The High Court has struck out proceedings brought by Scotchstone Capital Fund Limited and Piotr Skoczylas against Ireland and the Attorney General, finding the claim frivolous, vexatious and bound to fail.
In a judgment delivered on 2 April 2020, Mr Justice Mark Sanfey refused to refer questions to the Court of Justice of the European Union (CJEU). He directed that the parties be heard on the exact terms of the order. The judgment does not set out those final terms.
The plaintiffs sought damages and a declaration that Ireland was liable for alleged EU law breaches arising from decisions in earlier litigation about the State’s 2011 recapitalisation of Irish Life and Permanent Group Holdings. They alleged, among other things, that the Court of Appeal and Supreme Court had misapplied EU law, failed to refer questions to the CJEU, and failed to apply proportionality principles. These were the plaintiffs’ claims, not findings in the present judgment.
The defendants applied to strike out the case under the Rules of the Superior Courts and the court’s inherent jurisdiction, arguing that the CJEU had already answered the relevant EU law questions and that the claim sought to reopen issues decided in the earlier proceedings. The plaintiffs opposed the application and sought judgment in their own motion; the judge heard the defendants’ strike-out application first.
The earlier litigation followed a 2011 direction order that enabled the Minister for Finance to acquire 99.2% of the holding company through a share issue. In 2016, the CJEU ruled that the Second Company Law Directive did not preclude a measure of that kind in circumstances involving serious economic and financial disturbance and a threat to EU financial stability. The High Court later rejected the challenge to the direction order, and the Court of Appeal upheld that decision. The Supreme Court refused leave to appeal in 2019.
Justice Sanfey concluded that the CJEU’s ruling answered the question referred by the High Court and that the Irish courts were bound to apply it. He found that the plaintiffs’ arguments about the ruling’s meaning and alleged EU proportionality breaches had no prospect of success. He also held that the pleaded complaint about the Supreme Court’s refusal to refer further questions did not establish a manifest breach of EU law.
The judge rejected the plaintiffs’ arguments that the defendants’ motion was an abuse of process or barred by delay. He said the Köbler principle can provide a remedy for sufficiently serious EU law breaches by a court of last instance, but does not permit relitigation of the underlying factual findings. He concluded that the proceedings should be struck out and that no further CJEU reference was appropriate.