Dowling and Others v Ireland and Others

• Jurisdiction: Ireland
• Judge: Ms Justice Bolger
• Judgment Date: 13 May 2024
• Neutral Citation: [2024] IEHC 288
• Court: High Court
• Docket Number: [Record No. 2013/2708P and 2013/2709P]

In the Matter of the Credit Institutions (Stablisation) Act 2010 and in the Matter of the Direction Order Made on 26 July 2011 Pursuant to the Credit Institutions (Stabilisation) Act 2010 and in the Matter of the Direction Order Made on 28 March 2012 Pursuant to the Credit Institutions (Stabilisation) Act 2010

Between

Gerard Dowling, Padraig McManus, Piotr Skoczylas, Scotchstone Capital Fund Limited, John Paul McGann, Tibor Neugebauer, Muriel Scorer, Georg Haug and J. Frank Keohane

Plaintiffs

and

Ireland and The Attorney General and The Minister for Finance

Defendants

[2024] IEHC 288

[Record No. 2013/2708P and 2013/2709P]

THE HIGH COURT

The third, fifth, and sixth named plaintiffs appeared for themselves.

Counsel for the defendants: Eoin McCullough SC, Ailbhe O'Neill SC.

DECISION ofMs Justice Bolgerdelivered on the 13 ^th day of May 2024

1 . This is the plaintiffs' claims for 26 separate declaratory reliefs pertaining to the constitutionality and the consistency with EU law of the Credit Institutions (Stabilisation) Act 2010 (herein after referred to as “the Act”), an Article 267 reference, if necessary, to the Court of Justice of the European Union and damages.

2 . The Act was enacted on 21 December 2010, it was amended in 2011 by the Central Bank and Credit Institutions (Resolution) Act 2011 and most of the provisions of the Act, including those impugned in the within proceedings, ceased to have any effect as of 31 December 2014. This challenge is to the provisions of the Act prior to the 2011 amendments.

3 . The third, fifth and sixth plaintiffs appeared personally, with the fifth and sixth plaintiffs supporting the written and oral submissions made by the third plaintiff, Mr. Skoczylas. The first and second plaintiffs had previously settled their differences with the State, the eighth plaintiff is deceased and the seventh and ninth plaintiffs did not appear.

4 . For the reasons set out below, I refuse the reliefs sought.

5 . I deal firstly with Mr. Skoczylas' application to represent the fourth plaintiff company. I then set out the Act and the impugned sections thereof. I summarise the background and previous litigation in which some of the plaintiffs were previously involved and I then address the consistency of the impugned sections of the Act with EU law and with the Constitution.

Application by Mr. Skoczylas to represent the company

6 . This hearing commenced before me on 20 June 2023, having been called on for three days the previous Thursday, 15 June. At the outset, Mr. Skoczylas sought to make an oral application to represent the fourth plaintiff company whose solicitors had been allowed to come off record by Roberts J. in a reserved written decision delivered on 7 June 2023, almost two weeks before this hearing commenced. Mr. Skoczylas is an experienced lay litigant and, as he highlighted to the court, has been commended by other courts on the quality of his paperwork. He sought to justify his failure to bring an application by notice of motion grounded on an affidavit by what he claimed was his entitlement to make the application orally and the court's inherent jurisdiction to deal with it. He did not explain his failure to file an application in that usual way since the decision of Roberts J. on 7 June, other than in referring to what he said were the exceptional circumstances of the case and that the facts on which he relied were “self-evident”. The State did not object to the absence of a formal application grounded on affidavit, but that in itself does not render the application properly before the court or excuse its absence.

7 . Mr. Skoczylas relied on the decision of the Supreme Court in AIB v. Aqua Fresh Fish Ltd[2018] IESC 49 and asserted that the exceptional circumstances that Finlay Geoghegan J. had referred to therein, permitted him to represent the company. He expressed concern that the company would be prejudiced by a possible argument that he was not affected because the money he invested had been invested via the company. No such case had been made in the respondent's Defence or written submissions that were filed prior to the commencement of the hearing. In any event, the prejudice Mr. Skoczylas seemed to be concerned about was potential prejudice to him rather than to the company.

8 . Prior to the application by the company's former solicitors to come off record, the same solicitors had been allowed to come off record in other related proceedings by the Court of Appeal on 25 May 2023. At the call over on 15 June 2023 in respect of this case, Mr. Skoczylas confirmed that this case was ready to proceed. By then he had known for some time that the company's solicitors had been permitted to come off record in both these and in other related proceedings. Therefore, any urgency to his application to represent the company was his own making and cannot justify his failure to bring the application properly before the court or constitute a valid reason why he should be permitted to represent the company.

9 . Mr. Skoczylas put forward a position in correspondence of 2 September 2020, which he chose to open to the court, in which he had previously proposed a settlement of these proceedings if the State made certain financial payments to him, which he urged on the State on the basis, inter alia, that the State would not be able to obtain costs from him. That is a relevant factor in determining whether Mr. Skoczylas should be permitted to represent the company.

10 . It is only in truly exceptional circumstances that an individual may represent a company ( AIB v. Aqua Fresh), a position endorsed by the Court of Appeal in Scotchstone v. Ireland & anor[2023] IECA 129, at para. 82 of their decision in relation to Mr. Skoczylas' application to compel the company's then solicitors to stay on record on the grounds that Mr. Skoczylas had been unable to procure alternative legal representation for the company. This case does not come within the necessary exceptional circumstances in which an application by a person with no right of audience before the court to represent a company might be allowed. In addition, there is no clear (as versus hypothetical) evidence of prejudice that the company will suffer absent not being represented by Mr. Skoczylas.

11 . I therefore refuse this application.

The Act

12 . The Act was enacted by the Oireachtas on 21 December 2010 at a time when the State and the Eurozone was going through an unprecedented severe financial crisis, the extent of which is recorded in the recitals to the Act all of which merit quotation in full:

“WHEREAS THERE IS A SERIOUS DISTURBANCE IN THE ECONOMY OF THE STATE;

AND WHEREAS MEASURES ARE NECESSARY TO ADDRESS A UNIQUE AND UNPRECEDENTED ECONOMIC CRISIS WHICH HAS LED TO DIFFICULT ECONOMIC CIRCUMSTANCES AND SEVERE DISRUPTION TO THE ECONOMY;

AND WHEREAS THERE IS A CONTINUING SERIOUS THREAT TO THE STABILITY OF CERTAIN CREDIT INSTITUTIONS IN THE STATE, AND TO THE FINANCIAL SYSTEM GENERALLY;

AND WHEREAS IT IS NECESSARY, IN THE PUBLIC INTEREST, TO MAINTAIN THE STABILITY OF THOSE CREDIT INSTITUTIONS AND THE FINANCIAL SYSTEM IN THE STATE;

AND WHEREAS IT IS NECESSARY, IN THE INTERESTS OF THE COMMON GOOD, TO CONTINUE THE PROCESS OF REORGANISATION, PRESERVATION AND RESTORATION OF THE FINANCIAL POSITION OF ANGLO IRISH BANK CORPORATION LIMITED BEGUN WITH THE ANGLO IRISH BANK CORPORATION ACT 2009;

AND WHEREAS THE FUNCTIONS AND POWERS CONFERRED BY THIS ACT ARE NECESSARY TO SECURE FINANCIAL STABILITY AND TO EFFECT A REORGANISATION OF CERTAIN CREDIT INSTITUTIONS;

AND WHEREAS IT IS NECESSARY TO AMEND THE EUROPEAN COMMUNITIES (REORGANISATION AND WINDING-UP OF CREDIT INSTITUTIONS) REGULATIONS 2004 (S.I. NO. 198 OF 2004) TO IMPLEMENT DIRECTIVE 2001/24/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL OF 4 APRIL 2001 1 TO PRESERVE OR RESTORE THE FINANCIAL POSITION OF CERTAIN CREDIT INSTITUTIONS;

AND WHEREAS THE CONSIDERABLE FINANCIAL SUPPORT PROVIDED BY THE STATE TO CERTAIN CREDIT INSTITUTIONS HAS HELPED THOSE INSTITUTIONS TO MEET THEIR FINANCIAL AND REGULATORY OBLIGATIONS;

AND WHEREAS THE STATE WISHES TO PROVIDE FOR THE PERFORMANCE OF THE FUNCTIONS CONFERRED BY THIS ACT IN ORDER TO ACHIEVE THE FINANCIAL STABILISATION OF THOSE CREDIT INSTITUTIONS AND THEIR RESTRUCTURING (CONSISTENTLY WITH THE STATE AID RULES OF THE EUROPEAN UNION) IN THE CONTEXT OF THE NATIONAL RECOVERY PLAN 2011–2014 AND THE EUROPEAN UNION/INTERNATIONAL MONETARY FUND PROGRAMME OF FINANCIAL SUPPORT FOR IRELAND;

AND WHEREAS THE COMMON GOOD REQUIRES PERMANENT OR TEMPORARY INTERFERENCE WITH THE RIGHTS, INCLUDING PROPERTY RIGHTS, OF PERSONS WHO MAY BE AFFECTED BY THE PERFORMANCE OF THOSE FUNCTIONS;

AND WHEREAS THE URGENT REORGANISATION OF CERTAIN CREDIT INSTITUTIONS IS OF SYSTEMIC IMPORTANCE TO THE STATE;

AND WHEREAS IT IS NECESSARY TO MAINTAIN PUBLIC CONFIDENCE IN, AND ENHANCE, THE PROTECTION OF DEPOSITS IN CREDIT INSTITUTIONS GENERALLY;

AND WHEREAS IT IS DESIRABLE TO PROMOTE AND FACILITATE INVESTMENT BY PERSONS OTHER THAN THE STATE IN CREDIT INSTITUTIONS TO REDUCE THEIR RELIANCE UPON STATE SUPPORT;

AND WHEREAS BECAUSE CERTAIN CREDIT INSTITUTIONS IN THE STATE ARE PARTIES TO CONTRACTS AND OTHER ARRANGEMENTS GOVERNED BY THE LAW OF A STATE OTHER THAN THE STATE:”

13 . Section 4 sets out the purposes of the Act as follows:

“(a) to address the serious and continuing disruption to the economy and the financial system and the continuing serious threat to the stability of certain credit institutions in the State and the financial system generally,

(b) to implement the reorganisation of credit institutions in the State to achieve the financial stabilisation of those credit institutions and their restructuring (consistently with the state aid rules of the European Union) in the context of the National Recovery Plan 2011 – 2014 and the European Union/International Monetary Fund Programme of Financial Support for...