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Judgment Title: Dowling & ors -v- The Minister for Finance Neutral Citation: [2013] IEHC 299 High Court Record Number: 2013 5683 P Date of Delivery: 02/07/2013 Court: High Court Composition of Court: Judgment by: Laffoy J. Status of Judgment: Approved |
Neutral Citation [2013] IEHC 299 THE HIGH COURT [2013 No. 5683P] IN THE MATTER OF INJUNCTION TO RESTRAIN THE MINISTER FOR FINANCE FROM RE-SELLING IRISH LIFE GROUP LIMITED AND IN THE MATTER OF SECOND COUNCIL DIRECTIVE 77/91/EEC AND IN THE MATTER OF DIRECTIVE 2001/34/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL AND IN THE MATTER OF DIRECTIVE 2009/101/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL AND IN THE MATTER OF DIRECTIVE 2004/25/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL AND IN THE MATTER OF DIRECTIVE 2004/39/EC OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL AND IN THE MATTER OF ARTICLE 63 OF THE TREATY ON THE FUNCTIONING OF THE EUROPEAN UNION AND IN THE MATTER OF ARTICLE 267 OF THE TREATY ON THE FUNCTIONING OF THE EUROPEAN UNION BETWEEN GERARD DOWLING, PADRAIG McMANUS, JOHN PAUL McGANN, TIBOR NEUGEBAUR, PIOTR SKOCZYLAS, MURIEL SCORER, GEORG HAUG AND J. FRANK KEOHANE PLAINTIFFS AND
THE MINISTER FOR FINANCE DEFENDANT Judgment of Ms. Justice Laffoy delivered on 2nd day of July, 2013. Proceedings and application in outline 2. The application to which this judgment relates is an application for interlocutory injunctive relief, which was initiated by a notice of motion which the plaintiffs were given leave to issue on 5th June, 2013. The principal affidavits relied on by the plaintiffs on the application were sworn by the fifth plaintiff (Mr. Skoczylas). As has happened previously in related proceedings, as I understand it, at the hearing of the application Mr. Skoczylas made submissions to the Court on behalf of all of the plaintiffs. At the end of those submissions, the first plaintiff (Mr. Dowling), the second plaintiff (Mr. McManus), and the third plaintiff (Ms. Scorer) made short additional submissions to the Court. 3. In broad terms, the complaints of the plaintiffs, each of whom is a shareholder in Permanent TSB Group Holdings plc (Holdings), in respect of which they seek redress in these proceedings and in the related proceedings arise from actions taken by the Minister to recapitalise Permanent TSB plc (the Bank), which is a wholly owned subsidiary of Holdings, pursuant to the requirements of the Central Bank of Ireland and the obligations of the State to the Commission of the European Union (the Commission) and the International Monetary Fund in consultation with the European Central Bank, being collectively colloquially known as “the Troika”, and from subsequent actions taken by the Minister. 4. Before outlining the nature of the injunctive relief which the plaintiffs seek on this application, it is necessary to outline the relevant events in relation to Holdings and the Bank since 2009 to put the application into its factual and procedural context. Factual and procedural context 6. In line with the obligations of the State referred to earlier, the Credit Institutions (Stabilisation) Act 2010 (the Act of 2010) was enacted. As the beginning of the long preamble to that Act indicates, it was enacted to make provision, in the context of the National Recovery Plan 2011 – 2014 and the European Union/International Monetary Fund Programme of financial support for Ireland, in relation to the stabilisation and the preservation or restoration of the financial position of certain credit institutions. Part 2 of the Act of 2010, which is headed “Direction Orders”, was subsequently deployed by the Minister to propose and obtain, consequent on an ex parte application to the High Court, three direction orders pursuant to s. 9 of the Act of 2010. In the case of two of the direction orders, the plaintiffs, or some of them, have brought applications to the High Court under s. 11 of the Act of 2010 seeking to set aside the direction orders. The first direction order, which was made in June 2010, provided that the Minister could prepare for the sale of the Company by Initial Public Offering or private sale. That order has not been challenged. The second direction order was made by the High Court on 26th July, 2011 (the July 2011 Direction Order). The context in which that order was made was that the Bank was required, pursuant to the capital requirements of the Central Bank, to raise €2.9 billion before 31st July, 2011, which it was unable to do, in consequence of which the State was required to invest the capital in the Bank. The July 2011 Direction Order provided for the investment by the Minister of up to €3.8 billion in Holdings, which was partly effected by a subscription of €2.3 billion for what became effectively 99.2% of the issued share capital of Holdings. Insofar as is relevant for present purposes, the effect of the July 2011 Direction Order was that the Minister became a 99.2% shareholder in Holdings, which gave him control of Holdings, and through Holdings, control of the Bank. 7. Mr. Dowling, Mr. McManus, Mr. Skoczylas and a company controlled by Mr. Skoczylas brought an application to the High Court (Record No. 2011/ 239 MCA) (the 2011 Application) pursuant to s. 11 of the Act of 2010 seeking to set aside the July 2011 Direction Order. That application, which has been subject to a number of applications to the High Court and is the subject of case management, is still pending. On 2nd March, 2012, judgment was given in the 2011 Application by Feeney J. (Neutral Citation [2012] IEHC 89) dismissing an application by the Minister seeking to dismiss the application of, inter alia, Mr. Skoczylas on the grounds that he was not a member of Holdings or of the Bank at the date of the application and, therefore, did not have standing to bring the application. The Court was informed that that decision is under appeal to the Supreme Court. That is immaterial for present purposes, because no issue was taken that Mr. Dowling and Mr. McManus, who are plaintiffs in these proceedings, did not have standing. A further judgment was delivered in the 2011 Application by Charleton J. on 21st February, 2013 (Neutral Citation [2013] IEHC 75), which resulted in the joinder of Holdings and the Bank in the proceedings for a “limited and specific role”. Of more significance for present purposes is that Charleton J. held that the applicants on the 2011 Application could not pursue a challenge to the constitutionality of s. 11 of the Act of 2010 on the 2011 Application. That led to the initiation of the plenary proceedings referred to later. Since then, the 2011 Application has been subject to case management by the President of the High Court. My understanding is that an issue as to the entitlement of the applicants to discovery against the Minister is due to be heard. 8. The third direction order has been challenged by some of the plaintiffs. It is an order made on 28th March, 2012 (the March 2012 Direction Order), whereby the Bank was directed to sell the Company and its subsidiaries to the Minister for the sum of €1.3 billion, such sale to be completed not later than 30th June, 2012, and the Bank was directed to take certain specified steps preparatory to and necessary for the completion of the sale. All of the plaintiffs in these proceedings other than Ms. Scorer and the company controlled by Mr. Skoczylas brought an application in the High Court (Record No. 2012 / 116 MCA) (the 2012 Application) seeking to set aside the March 2012 Direction Order. The application was heard by Peart J. who delivered judgment on 28th June, 2012 (Neutral Citation [2012] IEHC 436). The decision of Peart J. was to refuse to set aside the March 2012 Direction Order. The sale of the Company and its subsidiaries to the Minister was subsequently completed. 9. In these proceedings the plaintiffs who are parties to the 2012 Application complained that, because of the failure to perfect the order of Peart J., they were not in a position to file a notice of appeal against that decision until 10th June, 2013. The position of the Minister is that he does not accept that the applicants in the 2012 Application are entitled to appeal, having regard to s. 64 of the Act of 2010. Sub-section (2) of s. 64 provides as follows:
10. The implementation of the March 2012 Direction Order by the sale of the Company and its subsidiaries was, in reality, the sale of the insurance business of the Permanent TSB group of companies. Such a sale, including the possibility of a sale effected as a private sale, had been in prospect from June 2011. In fact, following the decision of Peart J., the Minister acquired the Company and its subsidiaries on 29th June, 2012 for the consideration of €1.3 billion. On 2nd December, 2012, it was reported in the media, in the Sunday Business Post, that the Minister’s Department had re-opened talks on the sale of “the insurance company” to Canada Life a year after the parties had failed to agree on a price. Mr. Skoczylas obviously became aware of the media reports, because by letter dated 5th January, 2013 to the Minister, he threatened further legal action to stop the sale to Canada Life, if there was no confirmation from the Minister within a week that he would “not sign with Canada Life, or any other potential buyer, any re-sale” of the Company, meaning, obviously, a contract for the sale by the Minister, until the then pending proceedings were ultimately adjudicated on. In the correspondence which subsequently passed between Mr. Skoczylas and the solicitors on record for the Minister, Arthur Cox, culminating with a letter of 15th February, 2013 from Arthur Cox to Mr. Skoczylas, the position adopted by the Minister was that he did not intend to comment in relation to the proposals, if any, he may have had in relation to the Company. However, all of the allegations made by Mr. Skoczylas in the correspondence were denied. 11. During the course of that correspondence the plaintiffs in these proceedings other than the eighth plaintiff (Mr. Keohane) presented a petition to the Court on 25th January, 2013 invoking, inter alia, the provisions of s. 205 of the Act of 1963 (Record No. 2013 36 COS) (the s. 205 Proceedings). The respondents on the s. 205 Proceedings are eleven individuals and the Minister. Nine of the eleven individuals were directors of Holdings and the Bank when the petition was presented and the remaining two were directors of the Company and were former directors of both Holdings and the Bank. In the s. 205 Proceedings the petitioners therein have sought various forms of relief to redress their allegations that the respondents have conducted the affairs of Holdings in a manner oppressive to them and in disregard of their interests as members. Reference will be made later to the specific reliefs invoked by the plaintiffs on this application. 12. On the morning of 19th February, 2013, counsel for Horizon Growth Fund N.V. (Horizon), which was the other applicant the standing of which was challenged in the 2011 Application by the Minister, whose challenge was also rejected by Feeney J. in his judgment of 2nd March, 2012, indicated to this Court that Horizon wished to apply for an order to restrain the sale of the Company to Canada Life. The Court made it clear that it would not entertain such an application on an ex parte basis and that the Minister should be notified of any proposed application. The matter was put back to two o’clock that day, when counsel for Horizon appeared, as did Mr. Skoczylas. The Minister was also represented by counsel. The Court was informed that the Minister had signed the contract for sale of the Company to Canada Life at 1pm that day and that the sale was due to be completed in July 2013, subject largely to regulatory approval in the meantime. Mr. Skoczylas persisted in the position that he wished to bring an application for injunctive relief. The Court gave him leave to issue a notice of motion by lunchtime the following day returnable for 26th February, 2012 and it did so against the background of a submission on behalf of the Minister that the Minister would like to dispose of the interlocutory proceedings as quickly as possible. There was also some discussion as to whether it was appropriate, as Mr. Skoczylas proposed doing, to bring the application for interlocutory relief in the s. 205 Proceedings. However, the Court left that to the discretion of Mr. Skoczylas. Later that day, Mr. Skoczylas, by e-mail, informed, inter alia, the solicitors on record for the Minister and the registrar of the Court that the petitioners in the s. 205 Proceedings did not intend to pursue the application for injunctive relief at that stage. The notice of motion which Mr. Skoczylas was given leave to issue was not issued. 13. As regards the sale of the Company and its subsidiaries, the replying affidavit of John Cantwell, the Acting Head of the Shareholding Management Unit of the Minister’s Department, sworn on 12th June, 2013 discloses that the purchaser of the Company is Canada Life, a company incorporated in England and Wales, and a group company of Great-West Lifeco Inc., a Canadian listed company, each of which has various obligations in the legal documentation in relation to the sale. For convenience, the purchaser in the share purchase agreement (the Contract) will be referred to as Canada Life. Since 19th February, 2013, Canada Life has sought the approval of the Commission, the Central Bank, the Financial Services Authority in the United Kingdom and the Office of the Superintendent of Financial Institutions in Canada in relation to the acquisition of the Irish Life insurance business via the acquisition of the Company. On 31st May, 2013, Canada Life received notification from the Commission that the Commission would not oppose the notified transaction. Mr. Cantwell averred that, at the time he swore his affidavit, the other regulatory approvals had not been received but were expected shortly. Mr. Cantwell explained that, following receipt of the final regulatory approval, and assuming that the other terms of the Contract have been satisfied, Canada Life has ten business days in which to pay the Minister €1.3 billion in consideration and to proceed to completion of the purchase. The position is that, barring any unforeseen material breach of warranty or a regulator refusing approval, both the parties are contractually bound to complete the transaction. When he swore his affidavit, Mr. Cantwell’s best estimate of the closing date in accordance with the provisions of the Contract was that it would be 10th July, 2013. Mr. Cantwell further disclosed that, if the transaction does not close by 31st October, 2013, which he referred to as the “long stop date”, because any condition has not been satisfied, or a regulatory condition will not be satisfied by that date, or the parties, acting reasonably, agree that any condition has become incapable of being satisfied prior to that date, then either party will be entitled to terminate the Contract. 14. Subsequent to the judgment of Charleton J. of 21st February, 2013 in the 2011 Application, plenary proceedings were initiated by –
(b) the other plaintiffs in these proceedings (Record No. 2013/2709P), in each of which actions (collectively referred to as the Plenary Proceedings) the plaintiffs therein seek to challenge the constitutionality of the Act of 2010 on various grounds.
17. Essentially, the plaintiffs have sought two distinct reliefs on this motion, which require to be considered separately. 18. The first relief is an order by way of interlocutory prohibitory injunction restraining the defendant from completing the sale of the Company until:
(B) the adjudication of an appeal from the orders and judgments of Peart J. in the 2012 Application; (C) the Court has adjudicated upon certain reliefs sought in the Plenary Proceedings, the terms of which reliefs, as set out in the notice of motion, are replicated in the Appendix A attached to this judgment; and (D) the Court has adjudicated upon certain reliefs sought in the s. 205 Proceedings, the terms of which reliefs, as set out in the notice of motion, are replicated in Appendix B annexed hereto.
2. Should the High Court grant the interlocutory injunction to restrain the Defendant from re-selling an asset whose legal ownership is subject to ongoing legal proceedings, given that the ownership and original sale of that asset is challenged in court based inter alia on alleged breaches of European Union law?” 20. The Court has had the benefit of written submission from Mr. Skoczylas, supported by oral submissions. The Court has also had the benefit of written and oral submissions from counsel for the Minister. In view of the time constraint under which the Court has had to produce this judgment it is not practicable to summarise the submissions made by the parties, nor, indeed, do I consider that it is necessary to do so. However, it is important to record what has been set out by Mr. Skoczylas in his written submissions, which are described as “Summary Oral Submissions”, as to what this application is about, because it does identify the plaintiffs’ core complaint. Mr. Skoczylas submitted that the proceedings are essentially about the legal ownership of the Company and the legality of the original acquisition of this asset by the Minister. It was submitted that the sale of the Company must not be completed before the legal ownership of the asset and the legality of the original acquisition of the asset has been confirmed by the Court. This is because, it was submitted, a re-sale would “permanently and irreparably” prejudice the adjudication upon the reliefs sought by the plaintiffs, because such reliefs would become “completely or partly moot” and the effectiveness of EU law in respect of the reliefs “would be abrogated”. The object of seeking the injunction, it was submitted, is “to defend the plaintiffs’ constitutionally protected right to vindicate through courts their property rights and minimum rights enshrined in EU law”. 21. Mr. Skoczylas alleged that the Minister had perpetrated egregious breaches of EU law in the acquisition of his 99.2% shareholding in Holdings and in his acquisition of the Company and its subsidiaries from the Bank. Mr. Skoczylas has identified the alleged breaches in question by reference to the various European law instruments named in the title to these proceedings. In relation to the alleged breaches of the Second EU Directive on Company Law (77/91/EEC), Mr. Skoczylas has exhibited in his second affidavit, which was sworn on 14th June, 2013, a legal expert opinion of Professor Eddy Wymeersch dated 14th June, 2013, by reference to which he has identified alleged breaches of the Second Council Directive. If the alleged breaches occurred, then an issue does arise as to the legality of the Minister’s acquisition of a majority shareholding in Holdings, which, in combination with the March 2012 Direction Order, empowered him to acquire the Company and the insurance business from the Bank for €1.3 billion. That issue cannot be determined on this application. However, I think it is pertinent to record two matters overlooked by Mr. Skoczylas in his submissions. The first is that, to acquire the majority shareholding in Holdings, the Minister subscribed €2.3 billion. Secondly, he did so at a time when, as is stated in the preamble to the Act of 2010, measures were “necessary to address an unique and unprecedented economic crisis which has led to difficult economic circumstances and severe disruption to the economy”. Issues
(b) the Minister’s submission that the plaintiffs do not have standing to bring these proceedings; (c) the criteria which the Court has to apply in determining whether the interlocutory injunctive relief sought by the plaintiffs should be granted and the application of those criteria; (d) the issue of delay and laches raised on behalf of the Minister; and (e) whether it is appropriate to make a reference to the CJEU pursuant to Article 267 of the TFEU. 23. The plaintiffs’ claim as set out in the general endorsement of claim in the plenary summons mirrors the relief claimed in the notice of motion. The first relief sought is an order “by way of interim and/or interlocutory prohibitory injunction” in precisely the same terms as is set out at A, B, C and D of the notice of motion outlined earlier. The second relief claimed is a reference to the CJEU pursuant to Article 267 of the TFEU in similar terms to the terms set out in the notice of motion, which, as regards interim relief, have been quoted earlier. 24. It was submitted on behalf of the Minister that the plaintiffs were merely seeking interlocutory relief which, it was suggested, was entirely divorced from any pleaded cause of action and, accordingly, that they were in breach of the principle laid down by the Supreme Court in Caudron v. Air Zaire [1985] I.R. 716. In that case, the factual matrix necessitated an application to Court for leave to serve outside the jurisdiction under Order 11 of the Rules of the Superior Courts (the Rules). That complication does not arise in this case. These proceedings are related or connected to the various proceedings outlined earlier in which the substantive reliefs being sought by the plaintiffs, or some of them, and the legal bases therefor are clearly identified. The plaintiffs’ position in seeking an interlocutory injunction, as I understand it, is to preserve the status quo pending the determination of those proceedings. To resolve the deficit identified by counsel for the Minister, at the hearing, the plaintiffs were given leave by the Court to issue an amended plenary summons, which they did on 21st June, 2013. The first relief claimed on the endorsement of claim is a declaration that the Minister is precluded from completing the sale of the Company if it is determined by the Court that the original purchase of that asset by the Minister was illegal due, inter alia, to breaches of European Union law. The second relief claimed, which relates to the prohibitory injunctive relief, is framed as an order by way of “permanent” prohibitory injunction. I am satisfied that, insofar as there was any merit in the technical point raised on behalf of the Minister, it has been resolved. Whether the plaintiffs have standing 26. As I understand their case, the contention of the plaintiffs that the Minister does not have title to sell the asset in question, that is to say, the Company and its subsidiaries, to Canada Life, is two-pronged. The first prong is anterior to the second prong, namely, their contention that the March 2012 Direction Order should be set aside. The first prong is that the July 2011 Direction Order should be set aside. While there was an issue as to whether Mr. Skoczylas has standing to challenge that order on the basis that his name was not on the register of members, as I have recorded earlier, Feeney J. in his judgment in the 2011 Application found that he did have standing. Even though that decision is, apparently, subject to appeal to the Supreme Court, the standing of Mr. Dowling and Mr. McManus to seek an order setting aside that order has not been challenged. Without expressing any view as to whether what flowed from the July 2011 Direction Order, that the Minister acquired a majority shareholding in Holdings, was a necessary preliminary step to the Bank being ordered to sell the Company and its subsidiaries to the Minister, as happened pursuant to the March 2012 Direction Order, I have come to the conclusion that it is appropriate for the Court to assume for the purposes of this application that the plaintiffs, or some of them, have standing to bring this application. Relevant criteria for determination of application for injunctive relief and their application
28. The decisions of the Court of Justice identified by the editors of Wyatt and Dashwood in which the relevant criteria were considered (Cases C - 143/88 and C - 92/89 Zuckerfabrik Süderdithmarschen and Zuckerfabrik Soest [1991] ECR I-415; and Case C - 465/93 Atlanta Fruchthandelsgesellschaft mbH v. Bundesamt für Ernährung und Forstwirtschaft [1995] ECR I-3761) were recently considered by the Supreme Court in Pringle v. The Government of Ireland [2012] IESC 47. The Supreme Court did not consider it necessary in that case to analyse whether, and if so to what extent, there are substantial or material differences between the test laid down in that jurisprudence and the Campus Oil test referred to later (cf. judgment of Clarke J. at para. 9.12). In any event, I have come to the conclusion that, because of the nature of the plaintiffs’ allegations of breach of European Union law, the Zuckerfabrik/Atlanta test is not the appropriate test in this case. 29. That conclusion is based on the commentary in Wyatt and Dashwood (at p. 305). There, the editors considered whether the rulings in Zuckerfabrik and Atlanta raised the question whether substantive criteria for the grant of interim relief against allegedly invalid Union measures would also be extended to cover “Factortame style situations”, where the claimant is challenging purely national measures allegedly adopted in breach of Union law. They pointed out that in the recent case of Unibet (Case C-432/05 Unibet [2007] ECR 1-2271), the Court of Justice held that the substantive conditions under which interim relief is to be granted by national courts, in respect of allegedly unlawful national measures, are to be determined “in accordance with the usual Rewe/Comet framework of national procedural autonomy, equivalence and effectiveness”. As is pointed out in Kirwan on Injunctions Law and Practice (at para. 10.95) it has been held by the ECJ in the Rewe case (Case C – 33/76 Rewe-Zentralfinanz AG v. Landwirtschaftskammer für das Saarland [1976] ECR 1989), that it is for the domestic legal system of each Member State to determine the procedural conditions governing actions at law intended to ensure the protection of the rights which citizens have from direct effect Community law. 30. Accordingly, I have come to the conclusion that the proper course in this case is to apply the criteria laid down by the Supreme Court in Campus Oil Limited v. Minister for Industry and Energy (No. 2) [1983] I.R. 88 as to when it is appropriate to grant an interlocutory injunction. Accordingly, the issues which the Court has to address, as formulated in B & S. Limited v. Irish Auto Trader Limited [1995] 2 I.R. 142, and recently reiterated by the Supreme Court in Okunade v. Minister for Justice, Equality and Law Reform [2013] 1 ILRM 1 are:
(b) whether damages would be an adequate remedy for the plaintiffs if they were refused an injunction and were subsequently successful at the trial of the action; (c) whether the plaintiffs have given an undertaking as to damages which would adequately compensate the Minister if the injunction were granted and the Minister was subsequently successful at the hearing of the action; and (d) whether the balance of convenience lies in favour of the grant or the refusal of an injunction. Fair issue to be tried 32. Before considering the remainder of the criteria, I propose outlining the evidence contained in Mr. Cantwell’s affidavit as to the importance of the sale to Canada Life being completed in accordance with the terms of the Contract between the Minister and Canada Life. Evidence of consequences of delaying the sale to Canada Life 34. From the Minister’s perspective the focus is on the fact that when the sale is completed the Minister will be paid €1.3 billion. The consequences of the Minister not being paid that sum on the closing date, anticipated to be 10th July, 2013, are outlined as follows:
(b) The only consideration which the Minister will receive if the Contract is completed is the purchase price of €1.3 billion and a dividend of €40 million, which, in fact, was paid to the Minister on 7th June, 2013. The point emphasised by Mr. Cantwell is that any profits or losses generated by the Company pending completion, except the €40 million dividend, are for the account of Canada Life. (c) Receipt of the consideration of €1.3 billion will reduce the Government debt by approximately 1% in 2013, which Mr. Cantwell asserted is highly significant, given the high debt burden the State has at present. The consideration will also reduce the Exchequer deficit for 2013 by €1.3 billion. (d) The consideration to be paid and the dividend already paid have been factored into Government forecasts for 2013 and delay in receipt of the consideration would require downward adjustments in Government budgets to meet targets in the Programme of Support with the Troika. 35. In his affidavit Mr. Cantwell has also suggested that delay in completion would have adverse consequences for third parties, referring specifically to the following facts:
(b) that the employees of the Company and its subsidiaries would be materially affected by delay in the Irish Life insurance business exiting from State ownership and delay would add to the uncertainty for employees of both Irish Life and Canada Life, who number approximately three thousand, who could be “impacted by the new organisational structure”; (c) that, as the customers of both Irish Life and Canada Life are expecting completion of the acquisition shortly, delay could negatively impact on the business of both operations; and (d) the positive impact which is anticipated to flow from the completion of the acquisition of the Irish Life business by Canada Life, as evidenced, for example, by the attitude of a rating agency, Fitch, in a statement of 20th February, 2013, will be stalled. 37. Departing from the order of consideration of the criteria outlined in the B & S. case as summarised earlier, because of the unusual circumstances in this case, I propose considering where the balance of convenience lies next. Balance of convenience 39. The first is that the injunction is granted and it ultimately transpires that the plaintiffs have not established any wrongdoing against the Minister. The consequences of that would be that the Minister would have not only sustained the financial losses which Mr. Cantwell has outlined would result from a delay in closing the sale, but also the losses and damage ensuing from the loss of the sale, if the risk of such loss identified by Mr. Cantwell materialised, and the potential damage to the asset the subject of the sale, the Company and its subsidiaries, pointed to by Mr. Cantwell. As will be clear when I address the issue of an undertaking as to damages from the plaintiffs, the Minister would, in reality, be unable to recoup those losses from the plaintiffs. Accordingly, in that situation, the Minister would suffer irremediable damage, in the sense that the State would be without any adequate remedy against the plaintiffs on foot of which the losses could be reversed. Mr. Skoczylas recognised this outcome because he alluded to the reality that the plaintiffs will become bankrupt if they lose the case. 40. The second is that the injunction is refused but the plaintiffs do ultimately establish wrongdoing on the part of the Minister in the substantive proceedings. Because of the multiplicity of proceedings and the multiplicity of causes of action involving the Minister and the State which the plaintiffs are pursuing, it is impracticable on this application to anticipate the various outcomes which may arise in those circumstances. Therefore, I propose looking at what would be considered expressed colloquially as the worst case scenario from the Minister’s perspective. It could arise from any, or a combination of, the following outcomes:
(b) the setting aside by the Supreme Court on appeal of the March 2012 Direction Order, if leave is granted for an appeal, so that the purchase by the Minister of the Company would have been ineffective, again using a non-technical term; (c) a finding by the Court that the provisions of the Act of 2010 invoked by the Minister for the purposes of acquiring 99.2% of the share capital in Holdings and the purchase of the Company are invalid having regard to the provisions of the Constitution, which would have resulted in the actions of the Minister being null and void, or (d) the Court finding in the s. 205 Proceedings that the powers of the directors of Holdings had been exercised in a manner oppressive to the plaintiffs, or in disregard of their interests, and determining, pursuant to subs. (3) of s. 205 that, with a view to bringing to an end the matters complained of, it was possible and necessary to make an order which in some way reversed the Minister’s majority control of Holdings, and, as a consequence, his majority control of the Bank. 41. The only conclusion which is open from a comparison of the two possible outcomes, which I have outlined, is that the risk of injustice is minimised by refusing to grant the injunction. Therefore, the balance of convenience favours adopting that course. Damages as a remedy for the plaintiffs? 43. The Court is, of course, fully cognisant of the fact that the Act of 2010 does not provide for a remedy in damages and that it is well settled that one remedy which it is not open to the Court to grant under s. 205 is an award of damages to the petitioner. However, as I have indicated in dealing with the balance of convenience, if the plaintiffs succeed against the Minister they will have to be afforded redress and the probability is that redress in the form of damages will be the appropriate remedy, for which they should be able to formulate an appropriate claim. Finally, there is no question of the plaintiffs’ claims or the reliefs they have sought becoming moot on the completion of the Contract by the Minister and Canada Life. Undertaking as to damages by plaintiffs? 45. It is important to emphasise that unlike cases solely involving public law issues, this is not a case in which the adequacy of damages and the ability to discharge an award of damages on either side is irrelevant. Although the various proceedings which the plaintiffs have initiated against the Minister will undoubtedly involve a myriad of national and EU public law issues, in all of the proceedings the basis on which the plaintiffs claim to have locus standi to bring proceedings against the Minister is that they are members of Holdings and, as such, their private rights are being infringed, whether by reason of breach by the Minister by the Act of 2010, or their constitutional rights, or EU law. In seeking to injunct the completion of the sale to Canada Life, in essence the plaintiffs are endeavouring to protect their private law interests derived from their shareholding in Holdings, whereas the Minister, in resisting the injunction, has advanced the protection of the asset in sale, the Company. Irrespective of the fact that the Minister acquired that asset through a statutory process which the plaintiffs impugn, it is not open to the Court to ignore the fact that the plaintiffs are not in a position to give an undertaking as to damages which would adequately compensate the Minister in the event of it transpiring that the Court should have refused the injunction. Delay
Reference under Article 267 Order APPENDIX A (RELIEFS SOUGHT IN PLENARY PROCEEDINGS INVOKED BY THE PLAINTIFFS)
“(10) A Declaration that that the terms of the Direction Order made on 26 July 2011 pursuant to the terms of the Credit Institutions (Stabilisation) Act 2010 are inconsistent with the provisions of the Constitution of Ireland, and are of no effect and void. (11) A Declaration pursuant to the provisions of section 5 of the European Convention on Human Rights Act 2003 that the terms of the Direction Order made on 26 July 2011 pursuant to the terms of the Credit Institutions (Stabilisation) Act 2010 are incompatible with the State’s obligations under the European Convention on Human Rights and Fundamental Freedoms. (12) A Declaration that the terms of the Direction Order made on 26 July 2011 pursuant to the terms of the Credit Institutions (Stabilisation) Act 2010 (the “Act”) are in breach of provisions of the Second Council Directive 77/91/EEC; and that the terms of the Direction Order made on 26 July 2011 pursuant to the terms of the Act are of no effect and void insofar as the same are contrary to the provisions of the Second Council Directive 77/91/EEC. (13) A Declaration that provisions of the Direction Order made on 26 July 2011 pursuant to the terms of the Credit Institutions (Stabilisation) Act 2010 (the “Act”) are incompatible with provisions of the Directive 2009/101/EC of the European Parliament and of the Council; and that the provisions of the Direction Order made on 26 July 2011 pursuant to the Act are of no effect and void insofar as the same are contrary to the Directive 2009/101/EC of the European Parliament and of the Council. (14) A Declaration that the terms of the Direction Order made on 26 July 2011 pursuant to the terms of the Credit Institutions (Stabilisation) Act 2010 (the “Act”) are in breach of provisions of the Directive 2001/34/EC of the European Parliament and of the Council; and that the terms of the Direction Order made on 26 July 2011 pursuant to the terms of the Act are of no effect and void insofar as the same are contrary to the provisions of the said Directive. (15) A Declaration that the terms of the Direction Order made on 26 July 2011 pursuant to the terms of the Credit Institutions (Stabilisation) Act 2010 (the “Act”) are in breach of provisions of the Markets in Financial Instruments Directive 2004/39/EC of the European Parliament and of the Council (the “MiFID”); and that the terms of the Direction Order made on 26 July 2011 pursuant to the terms of the Act are of no effect and void insofar as the same are contrary to the provisions of the MiFID. (16) A Declaration that provisions of the Direction Order made on 26 July 2011 pursuant to the terms of the Credit Institutions (Stabilisation) Act 2010 (the “Act”) are incompatible with provisions of the Directive 2004/25/EC of the European Parliament and of the Council (the “Takeover Directive”); and that the provisions of Direction Order made on 26 July 2011 pursuant to the terms of the Act are of no effect and void insofar as the same are contrary to the Takeover Directive. (17) A Declaration that the terms of the Direction Order made on 26 July 2011 pursuant to the terms of the Credit Institutions (Stabilisation) Act 2010 (the “Act”) are in breach of provisions of The Treaty on the Functioning of the European Union (the “TFEU”) in respect of the freedom of movement of capital; and that the terms of the Direction Order made on 26 July 2011 pursuant to the terms of the Act are of no effect and void insofar as the same are contrary to the TFEU. (18) A Declaration that the State has failed in its obligation to give effect to provisions of European Union law – and specifically to Articles 8(1), 25(1) and 29(1) of the Second Council Directive 77/91/EEC; Article 10 of the Directive 2009/101/EC of the European Parliament and of the Council; Articles 5, 42 and 45 of the Directive 2001/34/EC of the European Parliament and of the Council; Article 42 of the Markets in Financial Instruments Directive 2004/39/EC of the European Parliament and of the Council; Article 3 of the Directive 2004/25/EC of the European Parliament and of the Council; and Article 63 of the Treaty on the Functioning of the European Union – by effecting contrary provisions of the direction order made on 26 July 2011 pursuant to the Credit Institutions (Stabilisation) Act 2010.” Regarding March 2012 Direction Order “(19) A Declaration that that the terms of the Direction Order made on 28 March 2012 pursuant to the terms of the Credit Institutions (Stabilisation) Act 2010 are inconsistent with the provisions of the Constitution of Ireland, and are of no effect and void. (20) A Declaration pursuant to the provisions of section 5 of the European Convention on Human Rights Act 2003 that the terms of the Direction Order made on 28 March 2012 pursuant to the terms of the Credit Institutions (Stabilisation) Act 2010 are incompatible with the State’s obligations under the European Convention on Human Rights and Fundamental Freedoms. (21) A Declaration that the terms of the Direction Order made on 28 March 2012 pursuant to the terms of the Credit Institutions (Stabilisation) Act 2010 (the “Act”) are in breach of provisions of the Second Council Directive 77/91/EEC; and that the terms of the Direction Order made on 28 March 2012 pursuant to the terms of the Act are of no effect and void insofar as the same are contrary to the provisions of the Second Council Directive 77/91/EEC. (22) A Declaration that the terms of the Direction Order made on 28 March 2012 pursuant to the terms of the Credit Institutions (Stabilisation) Act 2010 (the “Act”) are in breach of provisions of the Directive 2001/34/EC of the European Parliament and of the Council; and that the terms of the Direction Order made on 28 March 2012 pursuant to the terms of the Act are of no effect and void insofar as the same are contrary to the provisions of the said Directive. (23) A Declaration that the terms of the Direction Order made on 28 March 2012 pursuant to the terms of the Credit Institutions (Stabilisation) Act 2010 (the “Act”) are in breach of provisions of the Markets in Financial Instruments Directive 2004/39/EC of the European Parliament and of the Council (the “MiFID”); and that the terms of the Direction Order made on 28 March 2012 pursuant to the terms of the Act are of no effect and void insofar as the same are contrary to the provisions of the MiFID. (24) A Declaration that the terms of the Direction Order made on 28 March 2012 pursuant to the terms of the Credit Institutions (Stabilisation) Act 2010 (the “Act”) are in breach of provisions of The Treaty on the Functioning of the European Union (the “TFEU”) in respect of the freedom of movement of capital; and that the terms of the Direction Order made on 28 March 2012 pursuant to the terms of the Act are of no effect and void insofar as the same are contrary to the TFEU. (25) A Declaration that the State has failed in its obligation to give effect to provisions of European Union law – and specifically to Articles 25(1) and 42 the Second Council Directive 77/91/EEC; Articles 5 and 42 of the Directive 2001/34/EC of the European Parliament and of the Council; Article 14.4 of the Markets in Financial Instruments Directive 2004/39/EC of the European Parliament and of the Council; and Article 63 of the Treaty on the Functioning of the European Union – by effecting contrary provisions of the direction order made on 28 March 2012 pursuant to the Credit Institutions (Stabilisation) Act 2010.” APPENDIX B
(RELIEFS SOUGHT IN S. 205 PROCEEDINGS INVOKED BY THE PLAINTIFFS)
6) That, pursuant to Articles 25(1) and 42 of the Second Council Directive 77/91/EEC and pursuant to Article 14.4 of the Financial Instruments Directive 2004/39/EC of the European Parliament and of the Council and pursuant to Articles 5 and 42 of the Directive 2001/34/EC and pursuant to Article 63 of the Treaty on the Functioning of the European Union, the provisions of the direction order made on 28 March 2012 pursuant to the Credit Institutions (Stabilisation) Act 2010 in the terms of the proposed direction order made by the Minister for Finance on 27 March 2012 be declared incompatible with the said provisions of European Union law and/or oppressive to the members of ILPGH and/or in disregard of their interests as members; (8) That, given the relief sought at (6) above pursuant to Articles 25(1) and 42 of the Second Council Directive 77/91/EEC and pursuant to Article 14.4 of the Financial Instruments Directive 2004/39/EC of the European Parliament and of the Council and pursuant to Articles 5 and 42 of the Directive 2001/34/EC and pursuant to Article 63 of the Treaty on the Functioning of the European Union, any re-sale of Irish Life Group Limited by the Minister for Finance be disallowed; (9) Further or in the alternative to the relief sought at (8) above, given the relief sought at (6) above pursuant to Articles 25(1) and 42 of the Second Council Directive 77/91/EEC and pursuant to Article 14.4 of the Financial Instruments Directive 2004/39/EC of the European Parliament and of the Council and pursuant to Articles 5 and 42 of the Directive 2001/34/EC and pursuant to Article 63 of the Treaty on the Functioning of the European Union, if any re-sale of Irish Life Group Limited by the Minister for Finance has been completed before the ultimate resolution of the within proceedings, that such a re-sale transaction be declared illegal, null and void.
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