Supreme Court to rule on promissory notes appeal

The Supreme Court will today hand down judgment in the case of Independent TD Joan Collins’ appeal against the rejection of her challenge to the finance minister’s issuing of €31bn promissory notes in 2009 for Anglo Irish Bank and other financial institutions.

The constitutionality of what the High Court described as the “far-reaching” legislation under which the notes were issued is a core issue in the appeal.

The death of Mr Justice Adrian Hardiman earlier this year meant the appeal, which opened before a seven-judge court, finished last April before a six-judge court with judgment reserved.

Ms Collins maintains the promissory notes were impermissibly issued without a Dáil vote, in breach of constitutional provisions dealing with appropriation of public money.

The State pleads that the minister had power to issue the notes under a 2008 law, the Credit Institutions (Financial Stabilisation) Act, enacted by the Oireachtas with the aim of averting a banking collapse. The notes were security for the Central Bank continuing to provide emergency liquidity assistance for the banks after the government provided the bank guarantee of September 2008.

The case relates to promissory notes issued for Anglo, Irish Nationwide Building Society, and Educational Building Society.

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 following the reorganisation of the finances of Allied Irish Banks, owner of EBS.

After a three-judge High Court rejected her case in November 2013, Ms Collins appealed to the Supreme Court.

Her lawyers argued a statutory power to charge the central fund is unconstitutional unless that charge is pre-quantified or there is an outer limit on it.

It is unconstitutional for the minister to charge a public fund under statute unless imposition of the charge has been considered in advance by the Dáil, they argued.

The State, through its senior counsel Michael McDowell, maintained that the situation in 2008 was not “normal”.

The finance minister, it was argued, remained fully accountable to the Dáil and the Oireachtas was entitled, under the 2008 Act, to authorise the minister to take the necessary steps to stabilise the financial position of the State.