Permanent TSB v Skoczylas

• Jurisdiction: Ireland
• Judge: Costello J,Baker J,Collins J
• Judgment Date: 10 June 2020
• Neutral Citation: [2020] IECA 152
• Docket Number: Court of Appeal Record Nos. 2018/177 High Court Record Nos. 2018/72 (COS) 2018/33 (COM)
• Date: 10 June 2020
• Court: Court of Appeal (Ireland)

In the Matter of Permanent TSB Group Holdings Plc

and

In the Matter of a Proposed Capital Reduction Pursuant to Section 84 and Section 85 of the Companies Act 2014 (As Amended)

and

In the Matter of the Companies Act 2014 (As Amended)

Between

Permanent TSB Group Holdings Plc

Applicant/Respondent

and

Piotr Skoczylas

Respondent/Appellant

[2020] IECA 152

Baker J

Costello J

Collins J

Court of Appeal Record Nos. 2018/177

2018/365

High Court Record Nos. 2018/72 (COS)

2018/33 (COM)

THE COURT OF APPEAL

Stay – Costs order – Balance of justice – Appellant seeking an additional stay on a costs order – Whether the balance of justice lay in favour of granting the exceptional order sought by the appellant

Facts: The Court of Appeal, on 21 January 2020, determined two linked appeals: [2020 IECA 1]. The Court refused the appeal of the appellant, Mr Skoczylas, against the refusal of the trial judge to recuse himself from hearing the application to confirm a reduction of share capital in the respondent, Permanent TSB Group Holdings plc (the Company), pursuant to ss. 84 and 85 of the Companies Act 2014 and it also refused his appeal against the order of the High Court confirming the reduction in the share capital in the Company. On 27 February 2020 the Court heard submissions from the parties regarding the costs of the two appeals and of two appeals in respect of the orders for costs made in the High Court. The Court awarded the Company 75% of the costs of the appeals (the Cost Order). The terms of the Costs Order reflected the fact that the Company had been substantially successful but also reflected the fact that Mr Skoczylas had succeeded on the issue of the costs of the recusal application he had made in the High Court. After the Court had risen, it was informed that, having considered the Court’s ruling on costs, Mr Skoczylas had decided to apply to the Supreme Court for leave to appeal the Court’s decision on the appeals and wished to apply for a stay on the Costs Order until his application for leave was considered by the Supreme Court, and, in the event that the Supreme Court granted leave to appeal, a stay pending the determination of his appeal. The Court reconvened later on 27 February 2020 to allow Mr Skoczylas to make his application for such a stay and, having heard the parties, granted a stay on any execution of the Costs Order on the terms sought. Mr Skoczylas applied to the Court seeking a stay on the Costs Order pending the determination of one or other or both of the Köbler proceedings (Scotchstone Capital Fund Limited and Piotr Skoczylas v Ireland and the Attorney General, Defendant, Record Number 2019/2991P) and Constitutional proceedings (Gerard Dowling, Padraig McManus, Piotr Skoczylas and Scotchstone Capital Fund Limited v Ireland and the Attorney General and the Minister for Finance, Record Number 2013/2708P). His essential contention was that if he was successful in one or other of those proceedings that it would have been fundamentally unjust for the Company to execute the Costs Order against him in the intervening period.

Held by the Court that the Company was presumptively entitled to enforce the Costs Order if and when that Order became final and conclusive. In the Court’s view, none of the arguments advanced by Mr Skoczylas, individually or collectively, were sufficient to warrant a departure from that position. It would, in the Court’s view, be a significant injustice to the Company to suspend the Costs Order – potentially for many years – to permit Mr Skoczylas to pursue proceedings against the State, in respect of alleged wrongs for which the Company bears no responsibility in law. Even if, as Mr Skoczylas asserted, he was at risk of being adjudicated bankrupt on foot of non-payment of the costs payable under the Costs Order, the Court held that this is a risk faced by every unsuccessful litigant who lacks the means to pay the costs of a successful opponent. In the event that he is bankrupted, that may have reputational consequences for Mr Skoczylas but the Court held that it could not protect him from those consequences – consequences which he ought to have understood and considered in deciding to appeal against the Recusal and Confirmation Orders made by the High Court – without doing an obvious and material injustice to the Company.

The Court held that Mr Skoczylas’ application for an additional stay on the Costs Order would be refused. It appeared to the Court that the Company was presumptively entitled to the costs of the application.

Application refused.

NO REDACTION REQUIRED

JUDGMENT of the Court delivered on 10 June 2020

Procedural History

1 . On 21 January 2020, this Court determined two linked appeals [ 2020 IECA 1], For the reasons set out in the judgment of Collins J, with which the other members of the Court agreed, the Court refused Mr. Skoczylas' appeal against the refusal of the trial judge to recuse himself from hearing the application to confirm a reduction of share capital in Permanent TSB Group Holdings plc ( “the Company”) pursuant to sections 84 and 85 of the Companies Act 2014 and it also refused his appeal against the Order of the High Court confirming the reduction in the share capital in the Company.

2 . On 27 February 2020 the Court heard submissions from the parties regarding the costs of the two appeals and of two appeals in respect of the orders for costs made in the High Court. The Court awarded the Company 75% of the costs of the appeals ( “the Cost Order”). As the Court explained in its ruling (given by Baker J), the terms of the Costs Order reflected the fact that the Company had been substantially successful but also reflected the fact that Mr Skoczylas had succeeded on the issue of the costs of the recusal application he had made in the High Court.

3 . After the Court had risen, it was informed that, having considered the Court's ruling on costs, Mr Skoczylas had decided to apply to the Supreme Court for leave to appeal this Court's decision on the appeals and wished to apply for a stay on the Costs Order until his application for leave was considered by the Supreme Court, and, in the event that the Supreme Court granted leave to appeal, a stay pending the determination of his appeal.

4 . The Court reconvened later on 27 February 2020 to allow Mr Skoczylas to make his application for such a stay and, having heard the parties, granted a stay on any execution of the Costs Order on the terms sought.

5 . It should be observed that the only stay sought by Mr Skoczylas on 27 February 2020 was a stay pending his application for leave to appeal to the Supreme Court and that application was determined by the Court on that date. So far as the Court was concerned, that brought Mr Skoczylas' appeals to a conclusion.

6 . However, on 3 March 2020, Mr Skoczylas emailed the Court of Appeal Office stating that

“Upon a further reflection and consideration, in accordance with the relevant jurisprudence, I seek to appear before the Court at the earliest opportunity to make an application for an additional stay on the execution of said cost order, until the final conclusion of the so-called Köbler- type proceedings (currently before the High Court, bearing the rec. no. 2019/2991P), which have been in principle sanctioned to be initiated in the High Court by the Department of Justice and Equality, having regard to the CJEU seminal caselaw” (emphasis in the original) 1

7 . Mr Skoczylas attached detailed submissions in support of the contention that this “additional stay” should be granted and asked for the matter to be listed on one of a number of dates indicated by him, one of which was 12 March.

8 . The Court will refer further below to the “ Köbler- type proceedings” that Mr Skoczylas and a company associated with him, Scotchstone Capital Fund Limited (“ Scotchstone”), have brought against Ireland and the Attorney General (and which, for brevity, will be referred to in this judgment simply as the “ Köbler proceedings”).

9 . The Court listed the further stay application on 12 March at 9.45 am. On 3 March the solicitors for Permanent TSB (who were on notice of the application) indicated that, given that their client was not involved in the Köbler proceedings, they considered it appropriate that the application be brought by way of formal notice of motion and affidavit.

10 . In response, on 5 March 2020, Mr Skoczylas issued a notice of motion, grounded on his own affidavit, which was made returnable to 12 March, also at 9.45 am. That notice of motion sought a stay on the Costs Order pending the determination of the Köbler proceedings, as had previously been flagged by Mr Skoczylas. However, it also sought a stay on the Costs Order pending the determination of a further set of the proceedings brought by Mr Skoczylas challenging the constitutionality of the Credit Institutions Stabilisation Act 2010 (“ the 2010 Act”). A stay pending the determination of those proceedings had not previously been mentioned by Mr Skoczylas.

11 . In circumstances where the Company is not a party to the Köbler proceedings and did not appear to be in a position to assist the Court as to the status of those proceedings, the Court directed that the defendants in those proceedings should be put on notice of the stay application and informed of the listing on 12 March. When informed of that direction, Mr Skoczylas expressed vehement objection to it. He had no proper basis for any such objection and, as will appear, the appearance of the State defendants before the Court on 12 March added significantly to the Court's understanding of the status of the Köbler proceedings.

12 . In advance of 12 March 2020, it became apparent to the members of the Court that due to other commitments that they had on that date, a 9.45 am start might not allow sufficient time to deal with the stay application. The Court therefore...