Whilst faceless negotiators are still hammering out a deal on the Anglo promissory notes, in the High Court from Tuesday next, 22nd January, 2013, the legal challenge to the legality of the notes will be tested. Campaigner for those in mortgage distress, David Hall – pictured above courtesy of Twitter – will be taking on the Minister for Finance, the Attorney General, the Central Bank of Ireland and Ireland itself, as he tries to have the notes declared unlawful and void.
When former finance minister Brian Lenihan was bailing out the banks in 2009 and 2010, he partly used cash which he mostly obtained by raiding the National Pension Reserve Fund. But he also used IOUs or promissory notes to partially bail out the banks, and he issued €31bn of the buggers to Anglo Irish Bank, Irish Nationwide Building Society and the Educational Building Society – over €25bn of the IOUs went to Anglo, €5bn to INBS and a less than €1bn to EBS. We are presently paying off these IOUs with annual payments every March. Last year, instead of paying the €3.1bn due, we issued a sovereign bond and used the proceeds to pay the instalment due. By the due date this 31st March, 2013, we hope that we will have some deal in place, but the view on here remains skeptical.
David launched his legal action in March last year, and he is claiming that the decision to issue the notes was never approved by the Dáil. He also claims that the provisions of two Acts which allowed the Government to issue the notes are unconstitutional.
David is represented by Mullan and Associates solicitors. The respondents are represented by the Chief State Solicitor, Eileen Creedon except for the Central Bank which is represented by McCann FitzGerald. The case reference at the High Court is 2012/3230 P. A judge doesn’t appear to have been yet assigned. You can follow David on Twitter @DavidHall75
UPDATE: 22nd January, 2013. The case opened this morning before the President of the High Court, Mr Justice Nicholas Kearns. It has been pencilled in to last for four days. David is being represented by barrister John Rogers SC. Today, David is outlining his case, and there will then be a response from the respondents, who are apparently being represented by two former Attorneys General.
UPDATE: 23rd January, 2013. Former Attorney General and leader of the Progressive Democrats went out to bat for the Government today, as the hearing entered its second day. Although the Government appear to have amply resourced the legal firepower – there were some 14 barristers on both sides milling about – they had somehow failed to provide David with a written defence. Conspiracists might believe the Government was deliberately trying to lose the case, but no, it was an oversight it seems – “startling” said the judge, President of the High Court, Mr Justice Nicholas Kearns. In the afternoon, Michael McDowell SC set out to justify the Government and Minister for Finance’s decisions, which weren’t referred to the Dail, but the Government’s claim is that the two Acts affecting the Anglo bailout gave the Minister and the Government the authority to spend any sum of money – ANY SUM OF MONEY – in saving Anglo. The hearing will probably go to a third day tomorrow.
UPDATE: 25th January, 2013. The hearing has concluded in Court 4 of the High Court in Dublin, and the judge has retired and reserved judgment, as might be expected in a case of this nature. No indication has been given as to when a judgment will be delivered, though hopefully it will be before 31st March 2013 when the next promissory note payment falls due. There was a dramatic development this morning when three Independent TDs, Deputy Shane Ross, Deputy Stephen Donnelly and Deputy Joan Collins arrived in court with a solicitor, Tony Williams. They were there, said their solicitor to the court, to counter the claim made by Michael McDowell yesterday as barrister for the Government, that no elected representative had resisted the payment of the promissory notes. It was said in court this morning that each of the three had written to Minister for Finance, Michael Noonan protesting about the payments but had received correspondence back in which the Minister is reported to have said the matters were best left to “ongoing litigation” – a reference to David Hall’s case.
UPDATE: 31st January, 2013. Judgment was handed down this morning – not yet available online – which rejected the challenge from David on the seemingly narrow grounds that he did not have the standing to challenge spending decisions by Ministers directly, though the judge, High Court president Mr Justice Nicholas Kearns did indicate that a challenger that was an existing TD might be more successful. There was also criticism of the three year delay in taking the challenge, with the promissory notes first deployed by then-finance minister Brian Lenihan in 2010. David has tweeted to say that he will be appealing the decision to the Supreme Court tomorrow morning and seeking an early hearing. It’s not over yet.
If course the goby is at the same time as defending this trying to change it at the European level.
Expect their arguments here to be used in evidence against them by the FANGS. A sensible solution would be to set out to lose this. They can then say to the ecb so sorry but those nasty judges. …
The Germany backbenchers who’ve been off Karlshrule every time a solution had emerged could n hardly complain.
@BrianLucey
“A sensible solution would be to set out to lose this……”
Well said. And well done to David Hall.
Some things don’t translate well in court cases……malice, fear, embarrassment at presiding over the destruction of the nations most enduring dynasty club.
JR Ewing himself would have been proud of such a stroke. Can’t you hear him saying “Don’t be polite when it comes to destroying the opposition before they even take power,… promissory notes, that way..nobody wins”
Oh, of course, it’s a technical issue, there are no human factors involved, silly me.
As if a group of politicians, sons of politicians, about to be whooped at the polls, would have thought that way, nah, it’s a technical issue alright.
I’ve been watching too much Dallas.
The Promissory Notes are essentially a decision by the Irish Government to pay Anglo/IBRC a cash stream of €3.1bn every year because “we love them so much”. In this sense, they are equivalent to the voted payments to other departments every year.
However, it’s not clear to me that it is unconstitutional for the government to make such payments. It might constitute excess, favouritism, or even cronyism, but these are not strictly speaking prohibited actions. While it certainly does constitute state support for a private company, this also is not in itself prohibited by the constitution.
The notes are voted expenditure every year(except this year of course). If the Dail says “OK give these guys the money”, I don’t see how you can constitutionally object to this. And the Dail does say this, every single year, when it passes the budget.
In any event, the Irish Constitution is not a document that the Irish state or successive governments (or indeed the courts) have ever paid much attention to, and I don’t expect them to start doing so now. Never go up against civil servants when pensions are on the line.
I wish him well in his action;
(In my layman opinion) Article 45 states principles that are not consistent with the actions taken to support Anglo Irish Bank. Combine this with the (now accepted) fact that the banks did not disclose seriousness of their situation either on night of guarantee and pending criminal charges and its hard to see how the actions taken could be perceived for common good.
Were the promissory note payments found to be unconstitutional then this would strengthen the government position with securing a deal though that would depend on a judgement well before end of March I guess.
If he loses then I for one would like to see some constitutional protection to prevent elected officials from signing financial guarantees/purchases/other commitments above a certain value without holding a referendum/citizens poll. As citizens we are essentially shareholders of the state, and this condition would be a standard clause in any private company shareholder agreement for obvious reasons.
We held a major referendum on children’s rights that might impact less than 1% of children while there is nothing to prevent our current gold-pensioned elected officials decreeing that 100% of our children/grandchildren should end up paying the principle back on reckless loans of Celtic Tiger banks !
Lets wait and See!
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Any update on this? From David Hall – “IBRC legal costs €27000 they are seeking against me . This resulted from 35 minutes in court and 24 hour time frame. I originally sought to take the promissory note case by judicial review and changed the next day to go by way of plenary
. No wonder IBRC are in liquidation . These charges are criminal and I’m opposing them tomorrow in the taxing masters court. EBS for exactly the same are looking for €8000 legal fees”
@Vicky, thanks, the full demand has been publicised by David and the documents are here
Both the amount of costs claimed, and the detail provided are outrageous and there may be a blogpost later.