Judge refuses to strike out Davy bond deal case
• 5h ago
The High Court has refused to strike out a claim by businessman Patrick Kearney alleging former Davy stockbrokers employees misled him over the onward sale of bonds he had held in Anglo Irish Bank.
Fifteen of 16 former employees, who are being sued along with Davy itself and deny the claims, had asked for the strike out on grounds including that the case was bound to fail.
Mr Justice Michael Twomey said the 15 had raised doubts over Mr Kearney’s claims he was induced by a fraudulent misrepresentation to settle a previous case in 2015 over the bond sale.
The judge said he refused to strike out the latest proceedings because, in this case, Mr Kearney alleged fraud.
There existed, he said, “the possibility of clandestine activity on the part of the defendants, combined with the fact that there is prima facie evidence of a lack of candour on the part of Davy, regarding the transaction in dispute”.
There was a possibility that there may be concealing of evidence which would come to light, he said.
“For this reason, this court cannot say that it is ‘clear beyond doubt’ that Mr Kearney will not succeed, such that his proceedings should be struck out now, without a trial,” he said.
The case arose after Belfast-based Mr Kearney and his company, Kilmona Holdings, approached Davy to sell his bonds.
The bonds were sold for €5.3m in November 2014 to the O’Connell Partnership of 16 employees and managers in Davy.
In the ruling, the judge said there was a clear contradiction between sworn evidence of Mr Kearney that he did not know that the O’Connell Partnership had purchased the bonds until July 2015, on the one hand, and his most recent sworn evidence that he knew this fact in November 2014.
“This is a serious matter and could well have a significant bearing on Mr. Kearney’s credibility when this matter comes to trial,” he said.
In 2015 Mr Kearney and his firm sued alleging his bonds were sold at an undervalue and that there was a conflict of interest on the part of Davy. That case was settled for €1.125m
However, Mr Kearney and Kilmona brought new proceedings after Davy was fined €4.13m by the Central Bank for regulatory breaches arising from the deal.