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State not restrained from selling company belonging to recapitalised bank

By: Mark Tottenham BL, on July 8th, 2013

Dowling v. Minister for Finance [2013] IEHC 299 (High Court, Laffoy J, 2 July 2013)

 

High Court refuses injunction to restrain Minister for Finance from selling company belonging to bank that had been recapitalised by state pursuant to scheme of arrangement, and refuses to refer issue to Court of Justice of the European Union.

Application for injunction by shareholders in public limited company (Permanent TSB PLC) - actions taken by Minister for Finance to recapitalise company - scheme of arrangement sanctioned by High Court in 2010 - change in corporate structure - capital invested by state in holding company thereby giving state control of bank - direction that bank sell assets to state - objection by shareholders - s 205 of the Companies Act 1963 - application to restrain sale by bank of company until adjudication on other proceedings - application for reference to Court of Justice of the European Union (CJEU) - Article 267 of the Treaty on the Functioning of the European Union - technical defect in plenary summons - amendment with leave of court - standing of shareholders to bring action - all share capital in company belonging to Minister - criteria for determination of injunctive relief - availability of relief to secure effectiveness of rights derived from EU law - whether fair issue to be tried - consequences of delaying sale - balance of convenience - damages as remedy - adequacy of undertaking as to damages - delay in seeking equitable remedy - whether delay unreasonable.

Quotation from judgment (courtesy of the Courts Service of Ireland):

“In this case it is clear that Mr. Skoczylas was aware as early at 5th January, 2013 that a sale of the Company to Canada Life was being negotiated. When the fact that the Minister had entered into a contract with Canada Life was announced on 19th February, 2013, the Court gave the plaintiffs leave to issue a motion seeking an interlocutory injunction returnable for the following week. However, despite the fact that the Court was prepared to accommodate the plaintiffs with an early hearing, which counsel for the Minister emphasised was crucial, the motion was not issued. In the circumstances, I consider that there was unreasonable delay on the part of the plaintiffs in commencing this application. I am also satisfied that, given that the anticipated date for completion of the sale was imminent, in fact, just approximately a month hence, when the application was commenced, it would be unjust to grant the plaintiffs at that late stage an injunction restraining completion of the sale. However, the primary basis on which I am refusing to grant an interlocutory injunction is that the balance of justice militates against making such an order for the reasons set out earlier.”
 

Key Cases Cited

Dowling v. Minister for Finance [2012] IEHC 89
Dowling v. Minister for Finance [2013] IEHC 75
Dowling v. Minister for Finance [2013] IEHC 129
Dowling v. Minister for Finance [2013] IESC 25
Caudron v. Air Zaire [1985] I.R. 716
Case C – 213/89 R v. Secretary of State for Transport, ex parte Factortame [1990] ECR 1 – 2433
Cases C - 143/88 and C - 92/89 Zuckerfabrik Süderdithmarschen and Zuckerfabrik Soest [1991] ECR I-415
Case C - 465/93 Atlanta Fruchthandelsgesellschaft mbH v. Bundesamt für Ernährung und Forstwirtschaft [1995] ECR I-3761)
Pringle v. The Government of Ireland [2012] IESC 47
Case C-432/05 Unibet [2007] ECR 1-2271
Case C – 33/76 Rewe-Zentralfinanz AG v. Landwirtschaftskammer für das Saarland [1976] ECR 1989
Campus Oil Limited v. Minister for Industry and Energy (No. 2) [1983] I.R. 88
B & S. Limited v. Irish Auto Trader Limited [1995] 2 I.R. 142
Okunade v. Minister for Justice, Equality and Law Reform [2013] 1 ILRM 1