Scotchstone Capital Fund Limitd v Ireland

• Jurisdiction: Ireland
• Judge: Donnelly J.,Faherty J.,Ní Raifeartaigh J.
• Judgment Date: 05 December 2022
• Neutral Citation: [2022] IECA 275
• Court: Court of Appeal (Ireland)
• Docket Number: Record No: 2020 149

Scotchstone Capital Fund Ltd

Appellant

and

Piotr Skoczylas

Applicant/Appellants

and

Ireland and the Attorney General

Respondents/Respondents

[2022] IECA 275

Donnelly J.

Faherty J.

Ní Raifeartaigh J.

Record No: 2020 149

COURT OF APPEAL

EU law – Infringements – Damages – Appellants seeking a declaration that Ireland was obliged to make good damages allegedly caused to them by infringements of EU law for which it was claimed Ireland was responsible – Whether the proceedings were frivolous and vexatious and/or bound to fail

Facts: The appellants, Scotchstone Capital Fund Ltd and Mr Skoczylas (the applicant), sought a declaration that Ireland was obliged to make good damages allegedly caused to them by infringements of EU law for which it was claimed Ireland was responsible, relying on Case C-224/01 Köbler v Österreich (the Köbler proceedings). The respondents, Ireland and the Attorney General, brought a motion to strike out those proceedings for being frivolous and vexatious and/or bound to fail. They succeeded in that motion before Sanfey J in the High Court. On the 31st January, 2022, the Court of Appeal delivered judgment dismissing the appellants’ appeal against the decision and order of Sanfey J. By notice of motion dated 16 March 2022, the applicant issued a motion in which he sought the following orders: (a) to vary/set aside/rescind the judgment of the Court of 31st January, 2022 pursuant to the jurisdiction identified in Re Greendale Developments Ltd (No. 3) [2000] 2 IR 514 (the Greendale relief); (b) to correct what he contended were “material and decisive errors” in the said judgment, pursuant to the jurisdiction identified in Nash v Director of Public Prosecutions [2017] IESC 51 (the Nash relief); (c) alternatively, an order to stay the proceedings and to stay any order striking out the case pending the outcome of other proceedings in which the appellants sought to challenge the constitutionality of the Credit Institutions (Stabilisation) Act 2010 (Dowling & Ors v Minister for Finance & Ors (Rec. No. 2013/2708P)).

Held by the Court that the applicant had not discharged the onus on him as required by the principles in the Greendale jurisprudence to set aside the written judgment of the 31st January 2022. The Court was satisfied that the stay sought by the applicant ought not to be granted. The Court held that it would be inconsistent with the proper administration of justice for the Court, having proceeded to hear and determine the appeal to finality, to then take the extraordinary step of “staying” or “arresting” the judgment/order of the Court solely so that other proceedings may be heard to finality. The Court held that as a matter of principle, a case which has been heard and determined and where judgment has been given, ought to be finalised, subject to any appropriate intervention that is made pursuant to the Greendale jurisprudence. The Court held that it would be inconsistent with the policy considerations which attach to the importance of finality, as expressed in the relevant judgments, to postpone finality merely because other proceedings exist. Moreover, even if it may be appropriate to make such an intervention in other situations, the Court held that this was not a situation where such an intervention ought to be made. The Court held that these proceedings were of a particular type; a Köbler claim that the Supreme Court engaged in a manifest violation of EU law. The Court was satisfied that the proceedings were separate and discrete proceedings which ought to be finalised.

The Court refused the applicant the Greendale relief and the Nash relief, noting that although sought as separate reliefs, the Nash decision formed part of the general Greendale jurisprudence and therefore were dealt with together. The Court also refused the applicant the stay on the proceedings that he had requested which was in effect a stay on the finalisation of the motion to strike out the proceedings. The Court confirmed the decision to dismiss the appeal; therefore, the order of the High Court stood and the entire proceedings were struck out.

Application refused.

JUDGMENT of the Court delivered on the 5 ^th day of December 2022

Introduction

1 On the 31 ^st January, 2022, this Court delivered judgment dismissing the appeal against the decision and order of the High Court (Sanfey J.) to strike out proceedings as being frivolous and/or vexatious and/or bound to fail.

2 By notice of motion dated 16 March 2022, the second named appellant (hereinafter the applicant) issued a motion in which he sought the following orders:

• a) to vary/set aside/rescind the judgment of this Court of 31 ^st January, 2022 pursuant to the jurisdiction identified in Re Greendale Developments Ltd. (No. 3) [2000] 2 IR 514; (“the Greendale relief”)

• b) to correct what he contends are “material and decisive errors” in the said judgment, pursuant to the jurisdiction identified in Nash v Director of Public Prosecutions [2017] IESC 51 and Bailey v Commissioner of An Garda Síochana [2018] IECA 63 (“the Nash relief”)

• c) alternatively, an order to stay these proceedings and to stay any order striking out this case pending the outcome of other proceedings in which the appellants seek to challenge the constitutionality of the Credit Institutions (Stabilisation) Act 2010. ( Dowling & Ors v Minister for Finance & Ors (Rec. No. 2013/2708P))

3 Scotchstone Ltd, the first appellant, did not issue a motion. Subsequent to the issuing of the Greendale motion by the applicant, the Court was apprised that the first appellant had instructed Flynn O'Donnell Solicitors (who had acted for the first appellant in the appeal) to retain counsel for the purposes of making submissions in relation to the Greendale motion. One set of submissions was filed by the appellants (signed by the applicant in person and senior counsel, whom the Court was informed was instructed by Mr. Shane O'Donnell of Flynn O'Donnell Solicitors), each adopting the other's submissions. There was a change of solicitor for the company in October 2022. The new solicitor issued a motion to come off record on the 26 ^th October 2022. That motion has been adjourned, at the request of the applicant, for hearing to the 7 ^th December 2022. Hence, at the hearing of the motion on 2 ^nd November 2022, the applicant was not represented.

4 A brief background to the history of these proceedings is necessary. The appellants, as plaintiffs, sought a declaration that Ireland was obliged to make good damages allegedly caused to them by infringements of EU law for which it is claimed Ireland was responsible. The appellants relied on Case C-224/01 Köbler v. Österreich, Case C-173/03 Traghetti del Mediterraneo SpA v Italy and Case C-160/14 João Filipe Ferreira v Portugal. For ease of reference these proceedings will be called the Köbler proceedings.

5 Following the issue of the Köbler proceedings, the respondents brought a motion to strike out those proceedings for being frivolous and vexatious and/or bound to fail. They succeeded in that motion before Sanfey J. in the High Court and the appellants were unsuccessful in their appeal. In the course of the appeal, the applicant who appeared for himself, and whose oral and written submissions were adopted by the first appellant's then solicitor, argued that the High Court was wrong in law and in fact in granting the dismissal. The respondents submitted that the High Court was correct.

The Judgment of 31st January 2022

6 Before turning to the judgment delivered on 31 ^st January 2022, it is apposite to refer briefly to proceedings (“the underlying proceedings”) which preceded the Köbler proceedings. Suffice it to say that the central legal issue litigated by the appellants in the underlying proceedings was whether the Minister for Finance breached the appellants' rights under the Second Companies Directive when he recapitalised a bank (Irish Life and Permanent plc) of which they were shareholders. The recapitalisation was made pursuant to Direction Orders under the Credit Institutions (Stabilisation) Act 2011 (“CISA”). The underlying proceedings gave rise to the decision in Dowling v Minister for Finance [2014] IEHC 418 where the High Court made a reference for a preliminary ruling to the Court of Justice of the European Union. In Case C-41/15 Dowling v. Minister for Finance, the CJEU decided the issues contrary to the arguments of the appellants. The decision of the CJEU was applied by the High Court (O'Malley J.) in Dowling v Minister for Finance [2017] IEHC 520. The decision of O'Malley J. was upheld by the Court of Appeal in Dowling v Minister for Finance [2018] IECA 300. The Supreme Court refused leave to appeal ( Dowling & ors v The Minister for Finance & ors [2019] IESCDET 55) (see paras.149–234 of the judgment of 31 ^st January 2022).

7 In the present ( Köbler) proceedings, the appellants claimed damages against the State based upon a claim that there has been a manifest infringement of their EU law rights by the Supreme Court's decision. The case made by the appellants was, in essence, that the national courts have misinterpreted and/or misapplied the ruling of the CJEU in Dowling in a manner which brings the present litigation into the Köbler line of case law.

8 In our judgment of the 31 ^st January, 2022, we set out the legal principles applicable to considering a Köbler claim. We analysed the interpretation of the decision of the CJEU in Dowling and how it was subsequently applied in the Irish courts. As the issue before us was, in essence, the respondents' claim that the proceedings ought to be struck out as bound to fail, we examined whether such a strike out jurisdiction existed in the case of a Köbler type claim and we concluded, at para 310, that: “[n]othing in the Köbler line of jurisprudence, or in the EU authorities more generally, has been cited in support of the...