Scotchstone Capital Fund Ltd and Another v Ireland and Another

• Jurisdiction: Ireland
• Judge: Donnelly J.,Faherty J.,Ní Raifeartaigh J.
• Judgment Date: 25 May 2023
• Neutral Citation: [2023] IECA 129
• Court: Court of Appeal (Ireland)
• Docket Number: Appeal Number: 2020/149

Between/

Scotchstone Capital Fund Ltd.

and

Piotr Skoczylas

Plaintiffs/Appellants

and

Ireland and The Attorney General

Defendants/Respondents

[2023] IECA 129

Donnelly J.

Faherty J.

Ní Raifeartaigh J.

Appeal Number: 2020/149

THE COURT OF APPEAL

UNAPPROVED

JUDGMENT of the Court dated the 25 ^th day of May 2023

1 . The issue that arises in this judgment is whether in circumstances where the solicitor-client relationship has irretrievably broken down, the Court should nevertheless refuse to permit the solicitor to come off record.

2 . This is the application of Doran W. O'Toole & Co., Solicitors for the first named appellant, to come off record. For ease of reference, the applicant will be referred to as “the Solicitors” or “Mr. O'Toole”. The application is opposed by the first appellant (hereinafter “Scotchstone” or “the Company”) via the second appellant (hereinafter “Mr. Skoczylas”) qua his position as a director of Scotchstone.

3 . Before dealing with the merits of the application, it is useful to briefly set out the history of the proceedings and the circumstances in which the Solicitors came on record for Scotchstone.

4 . Scotchstone and Mr. Skoczylas, 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. For ease of reference the proceedings will be referred to as “the Köbler proceedings”. Following the issue of the Köbler proceedings, the respondents brought a motion to strike out the proceedings for being frivolous and vexatious and/or bound to fail. They succeeded in that motion before Sanfey J. in the High Court. Both Mr. Skoczylas and the Company appealed the decision of Sanfey J. to this Court. Mr. Skoczylas appeared for himself. The Company was represented by Flynn O'Donnell, Solicitors (“Flynn O'Donnell”). Flynn O'Donnell played little or no part in the appeal, Mr. Skoczylas' oral and written submissions having been adopted by Flynn O'Donnell on behalf of the Company. This was not unusual in litigation involving Mr. Skoczylas and Scotchstone, for reasons which will become apparent.

5 . The argument advanced in the appeal was that the High Court was wrong in law and in fact in granting the dismissal of the proceedings. The respondents submitted that the High Court was correct.

6 . This Court gave judgment in the substantive Köbler appeal on 31 January 2022 upholding the High Court Order ( [2022] IECA 23.

7 . By notice of motion dated 16 March 2022, Mr. Skoczylas issued a motion in which he sought the following orders:

• (a) To vary/set aside/rescind the judgement of this Court of 31 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 Mr. Skoczylas contended were “material and decisive errors” in the substantive judgment, pursuant to the jurisdiction identified in Nash v. Director of Public Prosecutions [2017] IESC 51 and Bailey v. Commissioner of An Garda Síochána [2018] IECA 63 (“the Nash relief”);

• (c) Alternatively, an order to stay the within proceedings and to stay any order striking out the case pending the outcome of other proceedings in which the appellants seek to challenge the constitutionality of the Credit Institutions (Stabilization) Act 2010.

8 . Subsequent to the issuing of what will hereinafter be referred to as the Greendale motion, the Court was apprised by Mr. Skoczylas that Scotchstone had instructed Flynn O'Donnell (who had acted for the Company in the appeal) to retain counsel for the purposes of making submissions in relation to the Greendale motion. Ultimately, on 2 August 2022, one set of submissions was filed on behalf of Mr. Skoczylas and Scotchstone (signed by Mr. Skoczylas in person and Senior Counsel for Scotchstone who, the Court was informed, was instructed by Mr. Shane O'Donnell of Flynn O'Donnell), each adopting the other's submissions.

9 . On 11 October 2022, the Solicitors formally came on record for Scotchstone in the within proceedings. This was in circumstances where Mr. O'Donnell had informed Mr. Skoczylas on 1 October 2022 that Flynn O'Donnell wished to come off record. There is dispute between Mr. O'Toole and Mr. Skoczylas as to Flynn O'Donnell's reasons for coming of record, as is apparent from their respective affidavits. This Court, however, does not find it necessary for the purposes of the present application to say whose account (Mr. O'Toole's or Mr. Skoczylas') in this regard is to be preferred.

10 . The Greendale motion was scheduled for hearing before this Court on 2 November 2022. On 24 October 2022, in advance of the scheduled hearing, Mr. Skoczylas sought to lodge an affidavit sworn by him on 21 October 2022, together with exhibits, with the Court of Appeal Office. Mr. Skoczylas' email of 24 October 2022 referred to “exceptional developments” and “unique circumstances” that had arisen regarding Scotchstone's legal representation of which, Mr. Skoczylas said, the Court needed to be apprised.

11 . On 25 October 2022, Mr. Skoczylas was informed by the Office, pursuant to the direction of the Court, that the Court had not given liberty to any party to file further affidavits, the Court already being in receipt of the respective affidavits sworn by the parties in relation to the Greendale motion as well as the parties' written submissions.

The Greendale motion and the Solicitors' motion to come off record

12 . The Greendale motion duly came on for hearing on 2 November 2022. It is common case that by the time that motion came before the Court, the Solicitors' motion dated 26 October 2022 to come off record had been filed in the Office and made returnable for 4 November 2022. The motion was grounded on an affidavit sworn by Mr. Doran W. O'Toole on 26 October 2022.

13 . Mr. O'Toole's affidavit is relatively brief. Therein he avers that he was requested by Mr. Skoczylas on 3 October 2022 to come on record for the Company “immediately”. According to Mr. O'Toole, when he asked about the case Mr. Skoczylas was “vague and evasive” saying that Mr. O'Toole would be more of an “administrator” and that Mr. Skoczylas “would do everything”. Mr. O'Toole asked for pleadings to be sent to him. He says that on 6 October 2022, a folder was sent to him by email “with limited access”. He avers to being pressured by Mr. Skoczylas to file a notice of change of solicitor and that he and Mr. Skoczylas had their first disagreement about the drafting of that notice. He states:

“4. I say the problems began immediately. Mr. Skoczylas would not listen to my advices, he was totally unreasonable expecting me to take on cases with limited information and pleadings and refused to even discharge Outlays being the Stamp Duty on the Notice of Change. He has also on numerous occasions threatened me with a Complaint to the LSRA.

5. I say that Piotr Skoczylas informed me that the Company had no issue with its previous Solicitors, Flynn O'Donnell Solicitors but told me not to contact them and there were no issues in relation to costs. I am not in a position to act for the Company as I will not continue now knowing how unreasonable the Second Named Plaintiff is and I am reluctant to continue not knowing the Company's position with the previous Solicitor on Record or without payment of fees.

6. I say I cannot continue to act for a company where I know very little about or how the Company is financing its litigation. Mr. Skoczylas has been aggressive and threatening to me. I cannot continue to act for the Company or to take instructions on behalf of the Company and the Second Named Plaintiff.”

14 . What was set out by Mr. O'Toole in his grounding affidavit and what was averred to by Mr. Skoczylas in the affidavit he swore on 21 October 2022 (an affidavit to which the Court will return in due course) constituted the state of play regarding the application to come off record by the time the Greendale motion came before the Court on 2 November 2022. At that hearing, Mr. Skoczylas advised the Court that he was not ready to deal with the motion to come off record (which he was opposing) scheduled for 4 November 2022 and he required time to put in submissions. He referred to the affidavit he had sworn on 21 October 2022 and intimated that he would be relying on it and that he wanted to swear a further affidavit in reply to Mr. O'Toole's affidavit. Mr. Skoczylas was duly informed by the Court that as there was now a motion to come off record before the Court, his 21 October 2022 affidavit would be accepted as part of his response to the motion. The Court duly fixed the hearing of the application to come off record for 7 December 2022, with leave given to Mr. Skoczylas to file his affidavits by 2 December 2022.

15 . Significantly, on 2 November 2022, Mr. Skoczylas had no objection to the Greendale motion proceeding (it not having been argued by Mr. Skoczylas on behalf of the Company that Mr. O'Toole was required to remain in the courtroom for the hearing) and, indeed, he stated that he was happy to proceed. Thus, Scotchstone did not participate in the Greendale application notwithstanding that it had previously been envisaged it would do so. Of course, the Solicitors remained on record for the Company, and as will become clear, this is what was and continues to be of concern to Mr. Skoczylas, not whether there was de facto participation by the legal representative on record for Scotchstone on the day. In any event, the joint written submissions of Mr. Skoczylas and the Company on the Greendale motion were before the Court.

16 . The hearing of the Greendale motion then proceeded with submissions from Mr. Skoczylas, and from Mr. McCullagh SC on behalf of the State respondents. Thereafter, the Court reserved its judgment in relation to the matter.

17 . The Court duly...