Dowling and Others v Minister for Finance and Others

JurisdictionIreland
JudgeMr. Justice Feeney
Judgment Date02 March 2012
Neutral Citation[2012] IEHC 89
CourtHigh Court
Docket Number[No. 239 MCA/2011]
Date02 March 2012
Dowling & Ors v Min for Finance & Ors
IN THE MATTER OF IRISH LIFE AND PERMANENT GROUP HOLDINGS PLC

AND

IN THE MATTER OF IRISH LIFE AND PERMANENT PLC
IN THE MATTER OF AN APPLICATION FOR THE SETTING ASIDE PURSUANT TO SECTION 11 OF THE CREDIT INSTITUTIONS (STABILISATION) ACT 2010 OF THE DIRECTION ORDER WHICH WAS MADE ON 26 TH JULY, 2011 PURSUAN TO SECTION 9 OF THE CREDIT INSTITUTIONS (STABILISATION) ACT 2010 AND ANCILLARY ORDERS

BETWEEN

GERARD DOWLING, PADRAIG MCMANUS, PIOTR SKOCZYLAS AND SCOTCHSTONE CAPITAL FUND LIMITED
APPLICANTS

AND

MINISTER FOR FINANCE
RESPONDENT

AND

HORIZON GROWTH FUND N.V.
APPLICANT

AND

MINISTER FOR FINANCE
RESPONDENT

[2012] IEHC 89

[No. 239 MCA/2011]

THE HIGH COURT

PRACTICE & PROCEDURE

Taxation of costs

Recapitalisation of credit institution - Direction of High Court - Set aside - Application to dismiss or strike out certain applicants - Locus standi - Meaning of "member of relevant institution" - Owners of beneficial interest in shares - Whether "member" defined in relevant legislation - Whether meaning specific and well understood - Whether definition in Companies Acts applicable - Whether meaning within Companies Acts consistent with relevant legislation - Whether legislation sui generis - Whether plain meaning rule applicable - Whether court should examine context of legislation as a whole - Whether obvious or one meaning - Whether literal approach applicable - Whether court should derive intention of Oireachtas - Whether "member" should be assigned technical or legal meaning - Whether Companies Acts in pari material - Whether purposive interpretation applicable - Whether strict time limit necessitate broad definition of "member" - Whether purpose and intend of providing statutory basis to set aside direction was to allow person or entity whose property rights affected to seek review - Whether beneficial owners of shares had locus standi - Whether broad interpretation would lead to uncertainty - Crilly v T & J Farrington Ltd [2001] 3 IR 251 and Adam v Minister for Justice [2001] 2 IR 53 considered - Monahan v Legal Aid Board [2008] IEHC 300, [2009] 3 IR 458 followed - Howard v Commissioners of Public Works [1994] 1 IR 101 and The State (Sheehan) v The Government of Ireland [1987] IR 550 applied - In re Via Net Works (Ireland) Ltd [2002] 2 IR 47 distinguished - Companies Act 1963 (No 33), ss 31 and 205 - Interpretation Act 2005 (No 23), s 5 - Credit Institutions (Stabilisation) Act 2010 (No 36) - Application to dismiss or strike out applicants refused (2011/239MCA - Feeney J - 2/3/2012) [2012] IEHC 89

In re Irish Life and Permanent Group Holdings plc; Dowling v Minister for Finance

Facts: The Minister applied for a direction order pursuant to s. 9 Credit Institutions (Stabilisation ) Act 2010 to facilitate and enable an investment to be made by the Minister by way of subscription in ordinary shares in Irish life and Permanent Group Holdings plc. The application was made ex parte. The Court had to determine a claim by the Minister that both the third named applicant, Piotr Skoczylas, and the applicant, Horizon, had no standing to bring an application as neither of them was a member of the relevant institution, pursuant to s. 11(1) of the Act of 2010. The Court considered the definition of a member and whether the Companies Act 1963 provided interpretative guidance in this regard. The Minister contended inter alia that the legal title to the shares was held by a trustee or custodian. The applicants claimed inter alia that the Act of 2010 was an extraordinary executive measure and that the definition of a member could not be straitjacketed by reference to the Act of 1963.

Held by Feeney J. that the definition of a member in s. 31 Companies Act 1963 did not dictate or identify the meaning of the word member in s. 11(1) of the Act of 2010. Uncertainty would result otherwise as the challenge had to be made within five working days and adverse impact on economic rights had to be established otherwise. Both Piotr Skoczylas and Horizon were the hoidlers of the beneficial interest in shares on 26 July 2011 and the date on which the application was made. The application by the Minister would be refused.

Reporter: E.F.

CREDIT INSTITUTIONS (STABILISATION) ACT 2010 S9

CREDIT INSTITUTIONS (STABILISATION) ACT 2010 S9(1)

CREDIT INSTITUTIONS (STABILISATION) ACT 2010 S9(8)

CREDIT INSTITUTIONS (STABILISATION) ACT 2010 S11(1)

CREDIT INSTITUTIONS (STABILISATION) ACT 2010 S11

COMPANIES ACT 1963 S31

COMPANIES ACT 1990 (UNCERTIFIED SECURITIES) REGS SI 68/1996

CREDIT INSTITUTIONS (STABILISATION) ACT 2010 S11(3)

CREDIT INSTITUTIONS (STABILISATION) ACT 2010 S11(4)

CREDIT INSTITUTIONS (STABILISATION) ACT 2010 S11(2)

CRILLY v T & J FARRINGTON LTD 2001 3 IR 251

HEALTH (AMENDMENT) ACT 1986 S2

HOWARD v COMMISSIONERS OF PUBLIC WORKS 1994 1 IR 101

INTERPRETATION ACT 20052005 PART 2

INTERPRETATION ACT 2005 S5

CREDIT INSTITUTIONS (STABILISATION) ACT 2010 S3

COMPANIES ACT 1963 S31

STATE (SHEEHAN) v GOVERNMENT OF IRELAND 1987 IR 550

HOWARD v COMMISSIONERS OF PUBLIC WORKS 1994 1 IR 101

DIRECT UNITED STATES CABLE CO v ANGLO-AMERICAN TELEGRAPH CO 1877 2 APP CAS 394

MONAHAN v LEGAL AID BOARD 2009 3 IR 458

ADAM v MIN FOR JUSTICE 2001 3 IR 53

CREDIT INSTITUTIONS (STABILISATION) ACT 2010 S63(3)

VIA NET WORKS (IRELAND) LTD, IN RE 2002 2 IR 47

COMPANIES ACT 1963 S205

COMPANIES ACT 1963 S31(2)

Mr. Justice Feeney
1

On the 26th July, 2011 the Minister for Finance (the "Minister") applied to the High Court for a direction order pursuant to s. 9 of the Credit Institutions (Stabilisation) Act 2010 (the Act). That application was made ex parte to the Court pursuant to s. 9(1) of the Act. The application was made for the purposes of facilitating and enabling an investment on the part of the Minister of up to €3.8 billion by way of subscription in ordinary shares in Irish Life and Permanent Group Holdings Plc. ("ILPGH"). The investment by the Minister was identified as being required to be used, in such sum as was necessary, to recapitalise a subsidiary company known as Irish Life and Permanent Plc. ("ILP").

2

On hearing theex parte application on the 26th July, 2011 the High Court made a direction order pursuant to s. 9 of the Act in the terms set out in the order of that date. Paragraph D granted an order pursuant to s. 9(8) of the Act providing that certain of the reliefs granted in the order were to have an immediate effect. Section 11(1) of the Act provides that an application can be made to set aside a direction order. Section 11(1) provides that a member of a relevant institution may apply to the Court by motion on notice grounded on affidavit, not later than five working days after the making of a direction order for the setting aside of the direction order. ILPGH and ILP were and are relevant institutions for the purposes of s. 9 and s. 11 of the Act.

3

On the 3rd August, 2011, the first and second named lay applicants, Gerard Dowling and Padraig McManus filed a motion in the Central Office to set aside the direction order pursuant to s. 11 of the Act. There is no dispute but that both of those applicants are members of the relevant institution, in this case ILPGH, and that such application was brought within the five working day time limit set out in s. 11(1) of the Act.

4

In anex tempore judgment of the 3rd February, 2012 in these proceedings the Court held that on the 3rd August, 2011 the third named applicant, Piotr Skoczylas, applied on his own behalf and on behalf of the fourth named applicant, Scotchstone Capital Fund Limited, within the provisions of s. 11(1) of the Act. It is claimed by the Minister that on the 3rd August, 2011, that the third named applicant, Piotr Skoczylas, was not a "member" of either ILPGH or ILP and that therefore he had no standing or entitlement to bring any application to set aside a direction order under s. 11{1) of the Act. It is accepted that Scotchstone Capital Fund Ltd. was a member as of the 3rd August, 2011 and that, therefore, pursuant to the judgment of this Court on the 3rd February, 2012, it follows that this Court is satisfied that an application has been made by the fourth named applicant, Scotchstone Capital Fund Ltd. within the time set out in s. 11(1) of the Act to set aside the direction order of the 26th July, 2011.

5

On the 2nd August, 2011 Horizon Growth Fund N.V. ("Horizon") applied to court by motion to set aside the direction order relying on the provisions of s. 11 of the Act.

6

By notice of motion dated 4th October, 2011, the Minister applied in relation to the third named applicant, Piotr Skoczylas, for an order dismissing or alternatively striking out his application on the grounds that he was not a member of ILPGH and/or ILP as of the date of his purported application of the 3rd August, 2011 or at any time within the five day working period provided for in s. 11 (1) of the Act and that therefore he had no standing or entitlement to bring any application to set aside the direction order pursuant to s. 11(1) of the Act. In another notice of motion of the 4th October, 2011 the Minister applied for an order dismissing or alternatively striking out the application of Horizon on the basis that Horizon was not a member of ILPGH and/or ILP at the relevant time and therefore could not bring the application which it had sought to bring on the 2nd August, 2011 and it was claimed that as Horizon was not a member as of the 2nd August, 2011 or at any time within the five day working period set out in paragraph 11(1) of the Act, that Horizon had no standing or entitlement to bring any application to set aside the direction order under s. 11(1) of the Act. In the alternative, the Minister sought in the notice of motion of the 4th October, 2011 the trial of a preliminary issue, namely:

"Whether the applicant...

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