Summary judgment of €8m made against ex-bankers

A fund is entitled to summary judgment orders totalling almost €8 million against John Hughes, a former head of business banking at AIB in Eyre Square, Galway, his wife and former Anglo Irish Bank executive director Tom Browne, the High Court has ruled.

The proceedings by Promontoria (Aran) Ltd came before Mr Justice Brian McGovern in what he described as "highly unusual circumstances" arising from an objection by Mr Browne to Mr Justice Max Barrett having heard them last May.

The objection was made on July 24th 2017, weeks after the May hearing and 13 days after Judge Barrett gave judgment, ruling the fund was entitled to some €8 million in total against John Hughes, his wife Margaret, and Mr Browne. Apart from a sum of about €503,000, there was no arguable defence to the claim for summary judgment in the amounts sought, Judge Barrett held.

The fund brought three cases over different loans mainly advanced for property purposes. Judge Barrett granted summary judgment for €1.1 million against Mr and Mrs Hughes in one case; for €3.5 million against Mr Hughes individually in the second and for €3.3 million against Mr Hughes and Mr Browne in the third.

Mr Browne's objection was based on Judge Barrett being a former company secretary of Irish Bank Resolution Corporation, which took over Anglo, at a time IBRC decided to take separate proceedings against Mr Browne seeking judgment for some €50 million.

In a judgment published this week, Judge McGovern said, when Judge Barrett heard the fund’s proceedings in May, no application was made then for him to recuse himself, there was no suggestion IBRC’s proceedings against Mr Browne were connected with the fund’s proceedings, and no indication Judge Barrett was aware of any conflict of interest on his part.

On July 24th, Mr Browne and his solicitor Paul Meagher swore affidavits grounding an application for Judge Barrett to recuse himself. Mr Meagher swore he had no knowledge of any possible conflict of interest on Judge Barrett's part until Mr Browne approached him (Mr Meagher) after the judgment was delivered.

Mr Browne swore he did not realise who Mr Justice Barrett was when the fund’s case was heard in May and had not claimed Mr Justice Barrett was actually involved in IBRC’s decision to prosecute proceedings against Mr Browne, Judge McGovern said.

What is “extraordinary” is Mr Browne himself held a senior executive position in IBRC. One would have thought, had Mr Browne attended court last May, he would have immediately identified the connection between himself and Judge Barrett of which he now complained but it seemed Mr Browne had let John Hughes “make the running” so far as these proceedings were concerned and to represent the interest of all the defendants.

Judge Barrett had decided, “out of an abundance of caution” to recuse himself despite his judgment having been delivered. The judgment had not, however, been perfected and has been vacated.

Judge McGovern said the only material change since July was the fund is no longer pursuing its claim for judgment for the €503,000 sum against Mr and Mrs Hughes.

Having reheard the fund’s proceedings, Judge McGovern said he agreed with, and adopted, Judge Barrett’s findings the fund was entitled to summary judgment in the sums sought, except in relation to the €503,000 sum no longer being pursued.

It was “wholly unsatisfactory” scarce court resources had been taken up with hearing this matter a second time when that could have been avoided had Mr Browne taken a “more proactive” role when the case was before Judge Barrett, he added.

John Hughes had debts of between €85 million and €95 million in 2015, with most of the money due to NAMA or IBRC.