Dowling v Minister for Finance
| Jurisdiction | Ireland |
| Judge | Mr. Justice Robert Haughton |
| Judgment Date | 08 November 2022 |
| Neutral Citation | [2022] IECA 256 |
| Year | 2022 |
| Court | Court of Appeal (Ireland) |
| Docket Number | Record Number: 2014/871, 2014/872, 2014/873, 2014/874 |
In the Matter of Irish Life & Permament Plc and in the Matter of the Credit Institutions (Stabilisation) Act 2020, and in the Matter of an Application by the Minister for Finance for a Direction in Relation to Irish Life & Permanent Plc Pursuant to Section 9 of the Credit Institutions (Stabilisation) Act 2010 and Ancillary Orders
and
[2022] IECA 256
Haughton J.
Binchy J.
Pilkington J.
Record Number: 2014/871, 2014/872, 2014/873, 2014/874
High Court Record Number: 2012/116MCA
THE COURT OF APPEAL
Direction order – Locus standi – Credit Institutions (Stabilisation) Act 2010 s. 11 – Appellants seeking to set aside a direction order – Whether the appellants had locus standi to seek to set aside the direction order
Facts: The appellants, Mr Dowling, Mr McManus, Mr Skoczylas, Scotchstone Capital Fund Ltd, Mr McGann, Mr Haug, Mr Neugebauer and Mr Keohane, appealed to the Court of Appeal from the judgment of Peart J in the High Court whereby he refused to set aside, pursuant to s. 11 of the Credit Institutions (Stabilisation) Act 2010 (as amended), a direction order made on 28 March, 2012 pursuant to s. 9 of the 2010 Act (the March Direction Order) and ancillary orders whereby the notice party, Permanent TSB plc (formerly Irish Life and Permanent plc), was directed to sell its life assurance business, Irish Life Ltd and its subsidiaries, to the respondent, the Minister for Finance, for the sum of €1.3 billion, such sale to be completed not later than 30 June, 2012. Mr Skoczylas argued that the High Court locus standi ruling was wrong in law in disregarding and/or abrogating Articles 5 and 42 of Directive 2001/34/EC, by making it “practically impossible” for the appellants to challenge the ex parte order of Kearns P approving the March Direction Order, and that that ruling was in breach of EU law. He further argued that such denial of locus standi was: (a) a breach of fair procedures and a breach of Article 6 of the European Convention on Human Rights; (b) in breach of the right to audi alterim partem; and (c) in breach of Article 47 of the Charter of the Fundamental Rights of the European Union in precluding the appellants from having access to the court, or to an effective remedy in respect of breach of their rights, including minimum rights guaranteed by EU law. The appellants therefore contended that the trial judge erred in law in failing to recognise that the 2010 Act must be interpreted as far as possible in conformity with the constitutional guarantee of fair procedures, that the High Court should have implied into the statutory decision-making process an obligation to respect fair procedures, and that the exclusion of such a right would have required clear words in the legislation.
Held by Haughton J that the correct interpretation of s. 11(1) of the 2010 Act was that the appellants did not have locus standi, and this was clear and unambiguous; to find otherwise to would be to interpret s. 11(1) contra legem, which is something that even a purposive interpretation in conformity with Community law would not require.
Haughton J affirmed the decision of the trial judge that the appellants did not have locus standi under s. 11(1) to seek to set aside the March Direction Order. In light of this, Haughton J held that it was not necessary or appropriate to consider or determine the substantive arguments raised by the appellants and he dismissed the appeals.
Appeals dismissed.
JUDGMENT of Mr. Justice Robert Haughton delivered on the 8th day of November, 2022
. These are appeals from the judgment of Peart J. in the High Court whereby he refused to set aside, pursuant to s. 11 of the Credit Institutions (Stabilisation) Act, 2010 (as amended) (“the 2010 Act”), a Direction Order made on 28 March, 2012 pursuant to s. 9 of the 2010 Act (“the March Direction Order”) and ancillary orders whereby Permanent TSB plc, formerly Irish Life and Permanent plc (“ILP”), was directed to sell its life assurance business, Irish Life Limited and its subsidiaries (“Irish Life”), to the Minister for Finance (“the Minister”/respondent) for the sum of €1.3 billion, such sale to be completed not later than 30 June, 2012.
. ILP is a wholly owned subsidiary of Irish Life & Permanent Group Holdings plc (“ILPGH”). ILPGH is a public limited company in which the appellants are minority shareholders, and in which 99.2% of the shares are held by the Minister.
. The substantive hearing in the High Court was based on affidavit evidence, without cross examination, and legal submissions, and took place over 9 days in June 2012. Legal submissions made by Piotr Skoczylas (“Mr. Skoczylas”) were adopted by the other applicants, including solicitors appearing on behalf of Scotchstone Capital Fund Limited, which was the only applicant to have legal representation. The respondent and notice party were separately represented by a solicitor and counsel.
. Subsequent to delivery of the judgment on 28 June 2012 there was a costs hearing, and it was ordered that the applicants pay the respondent and notice party their costs of the proceedings, including all reserved costs. Following further hearings in August 2012 in which the applicants sought stays, Peart J. ordered that the applications for stays be refused. The perfected order, which is the subject matter of this appeal, is dated 20 May, 2013. While the costs orders made by Peart J. are also the subject of this appeal, argument has yet to be heard on that issue.
. For reasons given in this judgment, I agree with the trial judge that the appellants do not have locus standi under s.11 of the 2010 Act to seek to set aside or vary the March Direction Order, and I would dismiss these appeals.
. The 2010 Act was promulgated at a time of unprecedented financial instability in the State, when the banks and other credit institutions were under threat and required exceptional measures including State financial support to preserve them and restore confidence in the banking sector, and the means by which support was to be given was by “direction orders”. Section 7 of the 2010 Act provides for the making of “proposed direction orders” by the Minister in relation to a “relevant institution”. Section 9 provides that the Minister should then apply ex parte to the High Court which, “if satisfied that the requirements of section 7 have been complied with and that the opinion of the Minister under that section was reasonable and not vitiated by any error of law” would make the direction order in the terms of the proposed direction order (or as varied by the court in limited circumstances). Section 11 of the 2010 Act then allowed for “the relevant institution in relation to which a direction order is made or a member of that institution” to apply to the High Court by motion on notice grounded on affidavit to set aside the order, and under ss. (4) the court could instead vary or amend the direction order in certain circumstances.
. The s.9 ex parte application by the Minister for the March Direction Order was made pursuant to Originating Motion Paper on 28 March, 2012, and was duly granted by Kearns P
. There had been two earlier direction orders. The first of these, dated 9 June, 2011 (“the June 2011 Direction Order”), addressed only to ILP, directed the sale by ILP of Irish Life. ILP attempted to sell Irish Life by Initial Placement Offer (IPO), and later by private sale, but by the end of 2011 had failed to find a buyer at what was regarded as reasonable market value. That lack of success led to the Minister applying for the March Direction Order.
. A second direction order was obtained on 26 July, 2011 (“the July 2011 Direction Order”), addressed to both ILP and its holding company ILPGH. This will be described in greater detail below, but in essence pursuant to the July 2011 Direction Order, the Minister on behalf of the State undertook phase 1 of the recapitalisation of ILP by providing capital of €2.3 billion in exchange for a 99.2% shareholding in ILPGH. The sale of Irish Life by ILP was phase 2, and its purpose was to provide further liquidity for ILP's ongoing banking operation.
. The two earlier direction orders are part of the overall background to the circumstances in which the Minister came to make an application for the March Direction Order. No application was ever made to set aside the June 2011 Direction Order. Application was made pursuant to s. 11 of the 2010 Act to have the July 2011 Direction Order set aside. That s.11 application was heard by O'Malley J. in the High Court in what I will refer to as “the main proceedings” and resulted in a preliminary reference to the Court of Justice of the European Union (“CJEU”) – her first judgment is reported at [2014] IEHC 418. The ruling of the CJEU on the reference delivered on 8 November 2016 [Case C-41/15] was not favourable to the applicants, and following further argument before her O'Malley J. in her second judgment [2017] IEHC 520 refused the application to set aside the July 2011 Direction Order. That decision was affirmed by this court (Hogan J., Irvine and Baker JJ. concurring), and the Supreme Court declined an application for leave for further appeal. Accordingly, this appeal is concerned only with the refusal by the High Court to set aside the March Direction Order.
. It is at first blush surprising that this appeal proceeded. Irish Life (and its subsidiaries) has since been sold twice – first by ILP to the Minister/the State for €1.3 billion pursuant to the March Direction Order, which sale was completed on 29 June, 2012. Then on 19...
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