Court dismisses motion to cross-examine witness on affidavit where no factual conflict exists and evidence is irrelevant to trial issues.

Neutral Citation: [2015] IEHC 134

THE HIGH COURT

[2011 No. 5843 P.]

[2012 No. 120 COM]

BETWEEN

IRISH BANK RESOLUTION CORPORATION LIMITED (IN SPECIAL LIQUIDATION) QUINN INVESTMENTS SWEDEN AB AND LEIF

BAECKLUND

PLAINTIFFS

AND

SEÁN QUINN, CIARA QUINN, COLETTE QUINN, SEÁN QUINN JR., BRENDA QUINN, AOIFE QUINN, STEPHEN KELLY, PETER

DARRAGH QUINN, NIALL MCPARTLAND, INDIAN TRUST AB, FORFAR OVERSEAS SA, LOCKERBIE INVESTMENTS SA, CLONMORE

INVESTMENTS SA, MARFINE INVESTMENTS LIMITED, BLANDUN ENTERPRISES LIMITED, MECON FZE, CJSC, VNESHKONSALT,

OOO STROITELNYE TEKHNOLOGII, OOO RLC-DEVELOPMENT, KAREN WOODS, SENAT FZC, SENAT LEGAL CONSULTANCY FZ-LLC

AND MICHAEL WAECHTER

DEFENDANTS

JUDGMENT of Mr. Justice Brian J. McGovern delivered on the 13th day of February, 2015

1. By notice of motion dated 15th July, 2014, the personal defendants seek leave to issue a motion pursuant to O. 40, r. 1 of the

Rules of the Superior Courts or, alternatively, pursuant to the inherent jurisdiction of the courts requiring the attendance of Mr. Kieran

Wallace, for cross examination in respect of an affidavit sworn by him on 29th May, 2014. The application is grounded on the affidavit

of Mr. Niall McPartland sworn on 14th July, 2014.

2. The affidavit sworn by Mr. Wallace was used in an ex parte application brought before Kelly J. on 30th May, 2014. In para. 2 of his

affidavit, Mr. Wallace stated:-

“This affidavit is not made to ground any application to the court in these proceedings but rather is made to inform the

court of applications made since 21 February, 2014, for Norwich Pharmacal type relief in aid of these proceedings in the

Commercial Court in London (‘the English application’) and, separately, in the Bankruptcy Court in Delaware (‘the US

application’) in the context of existing Chapter 15 proceedings arising from the liquidation of IBRC. Both the English

application and US application were the subject of no tell orders or ‘gagging’ orders in those jurisdictions such that the

court files have been sealed and that the respondents to those applications have been prevented from notifying any

third parties of the proceedings and/or orders made. I believe that the court seals have now been lifted in both

jurisdictions following the expiry of the gagging orders, and I, therefore, wish to inform the court of the basis of those

applications and the orders made in those proceedings. The US proceedings are on-going. No other proceedings, civil or

criminal, arising from the information described at paragraphs 11 onward, have been initiated in the other jurisdiction

and there are no such proceedings in existence in any other jurisdictions.”

3. In the course of the affidavit, Mr. Wallace set out a considerable amount of information including some obtained from informants

who were not identified. Email correspondence was also referred to and Mr. Wallace expressed the view that some of the information

set out in the affidavit tended to support the plaintiffs’ claims that the defendants were seeking to put their assets beyond the reach

of the plaintiffs by means of various schemes which had been devised.

4. The applicants in the motion complain that the information contained in the affidavit of Mr. Wallace cast them in a bad light, not

only before the court, but also before the public in general and gives a litigation advantage to the plaintiffs over the personal

defendants. The application was made on a Friday and the applicants claim that over the following weekend there was extensive,

hostile media coverage of them in the light of the information put before the court by Mr. Wallace. They suggest that someone

connected with the plaintiffs leaked to the media the fact that an ex parte application would be made thus ensuring that there were

journalists in court, notwithstanding the fact the applicants were not put on notice of the application and were unaware of it. The

applicants also complain that while the court made no findings as a result of the ex parte application, it did make costs of the

application costs in the cause and that this was a ruling made without them being heard or present in court and they are affected by

it.

5. The evidence as to how journalists came to be in court when the ex parte application was made is inconclusive. The ex parte

application was made on a Friday which is the day on which a call over of the cases for the following week takes place and it is

normal for applications regarding matters in the list to be made. It is not unusual for journalists to be present in the court on a Friday.

If there were journalists present then the information put before Kelly J. on 30th May, 2014, would have been a matter of public

interest and one would expect that it would be reported in the media. Whether the media were tipped off about the application is

hard to say. It would be undesirable if the media were alerted to a court application made ex parte if the dominant purpose was to

obtain a litigious advantage. But that could not arise here. I am satisfied that the application made to the court was merely for the

purpose of updating the court at the earliest opportunity on information which had come to light as result of proceedings in the US

courts and the Courts of England and Wales. While it is true that in his affidavit Mr. Wallace stated that some of the facts canvassed

tended to support allegations of conspiracy to put assets beyond the reach of the plaintiffs, there were no new allegations made.

Furthermore, no order was sought from the court other than asking that costs of the application be costs in the cause.

6. It would be normal for a receiver or liquidator to apply for costs of applications brought before the court in the course of a

receivership or liquidation and - save for an application improperly made - it is hard to conceive of any circumstances where an

application that the costs of such an ex parte application should be made costs in the cause would not be approved by the court.

7. The applicants assert that their constitutional rights as articulated in In Re Haughey [1971] I.R. 217, and Maguire v. Ardagh [2002]

1 I.R. 387, would be breached if they were not entitled to cross examine Mr. Wallace on the contents of his affidavit. Such an

argument is, in my view, misconceived. The circumstances in both those cases were entirely different. Each of those cases involved

the rights of a citizen to cross examine a witness giving evidence against them. In Re Haughey, the witness had made accusations

against Mr. Haughey at a public hearing of an Oireachtas committee, namely, the Committee of Public Accounts. In Maguire v.

Ardagh, witnesses were called to give evidence against the applicant before an Oireachtas subcommittee. There is no equivalence

between the facts of those cases and the circumstances giving rise to this application.

8. In his affidavit grounding this application, Mr. McPartland states that the applicants seek the cross examination of Mr. Wallace on

foot of his affidavit sworn on 29th May, 2014:-

“…to ascertain, inter alia, the real reason why this matter was opened before the Commercial Court, the manner in

which journalists were informed of the application, and the averments made by him to the effect that the content of

emails which had been located would be provided and that this content would show a link or connection between the

emails in question and the Personal Defendants, when that does not appear to be the case.”

9. However, in the course of the application, counsel for the applicants suggested that they were entitled to rebut or challenge the

material set out in the affidavit of Mr. Wallace in support of the ex parte application. But crucially, the applicants have not filed any

affidavit challenging what is set out in the affidavit of Mr. Wallace which is a pre-requisite for any application for leave to cross

examine on his affidavit. Counsel for the applicants says that the affidavit raises serious questions as to the motives of Mr. Wallace in

putting the affidavit before the court in the first place. In my view, that is not a ground for granting leave to cross examine him.

10. The test for cross examination of a witness on an affidavit is set out in Director of Corporate Enforcement v. Seymour [2006]

IEHC 369. In that case, O’Donovan J. stated at p. 5:-

“In my view, it is axiomatic that, when, in the course of applications to the court which are required to be heard and

determined on affidavit, as is the situation in this case, it becomes apparent from the affidavits sworn in those

proceedings that there are material conflicts of fact between the deponents of those affidavits, the court must, if

requested to do so, consider whether or not to direct a plenary hearing of the proceedings or that one or more of the

deponents should be cross examined on his or her affidavit. This is so because it is impossible for a judge to resolve a

material conflict of fact disclosed in affidavits. However, while it seems to me that, where it is debatable as to whether

or not the cross examination of a deponent on his or her affidavit is either necessary or desirable, the court should tend

towards permitting the cross examination, at the end of the day it is within the discretion of the court as to whether or

not such a cross examination should be directed and that discretion should only be exercised in favour of such a cross

examination if the court considers that it is necessary for the purpose of disposing of the issues which the court has to

determine. That appears to me to be the import of a statement of Keane C.J. in the course of an unreported judgment

of the Supreme Court delivered on the 15th day of December, 2003, in a case of Holland v. The Information

Commissioner and represents the current jurisprudence in that behalf in this country.” [Emphasis added]

11. There is no conflict on affidavit before me with regard to the ex parte application. Mr. Wallace swore an affidavit and after the

application was made, the applicants and the other defendants in these proceedings were informed of the making of the application

and were served with the papers. Since then, no affidavit has been filed challenging the information furnished to the court by Mr.

Wallace. The cross examination of Mr. Wallace is not relevant to any issue that has to be determined at the trial of the action and

would serve no useful purpose in this case. Information furnished to the court by Mr. Wallace was of a limited nature and related to

applications brought in other jurisdictions. Other than informing the court that some of the information arising out of those other

proceedings tended to support the case being made by the plaintiffs, it did not make any new case out against the applicants or the

other defendants. Nor was any order sought from the court other than the request that the costs of the application be costs in the

cause. The purpose of the application on 30th May, 2014, was part of a process of policing the orders made in foreign courts.

12. I am satisfied that there are no grounds for giving the applicants leave to cross examine Mr. Wallace on his affidavit and I refuse

the applicants’ motion brought for that purpose.