The Court of Appeal has dismissed an appeal by shareholders challenging the decision to join Permanent TSB Group Holdings plc and Permanent TSB plc as notice parties in proceedings concerning the bank’s restructuring. It also upheld the High Court’s order that the appellants pay the companies’ costs of the joinder application.
The appeal concerned a High Court ruling made in October 2013. The underlying proceedings sought declarations and an injunction to prevent the Minister for Finance from completing a major irreversible restructuring of Permanent TSB plc while other court cases remained unresolved. The appellants also sought, if necessary, a reference to the Court of Justice of the European Union. They did not pursue a separate interlocutory injunction application.
The companies sought to join the proceedings, arguing that the requested relief could affect their ability to implement a restructuring plan approved by the European Commission. In an affidavit, their then secretary said failure to implement the plan could expose them to a demand to repay €2.7 billion in State aid, which he said the bank could not repay. The appellants disputed that account and argued that the companies’ interests were aligned with the Minister’s, making their participation unnecessary and costly.
The Court of Appeal said the High Court had a reasonable basis to find that the companies had a vital interest in the outcome and could be directly affected by the orders sought. It said the application did not require the courts to decide whether the companies would actually have to repay the aid. The issue was whether there was a reasonable basis for finding that such a risk existed.
The court found no error in the High Court’s test or its application. It added that even if the civil-law test for joinder had applied, the outcome would have been the same, given the potential effect on the companies’ interests and their role in implementing the restructuring plan. The court also rejected the argument that aligned interests or potentially duplicated representation amounted to an abuse of process.
The appellants argued that the appeal was moot because the restructuring plan had been completed and the companies had exited it in 2018. The Court of Appeal declined to dismiss the appeal on that basis: it said there was no evidence before it about implementation or any irreversible restructuring or disposal of assets.
The appeal court dismissed the appeal in full. It gave a provisional view that the appellants should pay the respondents’ appeal costs, with the amount to be adjudicated if the parties could not agree. A party wishing to argue for a different costs order could request a short oral hearing within 14 days of delivery of the judgment. The court did not decide the underlying request to restrain restructuring.