Talks underway in Quinn children's case, High Court told

Talks are underway in the marathon case by Sean Quinn’s children denying liability for some €415m under guarantees of loans advanced by Anglo Irish Bank to Quinn companies, the High Court has heard.

Mr Justice Garrett Simons today welcomed that news and adjourned the case until tomorrow to facilitate the talks.

The discussions began late last week after the case was adjourned to allow the judge consider a key application by the children to amend their case.

Today, the judge refused to allow the children pursue that key claim, that undue influence by their father lead to them signing guarantees for millions of euro of loans by Anglo Irish Bank to Quinn companies.

That refusal is a significant setback for the children in their case.

In his ruling, the judge said such a “radical” change to the case would cause real prejudice to Irish Bank Resolution Corporation in defending it.

He refused to find a claim of undue influence against Sean Quinn Senior already exists within the children’s pleaded claim or, if not, to permit them to amend it to make that claim.

He said the proposed amendments failed to give proper details of the alleged undue influence and would result in the children’s statement of claim being inconsistent with their original claim of undue influence by the bank.

To grant the children’s application would mean it “is impossible for the bank to know the case that it is now expected to meet,” he said.

The defendants would also suffer prejudice as the proposed amendments would cause further delay to the proceedings, initiated in 2011, he said.

The undue influence claim against Sean Quinn senior is “entirely inconsistent” with the manner in which the children had pursued their case to date.

There was also unexplained delay in seeking to amend the claim, which was initiated in 2011, he added.

After his ruling, Bernard Dunleavy SC, with Ciaran Lewis SC, for the Quinns, said they had used the time in recent days for discussions which are continuing.

Paul Gallagher SC, for IBRC, confirmed that was the situation.

The judge welcomed the development and adjourned the case to tomorrow to facilitate the discussions.

Brenda Quinn was due to begin her evidence on Friday but that was deferred after the judge was asked to hear the procedural applications which he refused today.

The children wished to claim that, when they signed documents, they operated under their father’s influence and Mr Dunleavy argued they would be "seriously prejudiced" if they could not.

The way the children grew up, their father “took every decision”, he said.

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 ten 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.

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.