Permanent TSB Plc v Skoczylas

CourtSupreme Court
JudgeO'Donnell J.
Judgment Date05 November 2019
Neutral Citation[2019] IESC 78
Docket Number[S:LE:IE:2013:000062]
Date05 November 2019





[2019] IESC 78

O'Donnell J.

McKechnie J.

Charleton J.




Interlocutory injunction – Companies Act 1990 s. 160 – Issuance of proceedings – Respondents seeking an interlocutory injunction restraining the appellants from issuing proceedings to seek reliefs under s. 160 of the Companies Act 1990 – Whether there was jurisdiction to restrain the issuance of proceedings

Facts: The plaintiffs/respondents, Permanent TSB plc, Mr Cook, Mr Masding, Mr Murphy, Mr McCarthy, Mr Collins, Mr MacSharry, Ms Hayes, Ms Daly, Ms Kinney, Mr Ryan and Mr Keenan, on 18 January 2013, issued a notice of motion in plenary proceedings which they commenced on that day (High Court Record No. 2013/569 P) seeking an interlocutory injunction restraining the defendants/appellants, Mr Skoczylas, Scotchstone Capital Fund Ltd, Mr Dowling, Mr McManus, Mr Haug, Mr McGann, Mr Neugebauer and Ms Scorer, from issuing proceedings to seek reliefs under s. 160 of the Companies Act 1990. The respondents obtained an interim injunction in the High Court on the same day, which was continued pending the hearing of the motion. On 4 February 2013, Cooke J granted the interlocutory injunction sought by the respondents, giving his reasons in a written judgment ([2013] IEHC 42). The appellants appealed to the Supreme Court against that judgment and the order which was perfected on 5 February 2013. The issues in this appeal appeared to be the following: (1) What test should the High Court apply on an application to restrain the issuance of proceedings seeking the disqualification of a director under s. 160 of the 1990 Act (or its successor)? (2) Applying such a test, should the appellants have been restrained from issuing proceedings either because of a failure to serve a valid notice under s. 160(7) setting out the matters relied upon, or as an abuse of process, or both?

Held by O’Donnell J that (1) the appropriate test to be applied for the grant of an interlocutory injunction restraining the issuance of proceedings, such as those under s. 160 of the 1990 Act, is that set out by Keane J in Truck and Machinery Sales v Marubeni Komatsu [1996] 1 IR 12, that is that an applicant must satisfy the standard of showing a prima facie case, rather than the arguable case test applied in Campus Oil v The Minister for Industry and Energy (No. 2) [1983] IR 88; (2) applying that test, the plaintiffs in the proceedings had shown a prima facie case that the purported notice issued under s. 160(7) was invalid, and that such invalidity would vitiate the proceedings, and that furthermore, the threatened proceedings were for a collateral and improper purpose, and would constitute an abuse of process; (3) the balance of convenience favoured the grant of an injunction in the particular circumstances of this case.

O’Donnell J held that there was jurisdiction to restrain the issuance of proceedings under s. 160 of the 1990 Act, and that in the circumstances of this case, the proceedings were justified, and the High Court judge was entitled to make the order he did. Accordingly, O’Donnell J dismissed the appeal and affirmed the order of the High Court.

Application dismissed.

Judgment of O'Donnell J. delivered the 5th day of November 2019.

These proceedings represent a small skirmish in a lengthy litigation war. There have been substantial battles in the High Court, the Court of Appeal, this court, and in the Court of Justice of the European Union (“CJEU”). In the Irish Courts alone there have been at least 13 different sets of proceedings between these or related parties.


Each of the appellants are shareholders in Permanent TSB Group Holdings plc (formerly known as Irish Life and Permanent Group Holdings plc) (“the group holding company”). The first appellant, Piotr Skoczylas, has been a shareholder in the group holding company since March 2011, and was formerly one of its directors. Mr. Skoczylas is a managing director and fund manager of the second appellant, Scotchstone Capital Fund Ltd. (“Scotchstone”), which also has a shareholding in the group holding company. Some of the appellants, namely Gerard Dowling, Padraig McManus, and Muriel Scorer, notified the court in advance of the hearing that they did not wish to participate in the appeal. At the hearing, the court was informed that the fifth appellant, Georg Haug, is deceased. Mr. Neugeberger attended in court as did the father of Mr. Mc Gann. Mr. Skoczylas indicated that these individuals were adopting the position advanced by him, and subsequently Mr. Neugeberger wrote to the court indicating he adopted Mr. Skoczylas's submissions. Mr. Skoczylas made submissions on his own behalf. He has shown himself to be a well-prepared and knowledgeable litigant who has put comprehensive submissions before the court. The legal issue for determination in this appeal is not affected by the absence of any of the other appellants. Any reference to Mr. Skoczylas and his submissions should be understood as encompassing any individual shareholder who adopts his submissions.


The first respondent, Permanent TSB plc (formerly Irish Life and Permanent plc) (“the bank”) is a wholly owned subsidiary of the holding company. The bank was until 2012 the owner of a life assurance business carried out through Irish Life Group Ltd. and its subsidiaries (“the Irish Life Group”). The second to twelfth respondents are each serving or former directors of the group holding company and the bank.


The detailed background to this matter is set out in the judgment of O'Malley J [2014] IEHC 418, from which this perhaps oversimplified account is drawn, which is sufficient to identify the net legal issues to be determined in this matter. The broad background to this matter is that the bank was the successor to a well-known building society. At the time of its conversion to a bank, depositors with the society became shareholders in the bank and then the holding company. It appears, however, that Mr. Skoczylas and Scotchstone acquired their shareholding in the group holding company at a time when the banking system in Ireland was in distress and the share price had dropped to a few pence. While the bank differed from some of the other financial institutions in the Irish market in that it was part of a group which included a profitable insurance company, and the bank had not had to engage with the National Asset Management Agency (“NAMA”), because it was not as exposed to lending to developers, it was clearly affected by the collapse of liquidity in the market. In early 2011 it, together with other banks, was the subject of a prudential review by the Central Bank of capital and liquidity requirements, PCAR and PLAR respectively, with a view to deleveraging the banking system and reducing the banks’ reliance on short term funding, pursuant to Ireland's obligations under the Programme for Support, known colloquially as “the bailout”. In the case of the bank, this resulted in a decision by the Central Bank of 31 March 2011 requiring the bank to raise an additional €4 billion by the end of July 2011 to be achieved in part by asset disposal, but principally would require a very substantial introduction of fresh capital in the region of €2.3 billion. The Minister for Finance was prepared to provide that amount in return for an allotment of shares which would have diluted the existing shareholders’ interests and made the Minister the owner of the clear majority (more than 99%) of the shares in the group holding company. This proposal was, however, rejected by the shareholders at an EGM on 20 July 2011 at which Mr. Skoczylas was prominent. Accordingly, the group was the subject of the first of three direction orders made at the suit of the Minister for Finance in respect of the bank and the group holding company under s. 9 of the Credit Institutions (Stabilisation) Act 2010 (“the 2010 Act”), each of which has been challenged by Mr. Skoczylas. The 2010 Act was enacted, inter alia, to make provision, in the context of the National Recovery Plan 2011-2014 and the European Union/International Monetary Fund Programme of Financial Support for Ireland, for the stabilisation and preservation or restoration of the financial position of certain credit institutions. The direction orders made in respect of the group included two which are of relevance to these proceedings. :-

(a) A direction order made by the High Court on 26 July 2011 (“the 2011 direction order”) providing, inter alia, for the subscription by and allotment to the Minister for Finance of new shares in the group holding company, making him the owner of 99.2% of the capital in the company, giving him control of the group holding company, and thus of the bank, and

(b) A direction order made by the High Court on 28 March 2012 (“the 2012 direction order”) requiring the bank to sell its shareholding in the Irish Life Group to the Minister for Finance for the sum of €1.3 billion.


Mr. Skoczylas and other shareholders in the group holding company have sought to challenge these interventions, and the manner in which the group responded to the Minister's approach by the Minister in a number of different proceedings, thirteen in total to date. These include a series of injunction proceedings, constitutional challenges and proceedings under s. 205 of the Companies Act 1963 (“the 1963 Act”) alleging oppression of minority shareholders, but for present purposes it is sufficient to refer to three sets of proceedings in particular.



To continue reading

Request your trial
4 cases

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT