The High Court has ordered discovery of documents concerning the Central Bank’s investigation into Davy and the resale of Anglo Irish Bank bonds at the centre of a dispute between Patrick Kearney, Kilmona Holdings Limited and Davy and 16 individuals.
Mr Justice Quinn’s 2 November 2022 judgment dealt with contested discovery applications in ongoing proceedings. The court did not determine whether the plaintiffs’ allegations were true or decide the underlying claims.
The plaintiffs allege that Davy and its employees advised them to sell the bonds in November 2014 to a consortium of Davy employees without disclosing who the buyers were. They claim the bonds were sold below the price they could have achieved and seek, among other relief, an account of benefits from the subsequent resale. The defendants deny wrongdoing and dispute the plaintiffs’ account, including the claimed advisory relationship. They rely on a 2016 settlement of earlier proceedings.
The court ordered the defendants to discover documents showing communications with the Central Bank during its investigation, as well as internal consideration of that investigation. The judge found the material relevant to issues raised in the pleadings, including the parties’ relationship and duties, alleged conflicts of interest, and whether the buyers’ identity was disclosed or concealed. The ruling leaves the admissibility and meaning of the Central Bank’s findings for the trial judge.
The defendants must also discover documents showing their involvement in the consortium’s resale of the bonds: when and at what price they were sold, the gross income or profit, and how income or profit was distributed among the defendants. The order does not extend to the identity of later purchasers, their links to the defendants, or how individuals spent money received from the sale.
The court refused the plaintiffs’ request for documents about Davy’s engagement by the State to advise on or sell bonds, and advice to government departments about honouring bonds. The judge said those matters were not relevant to the case as pleaded; an agreed category already required discovery of documents from the specified period showing the possibility that the bonds might be redeemed at full value.
The plaintiffs must also discover documents from 1 January 2014 to 30 July 2015 concerning their interaction with Cerberus entities and any actual or potential restructuring or compromise of those liabilities. The court considered this relevant to the dispute over whether pressure relating to Cerberus affected the timing of the November 2014 sale. The judge said the final form of the order would be heard separately.