The Supreme Court has allowed Permanent TSB Group Holdings plc and Permanent TSB plc to participate without restriction as notice parties in a High Court case challenging a 2011 direction order that required the bank’s recapitalisation.
The appeal concerned the companies’ right to take part, not whether the direction order was lawful or should be set aside. In a judgment delivered on 19 December 2013, Mr Justice Fennelly said an application under section 11 of the Credit Institutions (Stabilisation) Act 2010 had the features of judicial review. By analogy with the rules for judicial review, parties directly affected should be joined.
The High Court had allowed the companies to give evidence and make submissions only about their current financial position and what order should replace the direction order if it were impugned. The companies appealed those limits. The Supreme Court set them aside and ordered that the companies be joined as notice parties without restriction.
The underlying proceedings were brought by shareholders in the holding company, including Gerard Dowling, Padraig McManus, Piotr Skoczylas and Scotchstone Capital Fund Ltd. Their application seeks to set aside the direction order under section 11. The Minister for Finance supports the companies’ appeal concerning participation.
The direction order was made by the High Court on 26 July 2011, on the Minister’s application. It required changes to the holding company’s share capital and corporate documents, the allotment of shares to the Minister, and a placing agreement with the Minister and the National Treasury Management Agency. It also required the company not to implement resolutions passed at its extraordinary general meeting on 20 July 2011.
Shareholders’ grounds in the pending case include allegations that the Minister’s opinion was unreasonable and that the recapitalisation was unnecessary. The Supreme Court did not decide those allegations or the disputed legal effect of the shareholders’ resolutions. It also left open whether setting aside the direction order could raise any question about repayment of the capital.
Justice Fennelly said those issues belonged to the High Court hearing and should not be decided in advance on the interlocutory appeal. He found the companies were at least potentially directly affected by the section 11 application. The judgment records that the companies were recipients of the capital and could have interests different from the Minister’s. It also found that the companies’ participation would not delay the scheduled High Court hearing.
The Court declined the shareholders’ request to refer questions to the Court of Justice of the European Union at this stage. The High Court hearing was scheduled for 14 January 2014. The Supreme Court’s ruling resolved the companies’ participation in that hearing; it did not determine the challenge to the direction order.