Quinn v Irish Bank Resolution Corporation Ltd (in special liquidation) & Wallace

• Jurisdiction: Ireland
• Judge: Mr. Justice Ryan
• Judgment Date: 15 March 2013
• Neutral Citation: [2013] IEHC 116
• Date: 15 March 2013
• Court: High Court
• Docket Number: [2011 Nos. 4336 P and 101 COM]

[2013] IEHC 116

THE HIGH COURT

[No. 4336 P./2011]

Quinn v Irish Bank Resolution Corp Ltd (in special liquidation) & Wallace

BETWEEN

CIARA QUINN, COLLETTE QUINN, BRENDA QUINN, AOIFE QUINN, PATRICIA QUINN, SEAN QUINN JUNIOR

PLAINTIFFS

AND

IRISH BANK RESOLUTION CORPORATION LIMITED (IN SPECIAL LIQUIDATION) AND KIERAN WALLACE

DEFENDANTS

AND

SEAN QUINN SENIOR, DARA O'REILLY AND LIAM McCAFFREY

THIRD PARTIES

Re. Notice of Motion dated the 14 th February, 2013.

IRISH BANK RESOLUTION CORPORATION ACT 2013 S6(2)(A)

IRISH BANK RESOLUTION CORPORATION ACT 2013 S6

COMPANIES ACT 1963 PART VI

COMPANIES ACT 1963 S222

IRISH BANK RESOLUTION CORPORATION ACT 2013 S6(2)

IRISH BANK RESOLUTION CORPORATION ACT 2013 S3

IRISH BANK RESOLUTION CORPORATION ACT 2013 S4

IRISH BANK RESOLUTION CORPORATION ACT 2013 S6(B)

IRISH BANK RESOLUTION CORPORATION ACT 2013 S6(5)

IRISH BANK RESOLUTION CORPORATION ACT 2013 S10

IRISH BANK RESOLUTION CORPORATION ACT 2013 S10(2)

COMPANIES ACT 1963 S220

COMPANIES ACT 1963 S221

COMPANIES ACT 1963 S223

IRISH BANK RESOLUTION CORPORATION ACT 2013 S10(2)(I)

COMPANIES ACT 1963 S280(3)

COMPANIES ACT 1963 S280(4)

COMPANIES ACT 1963 S280(1)

COMPANIES ACT 1963 S280(2)

EAST DONEGAL CO-OPERATIVE LIVESTOCK MART LTD v AG 1970 IR 317

MCDONALD v BORD NA GCON (NO 2) 1965 IR 217 100 ILTR 89

EDISON FIRST POWER LTD v CENTRAL VALUATION & ANOR 2003 4 AER 209 2003 2EGLR 133 2003 UKHL 20

INTERPRETATION ACT 2005 S5

CONSTITUTION ART 40.1

BRENNAN v AG 1983 ILRM 449

EUROPEAN CONVENTION ON HUMAN RIGHTS ACT 2003 S2(1)

COMPANIES ACT 1963 S280

IRISH BANK RESOLUTION CORPORATION ACT 2013 S6(1)

STATUTORY INTERPRETATION

Construction

Special Liquidation Order - Immediate stay on proceedings - Effect on existing proceedings - Literal interpretation - Interpretation consonant with constitutional principle - Constitutional rights - Whether stay temporary and capable of being lifted by application to court - Brennan v Attorney General [1983] ILRM 449; East Donegal Co-Operative Livestock Mart Ltd v Attorney General [1970] IR 317; McDonald v Bord na gCon [1965] IR 217 and R (Edison) v Central Valuation Officer [2003] UKHL 20, [2003] 4 All ER 209 considered - Companies Act 1963 (No 33), s 222 - Interpretation Act 2005 (No 23), s 5 - Irish Bank Resolution Corporation Act (No 30), ss 6(2)(a), 6(2)(b) and 10 - Stay lifted (2011/4336P and 2011/101COM - Ryan J - 15/3/2013) [2013] IEHC 116

Quinn v Irish Bank Resolution Corp Ltd (in liquidation)

Facts The notice of motion concerned the effect of s. 6(2)(a) of the Irish Bank Resolution Corporation Act, 2013 on existing court proceedings. The plaintiffs had been in litigation with the Irish Bank Resolution Corporation (IBRC). The 2013 Act had the effect of putting IBRC into liquidation and section 6 of the Act provided that all existing court proceedings would be stayed and that no further proceedings could be issued without leave of the court. Both parties agreed that the legislature did not have the power to declare that proceedings already in being would no longer be an action to be heard by a court although this was open to debate by the terms set out in the legislation. It was submitted that the legislature did not intend in the 2013 Act to prevent the courts from administering justice in cases already before it.

Held by Ryan J in making the following order and finding in favour of the plaintiffs: The court must prefer a constitutional construction to one which would be unconstitutional or doubtful. The court would hold that a fair proper and constitutional interpretation and also a similar approach based on common law led one to the inevitable conclusion that the stay on proceedings was intended to be subject to being lifted on application to the courts.

1 JUDGMENT of Mr. Justice Ryan delivered the 15th March, 2013

1. Introduction

2 This motion concerns the meaning and effect of s. 6(2)(a) of the Irish Bank Resolution Corporation Act, 2013. The legislation was passed with great urgency over the course of one night and it had the effect of putting IBRC into liquidation. The Act empowered the Minister for Finance to make a special liquidation order. Section 6 of the Act deals with some of the consequences of the procedure; subsection (2)(a) provides that on the making of the order "there shall be an immediate stay on all proceedings against IBRC" and paragraph (b) says that "no further actions or proceedings can be issued against IBRC without the consent of the Court".

3 The plaintiffs have litigation in being in which they are suing IBRC in proceedings that they instituted in 2011 and that were pending at the time when the legislation was passed and the special liquidation order was made.

4 The result of the action that was authorised by the Act was the liquidation of IBRC. This was a liquidation that was effected by statute and not by a court pursuant to Part VI of the Companies Act. In a winding up by the Court, Section 222 of the 1963 Companies Act provides that proceedings that are already in being or proceedings that are intended to be brought at the time of the liquidation can only be continued or instituted with leave of the court. Under S. 222, the same rule applies to existing proceedings and to intended proceedings that are not yet in existence when the order for winding up is made by the court.

5 The 2013 legislation contains some provisions concerning the liquidation of the bank that are adopted from the Companies Act with necessary alterations to fit the special statutory scheme. Other sections of the 1963 Act are excluded from applying, among them Section 222. Section 6(2) is analogous to that provision.

6 The question that arises here is what impact does S. 6(2)(a) have on the plaintiffs' litigation that was in existence at the time of the making of the special liquidation order. Obviously, one thing it does is to put a stay on those proceedings, but the real question is: what more does it do? Is it intended to terminate the proceedings? Is this an enactment by the Oireachtas that simply puts an end to all existing actions against IBRC?

7 The parties to this motion argue that the obvious answer is that it does not and cannot have that effect. In other words, the legislature does not have the power to declare that a proceeding that is already in existence before the court but has not yet been heard will no longer be an action to be heard by a court now or at any time in the future. They say that would obviously be an interference in the court process, it would prevent access to the courts for determination of rights or entitlements or claims, it would be a breach and a manifest breach of the separation of powers between legislature and judiciary and it would also offend against other basic principles of democracy as well as constitutional law. Such a construction put on the paragraph would also offend principles of equality and would be wholly irrational because of the difference of treatment of pending and intended litigation. The catalogue of infractions of rights and principles would be unrivalled in Irish legal and constitutional history.

8 The curious situation thus arises on the motion that there is no dispute between the parties as to what the result, that is, my decision, should be on the interpretation of section 6(2)(a). They are both in agreement that there is indeed a stay which was imposed on the making of the special liquidation order but they say that the legislation must be read as envisaging or at least permitting an application to this Court to lift the stay and let the case continue. They also agree that it is appropriate that the court should lift the stay. They argue that the stay is a temporary measure that was imposed under the Act and that it makes no sense to construe the provision in any other way.

9 The problem is that the section does not actually say what the parties contend for. It does not say that from the making of the special liquidation order, "no action or proceeding shall be proceeded with or commenced against the company except by leave of the court and subject to such terms as the court may impose" - which is what s. 222 of the 1963 Act says. That does not mean that they are wrong but that one has to see whether it is a legitimate interpretation or construction to read the section in the way that both sides submit should be done. The first step is to ascertain the meaning of s. 6(2)(a), an exercise that some scholars refer to as interpretation. Then it has to be construed in accordance with principles of statutory interpretation and construction.

10 The accord between the parties on the issue to be decided presents some difficulty for a court. In a sense, the only legitimus contradictor is myself as the judge. It may be compared with a question of jurisdiction, which a court must resolve before deciding the issues raised by the contending parties, where they are in agreement that the matter is properly before the court and willing to submit to its order. In normal circumstances, consent of the disputants is sufficient to overcome procedural impediments. But a court may not even by agreement act contrary to law. That is the issue that arises in this motion. If I do not have legal capacity to interfere with the stay that is admittedly in place, this application must be refused. If I do have jurisdiction, the defendant supports the lifting of the stay.

2. The Motion & Grounding Affidavit

11 In their Notice of Motion dated the 14 ^th February, 2013, the plaintiffs seek the following relief:-

12 2 "1. An order pursuant to the inherent jurisdiction of this Honourable Court, or otherwise, lifting the stay imposed on the above entitled proceedings pursuant to s. 62(a) of the Irish Bank Resolution Corporation Act 2013;

13 2. Such further and/or...