A solicitor for Kevin Mc-Nulty had sought orders requiring that all documents be discovered relating to Anglo’s solvency after Sept 2008 as part of his client’s defence to proceedings brought against him by a company belonging to Nama, which took over the Anglo loans at issue.
One of the “fundamental defences” advanced by Mr McNulty and his companies was that Anglo, which was nationalised in Jan 2009, was insolvent when it purported to make the alleged loans, solicitor John Larney said in an affidavit.
While there was “a wealth of evidence in the public arena” suggesting the bank had been insolvent since 2008, such material would not constitute the proof required by a court and that was why discovery was being sought, Mr Larney said.
Mark Sanfey SC, for Nama, opposed discovery relating to Anglo’s solvency, saying it was not relevant to the issues to be decided in the case. The loan facilities at issue were increased, extended and refinanced between 2000 and 2009, he said.
Mr Justice Peter Kelly said that while the courts have found Irish law does not provide for a cause of action for reckless lending, this case involved claims that loans were advanced negligently. He considered Anglo’s solvency relevant but said the matter was best addressed by an Anglo official providing a sworn “simple yes or no” answer over Anglo’s solvency in 2009, rather than the extensive discovery sought.
The case was adjourned for trial in June.
National Assets Loans Management Ltd initiated proceedings against Mr McNulty and others last year. Last April, lawyers for NALM said there were issues concerning “grave irregularities” in the security provided for some of the Anglo loans and other issues about certain asset transfers to Mr McNulty’s wife Jessica.
The action is against Mr McNulty, of Red Bog, Blessington, Co Wicklow, and two of his companies — Ashburton Construction Ltd, and PA Bello Ltd, both with registered offices at Clondalkin, Dublin.
The claim relates to a 2009 facilities agreement provided by Anglo and to personal guarantees allegedly provided by Mr McNulty in 1998 and 2003 over the liabilities of the companies.
The case is also against Conal P Byrne, Castlepark, Mill Rd, Leixlip, Co Kildare, who is being pursued for €4.1m arising from a personal guarantee allegedly provided by him in 1998 concerning liabilities of Ashburton. Mr Byrne denies liability and claims he was “sidelined” from the affairs of Ashburton.