The High Court has partly granted a discovery application by Patrick McKillen in Irish Bank Resolution Corporation Limited’s claim over a loan used to buy the bank’s shares. Mr Justice Noonan refused several categories of documents, allowed others in the forms offered by the bank, and said the final form of the order would be discussed with counsel.
The dispute concerns a July 2008 loan for Mr McKillen to buy 10.2 million ordinary shares in the bank, then known as Anglo Irish Bank Corporation Plc. The bank’s pleadings say it advanced more than €45 million, with recourse to Mr McKillen limited to 25% of the outstanding balance. It claims that, by January 2016, more than €46 million remained outstanding and his share of liability exceeded €11.5 million.
The bank says a second facility letter, issued in October 2008 and backdated to July, was not binding because it lacked consideration and was not signed by Mr McKillen. He argues that it superseded the first letter and capped his liability at the lower of 25% of the balance or the shares’ value at expiry. He says the shares were then worth nothing, leaving him with no liability.
Mr McKillen also counterclaims, alleging breaches of a conduct code for investment services and related duties. The judgment records allegations concerning the purpose and conduct of the share purchase scheme, but says fraud was not pleaded as a cause of action and was not the defence relied upon. The judge therefore rejected requests for documents about Mr McKillen’s selection for the scheme, the share purchase agreement, and advice about the scheme and stock-market rules, finding those categories were not tied to pleaded issues.
The judge directed discovery for documents relating to the July 2008 facility letters, limited to material the bank had already offered. He also directed discovery concerning the January 2009 facility letter in the terms offered, despite neither side relying on it. Two other categories were agreed. For documents about the sale of the shares under a power of attorney, discovery was limited to the bank’s offer, including “instructions given regarding” the sale. The judgment says broader material about the bank’s consideration of the sale was not relevant or necessary to the pleaded case.
The ruling addressed discovery only. It did not decide the bank’s loan claim or Mr McKillen’s counterclaim.