorrhage while under stress dealing with it.

Mr Justice Kelly described as “nonsense” the denial of the loans, warned Mr Morrissey he had two weeks to provide a properly pleaded defence, and stressed the court was not engaged in a public inquiry into Anglo.

Mr Morrissey is being sued over loans allegedly due for repayment in July 2009. The bank earlier this year appointed a receiver over secured assets of Mr Morrissey and his wife, Carol Nolan, including about 18 properties in Dublin.

Last July, Mr Justice Kelly refused summary judgment and sent the case for full hearing after finding Mr Morrissey had made out an arguable defence.

The court was told Mr Morrissey wished to defend on grounds including Anglo owed him fiduciary duties, including to disclose what was going on within it which could have consequences for him.