Independent TD Joan Collins has lost her Supreme Court appeal over the issuing by the Minister for Finance of €31bn promissory notes in 2009 for Anglo Irish Bank and other financial institutions.
The six-judge court yesterday unanimously rejected the TD’s core argument that the minister had no power, under the 2008 law authorising him to issue the notes, to allocate unlimited sums of public money without those first being quantified and considered by the Oireachtas.
The Credit Institutions (Financial Support) Act 2008 was enacted with the aim of averting a banking collapse.
The notes were essentially IOUs from the State to ensure continuation of Central Bank funding for Anglo, Irish Nationwide Building Society, and the Educational Building Society after the controversial bank guarantee of September 2008.
Anglo and INBS were later nationalised and, after their successor in title, Irish Bank Resolution Corporation, was wound up in 2013, the Anglo note, on which €25bn was then outstanding, was converted into long-term Irish Government bonds. The EBS note no longer exists after a reorganisation of the finances of Allied Irish Banks, owner of EBS.
Giving the court’s judgment, to which all six judges contributed, the Chief Justice, Ms Justice Susan Denham, said the 2008 act was “undoubtedly exceptional” but was “a permissible constitutional response to an exceptional situation”.
While the act did not include a cap on the financial support, the Constitution did not require such a limit, she held.
In the “extraordinary circumstances” that were the backdrop to the 2008 act, it was permissible to confer such power on the minister and there was no constitutionally impermissible transfer of power of expenditure from the Oireachtas, particularly the Dáil, to the Government.
However, the act cannot be considered to be “a template for broader ministerial power on other occasions”.
Speaking to the Irish Examiner, Ms Collins said she and her team are examining the option of appealing the decision in the European Court, and said numerous avenues will be considered in the coming days. She confirmed that the subject of costs relating to her failed cased will be dealt with next month. She said she was “disappointed but not particularly surprised” with the judgment.
“Unfortunately, I believe the political and financial concerns which were repeatedly emphasised by the State during the proceedings weighed strongly on the judges’ verdict. The strategy in this case was to paint a doomsday scenario to justify the Government’s decision to waste huge amounts of public money, particularly on Anglo-Irish Bank, without even bringing the issue to the Dáil for a vote.
“By allowing this provision of the Constitution to be bypassed using excuses about extraordinary circumstances and temporary measures the court has weakened our political system, placing fewer checks on the actions of the minister for finance and the government of the day,” she added.
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