Tycoon Sean Quinn's wife who pleaded ignorance over loans faces €3m demand
Sean Quinn’s wife faces the prospect of joining her husband in the bankruptcy courts after the Irish High Court ordered her to repay more than €3m (£2.5m) to Anglo Irish Bank.
The bank is likely to call in the debt within days and could ask the High Court to declare Mrs Quinn bankrupt if she fails to pay it — condemning her to as long as 12 years out of business life and unable to borrow.
But the mother-of-five has a window of opportunity to follow her husband’s example and apply for bankruptcy under the more lenient regime in Northern Ireland, where she could be freed of her debts in just a year.
Patricia Quinn has the option of asking the Supreme Court to overturn yesterday’s judgment.
A spokesman for the family last night declined to comment on any aspect of the case.
The 57-year-old, who has served as a director of more than 90 Quinn companies, had claimed she was a housewife and mother whose only financial role was deciding what to buy for weekly groceries and managing household expenses.
She said she was unduly influenced by her husband Sean Quinn and signed documents given to her without reading them.
But High Court Judge Mr Justice Peter Kelly said that since the middle of the 18th century the law allowed for no presumption of undue influence between a wife and husband.
The judge said he accepted at face value Mrs Quinn’s explanation of her role in the family home and her claim that she did not possess even a basic knowledge of business matters.
But he said Mrs Quinn |“gave no thought to what she was signing” and such negligence disentitled her to make a claim of not understanding what she signed.
It would have been clear “to all but the illiterate” by a cursory glance at these documents that they related to a borrowing transaction, said Judge Kelly.
The judge also added that there was no evidence of undue influence, such as bullying behaviour, or evidence that Mrs Quinn was feeble minded or mentally ill.
The massive debt order paves the way for Anglo, now named as IBRC, to quiz Mrs Quinn about her assets if she fails to pay the debt.
Mrs Quinn has not claimed an inability to repay and Anglo has no visibility of her wealth.
Last night the bank was considering all of its options in relation to Mrs Quinn — including bankruptcy. The bank cannot make any move against the matriarch until it has given her a number of days to indicate whether she will pay the debt.
The judgment against Mrs Quinn comes ahead of a key legal challenge next Monday in the High Court in Belfast where Anglo will seek to overturn a bankruptcy application filed there by Mr Quinn.
It was learned yesterday that minutes before Judge Kelly ruled on Mrs Quinn’s loan, lawyers for Anglo asked another High Court judge to give it permission to serve a bankruptcy summons on Mr Quinn who has been ordered to pay more than €2bn (£1.7bn) to the bank.
High Court Judge Ms Justice Elizabeth Dunne granted Anglo liberty to serve the summons within the two weeks.
The move, a pre-emptive strike by the bank, will allow it to proceed immediately with bankruptcy in the Republic if the High Court in Belfast rules in favour of the bank.
The hearing in Belfast, which may feature direct evidence from Mr Quinn, is seen as critical for Anglo as bankrupts can emerge free from their debts within a year compared to 12 years in the Republic.
Back in October, Anglo told the Cypriot courts there was a “strong possibility” the Quinns five children could become bankrupt “soon”.
The children’s liability to the bank is the subject of a legal case in February. The bank can not make any move to bankrupt them pending the outcome of that case.
Mrs Quinn had signed the €3m loan facility five times under headings including “borrowers’ acceptance” and provisions allowing her a 10-day cooling off period and related to seeking legal advice.
She also signed a credit agreement and the bank's general terms and conditions.
She had raised the defence that she had signed the documents without understanding their nature but Mr Justice Kelly said that defence was not available to anyone who did not take the trouble to find out the general content of a document.
Another strand to her defence, that she failed to benefit from the loan because it was transferred by her husband to QML, was also rejected.
Mr Justice Kelly said the couple had jointly borrowed the €3m and Mr Quinn was entitled to direct the bank pay the monies to an account of QML.
It was no concern of the bank's what happened to the monies after they were drawn down.
When there are joint borrowings, there is always the possibility one borrower can use the funds at issue without the other borrower benefiting, he added.