This appeal takes place against the backdrop of hugely extensive litigation, not only in Ireland but in several other countries around the world, between the Irish Bank Resolution Corporation, formerly Anglo Irish Bank Corporation, and various members of the Quinn family and their companies.
This appeal, however, is brought only by the fourth-named defendant, Sean Quinn Jr., against orders of the High Court (Dunne J.) and concerns a comparatively narrow issue. Firstly, he says that there was no sufficient evidence before the High Court to justify the finding made, namely that he had been involved in August 2011 in paying US $500,000 out of the account of a Ukrainian company, QPU, to a certain Ms. Larissa Puga so as to amount to a contempt of a restraining order made by Clarke J. on 20th July 2011. For that, he was committed to prison by way of punishment for contempt of court for three months. Secondly, he says that the High Court, having found him to be in contempt by participating in that transaction, in any event, exceeded its powers by requiring him to reverse or undo a large number of separate transactions in respect of which there was no contempt finding or even allegation against him.
Factual background and history
The First named plaintiff, Irish Bank Resolution Corporation Ltd (hereinafter “the Bank” or “Anglo” when referring to its former business) has commenced this action under the name under which it was best known, when it traded as a Bank, Anglo Irish Bank Corporation.
4. The background to the issues on the present appeal is explained in the judgment of Clarke J. of 13th September 2011. (Anglo Irish Bank Corporation PLC v Quinn Investments Sweden AB  IEHC 356). In that judgment Clarke J. rejected a challenge by the defendants to the jurisdiction to maintain the action in this jurisdiction pursuant to Council Regulation (EC) No. 44/2001 of 22nd December, 2000, on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (OJ L 12, 16.1.2001, P.1) (the “Brussels Regulation”). It is worth quoting the opening paragraph of that judgment:
Both the plaintiff (“Anglo”) and the group of companies (the “Quinn Group”) associated with many of the defendants were apparent stars of the Celtic Tiger years. However, the situation facing both has dramatically altered. As is widely known Anglo is now in state ownership, would be hopelessly insolvent but for state assistance, is no longer involved in ordinary banking but is seeking to recover such loans as it can so as to minimise the ultimate exposure of the taxpayer. Likewise, the Quinn Group in its various component parts has been the subject of significant financial difficulty with the appointment of administrators and receivers to many companies within the Group.
Anglo lent very large sums of money to members of the Quinn family or to companies in the Quinn group. It is not disputed that there is a sum of some €450 million owing. However, there is a dispute about a claim by the Bank to recover a sum of some €2.8 billion advanced to a Quinn Finance, a private unlimited Irish registered company within the Quinn Group, said to be related to certain obligations under various contracts for difference or margin calls which had been entered into relating to shares in Anglo. There is litigation in being in which various Quinn interests challenge the validity of that loan and of security granted by a number of Quinn companies in relation to it.
Clarke J. summarised the object of the present action as follows:
In the present proceedings, Anglo seeks to prevent the Quinns, acting individually or in a conspiracy or in concert with one another, from inducing breaches of contract and intentionally causing loss to Anglo by unlawful means, including taking actions which, it is alleged, will result in transferring assets of companies within the IPG to companies in another corporate structure for the purposes of denuding the IPG of its assets. The reliefs sought by Anglo include orders restraining the Quinns from inducing, procuring or facilitating breaches of Share Pledges or from taking steps to transfer assets or purporting to exercise rights attaching to pledged shares or to establish an alternative corporate structure. Orders are also sought declaring that the Quinns hold certain assets as constructive trustees for Anglo and directing an accounting to Anglo of any such property or assets transferred.
The underlying action alleges conspiracy against the defendants, members of the Quinn family, consisting of the entering into and putting into effect a scheme or coordinated plan designed to strip assets from various companies or other legal entities, described as the International Property Group (“IPG”), over which Anglo had security.
On the 27th June, 2011, Anglo applied to the High Court ex parte for an interim injunction against the defendants designed to restrain them from taking further steps in furtherance of that alleged plan. The matter was then made returnable for an interlocutory hearing before the High Court. At an interlocutory hearing on the 20th July, 2011, counsel for the defendants, including the appellant, agreed to give a number of undertakings which were in identical terms to the interim relief which had been granted. This was without prejudice to the contention that Anglo was and is not entitled to the reliefs sought and that Anglo’s concerns were unwarranted.
The more specific subject-matter of the present contempt proceedings relates to a part of the Quinn family empire which derived from the acquisition of a significant property portfolio largely based outside Ireland and held through a complex network of company structures in a number of countries. Quinn Investments Sweden AB (“QIS”), a Swedish company, was the vehicle through which that property portfolio was owned. To quote Clarke J. again:
QIS in turn had many ultimate subsidiaries including a number of Cypriot companies, which in turn held the shareholding in companies in countries such as Russia, Ukraine and India which latter companies directly owned the properties which formed part of the portfolio.
On 20th July 2011, Clarke J. made the order (which I will call “the Clarke J. order”) to which the contempt hearing before Dunne J. was referable. It was made pending the determination of the issue of jurisdiction and, if that issue was determined in favour of the plaintiffs, pending the hearing of the action. The terms of that order were that:
The Defendants be restrained forthwith whether by themselves or by their respective employees, servants, officers or agents or otherwise howsoever from:
The act of contempt alleged against the appellant, in effect the payment of a sum of $500,000 out of a Ukrainian company was held by Dunne J. to be a breach of the order. I will call that “the Quinn Junior contempt.” It will not be necessary to consider the detailed terms of the Clarke J. order.
The Clarke J. order was served duly endorsed on the appellant’s solicitors on 21st July 2011. The appellant accepted in evidence that the solicitors brought it to his attention.
In September 2011, McCann Fitzgerald, solicitors for the Bank commenced correspondence with Eversheds, solicitors for the defendants, including the appellant. In September they expressed serious concern that steps had been taken by two of the defendants which had the effect of stripping certain named Russian companies, Finanstroy and Red Sector, of their assets. These alleged, inter alia, that shareholdings of Cypriot companies were withdrawn, that contrived debts were created by claimed arbitrations resulting in the “self insolvency” of well-resourced subsidiaries. I will not take up time and space to describe these matters at this point for two reasons. Firstly, allegations that these acts amounted to a contempt of the Clarke J. order were made against other named members of the Quinn family, but were not made against the appellant. Secondly, insofar as they relate to other members of the family, it is preferable not to comment on them, since they are not the subject of the present appeal.
Those remarks need to be qualified in one respect only. On 7th September 2011, McCann Fitzgerald inquired whether the appellant had been a General Director of one Russian company, Logistica. Eversheds wrote on 13th September 2011 confirming that he had been, but that he had resigned on 4th July 2011, “on account of the within proceedings.” The letter also denied any further involvement by their clients with Logistica after that date.
On 2nd December 2011, McCann Fitzgerald wrote making the allegation which formed the subject-matter of the Quinn Junior contempt allegation. That letter contains the essence of the case with which this appeal is concern and the relevant part warrants being quoted in full:
Payment to former QPU General Director
It has emerged that Sean Quinn Jr. and Peter Quinn, .... travelled to Kiev in late August 2011. While in Kiev they caused US$500,000 of the cash at bank of Quinn Properties Ukraine (“ QPU”) to be transferred to the personal bank account of the then General Director of QPU. Quinn Investments Sweden (“QIS”) is a 15% shareholder in QPU. QPU is thus protected by the Order of Clarke J .... This dissipation of QPU’s assets was in breach of the Order.
This arose in the following circumstances. On 30 August 2011 Sean Quinn Jr and Peter Quinn attended at the Lenardo Business Centre in Kiev. The Lenardo Business Centre is a valuable asset owned by QPU. A resolution has been produced (copy enclosed) which purports to constitute a resolution of a shareholders' meeting of QPU in GF on that day .... The resolution is, however, signed by Sean Quinn Sr and Peter Quinn as, alternatively, Chairman of Quinn Properties Sweden AB (“QPS” a 0.5% shareholder in QPU) and an alternative director of Quinn Office Sweden AB (the 99.5% shareholder in QPU).
The Resolution, which bears the company seal of QPU, provides that Peter Quinn acted as chairman of the meeting and ‘Sean Quinn’ as secretary, and that Peter Quinn proposed the dismissal of the General Director of QPU, Mrs Yanez Puga Larissa Nikolaevna, “in connection with commitment by [her] of guilty actions that provide grounds of losing confidence by the owner,” and the appointment of an alternative General Director. Both voted for this unanimously. According to the Resolution, both also voted unanimously to "conduct all payments to her in accordance with the legislation and to labor contract.”
The labour contract provides that Mrs. Yanez Puga was entitled to a payment of "$500,000" and other generous benefits on termination of her contract.
Sean Quinn Sr. and Peter Quinn had been notified, as chairman and deputy director respectively of QPS, that a shareholders' meeting of QPS had been convened for 31st August for the purpose of considering a resolution to remove Sean Quinn Sr. and Peter Quinn from the Board of QPS. That resolution was passed on 31st August, and they were so removed.
On 2nd September, without the knowledge of the QPS Board, the new General Director of QPU appointed by your clients on 30th August wrote to QPU’s bank requesting the release of UAH 3,985,350 (approximately US $500,000) from the short term deposit account of QPU. On 5th September these funds were transferred to the account of the former General Director Mrs. Yanez Puga described as ‘payment of salary.’ in that regard we enclose a copy of QPU’s bank statement showing the payments made.
We understand that QPU, which is no longer under the defendants’ control, has lodged a criminal complaint with the Ukrainian prosecutor in respect of the misappropriation of these funds and we have been informed that the funds are frozen in Mrs. Yanez Puga’s account pending the criminal investigation.
We also enclose a copy of the purported labour contract to which the Resolution Refers. Signed by Dara O'Reilly and Sean Quinn Sr., it provides that Mrs. Yanez Puga’s salary was US$563 per month up to 1 June 2011 which then suddenly increased to US $7000 per month. The document purports to give Mrs. Yanez Puga an entitlement in the event of termination of her contract to “a compensation amounting to 500,000.00 $ and all possible compensation as well is to provide the medical insurance for the Director for three years.” On foot of this document your clients approved a payment of US $500,000 to the now sacked General Director of QPU and gave directions to the payment of this very substantial sum to her, while considering it appropriate to dismiss her for “guilty actions that provide grounds for losing confidence by the owner."
The payment of US $500,000 to a sacked General Director, who until June 2011 was earning less than US $10,000 Per annum, on the basis of the labour contract which at the very least raises questions as to its authenticity, could in no way be presented as being in the ordinary course of business and this must have been clear to your clients at the time of directing the payment to her. Your clients also knew that the cash at bank of QPU is protected by the Order and they knew that in divesting the company of these assets they were in breach of the Order ....
QPU, Quinn Properties Ukraine is a company incorporated in the Ukraine, the owner of a valuable office block, the Leonardo building.
In a letter of 13th December 2011, Eversheds denied that Sean Quinn senior, Sean Quinn Jr. or Peter Quinn had had been involved in any way or had any knowledge of the transfer of US $500,000 to Ms. Puga. They denied that Sean Quinn Sr. or Peter Quinn had signed the minutes of a meeting of 30 August 2011, described as "Minute No 21,” or that they had ever seen that document. It was denied that any such meeting had taken place as was recorded or that they had been parties to the alleged proposals or resolutions. The letter explicitly stated: “These are not our client’s signatures.” The letter went on to deplore the payment to Ms.Puga, saying that they shared the Bank’s concern as to its appropriateness. On the other hand, they defended the increase in salary provided for Ms.Puga in June 2011 saying that the management contract was not unusual and had been negotiated with the benefit of legal/professional advice. The letter did not say that the appellant and Peter Quinn had, in fact, been in Kiev on 30th August.
In a letter of 6th January 2012, McCann Fitzgerald expressed surprise at the contention that the appellant had never had any role in QPU and that no such meeting had taken place as had been described in their letter of 2nd December. They went on to assert that both the appellant and Peter Quinn were present on the QPU premises in Kiev on 30th August and that this was in the context of dismissing Ms.Puga.
Eversheds replied on 12th January 2012 stating that the attendance of the appellant and Peter Quinn at the QPU premises in Kiev on 30th August was not denied. They denied, however, attending "the alleged meeting." They said that both persons in question had "ongoing business interests in the Ukraine and on that date attended numerous meetings in Kiev."”
The Bank issued a notice of motion for 17th February 2012 seeking orders pursuant to Order 44 of the Rules of the Superior Courts (S.I. No. 15 of 1986) directing the attachment and if necessary the committal of the first named defendant (Sean Quinn Sr.), the ninth named defendant (Peter Quinn) and the fifth named defendant (who is the appellant). In respect of the first and ninth named defendants, the Bank complained of breaches of the Clarke J. orders effectively in three respects: firstly, directing the assignment of some US $130 million worth of loans to a Belize Corporation for nominal consideration so as to justify placing three named Russian subsidiaries of the Quinn group into self-insolvency; secondly, directing the assignment of a loan of €45.2 million due to a Northern Irish entity with the object that the debt of the new Creditor should take priority over at the claims of the Bank; thirdly, directing or participating in the process which is also alleged against the appellant. That allegation, effectively the one made in the McCann Fitzgerald letter of 2nd December 2011 is expressed in the notice of motion as follows:
directing or participating in a process whereby on 30 August 2011, US $500,000 cash at bank of an IPG subsidiary company was paid into the personal bank account of the General Director of that company, contrary to the interests of the Plaintiff and other than in the ordinary course of business, immediately prior to the Defendants losing control of the subsidiary company on 31 August 2011.
The notice of motion was grounded on the affidavit of Mr. Richard Woodhouse, the Group Head of Specialised Asset Management at the Bank. He said that the Bank had reason to believe that breaches of the Clarke J. orders had occurred, amounting to contempt of court. He said that they "demonstrated a continuation of a co-ordinated strategy before and after the Order to place the assets within the Quinn International Property Group ("IPG") beyond the reach of the plaintiff, to undermine its validly handled security in respect of those assets and to damage the Plaintiff's interests."
Mr. Woodhouse essentially repeated the complaint made in the McCann Fitzgerald letter of 2nd December 2011, quoted above. He said that the Leonardo Office Building in Kiev, owned by QPU, was a valuable IPG asset which he valued at some US$71 million. He continued:
Sean Quinn Jr. and Peter Quinn .... travelled to Kiev in late August 2011. While there on 30 August 2011 they caused US $500,000 of the cash at bank of QPU to be paid to the General Director, Larissa Yanez Puga. This substantial cash at bank was an asset of QPU and thus I am advised and believe protected by the Order.
Mr. Woodhouse referred to the document recording the resolution, Minute No. 21 of QPU, to the employment contract of Ms. Puga, which provided that her salary was increased on 1 June 2011 from US $563 per month to US $7,000 per month. He said:
I do not know whether Sean Quinn Sr. was in Kiev on 30 August 2011. I am advised and believe that [Sean Quinn Sr.] likely signed the Resolution in Ireland and that [the appellant and Peter Quinn] then travelled to Kiev with the Resolution to put it into effect. I say that at the time of the passing of the Resolution, Sean Quinn Sr had been notified, as chairman of QPS, that a shareholders’ meeting had been convened for 31st August 2011 for the purposes of considering a resolution to remove Sean Quinn Sr from the board of QPS, which would have also affected Peter Quinn's position as an alternate director of Quinn Office Sweden .... Accordingly at the time of passing the Resolution the Defendants were aware that they would lose control of the company the following day. I am also advised and believe that [the appellant] was in Kiev on 30 August 2011 and attended meetings with Peter Quinn in the QPU building that day.
Mr. Woodhouse referred to the instructions and banking documents which led to the payment out of US$500,000 from the account of QPU on 5th September 2011. The payment was not, he said, "in the ordinary course of business" having regard to the stated reason for which Ms. Puga’s employment was terminated, namely "commitment of guilty actions."
Replying affidavits were sworn by Sean Quinn Sr., the appellant and Peter Quinn. Each of them denied in the strongest terms that they participated in or even knew of the US $500,000 payment. They explicitly denied that any of them had attended at such a meeting as Minute No. 21 purports to record. Sean Quinn Sr. expressed his belief that no such meeting took place and that no such resolution was ever passed. The appellant believed that the Minute was not a genuine document.
The hearing of the contempt motion took place before Ms. Justice Dunne in the High Court over 15 days. Each of the three respondents to the motion gave evidence and was cross-examined. Each maintained his denial of having any knowledge of or role in the US $500,000 payment.
Peter Quinn accepted that the signature on the minute looked like his. Thus he did not claim that it was forged. He did, however claim that the minute itself was a forgery, in effect a fabrication. In cross-examination, he was reminded that his solicitors in their letter in reply to McCann Fitzgerald had stated that the signatures on the minute were not those of Sean Quinn Sr. or of Peter Quinn.
He said that there were a couple of reasons for the visit to Kiev. He knew that, on the next day, he would be removed from any involvement in QPU. He had been working with the QPU people for five years and did not want to be "in a position where I disappeared off the face of the earth.” He wanted “to thank them for all their efforts over the years because they worked very hard for me.” he said that the meeting between himself and the appellant had taken place in the Leonardo building and lasted an hour or an hour and a half. He said that everyone was concerned about their own future and that he tried to reassure them. He said:
I tried to reassure Ms. Puga that her position wouldn't be affected .... because she had done a very good job, so I assumed, incorrectly as the case was, that she'd be kept on. It would have been my wish that she was kept on because I feel that she would have had a benefit to the business.
He was challenged in cross-examination on his statement that he had never denied the meeting of 30th August 2011 because his solicitors had not mentioned it. He said that this was a "play on words."
The appellant, in evidence, repeated his denial of any knowledge of the resolution or the payment of US $500,000. He was examined and, in particular cross-examined about his explanations for travelling to Kiev. He said:
I suppose since the injunction was got on 27 June Peter would have, Peter Quinn, would have spoke to me on a number of occasions and explained that he was becoming concerned with Ms. Puga’s bona fides. On hearing that – also he told me that he was travelling to the Ukraine on 30 August and I suggested I would attend with him, I suppose, more or less for a second opinion to have a view of what Ms. Puga was or was not actually doing.
His account of the meeting in the Leonardo building was similar to that of Peter Quinn. His explanation of the reason for that was however, at least so it was suggested in cross-examination, quite different from that of Peter Quinn. When he learned from Peter Quinn about his intended trip to Kiev on 30thAugust he made the decision to travel with him. He said that Peter Quinn had told him that his contact with Ms. Puga was diminishing, that he was sceptical of what she was doing and that his relationship with her was deteriorating. It was pointed out to him that Peter Quinn had said nothing about Ms. Puga’s bona fides. Nonetheless, he insisted, in several answers, that Peter Quinn had spoken in these terms to him. He is said that the shares in QPU were owned by his extended family, former work colleagues and friends and that if anything happened to QPU they would be affected. Thus he went to Kiev not only on his own behalf but in the Quinn family interests.
The Bank attaches particular significance to what it describes as a number of admissions made by the appellant of his knowledge of the existence of a co-ordinated plan or scheme put into effect largely by Peter Quinn to extract cash or other assets from companies in the Quinn Property Group with the object of putting them beyond the reach of the Bank. In this context, the appellant accepted that Peter Quinn was not only his cousin but also his friend and that he regularly spoke to him. The appellant was aware of a plan from late April 2011 to get unsecured assets into the control of the Quinn family. He was aware "at an overall level .... that there was things being done in from April 2011 to try and take assets out of the QIS structure and put them beyond the reach of Anglo.”
The High Court judgment
Dunne J. delivered a judgment on 26th June 2012 in which she found all three respondents to the notice of motion guilty of contempt of court. More specifically, she found all three in contempt in respect of the €500,000 payment from the account of QPU. This was, of course, the sole allegation made against the appellant.
She emphasised that the appellant was not alleged to be in contempt of court in respect of any breach of the Orders of Clarke J. of the 27th June, 2011 and the 20th July, 2011 in any other respect.
She made it clear that she had considered the lengthy submissions made on behalf of the respondents. She had also considered all the evidence: although she made reference to the evidence on the principal issues before her, she did not find it necessary to rehearse it all. She noted that she had to be satisfied beyond reasonable doubt in respect of each of the allegations of contempt and that the criminal standard of proof applied to each and every allegation.
In the result, she expressed herself satisfied that the Bank had “produced compelling evidence to establish beyond reasonable doubt that the attempted payment to Ms. Puga was brought about by the respondents.” She conducted a comprehensive and detailed analysis of the evidence upon which the Bank had relied. Furthermore, she found that both Peter Quinn and the appellant had been untruthful in the evidence they had given.
I will discuss the main points in the evidence and the learned judge’s findings at a later point. At this point, I will present a short summary of the essence of her findings and her reasoning. It is as follows.
At the beginning of September 2011, US€500,000 was paid out of the account of QPU apparently for the benefit of Ms. Puga, a transaction clearly not in the ordinary course of business. Ms. Puga’s employment contract had been backdated and essentially fabricated in such a way as to justify that payment. Minute No. 21 of the purported meeting of directors of QPU appeared to authorise the payment. It appeared to bear the signatures of Sean Quinn Sr. and Peter Quinn. Each accepted that the signature appeared to be his, while denying any participation in or knowledge of the transaction. The date of the meeting coincided with the arrival in Kiev on 30th of August 2011 of Peter Quinn and the appellant. Each of them knew that, on the following day, the Quinn family would be deprived of any control of QPU. Sean Quinn had no previous involvement in QPU and no apparent reason for visiting Kiev. Peter Quinn and the appellant gave inconsistent and contradictory accounts of their reasons for being in Kiev on that day. They both attended a meeting in the Leonardo building with Ms Puga. The learned judge did not believe either of them.
The coercive orders
Having delivered her judgment in which she had made findings of contempt of court on 26th June, the learned judge adjourned the matter to enable the parties to consider her judgment further until 29th June. In particular, insofar as the Bank was concerned this provided time for it to propose coercive orders arising out of the findings of contempt. Counsel for the appellant invited counsel for the Bank to indicate what coercive measures would be sought. It was agreed that these would be notified by close of business on the following day, 27th June. The learned trial judge said that it would be very difficult to persuade her that there should not be a punitive element in her order.
By a letter dated 27th June, McCann Fitzgerald informed the appellant’s solicitors of the very extensive “coercive orders” it proposed to seek. The orders sought were set out over sixteen pages and several schedules. They made no distinction, and gave no reason for failing to make any distinction, between the three respondents to the notice of motion of 13th February. Notably, it took no account of the fact that the Bank had alleged contempt of court against the appellant in respect of one transaction only. For example, it proposed to require the appellant to cause various named entities in the Russian Federation to enter into “unconditional and irrevocable agreements” terminating some thirty purported assignments dated 26th November 2011 connected with Galfis. That was an entity or company in Belize in respect of which allegations of contempt had been made against the other two respondents to the motion, but not the appellant.
No notice of motion was served. However, one schedule to the letter listed “Mareva Type Reliefs sought by IRBC under Notice of Motion dated 14 June 2012.”
The order made on 29th June gave effect very largely to the “coercive orders” sought in the letter of 27th June. It suffices at this point to note three points: Firstly, the orders sought did not differentiate between the three respondents to the contempt motion; in particular, so far as the appellant was concerned, he was treated as if he had also participated the matters in respect of which contempt finding as had been made against Sean Quinn Sr. and Peter Quinn; secondly, the appellant was to be required to reverse or undo transactions in which it had not been alleged in the contempt motion that he had taken part; thirdly, as was conceded, some of the reliefs did not flow from any finding of contempt against any party, but were justified by the general need to police the order of Clarke J.
At the same time, it does not appear that objection was taken, on behalf of the appellant at least, to a procedure whereby the Bank would give notice of the sort of coercive orders it would seek arising out of the findings of contempt.
At the hearing on the 29th June counsel for the Bank argued that the coercive orders were necessary for the purpose of remedying the specific contempt which had been found. Counsel for the Bank said that some of the reliefs sought were such as a court could grant “irrespective of any finding of contempt.” He further submitted that: the court was not confined to making orders specifically relating or confined to the particular findings and that the orders could be broader and could be made to protect the terms of the order which had been made by Clarke J. in their entirety; that, in circumstances where a number of breaches of the order had been established beyond reasonable doubt, the coercive orders sought were appropriate to protect the remaining parts of the order, rather than have a situation where each individual contempt must be alleged, proved and brought back before the court for that purpose and a further order sought.
Counsel for the appellant (who also appeared for the other two respondents to the contempt motion) made a fundamental objection, which was applicable to the great majority of the orders sought by the Bank. He argued strenuously that any coercive measures which the court could impose must be directed towards the purging of the contempt which the court had found and be confined to the specific and particularised allegation made in the notice of motion. To act otherwise would be to condemn a person without being heard.
It was said that the Bank was moving for these orders without bringing any application by way of notice of motion or amendment of the existing notice of motion and without putting its complaints of further acts of contempt on affidavit.
Counsel submitted that no authority had been cited for this procedure so as to justify depriving a person of his liberty for breach of a court order going beyond the allegations which had been made. Counsel referred to a number of specific examples. In particular, he referred to the allegations that had been made in the notice of motion against Sean Quinn Sr. and Peter Quinn, but not against the appellant, of responsibility for assignments from Demesne (a Northern Ireland company) to Galfis (a Belize company) but that coercive measures were now being sought against him in respect of matters in which he had not been alleged to be involved.
The learned trial judge responded to the submission that the appellant had been the subject of only one allegation of contempt by saying that all three of the respondents to the motion “were involved in a conspiracy....to deprive Anglo of access to assets.” Although the appellant was involved in one aspect only, he “was involved in the overall strategy.” Therefore she held that he was somebody against whom such orders should be made. On the other hand, she expressed herself as reluctant to grant injunctive relief. She was mindful of the fact that there was a separate application pending before the Commercial Court. She thought that matter should be dealt with at that venue. The learned judge referred to the inherent jurisdiction of the court and held that she was not confined to dealing with the orders solely on the basis of the relief that had been sought in the notice of motion (for contempt). She stated that the Quinn family were acting in a way to put matters beyond the reach of the Bank “in circumstances where there would be a breach of the orders of the court.”
The order of 29th June 2012 gave effect to the application for coercive measures in the Bank’s letter of 27th June. It was made without distinction against Sean Quinn Sr., the appellant and Peter Quinn. The order runs, with its schedules, to some thirty pages. It includes 33 paragraphs and many subparagraphs. Only paragraph 31 relates to the payment of US$500,000 by QPU to Ms. Puga. The order provides for: disclosure of all assets worldwide, the appointment of a receiver, with extensive powers, over all properties. It directs the appellant to issue instructions to take all steps necessary to terminate and withdraw legal proceedings in Russia, Ukraine, India, BVI, Belize and Panama; to take steps in relation to companies in various countries; to resign from boards of directors; to transfer shareholdings; to assign or reassign loans; to cause various companies (particularly in Russia) to withdraw claims; to cancel powers of attorney and very many other things. In general terms, all the requirements of the order are designed to secure the return to the Bank or protection of the interests of the Bank in assets in various jurisdictions.
Orders of 20th July 2012: imprisonment
The appellant swore an affidavit dated 20th July 2012 outlining the extent of his compliance with the coercive measures made on 29th June. Counsel for the Bank expressed the view that there had been a very significant failure to comply with the orders and that nothing material had been done in terms of the return of the assets. He suggested that, while it was a matter for the court, the matter might be dealt with in the following week. The learned judge, however, expressed a preference to have the matter dealt with on that day, which was also the preference of counsel for the appellant. In the result, there was no further affidavit from the Bank before the court, although the Bank expressed concern at certain matter that had been disclosed in the affidavits of disclosure of the appellant and of Peter Quinn.
The appellant, in his affidavit of 20th July said that he wished to outline for the court the steps that he had taken or which he had caused to be taken since the judgement of 26th June to comply with the order of the court. He referred to a separate affidavit of disclosure sworn on the same date and said that he had cooperated with the receiver appointed pursuant to that order.
His affidavit contained the following striking paragraph:
As is clear from the evidence adduced in the hearing of this application, I, along with certain other of the Defendants herein took steps to remove assets from the IPG in order to frustrate [the Bank’s] efforts to enforce its security against those assets in circumstances where we disputed the validity of the Bank’s security ....
The appellant outlined in some detail the manner in which the Quinn family had acted so as to, as he put it, "protect the assets from recovery by the Bank." For reasons which will appear later, it is, in my view, unnecessary to relate the matter is detailed in that very lengthy affidavit. It is right to note, however, that the Bank claimed at the hearing in this court, firstly, that the affidavit itself discloses further very serious breaches of the order of Clarke J. and, secondly, that it did not disclose that the appellant had taken any sufficient steps to comply with the order of 29th June.
The learned trial judge held, on 20th July, that there had been contempt of court of the most serious kind in relation to a scheme to put assets beyond the reach of the Bank. She explained the background to the orders of 29th June as follows:
.... the matter was adjourned to the 29th June and at that stage a list of proposed coercive orders were put before the Court in relation to how the Bank .... would see matters moving on with a view to undoing the scheme or conspiracy or whatever word one wants to use to put the assets beyond reach of the Bank and for that reason, a series of orders were made by the Court.
The purpose of that was to facilitate the Plaintiff in getting information which would allow the policing, effectively, of what was going on and would also effectively set in train the undoing or unravelling of the scheme that had been put in place.
Throughout her remarks, the learned judge expressed herself as being unconvinced that the appellant and other members of the Quinn family had taken effective steps to fulfil the requirements of the coercive measures and what she saw as a lack of co-operation. She was “not impressed by the suggestion that what the Quinns have done to date is a satisfactory way of dealing with matters.” While she accepted that a great number of letters had been written, she was not “sure to what extent that is, in practical terms, dealing with matters efficiently and effectively.” Her conclusion was as follows:
So in effect the position of the Court is that this a case where it seems to me that (a) the contempt that has occurred to date is a contempt that could be described as outrageous, to use the type of language that is used in some of the judgements, such that it is a contempt of court that gives rise to the possibility of a punitive order being made. But, there is a very strong and important and desirable element in this case having regard to the nature of the case and what is at stake for the parties as a general observation, and that is also there should be a strong coercive element. And as I have indicated imprisonment with a view to a coercive element is generally intended to be indefinite in nature.
Given the fact that I am of the view that matters should be dealt with for the purpose of coercion in the first instance, what I propose to do is make an order today imprisoning Peter Quinn and Sean Quinn Junior for a period of time until they come before the Court and purge their contempt. In that regard, I am also minded to build into that period of time a period which recognises the punitive element in relation to the matter. And to that extent it seems to me that what I should do at this stage is to indicate, for the purpose of clarity, what that period should be. And in that regard the period I have in mind is a period of three months.
Thus, the appellant had imposed upon him a fixed period of three months imprisonment by way of punishment for his contempt of Court in committing a breach of the order of Clarke J. In addition he was imprisoned indefinitely until he should satisfy the court that he had purged his contempt by complying with all the coercive orders of 29th June.
When pressed by counsel to indicate the precise ground for the imposition of the term of three months imprisonment, particularly in the light of the single allegation of his involvement in the payment of US$500,000, the learned judge added:
The only thing I will say .... in regard to that is that, yes, there was one allegation made against him, I made various findings in the course of the decision in relation to the way in which he gave evidence and I am taking that into account.
This statement made it clear that the sentence of three months imprisonment was imposed only in respect of the finding of contempt made on 26th June, i.e., taking part in the payment of US$500,000 to Ms. Puga.
Counsel for the appellant applied for a stay in respect of the order of imprisonment, which was refused, following opposition on behalf of the Bank on the basis that a stay would not have the effect of giving support for the objective of the Court’s order.
There are three aspects of the appeal:
Firstly, the appellant submits that there was no sufficient evidence before the High Court to justify the finding of contempt made against him in respect of the payment of US$500,000 from the account of QPU in favour of Ms. Puga;
Secondly, he submits that, even if the finding of contempt was justified, it was not permissible to make the coercive orders insofar as they went beyond the subject-matter of that finding so as to encompass matters in respect of which no allegation of contempt had been made against him;
Thirdly, he submits that, even if he is incorrect in making each of those submissions, the High Court was not justified in making the order for his indefinite imprisonment, because there was no sufficient evidence that he failed in his efforts to purge his contempt.
Clearly, the second and third points are each respectively dependent in turn on the outcome of the preceding issue. If the appellant succeeds on the first point, there was no basis for either the coercive measures or the imposition of imprisonment. Similarly, if the coercive measures were not properly imposed, there could be no basis for punishing the appellant for breach of them.
Before proceeding, it should be noted that the order of 20th July 2012 records that the appellant was found guilty of contempt of the orders of Clarke J as well as of the order of 29th June 2012, although it would not appear that the learned trial judge intended, at least, to impose the sentence of three months’ imprisonment for breach of the latter order.
Conclusion on the finding of contempt
The appellant contends that there was no sufficient evidence before the High Court to enable it to make a finding that the appellant had participated in any way in the payment of US$500,000 at the end of August or beginning of September 2011 from the account of QPU in Kiev to Ms. Puga. The learned trial judge did not identify any act on the part of the Appellant which did, or was necessary to, effect the transfer of US$500,000 to Ms. Puga and there was no finding of fact sufficient to provide a basis for finding the appellant guilty of contempt of court. The appellant points out that the appellant had no role in the company, QPU, that he had no power in that company and that there was no evidence that he had ever taken any action in relation to that company.
It is accepted on the part of the Bank that the evidence of the appellant’s involvement in the transaction was entirely circumstantial. It is submitted, nonetheless, that there was more than adequate evidence to sustain the finding. Circumstantial evidence can lead to clear findings of guilt even of criminal offences.
The correct approach to resolution of this issue is to ask whether there was sufficient evidence before the High Court to enable it, as the forum with the exclusive role of determining the facts, to decide beyond reasonable doubt that the appellant was guilty of contempt. The first stage is whether there was sufficient prima facie evidence which, if taken at its highest, was accepted by the court, to permit the court to go to the second stage and consider whether the case is proved beyond reasonable doubt. It was a matter for the learned trial judge to decide whether or not she believed the witnesses. Likewise, only she could determine whether the case had been proved to the criminal standard. This Court performs the appellate function of deciding whether there was sufficient prima facie evidence.
It is true, and was accepted by the Bank, that the appellant had no formal role on the board or in the management of QPU. He claimed in evidence that he had “no involvement whatsoever in the Ukraine.” Nonetheless, it is clear from his own evidence that he was interested in the affairs and business of QPU. Although the Quinn family had only a 15% share in QPU, he said that the “asset” was owned by former work colleagues, friends and extended family, and that he “wanted to see nothing happen to that.” He was aware of discussions involving QPU and/or Anglo regarding management of that asset. It was he who decided, at his own initiative, to travel to Kiev in the company of Peter Quinn at the end of August 2011. On his own admission, the trip was clearly related to QPU.
The appellant said that he had had discussions with Peter Quinn or with his father about QPU and the Leonardo building. He was aware of the impending changes to the board of QPU which would take place on 31st August, which would remove the Quinns from any control of the company. That was to happen the day after his own planned visit to Kiev in the company of Peter Quinn. Indeed, in that respect he said that “we,” meaning the Quinns had suggested to Anglo that they were better capable of managing the asset. He went to Kiev, he said, on his own behalf but also in the Quinn family interests.
He mentioned several times in evidence that Peter Quinn had expressed concern to him about his deteriorating relationship with Ms. Puga: his contact with her was diminishing; she was becoming more distant; he was losing his relationship with her. He said that he had gone to Kiev “with the express intention of trying to understand what Ms. Puga may or may not be doing” or, as he said at another point, to provide “a second opinion to have a view of what” she was doing. Although this account differed sharply from that of Peter Quinn, a fact which may have its own significance, it does not suggest that the appellant was entirely uninvolved with or unconcerned about QPU.
Against this background, the learned trial judge had regard to the two significant documents in the case. Firstly, there was the employment contract. Strikingly, that document, though dated 25 February 2009, appeared to provide for a payment of US$500,000 to Ms Puga in the event of the termination of her employment as from June 2011. The learned judge found this document, at least in that respect, to have been fabricated. Although there was no direct evidence of who did so, that finding does not seem open to doubt. The second document is, of course, Minute No. 21. While there is no direct evidence of the events it purports to record, it was found in the files of QPU, appears to bear the signatures of Sean Quinn Sr. and of Peter Quinn and the seal of the company.
The learned trial judge had regard to these facts, to the fact that the appellant and Peter Quinn travelled to Kiev the day before the Quinn interests would be removed from the board of QPU and that the sum of US$500,000 was in fact removed from the account of QPU on or about 5th September pursuant apparently to the resolution recorded in the minute.
Two further points were that, in response to the initial letter from McCann Fitzgerald of 2nd December 2011, which alleged that the meeting recorded in the Minute had taken place at the Leonardo building on 30th August, the appellant’s solicitors did not admit, as was the fact, in their letter in reply of 13th December, that the appellant and Peter Quinn had attended a meeting in the Leonardo building on that day. They limited themselves to denying that they had attended such a meeting. While that might be considered correct if they were referring to the shareholders’ meeting, it was not, in the circumstances a complete answer to the inquiries from McCann Fitzgerald. Furthermore, the solicitors denied, in the same letter, that the signatures on the Minute were those of their clients. In evidence, however, neither Sean Quinn Sr. nor Peter Quinn denied the authenticity of the actual signatures.
The learned trial judge had the advantage of hearing the evidence of the appellant and of Peter Quinn. There was significant inconsistency between their accounts of their reasons for traveling to Kiev. The appellant repeatedly quoted Peter Quinn as having expressed concern regarding the behaviour and attitude of Ms. Puga. Peter Quinn expressed no such concern. On the contrary, according to his version, the trip was more in the nature of a good will mission. The judge did not believe either of them. Nor did she believe that the appellant and Peter Quinn had not discussed between themselves on the long flight to the Ukraine their reasons for going there.
Finally, the learned judge was not satisfied with the appellant’s explanation of the meeting, in the presence of Ms. Puga at the Radisson Hotel of unknown Ukrainian businessmen.
At the end of the day, the learned judge had before her the two documents. If authentic, they purported to provide justification for the payment by QPU to Ms. Puga. The two Quinns travelled to Kiev the day before, as they knew, the Quinns would be ousted from any position or control in the company. The money was, in fact, paid out of the company account within days. The situation called for an explanation. Two inconsistent explanations were provided. The learned judge disbelieved both. She was entitled to do so. That left the trip unexplained. As she said, there was “no apparent reason” for the appellant to be in Kiev.
In addition to all these points, the appellant admitted in evidence that he was aware of the scheme or plan to place assets beyond the reach of the Bank. While the learned judge did not include this in her analysis of the evidence regarding this transaction so far as the appellant was concerned, she did emphasise that she had considered all the evidence. She must be taken to have borne this evidence in mind.
In my view, the learned judge had ample evidence before her from which she could make the finding beyond reasonable doubt that the appellant was party to the payment out of the US$500,000 from the account of QPU.
In all of the circumstances, she was also entitled to reach the conclusion that the contempt of court was outrageous. The learned judge had before her on 20th July, when she imposed that sentence, the affidavit of the appellant sworn on that day in which he expressly admitted that he, along with certain other defendants had taken “steps to remove assets from the IPG in order to frustrate the [Bank’s] efforts to enforce its security against those assets in circumstances where we disputed the validity and enforceability of the Bank’s security.” This, combined with his acceptance during the contempt hearing of his knowledge of that plan was confirmation that the appellant was knowingly engaged in the patently unlawful activity of interfering with the secured assets of the Quinn group of companies for the avowed purpose of defeating the Bank’s claim. However, I think it is clear that the sentence of three months’ imprisonment related only to the US$500,000 transaction.
The sentence of three month’ imprisonment was, in these circumstances amply justified. I would dismiss the appeal on this point.
Conclusion on the coercive orders
The respective contending submissions regarding the making of the coercive orders are well expressed in the summary already given of the arguments before the learned trial judge on 29th June.
The appellant submits that it is axiomatic that the purpose of a coercive order must be to persuade the contemnor to purge his contempt or to remedy the breach of a Court Order. In the present case, the purpose of inviting the Bank, following delivery of judgment on 29th June, was to enable it to formulate orders or directions which the learned judge might make in order to reverse the breaches of the orders of which they had been found guilty.
As can be seen from the summary of the arguments advanced on behalf of the Bank, it appears that the Bank contends that the court is not limited to the making of coercive orders related to the purging of the contempt actually found or the reversal of the particular transaction with which that finding was concerned, but that the court had power, in the context of the contempt proceedings, to make orders designed to protect the terms of the orders which had been made by Clarke J in their entirety and “irrespective of any finding of contempt.”
There was a separate strand of the Bank’s argument which emerged also at the hearing of the appeal. Counsel argued that, quite apart from the contempt jurisdiction, the court had power to grant injunctions, in particular Mareva-type orders, intended to protect the assets which, in the action, the Bank maintains, have been systematically stripped from companies in the Quinn group, particularly the International Property Group, in pursuance of a conspiracy in that behalf which has effectively been admitted on the part of one or all of the defendants.
I do not accept that the order of Dunne J of 29th June 2012 is susceptible to that interpretation for several fundamental procedural reasons.
Firstly, the Bank did not serve any notice of motion seeking such relief. It is true that there was included, as schedule 3 to the letter of 27th June, a “list of Mareva type Reliefs” sought under a notice of motion of 14th June, but no such motion was returnable for 29th June. The only matter before the court on that day was the adjourned consideration of the contempt motion. On 26th June, the Bank was invited both by the learned judge and by counsel for the appellant to propose coercive measures and to give notice of them to the solicitors for the appellant. The appellant must be taken to have consented to that procedure. However, consent to be notified by letter of proposed coercive orders flowing from the contempt finding cannot, on any basis, be extended beyond the scope of that finding. Frankly, it is surprising to hear a submission which so conspicuously departs from the minimum requirements of fair procedures.
Secondly, the Bank had contemporaneously before the Commercial Court an application for extensive Mareva-type relief. As I understand that matter, that application stood adjourned before Kelly J at the time of the hearing on 29th June.
Thirdly, Dunne J, in her decision of 29th June, declared that she was reluctant to grant injunctive relief. In the first instance, she said that she proposed to see how the respondents to the motion dealt with the disclosure which was to be provided. She also bore in mind that there was a motion being dealt with before the court and that it might be appropriate to deal with that matter in that venue.
Fourthly, the order made by the High Court on 29th June is not capable of being interpreted as granting an interlocutory injunction. It recites the notice of motion of 13th February 2012 (the contempt motion), the findings of contempt of court made by the court in its judgment of 26th June and the fact that the court had adjourned the matter to that day (29th June) “to enable the parties to consider its judgment.” It then recites that the court proposed to “deal with Directions in respect of the coercive element of its judgment.” Nowhere is it recited that the court was considering a separate application for relief by way of injunction. Nor is any undertaking for damages made, as one would expect. Finally, all this is confirmed by the inclusion, at paragraph B of the order, headed “Injunction,” of provision granting liberty to the Bank to “apply in relation to orders being made pending the full trial of the proceedings in terms of the paragraphs of the notice of motion dated 14 June 2012, and currently pending before this Honourable Court (the Mareva injunction) as set out in Schedule 3.” (emphasis added). Schedule 3 to the order reproduces Schedule 3 to the McCann Fitzgerald letter of 27th June.
I turn then to consider the central issue, which is whether it was open to the Bank to apply for and to the court to grant, in the context of considering coercive orders for the enforcement of its findings of contempt, orders generally designed to protect the intent of the orders of Clarke J.
The cases draw a distinction between civil and criminal contempt, the object of the first being coercive and the latter being punitive. O’Dálaigh C.J. in Keegan v de Burca  1 I.R. 223, saw the matter as follows:
Criminal contempt is a common-law misdemeanour and, as such, is punishable by both imprisonment and fine at discretion, that is to say, without statutory limit, its object is punitive: see the judgment of this Court in Re Haughey. Civil contempt, on the other hand, is not punitive in its object but coercive in its purpose of compelling the party committed to comply with the order of the court, and the period of committal would be until such time as the order is complied with or until it is waived by the party for whose benefit the order was made.
It has become clear, in more recent cases, that this passage may present an over-simplification and that, on occasion, there may be a punitive element in cases of civil contempt.
The following passage from the judgment of Finnegan P. in Shell E & P Ltd v McGrath  1 I.R. 671 has been approved in later cases:
Committal by way of punishment likewise should be the last resort. It should only be engaged where there has been serious misconduct. In such circumstances it can be engaged in order to vindicate the authority of the Court. In litigation concerning exclusively private rights this will usually occur only at the request of the Plaintiff. Circumstances may exist which cause the Court to act on its own motion: Jennison v Baker, Seaward v Patterson (1897) 1 Ch 545. However where the interest of the public in general is engaged or where there is a gross affront to the Court it would be appropriate for the Court to proceed of its own motion to ensure that its orders are not put at naught. I am satisfied that such a power must be inherent in the Court. In the words of Judge Curtis-Raleigh:
Finnegan P continued in a passage which I quoted in my own judgment earlier this year in Dublin City Council v McFeely  I.E.S.C. 45:
More accurate is the proposition in Flood v Lawlor  3 IR 67 which left open the question as to whether civil contempt is exclusively as distinct from primarily coercive in nature. In Ross Company Ltd v Patrick Swan  ILRM 417 O’Hanlon J. was of the view that in an appropriate case the Court must exercise its jurisdiction to commit for contempt not merely for the primary coercive purpose but in order to vindicate the authority of the Court and in which case the Court has jurisdiction to make a punitive order. His approach is supported by the cases which he mentions Yager v Musa  2 ALL ER 561, 562 and Danchevsky v Danchevsky  3 ALL ER 934. It is also supported by Jennison v Baker  1 ALL ER 997, Phonographic Performance Ltd v Amusement Caterers (Peckham) Ltd.  Ch. 195 and by the passage which I quote from Halsbury.
Counsel for the Bank cited a wide range of convincing authority for the proposition that the inherent jurisdiction of the court to act in protection of its own orders is as ample as the occasion may require. In Nicholls v Nicholls  1 W.L.R., a number of quite significant procedural defects were found in an order committing a husband for contempt of court. Lord Woolf M.R. thought it “would be unjust to set aside the order in the absence of any prejudice.” He added:
Today it is no longer appropriate to regard an order for committal as being no more than a form of execution available to another party against an alleged contemnor. The court itself has a very substantial interest in seeing that its orders are upheld. If committal orders are to be set aside on purely technical grounds which have nothing to do with the justice of the case, then this has the effect of undermining the system of justice and the credibility of the court orders. While the procedural requirements in relation to applications to commit and committal orders are there to be obeyed and to protect the contemnor, if there is non-compliance with the requirements which do not prejudice the contemnor, to set aside the order purely on the grounds of technicality is contrary to the interests of justice.
In Mercantile Group (EUROPE) A.G. v Aiyela, an order had been made at first instance against a person described as a third party against whom no cause of action lay. Various members of the Court of Appeal upheld the order. Steyn L.J. thought that it was “just and convenient that the court should have jurisdiction to make such orders.” Sir Thomas Bingham M.R. argued for a jurisdiction such that the “armoury of powers available to the court to ensure the effective enforcement of its orders ....” I am in full agreement that it is of the first importance that the courts have all such powers as are necessary for the purpose of enforcing its orders. The question here, however, is not whether the court would have had the power to make the coercive orders proposed in the letter of 27th June. If properly framed, notified and justified by evidence they might well have been appropriate orders.
Insofar as we are concerned at this point in the present case with coercive measures, we must decide whether the court can order a person to take positive steps to reverse transactions alleged by the plaintiff to be wrongful by reason of a finding of a particular but different finding of contempt.
The position seems to me to be clear. A person, who has been found guilty of contempt of court, may be required by an order of a court to purge his contempt. Where, following a finding of contempt, a person refuses to obey the court order, he may be imprisoned by order of the court until he undertakes to obey the order, i.e., purges his contempt. Imprisonment is not the only remedy. In certain types of case, a court has been known to impose a daily or other periodic fine. In the case of a corporation, assets may be sequestered.
The point is, however, that the contemnor is required to cease and desist from doing the act which he has committed and which has been held to be a contempt or, where appropriate, to act positively so as to remedy the wrong. In either event, it is the contempt which must be purged. I have not come across any case where a contemnor has been required, pursuant to the contempt jurisdiction, to undo an act in respect of which he has not been found to be in contempt. Counsel for the appellant repeatedly submitted that there was no authority for the proposition advanced on behalf of the Bank that coercive orders could be made on 29th June and arising from the finding of contempt made on 26th June, as it was put “irrespective of any finding of contempt” and for the purpose generally of protecting the order of Clarke J. No such authority has been produced.
The Bank submitted that, in circumstances where a number of breaches of the order had been established beyond reasonable doubt, the coercive orders sought were appropriate to protect the remaining parts of the order, rather, as it was submitted, than have a situation where each individual contempt must be alleged, proved and brought back before the court for that purpose and a further order sought.
The Bank also relied, in support of its proposition, on two aspects of the evidence.
Firstly, it said that the evidence established that the appellant was party to a plan or scheme, amounting to a conspiracy, with other members of the Quinn family to put assets out of the reach of the Bank.
Secondly, it was said that certain particular pieces of evidence had emerged in the course of the contempt hearing before Dunne J and, at a later point, in the disclosure affidavit sworn by the appellant.
It would not be right for this Court at this point and on this appeal to comment on the strength of the evidence available to the Bank in respect of the alleged participation by the appellant in the plan or scheme to put assets beyond the reach of the Bank. There is striking evidence in the appellant’s own affidavit of 20th July 2012.
The central point is, as counsel for the appellant repeatedly emphasised before the High Court, that the Bank never sought to amend its notice of motion so as to allege a broader range of acts of contempt against the appellant. Counsel for the Bank, in the course of the appeal correctly and properly explained that, at the time of issue of the notice of motion, the Bank did not have sufficient evidence to allege any act of contempt of court against the appellant other than in respect of the single matter of the US$500,000 transaction. The logic of that perfectly correct position is that, in the event that the Bank wished to allege other acts of contempt against the appellant, they should have taken steps either to apply to the High Court to amend the existing notice of motion or to issue a new one.
I cannot accept the argument of convenience advanced by the Bank that it should not be necessary have a situation where each individual contempt must be alleged, proved and brought back before the court for that purpose and a further order sought. Those are simply the demands of respect for justice and the rule of law.
I said in my judgment in McFeely v Dublin City Council, cited above:
Having referred to the provisions of Order 44 of the Rules of the Superior Courts, I also said:
The object of these rules is to comply with the obvious need to respect fair procedures where a person is at risk of being imprisoned, that is to respect the rule of audi alteram partem. It is inherent in this system that the person be put on notice of the nature of the contempt alleged against him. In a case where the charge is that he is in breach of a court order, he should be told what the order is and how he is alleged to be in breach. It seems to me axiomatic that these procedures must be observed before the court makes a finding that the person is in breach of the order. That is what the contempt consists of.
The procedural defect in the McFeely case was that the High Court heard an inquiry into whether the respondent had committed contempt of the court order, before any notice of motion for attachment and committal was issued. At the subsequent attachment hearing, the court held that it had already found the respondent to be in contempt. In that case, the party had been found guilty before he had received notice of the complaint against him.
The procedural problems in the present case arose in a different way. There was, in the first instance, a perfectly fair and proper hearing on foot of a notice of motion alleging specific acts of contempt against three respondents, but only one against the appellant. The appellant was charged with a breach of the order of Clarke J. He was, in effect, and as I have said correctly, guilty as charged. In that respect, the appellants can make no complaint.
What then occurred was that, in the guise of further consideration of the contempt finding, a wide range of new orders were sought against the appellant. While described as coercive orders, they went far beyond the subject-matter of the single finding of contempt. They could not truly be regarded as coercive measures. In their content, they could conceivably have formed the subject-matter of an application for interlocutory injunctions. For the reasons already given, the order of 29th June cannot be regarded as and did not purport to be an order by way of interlocutory injunction. If such an application had been made, the Bank would have had to apply by way of notice of motion grounded on affidavit. It would have had to justify the grant of what would have amounted, in the main, to a large number of mandatory injunctions. The appellant would have had the right to file a replying affidavit. None of that was done.
Finally, and of crucial relevance to the order made on 20th July imprisoning the appellant indefinitely until he purges his contempt, the Bank would have been obliged to comply with the requirements of Order 44 of the Rules if they were to apply for attachment and committal for breach of the new orders. That was not done.
The Bank relies, in its written submissions on the appeal, on a large number of matters which they say were disclosed by the appellant in his disclosure affidavit of 20th July, which, it is said amount to further serious breaches of the order of Clarke J. The Bank may well have justifiable grounds of complaint. Nobody could doubt the seriousness of the matters alleged. The problem is that no notice of motion had been served seeking attachment or committal on foot of those allegations. The appellants faced the risk of being imprisoned for his failure to comply with a large number of requirements of the order of 29th June with no notice.
Furthermore, the Bank cites a large number of acts of alleged failure by the appellant with the coercive orders. Again, none of these were the subject-matter of the contempt motion served in February.
The Bank seeks to answer any concerns regarding procedural fairness by saying that counsel for the appellant expressed themselves anxious to proceed with the matter on that day. Counsel could not conceivably be taken on that basis to have consented to a procedure whereby their client was to be sentenced for acts of contempt of court going beyond the finding of 26th June.
Regrettably, the procedures followed by the Bank in respect of the appellant, after 26th June fell far short of what is required and should be expected. The Bank was entitled to seek appropriate orders flowing from the finding of contempt of court made by Dunne J. on 26th June but not otherwise. In the result, its actions were procedurally and substantively flawed: procedurally, because of absence of notice; substantively because of the assumption that coercive orders could be granted without connection to the finding of contempt.
None of this is to say that the Bank does not have strong grounds for pursuing the appellant in respect of all or any of the matters the subject-matter of the coercive orders of 29th June. But the Bank must follow appropriate procedures. It is right and necessary that the Bank take steps to protect the integrity of the orders of the court. That is to pursue the interests of justice, respect for the courts and the rule of law. However, it is equally of the essence of the administration of justice that any person whose imprisonment is to be sought be given clear, adequate and fair notice of the order he is alleged to have infringed and the manner in which he is alleged to have done so. Nothing less can satisfy the requirements of law and justice.
In the light of the foregoing reasons, I propose the following orders. I would dismiss the appeal against the finding of contempt made by the High Court on 26th June 2012 by reference to paragraph 3 of the notice of motion dated 13th February 2012 and affirm that part of the order. I would also dismiss the appeal against the imposition of three months’ imprisonment imposed by the order of 20th July 2012 and affirm that decision.
I would order that that the coercive orders of 29th June be set aside insofar as it relates to the appellant, save in respect of paragraph A, ordering disclosure, paragraph B granting liberty to apply for certain injunctions, paragraph C providing for the appointment of receivers and paragraph J. 31 a and b. Each of these orders was capable of being justified by reference to the original finding of contempt. Furthermore, the appellant claimed on 20th July that he had complied with or was complying with those requirements. Neither the disclosure order nor the appointment of the receiver figured significantly in argument on the appeal.
There was no distinct consideration in the High Court on 20th July 2012 of the question of whether the appellant should be committed to prison until such time as he should purge his contempt in respect of his participation in the payment of US$500,000, the subject of paragraph 3 of the notice of motion, considered on its own. Thus, the order now made does not prevent the Bank from making a further application to the High Court in that respect.
This is the appeal of the fourth-named defendant (originally the fifth-named defendant) Sean Quinn Junior against certain sentences of imprisonment imposed upon him on the 20th July, 2012, by the High Court (Dunne J.). The orders are complex and not entirely consistent one with the other. Accordingly, rather than state their effect here I will set out the relevant portions below. The case which the first-named plaintiff (“the Bank”) made on the hearing of this appeal was that on the 20th July, 2012 the plaintiff had been committed to prison for three months by way of penalty for criminal contempt and that on the same day he had separately been committed to prison “for an unlimited period of time”.
Insofar as the indefinite sentence of imprisonment, imposed in order to secure compliance with coercive orders made in the High Court is concerned, I agree with the Order proposed by Mr. Justice Fennelly to the effect that the coercive orders must be set aside. The rest of this judgment, accordingly, is concerned with the punitive order of three months imprisonment. In fact, this sentence expired on Friday last having been served, in full and without any remission, by the appellant. But he maintains this appeal as he is entitled to do, for the purpose of attempting to set aside the order finding him guilty of a criminal contempt. The sentence has been served in full, and nearly all of it served before the result of the appeal was announced, because the Bank objected to a stay being placed on the order pending appeal. It is my view that this action of the Bank, and the language in which its objection was phrased, casts considerable light on its true motivation for pursuing with avidity the imprisonment of the appellant.
The first-named plaintiff in this matter, the Irish Bank Resolution Corporation Limited, is the successor, insofar as these proceedings are concerned, to Anglo-Irish Bank. Anglo was, to all appearances, one of the stars of the Celtic Tiger years. Its growth was extraordinary in its rapidity and extent. Its fall was so rapid that during the year 2008 its shares were found to have lost 99% of their value. When, in September, 2008, after the collapse of Lehmann Brothers, Anglo was about to collapse, the Government took the view that it was simply too big to be permitted to fail and decided on the guarantee of Anglo and the other Irish Banks the cost of which for good or ill has dominated the Irish economy since the 29th September, 2008, and seems likely to do so for years to come.
The Quinn group of companies, with which many of the individual defendants are intimately associated, and which Mr. Sean Quinn Senior founded, was equally a star of the Celtic Tiger era. It started in the cement business and rapidly expanded to the point where it ran an enormous insurance company and acquired an extraordinary portfolio of property assets, mostly abroad. It too has collapsed and administrators and receivers have been appointed to many of the companies in the group. Mr. Sean Quinn Senior and his family connections have been effectively divested of control of the companies and there has been extensive litigation between the Bank and the companies and the individual members of the Quinn family. It is correct to say that this litigation has been fought on both sides with extraordinary bitterness.
Each side considers that the other has perpetrated grave injustices against it. The Bank considers that the Quinn interests have failed to discharge their liabilities to Anglo and thus significantly increased the difficulties which affect that company, its creditors and successors. The Quinns’ consider that Anglo have ruined them by treating them in a cynical and manipulative fashion and in particular by inducing certain of them to borrow money for the purpose of attempting to prop up the Anglo share price by the purchase of its shares, when the latter were in, or approaching, freefall. They consider that the proceedings taken against them are an attempt to saddle them with losses largely caused in the first place by their involvement, wittingly or otherwise, in an Anglo devised and Anglo-promoted scheme to save Anglo itself. They consider that enormous sums covered by the loan contracts which Anglo are attempting to enforce are tainted with illegality by Anglo’s own actions; that the Bank has acted unlawfully and destroyed the Quinn group in the process. There are criminal proceedings outstanding about some aspects of the Bank’s dealings with the Quinns.
The Quinns do not deny that, in those circumstances, they or certain of them attempted to remove their assets – lawfully as they see it – from the capacity of Anglo to lay hands on them. They deny however that they did so in a manner or at a time that was in breach of any Court order.
In February of this year the Bank issued a Notice of Motion directed at the jailing of Sean Quinn Senior, Sean Quinn Junior and Peter Darragh Quinn for contempt of court. Sean Quinn Senior and Peter Darragh Quinn were accused of six actions constituting, in summary, breaches of the Courts orders which they say were directed at protecting their security; Sean Quinn Junior was allegedly involved in one such action only involving a payment of $500,000 to a lady, Ms. Puga, with a role in a Quinn associated company in Ukraine. Accordingly, Sean Quinn Junior was, on the basis of the Bank’s own motion, apparently the least involved in what the Bank alleged to be an unlawful scheme to defeat their claims. Nonetheless, on the proposal of the Bank it was Sean Quinn Junior who went to jail while the proceedings against his father were adjourned.
It is manifest that the Quinns have questions to answer, in legal proceedings and perhaps otherwise, about the matters which are the subject of the dispute between the Bank and themselves. It is, at least to me, no less obvious that the Bank has questions to answer both in the legal actions in which issue has been joined and in a wider forum as well. But the Bank will not have to answer questions while the legal focus remains exclusively on their application to jail the Quinns. This is part of the litigious advantage which may derive from bringing a contempt application against one’s opponents.
It is a feature of the present phase of the litigation that both at the time of the High Court proceedings, and at the time of the appeal to this Court, significant evidence which the Bank intended to deploy was widely and one-sidedly publicised, having somehow come into the possession of media organs, firstly The Mail on Sunday and secondly the Irish Times. When evidence is deployed in court, the response of the other side will normally be virtually immediate and media coverage of the case must therefore cover both sides simultaneously. But when evidence on one side is published to the media without the other side being able to reply, one party derives significant litigious advantage and the other is correspondingly damaged. One sided publicity, especially for highly dramatic allegations, is sometimes aimed at building up a “head of steam” in favour of one party and against the other. There is of course no evidence to show how this material came into the hands of the media before it was opened in court, but as Mr. O’Moore S.C. for the appellant said in the course of the hearing, there was no conceivable reason for his side to leak it. It does not necessarily follow from that that the Bank were responsible for the one sided publicity. There are other possibilities which are not beyond the bounds of possibility.
The Orders of Imprisonment
There are no fewer than three orders of the High Court relating to the incarceration of the appellant. They reveal a confused and contradictory picture.
The first is entitled “Order of Committal in cases other than judgment debtors”. This is addressed to the members of An Garda Siochana and recites:
Whereas lately in the High Court it was adjudged that Sean Quinn Junior for default by his failure to comply with the orders of the High Court made on various dates between the 27th June 2011 and the 20th July 2011 together with the order dated the 29th June 2012 was guilty of contempt of the High Court and do stand committed to prison for the said contempt.
The effect of part of the Order is then set out:
You are hereby commanded to arrest the said Sean Quinn Junior and thereupon to lodge him in Mountjoy prison there to be detained for a period of three months from the date hereof unless discharged in the meantime pursuant to further order of the High Court.
This Order is dated, and was apparently perfected, on the 20th July 2012. It prescribed committal to prison for a fixed and limited period of three months namely for a period of three months. This is a sentence of three months for criminal contempt: there is nothing about an indefinite, coercive committal “for an unlimited period”.
On the same day, however, there is another Order in the same proceedings which, after certain introductory recitals says:
And said counsel for the plaintiff intimating to the Court that there is non-compliance on the part of the said defendants with the terms of the said order.
The Order continues:
And the Court being satisfied that the said second fifth and ninth named defendants herein are guilty of contempt for failure to comply with the said interim and interlocutory orders of the High Court.
The Court doth adjudge that the said second fifth and ninth named defendants are guilty of contempt of court for failure to comply with the interim and interlocutory orders of the High Court made on various dates between the 27th June 2011 and the 20th July 2011 together with the said order dated the 29th June 2012.
The effective portion of the Order is then made in the following terms:
And accordingly it is ordered that the said plaintiff be at liberty to issue Orders of Committal (2) directed the Commissioners and members of the Garda Siochana and to the Governor of Mountjoy Prison against the said fifth and ninth named defendants to arrest them and thereupon to lodge them in the said Mountjoy Prison there to be detained for a period of three months.
Liberty to apply to the said defendants in the event of them wishing to purge their contempt in the course of the said detention period.
And on hearing said counsel for the defendants on the issue of a stay on the order committing the said defendants to prison
And said counsel for the plaintiff opposing same
The Court doth refuse same ....
This is a sentence of three months, but with liberty for the prisoners to apply to purge their contempt. This suggests a coercive sentence for Civil contempt, capped at three months. This is different in nature and meaning to the first order. But the confusion does not end there.
There is then a third Order of the High Court in the same matter dated the 20th day of July, 2012 but said to be perfected on the 30th day of July 2012. “Perfecting” is the process whereby an order is formally done up and issued as an order of the Court.
This Order appears to be corrective of the previous Order whose effect is summarised above. This third Order recites:
Upon reading the Order herein of even date and it appearing that there is an omission therein concerning the non-reference to the term of imprisonment imposed in respect of the coercive element of this Order as against the fifth and ninth defendants therein.
And notwithstanding the punitive element of the said Order in respect of which a three month term of imprisonment was imposed on the said fifth and ninth named defendant they having been found guilty of contempt of court for failure to comply with the said interim and interlocutory Orders of the High Court made on various dates between the 27th June 2011 and the 20th July 2011 together with the Order herein dated the 29th June 2012-10-22
It is ordered that the said plaintiff be at liberty to issue Orders of Committal (2) directed to the Commissioner and members of the Garda Siochana and to the Governor of Mountjoy against the said fifth and ninth named defendants to arrest them and thereupon to lodge them in Mountjoy Prison there to be detained for an unlimited period of time until they come before the Court and purged their contempt in respect of the coercive elements of the said Order ....
These Orders appear to me to evidence an unfortunate level of confusion on the important topic of for how long the appellant was ordered to be imprisoned and for what.
It is well established in the authorities set out below that punitive imprisonment imposed for a criminal contempt of court must be for a finite, fixed period of time.
On the other hand, coercive imprisonment in order to enforce compliance in the future with a court order is imposed for civil contempt and can be indefinite in duration.
It appears to me that the difficulties which have arisen in relation to the Order are based on an unfortunate degree of confusion between civil and criminal contempt. The last Order, that perfected on the 30th day of July 2012 after the defendant had commenced his sentence, recited that there was “an omission” in relation to the first Order bearing the date 20th July 2012, and perfected ten days earlier than the rectifying Order. This omission is “concerning the non-reference to the term of imprisonment imposed in respect of the coercive element of this Order as against the fifth and ninth named defendants”. It is only in the third order that the spectre of imprisonment “for an unlimited period of time” is introduced. To make room for it, the three month sentence is consigned, unambiguously in my view, to the status of a fixed sentence for criminal contempt, as it had been in the first, but not in the second, perfected order.
My reasons for the foregoing conclusions are as follows:
The previous Order of the 20th day of July 2012 does, contrary to what is recited in the third Order, appears to me to contain a reference to coercive imprisonment. As appears from the extract from it set out above, the appellant was directed to be lodged in Mountjoy Prison “there to be detained for a period of three months” but was given “liberty to apply in the event of wishing to purge [his] contempt in the course of the said detention period”.
A period of imprisonment, in respect of a contempt, which can be purged by compliance with an Order, appears to me manifestly to be coercive and not punitive. Therefore it appears to me that the third Order is incorrect in referring to “an omission .... concerning the non-reference to the term of imprisonment imposed in respect of the coercive elements of this Order ....” But the practical effect of the third Order is dramatic. Instead of a term of imprisonment of three months capable of being terminated by purging the contempt, the appellant is in the third Order sentenced to be lodged in Mountjoy Prison “there to be imprisoned for an indefinite period of time”. The three month sentence is stated to be punitive and fixed in duration.
These are manifestly entirely different things. But the appeal appeared to me to be conducted on behalf of the Bank, at whose request the appellant was imprisoned, on the basis that he received a three month sentence by way of punishment for criminal contempt and an indefinite coercive sentence to ensure compliance with the Orders of the Court. But this is by no means clear from the Orders.
Contempt of Court, Criminal and Civil
The Irish law of contempt of court is amorphous. It is extremely difficult for a lay person to understand, principally because the term “contempt of court” is used inexplicably, to mean several quite different things and it is not always clear which of them is intended. Even when the term is used by lawyers – and even judges – the distinctions are not always clear. In part, this is because, from the point of view of a party seeking to use the law of contempt to have another person fined, compelled to comply with onerous requirements, or imprisoned, it can be advantageous to cultivate a certain vagueness in the law so as to avoid the strict requirements normally and correctly imposed on a person who wishes to have his opponent stigmatised, deprived of his liberty, and confined in a convict prison.
For many years the leading case on the subject, which appears to me to have the virtue of clarity, was the judgment of this Court in Keegan v De Burca  I IR 223. There, Ó Dálaigh C.J. had this to say:
The distinction between the Civil and Criminal contempt is not new law. Criminal contempt consists in behaviour calculated to prejudice the new course of justice, such as contempt in facie curiae, words written or spoken or acts calculated or prejudiced the due course of justice or disobedience to a writ of habeas corpus by the person to whom it is directed – to give but some examples of this class of contempt. Civil Contempt usually arises where there is a disobedience to an order of the Court by a party to the proceedings and in which the Court has generally no longer interest to interfere unless moved by the party for whose benefit the order was made.
Criminal contempt is a common law misdemeanour and, as such, is punishable by both imprisonment and fine at discretion, that is to say without statutory limit, its object is punitive: see the judgment of this Court In Re Haughey. Civil contempt, on the other hand, is not punitive in its object but coercive in its purpose of compelling the party committed to comply with the order of the Court, and the period of committal would be until such time as the order is complied with or until it is waived by the party for whose benefit the order was made.
But in Shell E.P. Ltd. v McGrath  1 IR 671 Finnegan P. held that the classic passages quoted above were merely obiter insofar as they concerned civil contempt. And he held that the definition of civil contempt was “not completely accurate”. The learned President felt that there might be, in a civil or coercive order, a criminal or punitive element. In so holding he followed the decision of
Ross Company Ltd. v Swan  ILRM 417, a decision of O’Hanlon J. in the High Court. This, if followed, would tend to blur the distinction between Criminal and Civil contempt.
This divergence of view perhaps derived from what Keane C.J. said in Flood v Lawlor  3 IR 67:
.... there may be some room for a difference of view as to whether a sentence imposed in respect of civil contempt is exclusively – as distinct from primarily – coercive in its nature in civil proceedings generally ....
But, the learned Chief Justice concluded that:
.... whereas here the proceedings are inquisitorial in their nature and the legislature has expressly empowered the High Court to secure compliance with the orders of the Tribunal, it cannot be said that a sentence imposed in respect of a contumelious disregard of the orders of the Tribunal and the High Court is coercive only in its nature.
In Lawlor v Flood , the proceedings in question were those of a Tribunal of Inquiry so that the case is not directly relevant to the present one. In relation to non-inquisitorial proceedings, such as the civil proceedings between the appellant here and his relations and the Bank, one cannot do more than echo Keane C.J. in holding that “there may be some room for a difference of view”. This “difference of view” does not suggest the clarity and precision normally required in a procedure which can lead to loss of liberty.
This appears to me to be a very unsatisfactory situation especially from the point of view of one at risk of his liberty. It is twenty years now since the Law Reform Commission urged the need for statutory reform in this area and some thirty-one years since such reform took place by statute in the neighbouring jurisdiction. It is most unfortunate that no positive steps have been taken here with the result that this fraught matter has come on for resolution in an uncertain state of the law.
However, in my view the authority of Keegan v De Burca is unaffected by the later decisions. Two of these are High Court decisions and the more recent Supreme Court decision does not purport to resolve the issue except in relation to Tribunal proceedings. Accordingly I propose to follow the judgment of this Court in Keegan v De Burca which in my view remains the authoritative statement of the law until reversed by this Court or overruled by statutory intervention. Accordingly I adhere to the clear distinction between criminal contempt and civil contempt which is there set out. This requires a clear distinction to be explicitly made as to whether an order for imprisonment is civil or criminal in nature.
In Keegan, the defendant was attached and committed for contempt of court when she refused to answer a relevant question which the judge had asked. She was imprisoned indefinitely, until she purged her contempt. The Supreme Court held that the contempt disclosed on the above facts was a criminal contempt and that the penalty should have been by way of imprisonment for a fixed period, and not an indefinite period. So the order was vacated.
The application of this authority to the present case will be considered below. It is first necessary to turn to some other aspects of the law of contempt, which are well and uncontroversially established in Irish law.
The most recent Irish authority is the decision of this Court in Dublin City Council v Thomas McFeely  IESC 45. There, Fennelly J. quoted Order 44 Rule 3 of the Rules of the Superior Courts as follows:
Save in respect of committal for contempt in the face of the Court or committal under Rule 4, no Order of Attachment or Committal shall be issued except by leave of the Court to be applied for by Motion on Notice to the party against whom the attachment or committal is to be directed.
He continued, at para. 10 of the judgment:
The object of these rules is to comply with the obvious need to respect fair procedures where a person is at risk of being imprisoned, that is to respect the rule of audi alteram partem. It is inherent in this system that the person be put on notice of the nature of the contempt alleged against him. In a case where the charge is that he is in breach of a court order, he should be told what the order is and how he is alleged to be in breach. It seems to me axiomatic that these procedures must be observed before the Court makes a finding that the person is in breach of the Order. That is what the contempt consists of.
In my judgment in McFeely, I asserted the importance of the contempt jurisdiction and continued, at para. 8:
But the exercise of this power must, in my opinion, always be a matter of last resort, embarked on with manifest caution and great reluctance. This is because the contempt of court procedures have the potential to deprive a citizen of his or her liberty, not to mention property, without their being accorded the elaborate but very necessary protections normally provided by the procedures of a criminal trial.
There then followed this significant passage, which I wish to reiterate in the present case:
If a citizen could be summarily imprisoned, or fined a huge sum of money, without all proper meticulous attention being paid to the procedures which exist for his protection, then the liberties of citizens generally would be undermined. Everyone threatened with imprisonment for contempt, whether protestor, picketer or property developer is entitled in the public interest, to a meticulous observation of procedural justice, all the more so since the nature of the procedures involved deprive him of the right to trial by jury. It is important that the Court Order allegedly breached should be indicated with absolute clarity and precision in the Motion for attachment and committal and that the evidence alleged to establish breach of that Order should be led in proper form after due and timely service of the Motion for attachment and committal. This Motion will normally be issued by a party and adjudicated upon, quite independently, by a judge.
These passages are of vital importance to the resolution of the present case. In my view, they are merely an exposition of the law as it stood and by no means a new departure. One could find legal authority for the proposition that an application to commit for contempt has to be approached with great caution, over a period of many centuries. This is because it is a procedure which allows a person to be locked up, sometimes “without limit of time”, without the procedures and protection which normally apply when a person is on risk of his liberty. It is therefore essential, in the public interest (and not simply to protect the rights of an individual), that there be a “meticulous observation of procedural justice” in such a case. The most important aspect of procedural justice is, as Fennelly J. put it “In a case where the charge is that he is in breach of a court order, he should be told what the order is and how he is alleged to be in breach. It seems to me axiomatic that these procedures must be observed before the Court makes a finding that the person is in breach of the order”. The nature of this obligation to notify the person whose imprisonment is sought is that “the order allegedly breached should be indicated with absolute clarity and precision in the Motion for Attachment and Committal and the evidence alleged to establish breach of that order should be led in proper form after due and timely service of the motion ....”
The Bank seeks the imprisonment of Sean Quinn Junior
The Notice of Motion seeking the attachment and committal of the appellant was in a particular form, and that form is also of great importance to the issues on this appeal. The appellant was one of three people against whom orders for attachment and committal were sought. The other two, Sean Quinn Senior and Peter Quinn were alleged to have committed breaches of Court Orders in six different ways. A single allegation only was made against the appellant, Sean Quinn Junior. This was in relation to the payment of $500,000 in the Ukraine. The appellant was not alleged to have participated in a wider conspiracy or to be responsible, vicariously or otherwise, for the other actions alleged against the other respondents. If it were intended to make such an allegation, that would have to be explicitly stated.
Nature of the proceedings
The proceedings against the appellant are contained in para. 3 of the Notice of Motion dated the 13th February, 2012. There it is stated that his attachment and “if necessary” committal is sought for his contempt in failing to comply with the interim and interlocutory Orders of this Honourable Court made on various dates between the 27th June, 2011 and the 20th July, 2011 by:
directing or participating in a process whereby on the 30 August, 2011 U.S. $500,000 cash at Bank of an IPG subsidiary company was paid into the personal Bank account of the General Director of that Company contrary to the interests of the plaintiff and other than in the ordinary course of business, immediately prior to the defendant losing control of the subsidiary company on 31 August, 2011.
This was the allegation against the appellant. There is no other. The remedy sought was his attachment and committal i.e. his imprisonment. He was in fact imprisoned on foot of this application, it appears, for a fixed period of three months.
The conclusion which I draw from the foregoing facts is that the proceedings in the High Court on foot of the Notice of Motion which led to an Order for the appellant’s imprisonment were a summary criminal trial in the High Court. I say this for the following reasons:
The proceedings were expressly directed at securing the imprisonment of the appellant, and they succeeded.
The appellant was therefore imprisoned on foot of the proceedings, and this imprisonment was for a fixed, definite period. This is the effect of the first and third orders, above.
The proceedings were, accordingly, proceedings for the offence of criminal contempt, a Common Law misdemeanour.
The proceedings were summary proceedings. They were not conducted on indictment and were not conducted with a jury. The appellant was not furnished with Statements of Evidence and was given no particulars at any time of any specific acts he was alleged to have performed to bring about the transfer in question. It could not be contended, and was not contended that his presence or participation was necessary in order to bring about that transfer. The case against him was entirely circumstantial.
The Supreme Court in Keegan v De Burca referred to In Re Haughey  IR 217 for the proposition that “criminal contempt is a Common Law misdemeanour and, as such, is punishable by both imprisonment and fine at discretion, that is without statutory limit, its object is punitive.”. In the judgment of the Court in Haughey the Supreme Court identified two cases which it considered to establish that “the High Court tried charges of contempt without a jury, i.e. summarily” pp 252/3.
The significance of the foregoing is that the assessment of the conduct of the proceedings in the High Court, and of the appellant’s complaints about them, must proceed on the basis that those proceedings were in the nature of a summary criminal trial conducted by a judge sitting alone.
The classic Irish authority on the conduct of an appeal to this Court from the decision of a judge sitting alone is the very well known case of Hay v O’Grady  IR 210. This decision was given not long after the passing of the Courts Act 1988 which provided that actions of certain kinds would be tried by a judge sitting alone rather than, as theretofore, by a judge and jury. This development required the Supreme Court in turn to consider the proper conduct of an appeal from a decision reached by a judge alone. The principles to be applied are set out in four numbered paragraphs on p.217 of the Report. They emphasise the great deference to be accorded to clear findings of primary fact made by a trial judge (which findings can rarely be overturned on appeal), and the much greater scope for an appellate court to draw its own conclusions “from the combination of primary fact and proper inference”.
Having set out the principles referred to, McCarthy J. speaking for a unanimous Court, went on to make a finding of great significance for the present case, at numbered para. 5:
These views emphasise the importance of a clear statement .... by the trial judge of his findings of primary fact, the inferences to be drawn, and the conclusion that follows.
In my view the approach mandated to the conduct of an appeal of the decision of a judge sitting alone in a negligence action, as Hay v O’Grady was, are also relevant to an appeal against the decision of a judge conducting a summary criminal trial in the High Court. Because it is a criminal trial it must, to comply with the Constitution, be conducted “in due course of law” (see Article 38.1 of the Constitution). The procedures to be applied and the obligations of the trial judge are not less onerous in such a trial than in a civil action for damages for negligence. Those obligations relate both to the conduct of the trial, the admission or rejection of disputed evidence and other decisions incidental to the conduct of a criminal trial where the defendant disputes the allegation, and also to the obligation to make at the conclusion a clear statement, firstly, of the findings of primary fact; secondly, of the inferences to be drawn from those findings of fact and thirdly of the conclusions that follow.
Hay v O’Grady has now held sway unchallenged for twenty years. It is possibly the most frequently cited decision on the hearing of appeals in this Court. It would be an understatement to say that it is an extremely well known case. It was cited by counsel for the appellants in the present case. It was not specifically addressed by the Bank.
Summary criminal trials for contempt are not a common form of litigation and when they do arise, they do not often take the form that this one did. That is because, as the reported cases show, the factual issues that arise in practice on an application for attachment and committal are usually very simple. Of the three modern Irish cases cited above, two related to a refusal to answer a question before a court or a tribunal: the scope for dispute on the basis facts was very limited. Other contempt applications relate to circumstances where the facts are not disputed, or where there is very limited scope to dispute, such as refusal to obey orders to leave premises, or to convey premises to another party, or to abstain from picketing or protesting in a particular way.
The present case is of quite a different nature. The appellant was alleged to be in contempt of court by reason of “directing or participating in a process” whereby a sum of money in a foreign Bank account was paid into another foreign Bank account. This was very hotly disputed in evidence over fifteen days and several days of argument. There was no direct evidence of an act found to be an act of direction or participation. The issues were complex, went on over a very long period, were the subject of most extensive legal submissions and were fought tooth and nail on either side. In those circumstances there was a manifest need for a clear statement of the primary facts found, the inferences that were drawn from them, and the conclusions that followed.
Having read the judgment of the learned trial judge, it appears to me that there are only two specific findings of primary fact made in relation to Sean Quinn Junior. These are, firstly, that he travelled to Kiev in time to be present there on the 30th August, 2011 and, secondly, that while there he attended a meeting with, inter alia, Ms. Puga. There is no specific statements on the part of any inferences can be drawn from those two facts. They appear to me to be manifestly incapable of grounding an inference that Mr. Sean Quinn Junior himself either directed or participated in the alleged payment to Ms. Puga. No such inference was set out in the judgment. There were, of course, other findings about that payment but none that involved Mr. Quinn Junior.
An omnibus approach
The appellant has put forward various discrete critiques of the decision in the High Court, both in relation to the decision to convict him of criminal contempt and in relation to the sentence imposed. It appears to me that most of these criticisms are aspects of a more general critique: that the learned trial judge failed to focus on the specific case made against the appellant, as opposed to the other two respondents or those respondents together with other persons not before the Court and therefore:
Failed to give any or any proper attention to the fact that there was no evidence against the appellant of any one specific action done by him by way of directing or participating in the payment of U.S.$500,000 to Ms. Puga, but only of the two facts mentioned above.
Took into account in the case against the appellant all of the evidence, including evidence of statements and actions which were admittedly not those of the appellant, but of other defendants.
Took into account against the appellant on the general issue of guilty or not guilty evidence which she herself admitted into evidence only for specific purposes i.e. as to credibility or “to show a state of mind”.
Found the appellant guilty, not only of the single charge which the Bank had brought against him but of participation in a larger conspiracy the other respondents which not even the Bank had alleged against him. Thus, when counsel submitted that the appellant had been the subject of only one allegation, the learned trial judge stated that all the respondents “were involved in a conspiracy .... to deprive Anglo of access to assets”. She further said that although the appellant was involved in one aspect only, he “was involved in the overall strategy”.
That was certainly the Bank’s view but it was not the allegation it had brought against Mr. Quinn Junior.
This is perhaps the most thorough going of the complaints made. It suggests that, in the course of a summary criminal trial (as I have found the proceedings to be) in which there was no evidence of any action by the appellant which either directed or facilitated the payment of $500,000 to Ms. Puga, the Bank fell back on a more general allegation that he was involved in a conspiracy, and that he was involved in an “overall strategy”, on the basis of which he was liable to be convicted despite the absence of specific evidence.
It is hardly necessary to say how foreign to the basic principles of a trial conducted in due course of law these things are. It is simply not permissible to bring a citizen before a court with the object of having him locked up on one charge only and then to fall back on the proposition that, (though there is no direct evidence on that charge), there is evidence of a more general nature that he was up to no good, or involved in an “overall strategy”, whether or not it involved the allegation originally made against him.
It is, of course trite law that where co-defendants are tried together, that is for the purpose for administrative convenience and the saving of expense. It does not mean that the acts, statements, or admissions of one co-accused is admissible against another, any more than the acts, statements or admissions of a person who is not party to the proceedings at all are admissible. The only general exception to this rule is in relation to conspiracy. Thus, in the well known Irish text book, Criminal Law by Charlton, McDermott and Bolger (Dublin 1999) it is said at para. 4.122:
It is a rule of the law of evidence that the actions and statements of a conspirator done or made in pursuance of the conspiracy are admissible against his co-conspirators. This is an exception to the general rule that an act or statement by an accused is only admissible against his co-excused if done or said in his presence, in other words that the same rule applies in respect of what any person said or did in the presence of the accused. The conspiracy rule would appear to work to the advantage of the prosecution. Joinder of a conspiracy count, where two or more accused are being charged with the substantive offence, would appear therefore to operate gravely to the detriment of the accused.
An even more basic rule is stated in the same work at para. 4.189 (p.300):
Joint trials occur for administrative convenience and require an express instruction to the jury that each accused is to be tried only on the evidence admissible against that accused, separately from the trial of any other accused.
In the present case, there was no allegation, in terms or in substance, of a conspiracy. On the contrary, the Notice of Motion is careful to distinguish between the activities attributed to each individual and particularly careful to distinguish between the single matter alleged against the appellant and the multiple matters alleged against the others also accused of contempt.
But in the section of the judgment dealing with the sole allegation against the appellant (pages 12 to 22), no attempt is made to distinguish the evidence against him from the evidence against the others allegedly involved. It is said, perhaps correctly, that the issue in relation to Ms. Puga focuses on two documents, that lady’s “labour contract” and the document referred to as “Minute No. 21”. Neither of these documents can be connected to the appellant, though there is evidence connecting them with one or both of the others accused of contempt. Minute No. 21, indeed, purports to record the Minutes of a meeting in Kiev attended by Sean Quinn Senior and Peter Quinn, but not the appellant. The signatures on the document appear to be those of Peter Quinn and Sean Quinn Senior. Alterations to the labour contract of Ms. Puga are not in any way linked to the appellant.
It is notable that the learned trial judge expresses her conclusions in this matter at p.22 in the following way:
I have come to the conclusion that Anglo has produced compelling evidence to establish beyond reasonable doubt that the attempted payment to Ms. Puga was brought about by the respondents. The signature of Sean Quinn Senior and Peter Quinn are on Minute No. 21. The signature of Sean Quinn Senior is on Ms. Puga’s labour contract. The main events which led to the transfer of that money occurred (by coincidence, one is asked to believe) on the 30th August, 2011 the day on which Peter Quinn and Sean Quinn Junior attended a meeting in Kiev with Ms. Puga.
It will be observed that this is an omnibus finding against the three respondents jointly and not against Sean Quinn (Junior) specifically. The only specific mention of Sean Quinn (Junior) is as having attended a meeting in Kiev with Ms. Puga on the 30th August, 2011. Other observations about him are negative: the judge did not believe his evidence that he and Peter Quinn did not discuss the purpose of their journey on the “long flight to the Ukraine”. Disbelief on this point in no way adds to the capacity of the only two positive findings of fact made about Sean Quinn Junior to give rise to an inference that he directed or participated in the relevant payment.
It is very noteworthy that the judgment
Does not indicate any single act that Sean Quinn Junior took by way of directing or facilitating the payment in question and
Does not indicate the necessity for Sean Quinn Junior participating in that payment, which could just as easily (on the evidence) have taken place without his involvement.
It is clear from the passage of the judgment to which I have referred that evidence exclusively referable to the two co-accused (such as the creation of the labour contract) are part of the factual matrix which led to the finding against the appellant. This, in my view, is wrong, inadmissible, and grossly prejudicial to the appellant. It would have been quite possible, if it had been thought necessary, to bring against Mr. Quinn Junior an allegation that he had breached the relevant orders by acting in concert with others. But this was not done. The same effect cannot be wordlessly achieved in the judgment, without notice of any kind to the appellant, any more than acts or statements of co-accused are admissible without a charge of conspiracy.
When the appellant was cross-examined in relation to the actions of the other two accused, his counsel naturally objected and emphasised that there was but one single allegation against the appellant. The matter was extensively canvassed in argument but in the end the cross-examination was permitted to proceed on the basis that it went to “credibility” “to show a state of mind”. Answers in relation to collateral questions raised as to credibility are final: the questioner is not allowed to contradict the witness.
But even apart from that consideration, it is trite law, quite as trite as that relating to evidence against co-accuseds, that evidence admitted for one or more specific purpose does not thereby become admissible on the general issue. This is a central point and was the subject of extremely forthright argument on the hearing of this appeal, because it is central to the capacity to justify the finding made against the appellant.
At the appeal Mr. Paul Gallagher S.C. for the Bank contended baldly that “once it’s in it’s in” and “no matter what the basis of admission, it’s in now and cannot be ignored”. I do not believe this position to be correct in law. A leading Irish text book, McGrath on Evidence puts it in this way, at p.13:
Sometimes, the evidence may be admissible for a specific and limited purpose only. For example, under the hearsay rule, out of Court statements are generally inadmissible to prove the truth of their contents. However, such a statement is admissible to prove the fact that it was made. Where such evidence is admitted the trial judge should warn the jury of the limited purpose for which the evidence had been admitted.
Speaking of evidence admitted as to credibility another leading Irish text, Healy and Irish Laws of Evidence (2004) says, at p.12:
.... the statement may only be considered by the jury as evidence bearing upon the witness’s lack of credibility or consistency, but not as evidence probative of any of the facts at issue in the trial. The failure of the trial judge to explain that the witness’s pre-trial account may not be considered when determining proof of the accused’s guilt has led to the overturning of convictions on numerous occasions.
It will thus be seen that the point of view summed up in the phrase, (no matter what the ground of admission), “it’s in now”, was a crude one and unrepresentative of the law. But it appears to me, on a perusal of the judgment, to be part of the basis on which the finding against the appellant proceeded. Certainly, there is no indication whatever of the exclusion from consideration on the general issue of evidence admitted for a limited purpose only.
Critiques of sentence
Quite separately from the above matters, which relate to the circumstances in which the appellant was convicted of a common law misdemeanour, contempt of court, the appellant trenchantly criticises the approach to determining the proper sentence to be imposed on him. Again, not to put a tooth in it, it is alleged that the learned trial judge, on the express proposal of the Bank, imposed an immediate custodial sentence on the appellant not for the purpose of appropriate punishment but for the principle purpose of putting pressure on his father, who was one of the other respondents, to comply with the course of orders which had been made against him. I regret to say that this criticism appears to me to be substantiated.
The appellant submits that on the 18th day of the hearing, the 20th July, 2012, the judge was invited by the Bank, and actually did, imprison the appellant in order to produce a coercive effect on his father. The Bank submitted to the Court that it should consider on whom a punitive sanction – immediate imprisonment – should be imposed. The Bank suggested that such a sanction should be imposed on the appellant, and Mr. Peter Quinn, but that the first-defendant “should not go to prison immediately, that he be there [i.e. at liberty]” to take steps to ensure compliance with the order because it is certainly within his power to do so. (Day 18, p.11).
The appellant protested at this, on the basis that it made him a sort of hostage, which was an improper purpose of incarceration, and “rather medieval” as counsel put it.
The learned trial judge then went on, in the course of her ruling, to say:
And what I propose to do, therefore, is to deal with matters by making an Order of Committal as requested by the Bank at this stage. Far from being a medieval suggestion, as suggested by Mr. O’Moore, I think that this is a practical way of trying to encourage the situation in relation to compliance with the orders. I am equally mindful of the fact that the position in relation to a punitive element is something that remains strongly in my mind as to how this matter ultimately will be dealt with.
Thus, the learned trial judge held that the sentence imposed was “a practical way of trying to encourage the situation”. This “practical way” of doing this was adopted at the suggestion of the Bank. In real life, of course, one does not “encourage” a situation, but only a person. The only conceivably relevant person to be “encouraged” was Sean Quinn Senior. He was to be “encouraged” by locking up his son. That is not a legally recognised basis of a just sentence. But there is no other realistic construction of the Bank’s proposals and the sentencing remarks.
It might be said that the aspect of what the Court did that was in practice coercive of Mr. Sean Quinn Senior was not so much the incarceration of Sean Quinn Junior but the deferment of a decision as to what sentence be imposed on him (the father). But this is quite inadequate as a theory to explain what happened when counsel for the appellant sought a stay on the order for the jailing of the appellant, pending appeal.
Although a summary criminal trial is unusual in the High Court it is in fact the commonest mode of criminal trial in the State, usually conducted in the District Court. When a person is convicted of a criminal charge in that forum he is prima facie entitled to a deferment of the sentence pending appeal. This reflects the fact that he has been deprived of the normal protections of a criminal trial on indictment and in particular of the right to trial by jury. But in this case the Bank insisted that the sentence be served immediately, notwithstanding the appellant’s intention to appeal and the reasons they gave for doing so are most instructive. It was that a deferred sentence would be less practical and effective as an encouragement to resolve the situation than an immediate sentence, commencing that very day.
Form of judgment
Apart from the foregoing there is an overarching criticism advanced by the appellant. This is that the form of the judgment of the learned trial judge does not remotely comply with what is required by the ruling in Hay v O’Grady, cited above. That is, there is no statement of the Court’s findings of primary fact, no statement of the inferences drawn from them nor of the conclusions which follow.
In a case such as the present, an omission clearly to set out the findings of primary fact, the inferences drawn from them and the conclusions, is not a mere technical deficiency. I have already set out what appears from a perusal of the judgment to be the only two express findings in relation to Sean Quinn Junior. Though there are not described as findings of primary fact they appear to me to be in this category. There is no statement of what inference is to be drawn from them and (still more significant in a case like the present), no statement of any other findings of fact from which inferences against the appellant was drawn.
These are significant matters because it makes quite impossible to determine, other than by speculation, what facts were taken into account and what inferences were drawn from them.
Mr. Gallagher S.C. admitted that, insofar as there was a non-compliance with the strict requirements laid down in McFeely, they should be excused on the basis that “the Court has a discretion in light of the evidence now available not to exercise its discretion in favour of the appellant”.
I do not consider an appeal against a sentence of imprisonment summarily imposed to be an occasion for an exercise of a discretion. I consider it to be an occasion for the strict observance of the established principles of the criminal law.
I would allow the appeal and set aside the finding of contempt.
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