Businessman Sean Quinn's wife and children can amend legal action in IBRC case, court rules

BUSINESSMAN Sean Quinn's family can amend a legal action seeking to avoid liability for €2.4billion in loans in relation to share pledges concerning their companies, the Court of Appeal ruled.

They can amend the action to argue they never signed the final version of two of six share pledges under which receivers - appointed by Anglo Irish Bank - took over their companies in 2011.

The three judge Court of Appeal granted the appeal by Mrs Patricia Quinn and her five adult children against the High Court's refusal to allow that amendment for their case, due to open next month.

The case, aimed at avoiding liability for €2.34bn loans advanced by Anglo to Quinn companies, is against State-owned Irish Bank Resolution Corporation (IBRC), Anglo's successor in title, and its liquidator Kieran Wallace.

IBRC previously secured orders joining Sean Quinn Senior and two former senior executives with the Quinn Group, Dara O'Reilly and Liam McCaffrey, as third parties.

The Quinns sought to amend their claim after learning, from documents disclosed in advance for the case, the two share pledges at issue were allegedly amended after being signed and signature pages from the earlier versions were switched to the amended versions.

In an affidavit, Aoife Quinn said email correspondence between Darragh Blake of the law firm William Fry, then acting for IBRC, and Dara O'Reilly showed the two men discussing the switching of signature pages from one document to another.

Ms Quinn's claim that Mr O'Reilly was not an agent of the family is disputed by IBRC.

Moving the appeal, Martin Hayden SC, for the Quinns, argued the amendment was necessary to do justice between the sides and would not prejudice the defence.

Shane Murphy SC, for IBRC, argued the amendment application came too late and involved a "drastic" change in the Quinns' claim as they had not previously disputed execution of the share pledges but rather challenged the circumstances of execution.

Mr Justice Sean Ryan, presiding, noted this case was initiated in May 2011 and, by any standard, was complex and difficult litigation.

The judge said witness statements from the Quinns last December asserted they had not signed certain share pledge documents.

That was "news" to the defence because until then the Quinns' case was they were persuaded and induced to sign and execute the share pledges and other documents.

When the Quinns sought leave to amend in the High Court, IBRC took a "pragmatic" view, saying it would not object to the  amendment provided the Quinns undertook to make no further application to amend, the judge noted.

He disagreed with IBRC's insistence on such an undertaking and it was "understandable" the family refused to provide it.

Although the proposed amendment was "apparently inconsistent" with other parts of the family's case, it involved a "relatively simple" dispute and that, along with absence of obvious or apparent prejudice, persuaded him to make an exception and "with considerable hesitation and reluctance" allow the appeal, the judge said.

That did not mean the appeal court should "be seen as an easy touch, especially in case managed litigation", he stressed.

Separately, a High Court judge is due to rule on Friday on the family's application to further amend their case following a recent Supreme Court decision which, IBRC argues, means the family cannot avoid liability for the €2.34bn loans even if those are found to be unlawfully made.

The family contend they are "innocent parties" to the loan transactions and are not caught by the Supreme Court decision.