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Judge rejects supermarket couple’s ‘hopeless’ plea to repay £5m debt

Published 27/10/2016

Judge said substantial costs have been incurred in funding and defending a
Judge said substantial costs have been incurred in funding and defending a "hopeless" appeal

Legal aid authorities must be alerted to a "hopeless" challenge to the winding up of a family supermarket company with bank debts of nearly £5 million, a High Court judge in Belfast has ordered.

Rejecting the appeal by Michael Quinn and his wife as directors of Cloughvalley Stores NI Ltd, Mr Justice Horner ruled it was based on a worthless promise to repay the money when they themselves are in "desperate financial straits".

The judge described the couple, who ran Quinn's Superstore across the border in Carrickmacross, Co Monaghan, as grasping at straws with a case devoid of merit.

"Like a drowning man, Mr Quinn (and his wife) were prepared to grab anything in the hope that it would keep him (and his wife) afloat," he said.

A winding up order was made against Cloughvalley Stores NI at the Northern Ireland High Court in March 2015.

Another company registered in the Irish Republic which owns 98% of its shares had been placed in receivership four years earlier.

Mr and Mrs Quinn, who each own one share in Cloughvalley Stores NI, initially challenged a finding that its centre of main interest was north of the border.

Ultimately, however, their appeal centred on a note given to the Northern Bank promising to pay the firm's full debt of £4.7m.

During proceedings Mr Quinn dismissed his entire legal team after counsel indicated he was not prepared to advance arguments based on the contents of his affidavit.

Dismissing the couple's grounds of challenge, Mr Justice Horner said: "They had no problem in making a case which was hopelessly flawed and which was doomed to fail."

He continued: "When the legal aid budget is under such pressure, it is scarcely credible that the appellants should receive legal aid both for the hearing before the Master and for this appeal."

Questioning how much the legal aid authorities knew about separate litigation in the Republic or the basis of the appeal, the judge endorsed claims by the bank that it was an abuse of process.

"This criticism is compounded by the decision of the appellants to proceed with an appeal which was ultimately founded on the worthless promise that they would pay the amount of nearly some £5m outstanding to the bank when they had no money or assets to do so," he said.

"A worthless promise to pay a debt can never extinguish it."

Pointing to the 18-month period since the winding up order was made, he added that substantial costs have been incurred in funding and defending a "hopeless" appeal.

Mr Justice Horner added: "I direct that this judgment be brought to the attention of the Legal Services Commission as I find it difficult to accept that it has been aware of all material facts."

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