The High Court has refused John (also known as Johnny) Moran leave to cross-examine a special liquidator on affidavit evidence in a dispute over security for costs. The court dismissed that application; it did not decide whether Irish Bank Resolution Corporation Limited (in special liquidation) must provide security.
The bank is suing Moran for €19,282,828.31, alleging that he personally guaranteed loans to two companies of which he is a director. The bank was refused summary judgment and the case was directed to proceed to a plenary hearing. The allegation about the guarantees has not been determined in this ruling.
Moran’s separate application sought security for his legal costs if he successfully defends the claim. The bank is insolvent and in special liquidation. The judgment records as undisputed that its liquidators were retaining at least €50 million in cash, earmarked for costs orders in litigation, and would maintain that amount while this case continued. The special liquidator also undertook to give Moran 21 days’ notice of any change that might affect the fund’s availability.
The judgment dealt with Moran’s request to cross-examine Kieran Wallace, one of the joint special liquidators, before the security application was heard. Under the applicable court rule, cross-examination on affidavit evidence in this type of application is discretionary, not an automatic right. The judge said an applicant must show a probable conflict in the affidavits relevant to the issue and that the issue cannot be fairly decided without cross-examination.
Moran raised questions about the fund’s availability, the liquidator’s authority to retain it, the bank’s financial position and its exposure to other proceedings. The judge found no sufficient conflict on a relevant issue requiring Wallace’s cross-examination. The judgment said the fund was specifically retained for costs, not to pay any judgment Moran might obtain. It also treated questions about the liquidator’s legal authority and the ranking of costs against a floating charge as legal issues for the substantive hearing, rather than matters requiring factual clarification from Wallace.
The judge dismissed the cross-examination application. The security-for-costs application was left for determination on another day.