The High Court dismissed a liquidator’s claim against Kevin Barnes after finding, on the balance of probabilities, that he had allowed money from his account to be used temporarily to cover other clients’ deficits on the understanding that it would be repaid. In a separate case heard alongside it, the court awarded Money Markets International Stockbrokers Limited the euro equivalent of IR£58,764.60 against his brother, John Barnes, for share dealings carried out through Kevin as agent.
The judgment, delivered by Mr Justice Bryan McMahon on 13 June 2008, concerned two summary summons proceedings. The liquidator initially claimed a larger amount against Kevin, but told the court the claim was €69,750. The company, which had entered liquidation in March 1999, alleged that both men owed money arising from share transactions.
Kevin Barnes disputed the claim, saying he had paid £30,000 and a further £100,000 raised by remortgaging his house in August 1998 as full and final settlement. The court accepted that the payments were made but rejected his account of their effect: his liability on extended credit transactions had not yet been quantified, and further contract notes were sent afterwards.
He also argued that the company had failed to sell Dana shares after an instruction in 1997. The judge found that, after speaking with another company representative, Kevin decided not to sell. The court rejected that defence.
On the set-off claim, Kevin said he authorised £62,300 to be moved from his client account to other clients’ accounts after being told the company would repay it. The company’s account manager, Colm O’Reilly, said Kevin authorised the transfers and was to recover the money from those clients. The judge preferred Kevin’s evidence, finding the arrangement was temporary and the money was to be repaid by the company. The judgment cited the way the transfers were recorded and the absence of evidence that Kevin was responsible for the other clients’ dealings. Allowing the set-off reduced the claim “to virtually nothing”; Kevin waived a small resulting credit. The claim against him was dismissed.
John Barnes denied liability, saying he had limited assets and relied on Kevin to manage his investments. He disputed signing the initial authority documents. The judge found Kevin had acted as his agent over several years. Although Kevin said he told the company around mid-1998 to contact John directly, the judge found no convincing evidence of an unequivocal notice ending the agency. The company continued sending transaction notes, and objections surfaced only after it went into liquidation. The court held that the relevant debts arose from instructions given by Kevin while acting as John’s agent and awarded the claimed IR£58,764.60 equivalent in euro.