The High Court ruled that bankrupt Seán Quinn had no personal entitlement to defend third-party proceedings brought against him by Irish Bank Resolution Corporation Limited, formerly Anglo Irish Bank Corporation. Mr Justice Kelly held that the decision whether to defend the claim belonged to the Official Assignee in Bankruptcy, who had declined to do so.
The ruling addressed a procedural question raised in litigation brought by members of the Quinn family against the bank and Kieran Wallace, a share receiver. The family sought declarations that share charges, personal guarantees and Wallace’s appointment were invalid. The bank denied the allegations and brought a counterclaim. It also obtained leave to serve third-party proceedings on Quinn and two other people.
The bank’s claim against Quinn sought an indemnity and damages, including for alleged misrepresentation, breach of warranty of authority, fraud, negligence and conspiracy. Those were allegations in the pleadings, not findings by the court. Quinn had filed a defence denying them. The judgment records that the bank said it would not pursue the damages claims if the family failed in its action against it; the claims against Quinn would arise only if the family succeeded against the bank.
Quinn was adjudicated bankrupt in this jurisdiction after a bankruptcy order made in Northern Ireland was annulled. The Assignee, responsible for administering the bankrupt’s property for creditors, decided not to defend the third-party claim because no benefit to creditors could be discerned. Mr Quinn argued that the allegations threatened his good name and that constitutional rights and Article 6 of the European Convention on Human Rights entitled him to defend himself.
The judge rejected those arguments. He held that the claim sought damages against Quinn’s estate and was not a personal claim outside the Assignee’s control. Allegations of wrongdoing did not give Quinn a separate right to conduct the defence. The judge also concluded that refusing him permission to defend did not breach his constitutional rights or Article 6. He said that if the claim proceeded undefended, any judgment would be entered by the ordinary process for an undefended claim, without findings on the allegations of dishonesty or conspiracy.
The court answered the question before it in the negative: Quinn had no personal entitlement to defend the third-party proceedings, and the Assignee was entitled to decline to defend them. The judgment decided that issue only; it did not determine the family’s claims against the bank or the truth of the allegations against Quinn.