SPV Osus Ltd v HSBC Institutional Trust Services (Ireland) Ltd

• Jurisdiction: Ireland
• Judge: Denham C.J.,Clarke J.,MacMenamin J.
• Judgment Date: 25 July 2017
• Neutral Citation: [2017] IESCDET 84
• Court: Supreme Court
• Date: 25 July 2017

[2017] IESCDET 84

THE SUPREME COURT

DETERMINATION

Denham C.J.

Clarke J.

MacMenamin J.

BETWEEN

SPV OSUS LTD

PLAINTIFF

AND

HSBC INSTITUTIONAL TRUST SERVICES (IRELAND) LIMITED

HSBC SECURITIES SERVICES (IRELAND) LIMITED

OPTIMAL INVESTMENT SERVICES S.A.

AND

BANCO SANTANDER S.A.

DEFENDANTS

APPLICATION FOR LEAVE TO APPEAL TO WHICH ARTICLE 34.5.3° OF THE CONSTITUTION APPLIES

RESULT: The Court grants leave to the Plaintiff to appeal to this Court from the Court of Appeal

REASONS GIVEN:

1. Introduction

1.1 This determination is directed to the question of whether leave to appeal should be permitted in the somewhat unusual the circumstances of this case. The plaintiff/intended appellant (‘Osus’) has brought these proceedings seeking to litigate issues against the defendants/intended respondents (‘HSBC’) on the basis that it contends that, as a result of an assignment made in the context of bankruptcy proceedings in New York in the United States of America, it has a legal entitlement to maintain the relevant causes of action in this jurisdiction. However, an issue arose as to whether the assignment in question was capable of conferring the right on Osus to litigate those issues in the Irish courts. In that context an issue was tried in the High Court with judgment being given by Costello J. on the 5th October, 2015 ( SPV Osus Limited v HSBC Institutional Trust Services (Ireland) Limited & ors [2015] IEHC 602). The factual background to the proceedings generally and to that application are set out fully in the judgment of Costello J. and it is unnecessary to repeat them here. Suffice it to say that Costello J. concluded that the assignment in question would not be recognised in Irish law.

1.2 From that decision Osus appealed to the Court of Appeal with the judgment of that court being given by Ryan P. on the 2nd March, 2017 ( SPV Osus Limited v. HSBC Institutional Trust Services (Ireland) Limited & ors [2017] IECA 56). For the reasons set out in that judgment the Court of Appeal dismissed the appeal and affirmed the order of the High Court. Osus now seeks to further appeal the matter to this Court. However, in circumstances which will be set out in a little more detail, a specific issue arose in the light of the respondent's notice filed by HSBC in relation to the application for leave to appeal. It was asserted on behalf of HSBC that the issues now sought to be raised by Osus on this appeal had not been raised in either the High Court or the Court of Appeal and, on that basis, and without prejudice to the question of whether those issues might, theoretically, demonstrate that the appeal met the constitutional threshold, it was said that it would be inappropriate to grant leave to appeal.

1.3 It was in those unusual circumstances that the Court directed that there be an oral hearing of the application for leave. It is, therefore, first necessary to address the issues which arose in the written submissions filed for the purposes of that oral hearing and in the oral submissions made by the respective parties. Before going on to consider the precise questions which arose for debate in the particular circumstances of this case it is appropriate to start by making some general comments relating to the new constitutional appellate architecture in the context of the possibility that a party may seek to raise new or different issues on appeal to this Court.

2. Raising New Grounds

2.1 Long before the passage of the 33rd Amendment to the Constitution it has, of course, been the case that appellate courts have been reluctant to permit issues to be canvassed on appeal where the issues concerned had not fairly been raised in the Court below. In Lough Swilly Shellfish Growers Cooperative Society Limited & anor v. Bradley [2013] 1 I.R. 227, O'Donnell J. analysed the principles by reference to which a court might consider whether it was appropriate, in the particular circumstances of the case in question, to permit grounds to be raised which had not been the subject of debate in the High Court. Lough Swilly was, of course, an appeal which came to this Court under the old constitutional appellate architecture.

2.2 It is clear from the judgment of O'Donnell J. in Lough Swilly that the Court was attempting to balance two important values in reaching an overall assessment as to the criteria to be applied in such situations. On the one hand there is the fact that this Court (and, indeed, now the Court of Appeal) are described in the Constitution as appellate courts so that their role should be seen as being focused on determining whether the judgment and order appealed can be said to have been correct. It is hard, at least in most cases, to argue that a decision of a trial court was incorrect on the basis of issues which were not addressed to that court. Furthermore, any undue tolerance of the admission of grounds of appeal relating to issues not previously argued would lead to procedural chaos and would run the risk of causing untold injustice across the range of cases. Those considerations lean very heavily against allowing litigants to reinvent their case on appeal. It has sometimes been observed, and litigants need to keep in mind, that a trial is not a rehearsal. See for example the comments in that regard in the judgments in Ambrose v. Shelvin [2015] IESC 10 and Koger Inc & anor v. O'Donnell [2013] IESC 28.

2.3 On the other side of the coin there is the legitimate aim of attempting to ensure that injustice is not caused by shutting out a party from making a case on appeal which may demonstrate that they should have won the proceedings sought to be appealed. However, as O'Donnell J. points out in Lough Swilly, such considerations may be accommodated a lot more readily where the case is towards the end of the spectrum where what is sought to be deployed as a ground of appeal might be considered to be a purely legal argument which is at least not inconsistent with the case previously made or, indeed, might be regarded as an evolution or refinement of the propositions advanced at first instance. The balance would be very different where there would be a reasonable basis for being concerned that the evidence at the trial might have been different had the issue sought to be raised on appeal been fairly advanced in the court of trial.

2.4 For example, trial judges frequently describe general background facts without analysing those facts in great detail on the basis that the facts concerned are not material to the issues which have to be decided. Likewise, parties may not exercise particular care in relation to facts which do not seem relevant to the issues as they appear at the trial. Evidence, for example, may not be contested, even if not accepted, if it appears to be of no relevance. The potential for injustice in allowing a case to be reinvented on appeal where there is a risk that the approach to the evidence at the trial might have been different had the issues sought to be raised been before the trial court, is all too obvious. In many such cases the only conceivable outcome might be a retrial. But exposing a party, who has fairly presented or met the case in the court of trial in accordance with the issues there raised, with the prospect not only of an appeal but the risk of a further trial (and possibly even a further appeal...