Bloxham ((in Liquidation)) v Irish Stock Exchange Ltd

• Jurisdiction: Ireland
• Judge: Mr. Justice Cooke
• Judgment Date: 03 July 2013
• Neutral Citation: [2013] IEHC 301
• Court: High Court
• Docket Number: [2013 No. 200 JR]
• Date: 03 July 2013

Bloxham (In Liquidation) v Irish Stock Exchange Ltd

MR JUSTICE COOKE

APPROVED TEXT

COMMERCIAL

JUDICIAL REVIEW

BETWEEN

BLOXHAM (IN LIQUIDATION)

APPLICANT

AND

IRISH STOCK EXCHANGE LIMITED

RESPONDENT

[2013] IEHC 301

[No. 200 J.R./2013]

THE HIGH COURT

JUDICIAL REVIEW

Remedies

Availability of remedy - Public or private law - Alternative remedies - Whether impugned decision amenable to judicial review - Whether impugned decision in realm of private law - Bane v Garda Representative Association [1997] 2 IR 449; Beirne v Commissioner of An Garda Síochána [1993] ILRM 1; Eogan v University College Dublin [1996] 1 IR 390; [1996] 2 ILRM 302; Murphy v The Turf Club [1989] IR 171; O'Donnell v Tipperary (South Riding) County Council [2005] IESC 18, [2005] 2 IR 483 and The State (Abenglen Properties) v Corporation of Dublin [1984] IR 381 considered - Reg v Takeover Panel ex parte Datafin Plc [1987] 1 QB 815 and Geoghegan v Institute of Chartered Accountants in Ireland [1995] 3 IR 86 distinguished - Rules of the Superior Courts 1986 (SI 15/1986) - European Communities (Markets in Financial Instruments) Regulations 2007 (SI 60/2007) - Companies Act 1963 (No 33), s 25 - Decision that decision not amenable to judicial review (2013/200JR - Cooke J - 3/7/2013) [2013] IEHC 301

Bloxham (in liquidation) v Irish Stock Exchange Ltd

Facts: Following the grant of leave on the 15 ^th March 2013, an application was brought by the liquidator of the applicant on the latter"s behalf for judicial review of a decision made by the respondent on the 19 ^th December 2012 which terminated the applicant"s membership of the Irish Stock Exchange Limited ('the Stock Exchange') with the relief sought being an order of certiorari quashing that decision. This judgment concerns the preliminary issue of whether the respondent"s decision could be judicial reviewed, and which was determined in advance of the substantive application.

The decision to remove the applicant"s membership was said to have been made pursuant to Rule 2.15 (Non Active Members) of the 'Rules of the Irish Stock Exchange Limited' which states that where a member firm has been inactive on Stock Exchange for a period of six months, the respondent may revoke the membership. It was the respondent"s case that as a private company limited by guarantee and acting pursuant to a purely private contractual rule applicable to the applicant, it did not possess the necessary attributes of public authority to be amenable to judicial review. The applicant argued that the respondent had adopted a public law character over time by co-opting to perform functions of that nature. On that basis, it was argued that judicial review was available.

Held by Cooke J that it was undisputed that the Central Bank had suspended the applicant"s trading activities after it had run into financial difficulties and entered liquidation. It was also clear that the respondent"s decision to revoke the applicant"s membership of the Stock Exchange was directly affected by this suspension. On that basis, it could be argued that the respondent was indirectly involved in the regulation of markets and financial instruments under the auspices of the Central Bank. However, there was also no doubt that the respondent was supervised by the Central Bank as a market operator, with it being regulated by the requirements and obligations of authorisation. These regulations did not give the respondent any public law authority. On that basis, it was determined that the relationship between the respondent and the Central Bank was not such to give the respondent a public law character.

The applicant had also argued that as a wrongful refusal of authorisation to operate as a stock broking firm on the regulated market could be challenged by judicial review, a decision to expel the firm must equally be amenable to judicial review. However, it was held that the court was satisfied that the applicant"s judicial review proceedings were not being brought in the hope of resuming trading activities. The company was currently in liquidation and it was the Central Bank"s decision to suspend the applicant"s trading activities, not the decision of the respondent, which terminated the firm"s ability to continue to operate as a trading investment firm. The applicant"s real aim by bringing judicial review proceedings was to retain its corporate status as a guarantor member of the respondent. The applicant"s argument was therefore rejected.

Contested decision determined to not be amenable to judicial review.

RSC O.84

STATE (ABENGLEN PROPERTIES LTD) v DUBLIN CORPORATION 1984 IR 381

MURPHY v THE TURF CLUB 1989 IR 171

BEIRNE v COMMISSIONER OF AN GARDA SIOCHANA 1993 ILRM 1

GARDA SIOCHANA (ADMISSIONS & APPOINTMENTS) REGS SI 164/1988

POLICE FORCES AMALGAMATION ACT 1925

GARDA SIOCHANA ACT 1958

GARDA SIOCHANA (ADMISSIONS & APPOINTMENTS) REGS SI 164/1988 REG 8

EOGHAN v UNIVERSITY COLLEGE DUBLIN 1996 IR 390

O'DONNELL v TIPPERARY (SOUTH RIDING) CO COUNCIL 2005 2 IR 483

GEOGHEGAN v INSTITUTE OF CHARTERED ACCOUNTANTS 1995 3 IR 86

BANE & ORS v GARDA REPRESENTATIVE ASSOCIATION 1997 2 IR 449

EUROPEAN COMMUNITIES (MARKETS IN FINANCIAL INSTRUMENTS) REGS SI 60/2007

COMPANIES ACT 1963 S25

COMPANIES ACT 1963 S205

COMPANIES ACT 1963 S31

R v TAKEOVER PANEL (EX PARTE DATAFIN PLC) 1987 1 QB 815

EEC DIR 2004/39 ART 5

EEC DIR 2004/39 ART 36

1 1. By order of the Court (Kelly J.) of the 15 ^th March, 2013, the applicant, acting by its liquidator Mr. Kieran Wallace, was granted leave to apply for judicial review of a decision made by the respondent on the 19 ^th December, 2012, purporting to revoke and/or terminate the applicant firm's membership of the Irish Stock Exchange Limited and in particular, for an order of certiorari to quash that decision.

2 2. This is the judgment of the Court upon a preliminary issue directed to be tried in anticipation of the substantive hearing of that application as to whether that impugned decision is susceptible of judicial review.

3 3. The respondent is a private company limited by guarantee, incorporated under the Companies Acts 1963 - 2006 and the applicant firm was one of its founding subscribers when it was established on the 22 ^nd May, 1995. As explained in greater detail below, the impugned decision of the 19 ^th December, 2012, ("the Contested Decision") was taken by the respondent under Rule 2.15 (Non Active Members) of the "Rules of the Irish Stock Exchange Limited" which provides that: "If a member firm has ceased to carry on business on the ISE for a period of six months or more, its membership may be revoked by the ISE, by notice in writing to such member firm".

4 4. This preliminary issue raises a question of law which has been considered in a substantial number of judgments in this jurisdiction and elsewhere in recent years namely, whether and in what circumstances a decision which is apparently taken by a private entity based upon a contractual relationship between it and the aggrieved party, can be considered as sufficiently endowed with attributes of public authority character to be amenable to judicial review. As the arguments of counsel on either side of this case have illustrated, it is far easier to identify the legal principles which are relevant to that question than it is to apply them to a specific case.

Background Facts.

5 5. The background and the events leading up to the taking of the Contested Decision can be briefly summarised. The respondent is the entity which provides the investment securities exchange and clearing house services of the Irish Stock Exchange, an institution which long pre-dates the current corporate entity. Since 1995 it has had a corporate status as a company limited by guarantee, the guarantors at its date of incorporation being the then principal stock broking firms in the State (ten in number), including the Bloxham firm.

6 6. The applicant firm continued in business as stock brokers and members of the exchange until it ran into difficulties and was directed to suspend its trading activities by the Central Bank as the competent authority in that regard on the 25 ^th May, 2012. Immediately thereafter the applicant's membership of the ISE was suspended on the 28 ^th May, 2012. On the 31 ^st May, 2012, the firm petitioned to be wound up as an unregistered company pursuant to the provisions of Part X of the Companies Act 1963, and Mr. Wallace was appointed official liquidator and administrator on the 25 ^th June, 2012.

7 7. On the 13 ^th December, 2012, Mr. Daryl Byrne, Head of Regulation of the Irish Stock Exchange wrote to the official liquidator and, after referring to the direction of the Central Bank to cease activities and the subsequent suspension of Bloxham under Rule 2.6.1 of the Rules of the Exchange, informed the liquidator that on the 27 ^th June, 2012, the Board had delegated to him as Head of Regulation: "The powers, duties and functions of the ISE (as defined in the Rules) in relation to any steps to be taken by the ISE under the Rules in relation to Bloxham, whether under Rule 2.6 and/or Rule 2.15. On the 12 ^th December, 2012, the Board of the ISE reaffirmed their delegation and again delegated those powers, duties and functions to me". The letter then stated:

"As Bloxham has ceased to carry on business on the ISE for a period of more than six months, I am now considering revoking Bloxham's membership of the ISE pursuant to Rule 2.15".

8 8. The official liquidator was invited to make representations as to why this decision ought not to be taken by 18 ^th December, 2012. This invitation was responded to by letter of the 17 ^th December, 2012, by Messrs Maples, solicitors for the official liquidator which, on a number of grounds, challenged the entitlement of the ISE to revoke membership under Rule 2.15.

9 9....