AN CHÚIRT UACHTARACH
THE SUPREME COURT
S:AP:IE:2024:000088
Dunne J.
Charleton J.
O'Malley J.
IN THE MATTER OF REGULATION NO. 1215/2012
AND ORDER 42A RULE 23(4) OF THE RULES OF THE SUPERIOR COURTS
AND S.I. NO. 9/2016
Between/
MICHAEL SCULLY
Respondent
-and-
COUCAL LIMITED
Appellant
Judgment of Mr. Justice O'Donnell, Chief Justice delivered on the 26th day of May 2025.
1. The facts in this case are set out with admirable clarity in the judgment of Hogan J. and need not be repeated here in detail. In 2006 the Respondent ("Mr. Scully") secured 78 Irish investors to invest in the purchase of land and the development of a shopping centre at Opole in Poland. A Polish company, Coucal SPV, was established as a vehicle for the investment. However, the investment was unsuccessful, in circumstances however, where the investors claimed Mr. Scully had nevertheless benefited from the transaction, while the investors experienced total loss.
2. Coucal Limited, the Appellant here ("Coucal"), is an Irish company established by 63 of the investors to pursue a claim against Mr. Scully in the Courts of Poland. For that purpose, each of the investors executed an assignment to allow the company to take action against Mr. Scully in Poland. Although the assignment was framed as an assignment of a future debt in the event that a court determined that the investment agreement was a nullity, there is no doubt that the assignment was intended to, and did, permit Coucal to pursue the claim in the Polish Courts. For present purposes, the relevant provision of the assignment was the following:-
"The Assignor states that:
- the Debt is free of any encumbrances;
- the right to sell the Debt to the third party has not been excluded;
- the Debt has not been the subject of the assignment so far;
- the assignment of the Debt to other entities has not been made after the conclusion of this Agreement."
3. This case turns on the second clause -"the right to sell the debt to the third party has not been excluded" [1] - although not on its interpretation, which was assumed for the purposes of argument in this case to permit onward transmission of the assignment, but rather on the consequences for enforcement of a judgment which gave effect to the assignment including this clause on the basis of that assumed meaning.
4. Coucal's claim was dismissed by the Regional Court in Warsaw but succeeded before the Polish Court of Appeal which, in June 2021, awarded Coucal the sum of PLN 28,391,106 (approximately €6.33 million) against Mr. Scully. Coucal now seeks to enforce that judgment in Ireland and Mr. Scully had commenced proceedings seeking an order refusing recognition and enforcement of the judgment pursuant to Article 45(1)(a) of Regulation (EU) No. 1215/2012 of the European Parliament and of the Council on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast) ("Brussels Regulation (Recast)") which provides that recognition and enforcement may be refused where it is manifestly contrary to public policy.
5. It was argued on behalf of Mr. Scully that recognition and enforcement of the judgment was manifestly contrary to public policy in two respects: first, that since the assignment must be understood as permitting the onward assignment from Coucal to an unconnected third party, as such it savoured of champerty ("the assignment issue"). The direct enforcement of such an assignment by an Irish Court had been held to be contrary to public policy in the decision of this Court in SPV Osus Limited v HSBC Institutional Trust Services (Ireland) Ltd [2018] IESC 44, [2019] 1 IR 1 ("SPV Osus"), and, it was argued, it should follow that enforcement of a judgment of another country, obtained on foot of such an assignment, would also be contrary to Irish public policy. Second, it was contended that one of the members of the Polish Court of Appeal who delivered judgment in favour of Coucal had been appointed under provisions held to be contrary to Articles 2 and 19 of the Treaty on European Union, and it was argued it would be contrary to public policy to enforce a judgment issued by a court composed in this way, which has been described in this case as "the rule of law issue".
6. The High Court (Owens J.) dismissed Mr. Scully's claim on both points. There had been evidence of Polish lawyers on the interpretation of the assignment, and in particular the significance of the phrase "the right to sell the debt to the third party has not been excluded". The Polish lawyer giving evidence on behalf of Mr. Scully contended that this was an express provision entitling Coucal to assign the debt (and therefore the claim) to an unconnected third party; the evidence on Polish law on behalf of Coucal was that this provision was no more than a warranty on the part of each individual assignor, that the assignment was not excluded or precluded.
7. In an impressive ex tempore judgment, Owens J. did not however resolve this dispute. He was prepared to assume for the purposes of the decision that the assignment had the effect contended for on behalf of Mr. Scully, but even on that assumption he did not consider that recognition or enforcement of the judgment was contrary to public policy. SPV Osus was, he considered, of no assistance in that regard. Nor did he consider that the composition of the Polish Appeal Court, or the legislation relating to judicial appointments, required refusal of recognition, or a reference to the Court of Justice of the European Union ("CJEU"). The Court of Appeal (Donnelly J; Ní Raifeartaigh and Binchy JJ. concurring) reversed the decision of the High Court on the assignment issue. The Court of Appeal considered that this was indeed manifestly contrary to public policy relying in this regard on the analysis of this Court in SPV Osus. Accordingly, the Court of Appeal considered it was not necessary to further address the rule of law issue and did not do so.
8. The issue in this appeal was narrow. Although the submissions canvassed a number of issues in respect of the wider dispute, it appeared to be accepted that the appeal was limited to a single question whether enforcement of the judgment could be refused under Article 45(1)(a) on the grounds of public policy in circumstances where it was accepted that an assignment of this nature would be unenforceable in Ireland. The narrowness of the debate in this Court, which follows from the structure of argument in the courts below, has given rise to some problems, which I will address later.
9. The argument on behalf of Mr. Scully largely adopted the reasoning in the judgment of the Court of Appeal. This laid emphasis on the decision of this Court in SPV Osus (endorsing in its turn the decision of the House of Lords in Trendtex Trading Corporation v Credit Suisse [1982] AC 679, "Trendtex"), and also relying on two High Court decisions in which recognition and enforcement had been refused on the basis of Article 45 or its predecessor: Celtic Atlantic Salmon (Killary) Ltd. v Aller Acqua [2014] IEHC 421, [2014] 3 I.R. 214 ("Celtic Salmon"), and Sporting Index Ltd. v O'Shea [2015] IEHC 407, [2016] 3 I.R. 417 ("Sporting Index").
10. In Celtic Atlantic Salmon recognition and enforcement was refused because it appeared that Danish procedural law would not permit the use in evidence of a contemporaneous expert report commissioned by the plaintiff in respect of fish feed alleged to be defective, and where the plaintiff company had on advice, not participated in Danish proceedings in which the Danish Court had granted a negative declaration that the feed was not defective. In Sporting Index the High Court had refused enforcement of a judgment obtained in the United Kingdom for a gambling debt, on the grounds that public policy could be discerned in the provisions of s. 36 of the Gaming and Lotteries Act 1956, which provided that contracts for gaming and wagering were void, and that no action would lie for any money paid in respect of a gaming and wagering contract. This public policy so identified, led to the conclusion that recognition and enforcement of a foreign judgment enforcing a gambling debt must be refused. The statutory provision constituted a rule of law regarded as essential in the legal order of Ireland. The Court considered that because the rule was contained in a statute and enacted by the Oireachtas he was bound to find that it was a rule which was essential in the legal order of the State. However, the judgment for costs was recognised and enforced.
11. SPV Osus was a case generated by the Madoff investment scandal. When the Bernard L. Madoff Investments LLC collapsed revealing itself to be a large-scale Ponzi-type fraud there were a large number of investors affected. Some of the investments in Madoff were made through funds the custodians and administrators of which were Irish subsidiaries of large international banks and in the case of SPV Osus, HSBC. The particular fund involved in the SPV Osus case, although very substantial, was only one of such funds structured in this way, and it is not irrelevant that proceedings had been commenced in Ireland by other disappointed investors contending that the custodian and/or administrator had been negligent, in breach of duty and in breach of contract in the manner in which they had participated in the investment.
12. While Madoff was insolvent it was by no means penniless. It is in the nature of a Ponzi scheme that there will be assets held - simply not enough to meet all claims if made at the same time. There were substantial assets still held by Madoff which were available to satisfy a large part of the claims brought by disappointed investors. Under New York law there was a procedure a procedure for Allowed Customer Claims ("ACCs") in bankruptcy/liquidation, under which investors could recover a substantial dividend in priority to unsecured creditors. However, that procedure was lengthy and a secondary market had been established allowing other investors, normally those specialising in distressed investments to invest in approved customer claims, which would also have the effect of realising an immediate return for the original investors. In the case of the fund at issue in the SPV Osus case there was, however, the further problem that individual investors may have found it difficult to sell their ACC because of the structure of the original investment and its sheer size which might make it difficult to secure an individual purchaser.
13. Accordingly, a special purchase vehicle, SPV Osus, was established to which the fund's ACC could be assigned. The original investors became entitled to shares in SPV Osus, commensurate with their interest in the original fund, and could then sell the share and consequently the right to participate in any recovery of the ACC.
14. The procedure for the assignment of claims was recognised by the Trustee in Bankruptcy and permitted in New York by the court supervising the bankruptcy. Furthermore, the scheme required that any assignment of the claim in relation to Madoff be an assignment of all connected claims held by the investor. In the event, 93 per cent of the investors were able to realise their investment in this way. If the assignment had simply operated in respect of the ACC and that had been paid in the New York bankruptcy, no issue, and in particular no issue of Irish law, would have arisen. The new shareholders in SPV Osus were however not content to limit themselves to the ACC, but instead having taken control of the company, they resolved to commence proceedings in Ireland for damages against the custodian and administrator and others, relying in this regard on the assignment of all connected claims.
15. The High Court, Court of Appeal and Supreme Court, held, that as a matter of Irish law, effect could not be given to that assignment because it savoured of champerty and of trafficking in litigation. While there was a genuine commercial interest underpinning the assignment of the claim by or on behalf of the investors to a company in which they were at that time the shareholders, the assignment did not preclude a further assignment or assignments to a party not connected in any way to the company or the original investors. Such onward assignment did not in fact occur, but of course the shareholding in the assignee company did change almost entirely. Public policy was not hostile to all assignments, since assignments of a chosen action were expressly permitted by s. 28(6) of the Supreme Court of Ireland (Judicature) Act 1877, and assignment of debts was commonplace and enforceable, and while public policy could be seen to have developed in this regard, so that assignments supported by a genuine commercial interest could be permitted an assignment in which it was possible to assign the claim further to another unconnected party was still regarded as contrary to public policy.
16. It is apparent that the sophisticated arrangements in SPV Osus are very far removed from the simple assignment in issue in these proceedings. Nevertheless, it was contended, and the Court of Appeal accepted, that the essential elements were identical: there was an assignment of a claim made to a connected party, but that assignment was on terms that permitted it to be further assigned to a party with no commercial or other connection to the case other than their desire to profit from it, and this was and remained contrary to public policy. If so, public policy also meant that a judgment should not be recognised or enforced which had the same effect, even if the law of the country in which judgment was obtained had no similar provision, and any assignment in such terms was valid in that jurisdiction.
17. This reasoning is well expressed in the Court of Appeal judgment under appeal. It is accepted that the Brussels Regulation (Recast) establishes a general rule of enforcement of judgments obtained in other Member States, and that any exception to that must be strictly construed, and that the addition of the word "manifest" to the 2001 version of the Regulations, and repeated in the 2012 Regulations, was intended to emphasise that it would only be in exceptional cases that recognition should be refused on grounds of public policy. However, it was held that this case involved the assignment of a bare cause of action which although it could be assigned to a party with an interest in the litigation, could be assigned onwards, and that the fact that such an assignment had not in fact taken place was not relevant. The issue of validity had to be determined as of the date of execution. This had been established in SPV Osus (at page 50 of the reported judgment) where it was said that it was not "necessary to demonstrate that any of the harmful features of maintenance, champerty or assignment should arise in the particular case: rather, it is sufficient that there is a perceived risk in the type of transaction which justifies the invalidation of any agreement of the particular type". If so, the decision in SPV Osus established that such an assignment was contrary to public policy, and which, moreover, related to the administration of justice, which was a fundamental matter within the Irish legal system. Furthermore, since that principle had been clarified recently in SPV Osus, it was clear, and therefore manifest.
18. I cannot agree with this analysis, careful and thorough though it was. Public policy is treated as a single value. Once public policy is identified as precluding enforcement of an assignment in Irish proceedings it is assumed that the same public policy would prevent the same Court from enforcing a judgment obtained in another country on foot of such an assignment. But that approach does not acknowledge, or give sufficient weight to, the critical fact that the Irish Court is not being asked to enforce an assignment under Irish law: it is being asked to enforce a judgment obtained in another Member State where such an assignment is and was perfectly lawful, and where there is a strong public policy, as a matter of both European and Irish law, in enforcing judgments obtained in the courts of other Member States of the European Union. The question is not whether an assignment of a claim with no restriction on onward assignment is contrary to Irish policy: it is whether Irish public policy requires the refusal of recognition of a judgment obtained in another country where any assignment is perfectly lawful. It is certainly possible that something may be so fundamental within a legal system that provisions or agreements contrary to it cannot be enforced directly by the legal system and also cannot be given indirect assistance by enforcing a judgment obtained in another jurisdiction in respect of such a transaction. Because public policy would preclude something if done in Ireland, under Irish law, it does not necessarily follow that an Irish Court must deny recognition when done elsewhere and in accordance with the law of the legal system of that Member State whose judgments we are generally bound to recognise and enforce. There is a significant space between the two propositions which it is critical to maintain.
19. This was addressed recently in Adoption Authority of Ireland v C and D and The Attorney General [2023] IESC 6, [2023] 1 I.L.R.M. 161 in the context of recognition of foreign adoptions where it was acknowledged that public policy reservation on recognition and enforcement was probably more important because of the sharp differences between different countries' legal social and moral cultures. In my judgment, [2] I said that the Constitution and statute law of the State dealing with the same subject matter within the jurisdiction of the State was the best and firmest guide to public policy and the fact that something was unenforceable in Irish law tends to suggest that such matters if carried out abroad may be considered to offend against public policy. However, [3] the question was not merely the existence of a public policy, but its precise contours and the strength with which it applies. "Once a public policy can be identified, the next question for the Court is, does that public policy require non-recognition [...] this is inevitably a question of degree, and moreover, one where the strength of that public policy may shift over time". The question is not the identification of a single public policy with the effect that direct enforcement in an Irish court and recognition and enforcement of a foreign judgment are all equally precluded. It is whether public policy requires refusal of direct enforcement, refusal of enforcement and recognition, or just one of the three. Indeed, the very fact that the law distinguishes between recognition and enforcement shows that this is a matter of degree.
20. There are, in my view, a number of steps which it is important to keep in mind. First, as Hogan J. observes, even as a matter of common law, and subsequently by statute, an Irish Court was permitted to refuse enforcement of a foreign judgment on grounds that to do so would offend public policy. However, the enforcement of foreign judgments at common law originally rested on concepts such as comity of courts, or reciprocity, in circumstances where courts were often suspicious of foreign law, and procedures which appeared unfamiliar. However, even under that regime it was made clear that refusal of enforcement on grounds of public policy had to recognise that there was a difference between what was forbidden here and the enforcement of a foreign judgment obtained in respect of a transaction which, where carried out, was perfectly lawful. As long ago as Mayo-Perrott v Mayo-Perrott [1958] I.R. 336 ("Mayo-Perrott"), O'Daly J. cited with approval the statement in Cheshire's Private International Law: "[T]he conception of public policy is, or should be, narrower and more limited in private international law than in internal law. A transaction that is limited by its lex causae ... should not be nullified on this ground unless its enforcement would offend some moral, social or economic principle so sacrosanct in English eyes as to require its maintenance at all costs ..." (Emphasis added).
21. This observation applies with even greater force in the context of the Brussels Convention and subsequent Brussels Regulation (Recast) which are based not merely on the respect due by one court to another, but originally on agreements made by sovereign states and later on an obligation now imposed by membership of the European Union, and owed by Member States to each other with the objective of permitting a free movement of judgments within the Union, something which can be said to be integral in the Common market established by the European Economic Community and now maintained by the European Union.
22. It is unsurprising therefore that the Court of Justice of the European Union has emphasised that Article 45 is an exception which must be construed strictly. This illustrates the fact that the conception of public policy sufficient to require refusal of recognition of a judgment should be narrower again than that which would have permitted or required it at common law in, say, 1958 when Mayo-Perrott was decided. The public policy, as it were, in favour of enforcement of judgments of Member States is of much greater weight and the public policy which requires non-enforcement must be of such a degree as to override that, and require and demand refusal of enforcement.
23. The principle has been restated repeatedly in the judgments of the CJEU. At paragraph 37 of the recent decision in Case C-633/22 Real Madrid Club de Fútbol, AE v EE, Société Éditrice du Monde SA ("Real Madrid Club de Fútbol"). The Court said:-
"Accordingly, recourse to the public policy exception provided for by Article 34(1) of Regulation No 44/2001 can be envisaged only where recognition or enforcement of the judgment given in another Member State would be at variance to an unacceptable degree with the legal order of the Member State in which enforcement is sought inasmuch as it would infringe a fundamental principle. In order for the prohibition of any review of the substance of a judgment of another Member State to be observed, the infringement would have to constitute a manifest breach of a rule of law regarded as essential in the legal order of the Member State in which enforcement is sought or of a right recognised as being fundamental within that legal order (judgments of 28 April 2009, Apostolides, C-‑420/07, EU:C:2009:271, paragraph 59, and of 25 May 2016, Meroni, C-‑559/14, EU:C:2016:349, paragraph 42)." (Emphasis added).
24. It is clear that this is, and is intended to be, a demanding test. Furthermore, the intervention of the legislator, in introducing the word "manifest" in the 2001 Regulation, can only be seen as seeking to reinforce this understanding.
25. Faced with this test, the Respondent seeks to point to certain passages in the judgment in SPV Osus and elsewhere in which the words fundamental and manifest have been used. Thus, at page 56 of SPV Osus, it is said that:-
"[T]he acceptance of the decision of the House of Lords in Trendtex ... in Australia and New Zealand suggests, at a minimum, that there remains a fundamental objection to the trading of claims, stigmatised in the jurisprudence as 'trafficking in litigation'" (emphasis added).
In Trendtex itself, Lord Roskill said that he could not agree with Lord Denning, the then Master of the Rolls, that the old saying that you cannot assign a "bare right to litigate" had gone and continued "I venture to think that still remains a fundamental principle of our law" (p.701). Lord Wilberforce, at p.694 said "The vice, if any, of the agreement lies in the introduction of the third party .... This manifestly involved the possibility, and indeed the likelihood of a profit being made" (emphasis added). These statements in the jurisprudence, it is said by the Respondent, show that Irish public policy on assignments satisfies the Apostolides test (C-420/07).
26. This however is merely to attempt to draw a superficial correspondence on the basis of two well-known adjectives used in different contexts. The terms 'manifestly' and 'fundamental' are among the most used in legal argument, and often with a degree of hyperbole to describe matters which are neither basic nor clear. The meaning of any word is to be understood from its use in its context. In particular, the statements in SPV Osus and Trendtex were not made by reference to, or in the context of, the language of the Brussels Regulation (Recast). Indeed, in his speech in Trendtex, Lord Roskill acknowledged that the Courts had adopted "an infinitely more liberal attitude towards the supporting of litigation by a third party than had previously been the case" and that just as the law had become "more liberal in its approach to what was lawful maintenance, so it became more liberal in its approach to the circumstances in which it would recognise the validity of an assignment of a cause of action and not strike down such an assignment as one only of a bare cause of action" (emphasis original), a trend which can only be said to have continued. It is clear, even manifest, that the degree to which it can be said the assignment here is contrary to public policy is not determined by the use of these adjectives in these passages.
27. The question is what is meant by the language used by the Court of Justice in Apostolides, Meroni (C-559/14), and Real Madrid Club de Fútbol, when explaining the circumstances when Article 45 will apply. It is in my view unmistakeable that what is being sought to be achieved by the use of the language is an emphasis of the very high hurdle which is necessary to surmount before it can be appropriate to refuse recognition on grounds of public policy. The concept of something being essential and fundamental suggests that it must go to the very core of, in this case, the legal order, and be so antithetical to that legal order itself that it simply cannot be permitted even indirectly when through the enforcement of a judgment of a court of another Member State. The reference by the Court of Justice to something being at variance to an unacceptable degree makes it plain, in my view, that the issue is not whether an assignment of a cause of action is, in the abstract, contrary to public policy, but rather whether it is so contrary to public policy that effect cannot be given to it even indirectly, and notwithstanding that it was entirely lawful in the place it was effected and the strong policy in favour of giving effect to judgments of other Member States. That would normally require something offensive to basic, fundamental, and essential provisions of the legal order, and which would be clearly recognised as such. It is difficult to see the current Irish law on assignments of causes of action being properly described in this way.
28. Furthermore, the addition of the word 'manifest' to the text of Article 45 should not be underestimated. This is an explicit indication of the legislator's intention that the test should be strict, and the type of public policy concerns which would justify refusal on this ground should be matters that express a judgment that is widely and strongly shared and regarded as integral to the legal system of a state. I cannot accept the respondent's suggestion that the requirement that the public policy objection be manifest is not connected to the strength or depth of the policy concern but only to the extent to which it could be said that it was clear that something was contrary to public policy, a test which it was suggested was satisfied by the fact that this Court had found in SPV Osus that a bare assignment with no limitation on onward assignment was contrary to public policy. On that basis a decision by a bare majority of this Court, perhaps overturning a contrary decision by the Court of Appeal and High Court and generating a degree of legal controversy, would nevertheless be clear, but I do not consider that would satisfy the requirement that enforcement of a judgment from another Member State in respect of a transaction occurring within that state and in accordance with its laws was manifestly contrary to Irish public policy.
29. It is clear to me that enforcement of the judgment in this case does not approach this standard.
30. There are a number of reasons for this conclusion. First, whatever public policy considerations weigh against enforcement of an assignment are substantially balanced if not outweighed by the strong public policy in favour of giving effect to judgments given in courts of other Member States in respect of proceedings properly before those courts, and contested by the parties.
31. Second, the public policy against assignment cannot be said to be static. The Plaintiff's case is based almost entirely on the decision in SPV Osus as establishing not just public policy, but public policy of such weight and force as to require refusal of enforcement. However, I think it is clear that the decision lies at the margins of what is or is not permissible, in circumstances where the law is in flux. The position is well expressed by Murray J. in paragraph 9 of McCool v Honeywell [2024] IESC 5:-
" ... the Courts should, I believe, be reluctant to extend 'public policy' as a basis for the invalidation of otherwise proper assignments of legal claims further than it is clearly necessary to do. We should strongly incline to view the general legal prohibition on the assignment of a bare cause of action (described by Lord Roskill in Trendtex ... as 'a fundamental principle of our law') as usually defining the outer boundary of the rules that secure the interest of the Courts in protecting their own processes in the specific context of assignments of this kind."
32. The public policy that would deny effect to assignments of causes of action, is related to concerns about the commodification of litigation in general, and the same policy which underpins the law of maintenance and champerty. It is not irrelevant in this context then that this is an area in which the law has recently developed, and at each point expanding the steps which are permissible, and narrowing the forbidden area. In the case of assignments, it was never the case that all assignments were regarded as impermissible. There has been a noteworthy and steady development of the law in this area at each point narrowing the area of invalidity. This does not suggest that the public policy can be said to be of such depth and strength as to be regarded as somehow essential to the Irish legal system so that it would simply be incompatible with it to give effect to a foreign judgment based on an assignment which is considered lawful by the law of that state.
33. Third, it is in my view relevant in this context that this case does not have any of the characteristics of commodification or trading in litigation that underpins the public policy objection of Irish law in this area. Indeed, even on the assumption on which the case has proceeded, namely that the terms of the assignment permitted onward assignment, it is relevant that there was no such assignment to an unconnected third party in fact. It is true that the validity of an assignment as a matter of Irish law is to be assessed at the time of the assignment and that the potential for onward assignment is fatal in that context. However, the test here is not the validity in Irish law of the particular assignment: it is whether or not Irish law should require refusal of recognition to a valid Polish assignment, which has been enforced in the Polish Courts, to whose judgments we are generally bound to give effect.
34. A useful analogy can be drawn with the recognition of foreign marriages. In that context the common law traditionally refused recognition to marriages solemnised according to the rights of religions which permitted a man to marry more than one wife. In such circumstances, even the first marriage contracted would be refused recognition because it was polygamous in the sense that it was entered into by both parties on the basis that the husband could marry more wives during the subsistence of the marriage. However, recently Irish law has drawn a distinction between marriages which are potentially polygamous and those which are actually polygamous and has been prepared to recognise marriages which are potentially polygamous but de facto monogamous, see HAH v SAA [2017] IESC 40, [2017] 1 IR 372 (judgment of O'Malley J.), and Hamza v Minister for Justice, Equality and Law Reform [2013] IESC 9 (judgment of Fennelly J.).
35. In considering whether public policy in Ireland requires refusal of recognition to the assignment here, it is in my view appropriate and permissible to take account of what occurred in fact. The words of Baroness Hale in Massai Aviation Services v Attorney General [2007] UKPC 12, paragraph 21, are apposite:-
"This was not wanton and officious intermeddling in another person's litigation for no good reason. It was simply the original owners retaining part of what they owned while disposing of the rest. There is nothing contrary to public policy in allowing Aerostar to pursue the claim against these defendants and no good reason why these defendants should be permitted to escape any liability that they may have."
Here it is simply the original investors combining in an effective way to pursue a claim for their benefit and no one else's. It is significant that it has not been suggested that the assignment to the company was to achieve any improper benefit.
36. In summary, I do not consider that Irish public policy would require refusal of recognition and enforcement of the Polish judgment. In that regard, I should say that I do not consider that the decision in Sporting Index is compatible with the test outlined above, or can be treated as a proper guide to the point at which Irish public policy requires refusal of recognition of a foreign judgment. The case does not appear to have been argued in any detail, and the distinction in the judgment between enforcement of the judgment and the order for costs (itself incompatible with the decision in Mayo-Perrott) reflects perhaps something of a 'compromise' approach.
37. The reasoning in the decision follows the same path as contained in the judgment of the Court of Appeal in this case. That is, that the provisions of the Gaming and Lotteries Act 1956 was seen as embodying Irish public policy, and it was assumed therefore that the same public policy required refusal of recognition, almost without further inquiry. The strength of the argument against enforcement was that Sporting Index could not have sued directly in an Irish court and it might be said that it would be surprising that it could succeed simply by obtaining judgment in England and seeking enforcement of that. However, there is a critical distinction central to any question of refusal of recognition and enforcement on grounds of public policy, between refusing enforcement of a gaming contract because of a statutory prohibition directly applicable to it, and the refusal of recognition of a foreign judgment obtained on foot of a contract which was perfectly lawful in the State in which it was made and performed. The statement in the judgment that because the rule was enacted by the Oireachtas, the Court was bound to treat it as a rule essential to the legal order of the State is, in my view, too broad and would remove the necessity to consider the degree to which it might be said something is contrary to public policy so as to require refusal of enforcement of a judgment which is central to the question of refusal of enforcement on grounds of public policy. I would regard Celtic Salmon for its part as an unusual case, dependent on its own particular facts.
39. Finally, it is necessary to consider the nature of the order which should be made in this case. It is regrettable that the High Court did not make a finding on the nature of the assignment in this case. That issue involved the application of Polish law, which is treated as a matter of fact for the purpose of Irish law. There is a plausible argument that the key clause did not permit onward assignment and if so, no argument in respect of public policy would arise. It would have been unsatisfactory if the Court of Appeal decision had been upheld, in circumstances where that decision was dependent upon an assumption as to the central matter in issue - the onward transmissibility of the assignment - without that matter being resolved. If possible, trial judges should make findings on factual issues which are in contest, so as to permit any appellate court to finally dispose of the litigation without the necessity for a remittal to the High Court. There is, in this regard, a difference in relation to a legal argument which may become superfluous if the court comes to certain conclusions on other issues. In such a case, even if an appellate court reverses the finding of the trial court, the appellate court may be able to resolve the subsidiary point so long as it was argued in the court below. However, this route is not possible with disputed issues of fact and it is certainly desirable that a court would make any necessary finding on such an issue, even if the issue to which the dispute relates is one which the trial court considers is redundant in light of its conclusions of law on other aspects of the case.
40. That problem does not arise on this issue because this Court has allowed the appeal and restored the decision of the High Court judge that the judgment was enforceable. However, a somewhat similar issue arises in respect of the decision of the Court of Appeal in this case. Because the Court found that enforcement of the judgment must be refused on the basis of public policy on the assignment ground, it did not go further and address the rule of law ground. However, in the light of this Court's conclusion on the assignment issue, a decision on that matter now requires to be made. I propose re-entering this matter with a view to receiving submissions from the parties as to whether matters should be remitted to the Court of Appeal to determine that issue, or whether it is possible, and if so preferable, that it should be dealt with in this Court.
[1] It might be noted that the judgment in the Court of Appeal quotes this clause as "the right to sell the debt to a third party has not been excluded". This perhaps highlights the difficulty created by the fact that the case has proceeded on an assumption - itself very debatable - as to the meaning of the clause in Polish law.
[2] At paragraph 60.
[3] At paragraph 61.