The High Court has refused an application by 15 defendants to strike out Patrick Kearney and Kilmona Holdings Limited’s claim over the sale of subordinated bonds in Anglo Irish Bank. The ruling leaves the claim to proceed; it does not decide whether fraud occurred or whether Kearney was induced to settle earlier proceedings by a false representation.
Mr Justice Twomey delivered the judgment on 18 January 2023, after hearing the application on 20 and 21 December 2022. The defendants sought dismissal without a trial, arguing that the claim was unsustainable and that documents showed Kearney knew the O’Connell Partnership included Davy employees before he signed the settlement agreement in February 2016.
Kearney’s claim is that he entered the settlement of earlier proceedings after two defendants, at meetings at the Merrion Hotel on 21 and 22 December 2015, allegedly misrepresented that the bond purchaser, the O’Connell Partnership, had no connection with Davy. The defendants relied particularly on a December 2015 reply to particulars which referred to a group of Davy employees, along with correspondence and the fact that Tony O’Connor signed the settlement agreement for the partnership.
The judge said the documents did not make it clear beyond doubt that Kearney could not succeed. The issue depended in part on what was said at the meetings and whether further evidence might emerge through discovery. The court also considered a Central Bank report stating that Davy took no steps to ensure Kearney knew the partnership was made up of Davy employees. The judge noted that submissions described the statement as an agreed fact with Davy and as the conclusion of a six-year investigation. The report also referred to Davy’s lack of candour with the Central Bank regarding the transaction.
The judgment stressed that the Central Bank material and the earlier finding of prima facie evidence were not findings by a court that fraud had occurred. The judge also noted conflicting sworn accounts about when Kearney learned the partnership had bought the bonds, describing the discrepancy as potentially significant to his credibility at trial. But that issue did not justify striking out the proceedings at this stage, before oral evidence could be tested.
The application was refused. The court directed the parties to try to agree outstanding matters and provide any draft order to the Registrar. The case was provisionally listed for mention one week after judgment, if needed, so the court could deal with final orders.