Permanent TSB Plc, Alan Cook, Jeremy Masding, Kevin Murphy, David McCarthy, Bernard Collins, Ray Macsharry, Margaret Hayes, Eimear Daly, Sandy Kinney, Pat Ryan and Roy Keenan v Piotr Skoczylas, Scotchstone Capital Fund Ltd, Gerard Dowling, Padraig McManus, Georg Haug, John Paul McGann, Tibor Neugebauer and Muriel Scorer

• Jurisdiction: Ireland
• Judge: O'Donnell J.,McKechnie J.,Charleton J.
• Judgment Date: 09 March 2021
• Neutral Citation: [2021] IESC 10
• Docket Number: S:AP:IE:2013:000062
• Court: Supreme Court
• Date: 09 March 2021

Between/

Permanent TSB Plc, Alan Cook, Jeremy Masding, Kevin Murphy, David McCarthy, Bernard Collins, Ray Macsharry, Margaret Hayes, Eimear Daly, Sandy Kinney, Pat Ryan and Roy Keenan

Plaintiffs/Respondents

and

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

Defendants/Appellants

[2021] IESC 10

O'Donnell J.

McKechnie J.

Charleton J.

S:AP:IE:2013:000062

AN CHÚIRT UACHTARACH

THE SUPREME COURT

Costs – Trial of action – Stay – Appellants seeking to set aside High Court order for costs in favour of the respondents – Whether the costs should be reserved to the trial of the action

Facts: The Supreme Court, in a judgment delivered on the 5th of November, 2019 ([2019] IESC 78) (the principal judgment), dismissed the appeal of the defendants/appellants, Mr Skoczylas, Scotchstone Capital Fund Ltd, Mr Dowling, Mr McManus, Mr Haug, Mr McGann, Mr Neugebauer and Ms Scorer, from a decision of the High Court ([2013] IEHC 42) restraining the appellants pending the trial of action from proceeding with an application under s. 160 of the Companies Act 1990 seeking the disqualification of the individual plaintiffs/respondents, Mr Cook, Mr Masding, Mr Murphy, Mr McCarthy, Mr Collins, Mr MacSharry, Ms Hayes, Ms Daly, Ms Kinney, Mr Ryan and Mr Keenan, as directors. The application for costs had been adjourned from time to time, Mr Skoczylas having sought an oral hearing. He contended that the High Court order for costs in favour of the plaintiffs should be set aside, and costs reserved to the trial of the action. He also argued that the costs of the appeal should similarly be reserved to the trial of the action. The trial of the action concerned was the trial of the proceedings seeking to permanently restrain the commencement of the particular proceedings under s. 160. As a fall-back position, Mr Skoczylas contended that any order for costs should be stayed pending the conclusion of those proceedings. The principal ground on which Mr Skoczylas resisted costs was that he contended that it was not possible to justly adjudicate on costs following the approach of Laffoy J in Tekenable Ltd v Morrissey [2012] IEHC 391, approving the judgment of Clarke J in Allied Irish Banks v Diamond [2011] IEHC 505, that there are types of injunctions which turn on the merits of the case which are based, therefore, on facts, and it may well be that the court would consider that it is unsafe to deal with the costs where the factual issue might look very different when a court of trial has an opportunity to hear witnesses, to see what other evidence may be disclosed on discovery and the like.

Held by the Court that to defer a decision on costs, and, moreover, to reserve it to a court which would never have heard or considered the merits of this appeal, would only likely add one further layer of complication to an already tangled web of litigation. Accordingly, the Court considered that it was possible to adjudicate on the costs of the appeal and would hold that the plaintiffs were entitled to their costs. The Court would not interfere with the order made by the High Court.

The Court thought it reasonable to anticipate that any stay would not necessarily be limited to the point at time at which the High Court had determined the plenary proceedings; second, nothing in the history of these or the related proceedings suggested that the proceedings would be advanced with any expedition. The Court found that these were all considerations which tell against any stay on the order. However, the Court was prepared to take into account the fact that Mr Skoczylas was not a lawyer; a limited stay may allow time for consideration and encourage focus. In the circumstances, the Court held that execution of the order would be stayed for one year.

Appeal dismissed.

Ruling of the Court delivered the 9th day of March 2021 .

1 . In a judgment delivered on the 5th of November, 2019 ( [2019] IESC 78) (“the principal judgment”), this Court dismissed the appellants' appeal from a decision of the High Court ( [2013] IEHC 42 (Unreported, High Court, Cooke J., 4th of February, 2012)), restraining the appellants pending the trial of action from proceeding with an application under s. 160 of the Companies Act 1990 (“the 1990 Act”) seeking the disqualification of the individual plaintiffs as directors. This Court's judgment of the 5th of November, 2019, sets out the fact that a number of the defendants have withdrawn from these proceedings, but it appears that Mr. Skoczylas and Mr. Neugebauer, and possibly Mr. McGann, remain participants in the proceedings. The appellants will be referred to collectively as “Mr. Skoczylas”, as he has managed the litigation at all times, and conducted both the appeal and this application in respect of costs.

2 . The High Court, after a hearing of three days, held, applying the test for an interlocutory injunction set out in the decision of the Supreme Court in Campus Oil v. Minister for Industry and Commerce (No. 2) [1983] I.R. 88 (“ Campus Oil”), that there was an arguable case that the notices served by Mr. Skoczylas under s. 160(7) of the 1990 Act were inadequate and invalid, and that the balance of convenience favoured the grant of an injunction. The Court did not consider the alternative ground argued: namely, that the applications constituted an abuse of process.

3 . On this appeal, this Court accepted Mr. Skoczylas's contention that the applicable test was not that set out in Campus Oil, but rather that set out in Truck and Machinery Sales Ltd. v. Marubeni Komatsu [1996] 1 I.R. 12 (“ Truck and Machinery Sales”), namely that, in order to restrain proceedings, it was necessary to show a prima facie case that the prosecution of the proceedings would be unlawful. However, applying that standard to the evidence, the Court concluded that there was a prima facie case, both in relation to the validity of the notices (applying, in this regard, the decision of the Supreme Court (Fennelly J.) in Director of Corporate Enforcement v. Byrne [2009] IESC 57 (Unreported, Supreme Court, Fennelly J., 23rd of July, 2009)) and, moreover, that there was also a prima facie case that issuance of the notice was an abuse of process. This latter finding was on the basis that Mr. Skoczylas's own affidavit in the proceedings set out that, at the time the notice was issued, the basis of the application had not been formulated, at least some of the named applicants had not even decided to commence the proceedings, and the issuance of the notice had been notified to executives of Canada Life Assurance, then in negotiation to purchase the insurance business of Irish Life. A prima facie case having been established, it was also held that the balance of convenience favoured the grant of the injunction.

4 . The application for costs has been adjourned from time to time, Mr. Skoczylas having sought an oral hearing. He now contends that the High Court order for costs in favour of the plaintiffs should be set aside, and costs reserved to the trial of the action. He also argues that the costs of this appeal should similarly be reserved to the trial of the action. For clarity, it should be understood that the trial of the action concerned is the trial of these proceedings seeking to permanently restrain the commencement of the particular proceedings under s. 160. As a fall-back position, Mr. Skoczylas contends that any order for costs should be stayed pending the conclusion of those proceedings.

5 . On this application, the parties were invited to deliver written submissions. Mr. Skoczylas delivered legal submissions running to some 11 pages, but also a booklet described as reference documents, itself running to 18 pages, and containing hyperlinks to attached documentation totalling 479 pages. Included among the documentation were matters such as: transcripts from the hearings in the High Court; an affidavit sworn in November 2019 in relation to these proceedings in the High Court; an application for discovery; and a notice to admit facts also served in these proceedings. In addition to this, the documentation included a statement of claim and appeal notices in separate proceedings described as “Köbler type proceedings” and a complaint made in August 2019 to...