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  • November 2012 2 This matter was dealt with as a matter of urgency by the High Court as it is by this Court as the appellant has sought declarations an injunction and consequential orders which have a relevance to the Referendum taking place on the 10th November 2012 3 In McKenna v An Taoiseach No 2 1995 2 I R 10 it was held that the Government in expending public moneys in the promotion of a particular result in a Referendum process was in breach of the Constitution The people adopted the Constitution 75 years ago The Constitution belongs to the people and may be amended only by the people in a Referendum It is this democratic process which is protected by the McKenna principles Public funding should not be used in a Referendum to espouse a particular point of view 4 The McKenna principles may be found in the several judgments in that case These principles which are not in dispute are consistent with standards recognised both nationally and internationally for a Referendum process such as the European Commission for Democracy through Law Venice Commission Code for Good Practice on Referendums adopted by the Council for Democratic Elections at its 19th Meeting Venice 16 December 2006 and the Venice Commission at its 70th Plenary Session Venice 16 17 March 2007 5 At issue in this case is the application of these principles to a booklet and a website both entitled Children s Referendum and advertisements published and disseminated by the Department of Children and Youth Affairs on foot of moneys voted by the Oireachtas which the appellant submits breach the McKenna principles 6 The Court is required to give its decision promptly in view of the pending Referendum to be held on Saturday 10th November 2012 The substance of

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  • by delay which is such as to preclude a fair trial will always entitle an applicant to prohibition 13 The prosecution delay here has been significant and is largely unexplained However it is accepted that this delay has caused no actual prejudice to the appellant Moreover it is also a fact that the case against the appellant is based largely on documents and is therefore not substantially reliant on human factors such as recollection or identification The grounds for this appeal must therefore be narrowly based and confined to presumptive prejudice arising from the lapse of time The question then arises as to whether the delay is of such a degree that the court will presume prejudice or whether it falls below that threshold i e point c in the judgment of Kearns J above in which case the Court will be required to carry out a balancing exercise where the community s entitlement to prosecute crime is engaged as the counter weight 14 In weighing these factors I refer to the three interests identified in this Court s judgments in P M v Malone and again in P M v Director of Public Prosecutions In P M v Malone Keane C J citing the decision of the United States Supreme Court in Barker v Wingo 1972 407 U S 514 identified the fundamental issues to be considered in a case of this nature as being a loss of liberty pending trial b anxiety and concern to the accused and c impairment of the defence 15 P M v Director of Public Prosecutions has a particular relevance to this case There the sole point of substance was whether blameworthy prosecutorial delay could in itself be sufficient to warrant a restraint of trial This court answered that question in the negative indicating that one or more interests protected by the right to an expeditious trial must be shown to have been so interfered with so as to warrant the granting of an order of prohibition In the instant case there has been no loss of liberty It is not said the delay after this Court s decision in 2008 has impaired the appellant s capacity to defend himself And it has not been submitted that there is any specific stress element in the case 16 The court would also lay emphasis on the fact that amongst the important factors mentioned in Barker v Wingo was whether the accused had taken any steps to assert his right by for example applying for an early trial see also the judgment of the ECtHR in McFarlane v Ireland 2010 ECHR 1272 at para 148 where the appellant in McFarlane successfully appealed to the ECtHR claiming violation of his rights under Articles 6 and 13 The appellant did not do so First he never made an application for or requested an early trial Second as clearly pointed out he did not ask for a new judge to deal with the preliminary applications 17 Therefore these authorities are not of assistance to the appellant The balancing exercise to be carried out between the public interest in the prosecution of crime and the appellant s right to an expeditious trial favours the former I now turn to the issue of systemic delay Systemic Delay 18 This question of systemic delay was also addressed by this Court Kearns J in McFarlane v Director of Public Prosecutions when he stated at p 164 Should systemic delay be seen as qualitatively different from prosecutorial delay From an applicant s point of view assuming he has not occasioned or contributed to the delay arising since the inception of the criminal process I believe that the distinction is one without a difference I believe that systemic delay is to be governed by the same principles which govern prosecutorial delay not least because both forms of delay affect an accused in the same way 19 Here again having regard to the balancing exercise involved the court must have regard to the absence of any of the three factors identified earlier loss of liberty stress or anxiety or impairment of the defence through actual prejudice Here too there is the important factor that much of the evidence relied upon by the prosecution is documentary in nature Assessing each of the relevant factors individually and collectively and placing each in the balance I find the appellant has not discharged the onus which necessarily requires him to demonstrate as a matter of probability that he will not receive a fair trial The community interest in the prosecution of crime outweighs the delay in the instant case Therefore I am unable to conclude that the appellant can succeed in this argument The Proceedings before the European Court of Human Rights 20 For completeness it is necessary then to consider whether the proceedings initiated by the appellant through another lawyer before the European Court of Human Rights have a bearing on this appeal In the proceedings before the ECtHR initiated in 2008 the appellant had alleged violation of his Convention rights by reason of the delay in prosecuting the charges and the lack of an effective remedy for such violation under Article 6 of the Convention Those proceedings were adjourned on the 14th December 2009 pending the decision of the Grand Chamber in McFarlane v Ireland 21 On the 6th October 2010 the ECtHR indicated by letter to the Director of Public Prosecutions and to the appellant that it was resuming consideration of the appellant s case following the delivery of the McFarlane judgment It is unnecessary to outline the facts in McFarlane for the purpose of this judgment It is sufficient to say that the ECtHR concluded that the Government of Ireland had not shown that any of the national remedies proposed by it including an action for damages for breach of the constitutional right to trial with reasonable expedition constituted effective remedies for delay and that accordingly there had been a violation of Article 13 ECHR

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  • that the evidence sought to be introduced could not be relevant to the appeal and should not therefore be admitted irrespective of whether leave was required The argument of the Competition Authority was that if leave was required it should be refused on the basis of the evidence being irrelevant However it was said that even if leave was not required the court should now determine that it would not consider the proffered evidence on the basis likewise that it was irrelevant The question of the relevance of the proposed evidence was on any view therefore central to the issues which arose on this appeal 3 3 Finally a practical issue was raised on behalf of the Competition Authority It has already been noted that the Competition Authority accepted at least to a certain extent that there would be consequences for Rye in the event that it was required to undo the merger In reality the evidence sought to be tendered concerns the extent of the integration measures which have in fact been put in place subsequent to the merger As I understand it Rye s case on relevance is that such evidence is material to the question of whether the appeal is as Rye asserts moot given that the merger has gone ahead However it is argued on behalf of the Competition Authority that even if contrary to the Competition Authority s primary position the evidence could be relevant that situation gives rise it is said to a most difficult logistical problem 3 4 While it may well be that the Competition Authority accepts some of the facts set out in the evidence proposed to be tendered on behalf of Rye it is argued that it would be unfair for this court to determine the appeal on the basis of evidence which is not capable of being challenged in a practical way and in circumstances where the Competition Authority would not have available to it an appropriate means of inquiring into whether additional evidence was required to be put before the court with a view to seeking to minimise the extent to which it might be difficult to unscramble the egg in this case 3 5 To use a metaphor suggested from the bench in the course of the hearing it might be that it would be possible for the Competition Authority to persuade the court if it had a proper opportunity that this was simply a case where the egg white and egg yolk had been separated rather than one where there had been a proper scrambling To the extent therefore that the court might consider it relevant to assess the degree of difficulty which Rye would encounter in restoring the affairs of the respective businesses to an unmerged state the Competition Authority argues that such an exercise would require a significant lengthening of the appeal before this court coupled with the undoubted difficulties which would be encumbered in inviting this court to consider facts which had not been the subject of tested evidence and findings in the High Court 3 6 Against that background I will turn first and briefly to the issue under the rules 4 The Rules 4 1 The relevant rule is Order 58 Rule 8 of the Rules of the Superior Courts which provides The Supreme Court shall have all the powers and duties as to amendment and otherwise of the High Court together with full discretionary power to receive further evidence upon questions of fact such evidence to be either by oral examination in court by affidavit or by deposition taken before an examiner or commissioner Such further evidence may be given without special leave upon any appeal from an interlocutory judgment or order or in any case as to matters which have occurred after the date of the decision from which the appeal is brought Upon any appeal from a final judgment or order such further evidence save as to matters subsequent as aforesaid shall be admitted on special grounds only and not without special leave of the Supreme Court obtained upon application therefor by motion on notice setting forth such special grounds The Supreme Court shall have power to draw inferences of fact and to give any judgment and make any order which ought to have been made and to make such further or other order as the case may require The powers aforesaid may be exercised by the Supreme Court notwithstanding that the notice of appeal asks that part only of the decision be reversed or varied and such powers may also be exercised in favour of all or any of the respondents or parties although such respondents or parties may not have appealed from or complained of the decision The Supreme Court shall have power to make such order as to the whole or any part of the costs of the appeal as may be just emphasis added 4 2 The rule does seem to distinguish between evidence in relation to matters which occurred after the decision of the High Court as opposed to matters which arose before such decision On any view the evidence sought to be tendered on this appeal concerns events which occurred post the decision of the High Court On that basis it seems clear that special leave of the court is not required under the rule 4 3 However in Fitzgerald v Kenny 1994 2 I R 383 Blayney J indicated that the court nonetheless retained discretion as to whether evidence should be admitted in respect of events which occurred after the decision of the High Court It seems to me that the reason for this is obvious In the ordinary way and at least in very many cases evidence of what occurred after a decision in the High Court will not be relevant It would not be in accordance with the requirement that appeals to this court be conducted in an orderly fashion that a party could simply place before the court irrelevant evidence not considered by the High Court and invite this court to take such evidence into account on an appeal This court clearly retains a discretion the rule speaks of full discretionary power to exclude additional evidence even where that evidence arises in respect of events which occurred after the High Court had concluded the case Unless there is some realistic basis on which it can be argued that the evidence in question could be relevant to the issues which this court has to decide on appeal then it seems clear that the evidence should be excluded 4 4 It seems to me therefore that this court has an inherent jurisdiction to rule out evidence relating to facts which occurred after the High Court decision on the grounds of relevance This will particularly be so where a case is subject to significant pre appeal hearing case management The whole point of such case management is to ensure that the issues which are to be considered at the hearing of the appeal itself will be as refined as is possible consistent with affording both sides a fair hearing In such circumstances it is entirely appropriate for this court where possible to rule in advance and at least in clear cases on the relevance of any evidence sought to be tendered concerning facts which occurred after the decision in the High Court If such evidence could not be relevant then it is appropriate that it be excluded at an early stage so as not to unnecessarily lengthen the hearing of the appeal It follows that it is appropriate on this application to consider and if possible determine the question of relevance I should however add that there may be cases where a very issue in the appeal itself may be as to the extent to which post High Court decision facts may be relevant In at least some such cases it may not be possible to determine on a procedural motion the question of relevance with the degree of certainty required to rule confidently on the matter Whether relevance can be determined at this stage and if so possible whether the proffered evidence is relevant seems to me to be the central issues in this case I therefore turn to those issues 5 Relevance 5 1 In order to understand the issues which arise in relation to the relevance of the suggested additional evidence it is necessary to start by noting the basis on which Rye suggests that the evidence is relevant I have already touched on the basic contention made on behalf of Rye Rye argues that these proceedings are moot by reason of the fact that the merger has gone ahead and a series of measures of integration have already occurred between the merged companies One of the issues which this court will have to decide at the hearing of the appeal is therefore as to whether the proceedings are moot on that basis 5 2 However there are a number of subsidiary questions which the court will need to address in that context The first question stems from the fact that the statutory regime which applies in respect of a challenge to a decision of the Competition Authority in the context of a merger makes express provision for both a challenge in the High Court and an appeal to this court Thus this court will be concerned at the hearing of the appeal with a form of appeal for which there is express statutory recognition In that context it will be necessary to consider whether and if so to what extent it could be said that the Competition Authority might lose the right to have an appeal determined on the merits by the occurrence of events post a decision in the High Court at least where it might be argued that such events were not of a type which render the entire process of merger redundant 5 3 There might well be cases where the relevant merger had ceased to be in contemplation and where none of the issues which informed a relevant decision of the Competition Authority were any longer of continuing relevance to any other potential merger In such cases it would be hard to argue with the proposition that the appeal was moot although it needs to be noted there remains a discretion in this court to consider a moot appeal in the sort of unusual or exceptional circumstances identified in the jurisprudence most recently analysed in the decision of this court in Okunade anor v Minister for Justice Equality and Law Reform 2012 IESC 49 In any event the merger in this case is of course still very much alive It is the very fact that the merger as contemplated has been it is said completed that gives rise to the mootness argument advanced on behalf of Rye 5 4 At the hearing of this application counsel on both sides set out a brief account of their argument on the question of mootness It seems to me to be useful at this stage to record those competing positions On behalf of the Competition Authority counsel argued that the appeal could not become a moot simply because a merger had taken place To regard such an appeal as being moot and thus to deprive the Competition Authority of an opportunity to have this court consider on the merits whether the High Court was correct in overturning the view of the Competition Authority would it was said be contrary to the statutory regime On that basis the primary position of counsel for the Competition Authority was that the appeal could not be moot in any circumstances 5 5 At the other extreme counsel for Rye argued that by allowing the merger to go ahead i e by not seeking some form of interlocutory court intervention the Competition Authority had allowed the issue to become moot In one sense if the position is found to be as straightforward as that primary argument advanced on behalf of Rye there then would be no need for evidence Counsel for the Competition Authority was prepared to stipulate for the purposes of the appeal that the merger had gone ahead and that some steps by way of integration had occurred Counsel was not however prepared to stipulate that the account of the steps taken by way of integration as set out in the schedule specifying the evidence sought to be introduced by Rye was necessarily correct in all respects and perhaps more importantly necessarily gave a full picture of all relevant matters Be that as it may if the pure argument advanced on behalf of Rye which is to the effect that allowing the merger to go ahead and allowing some steps be taken on foot of it is sufficient to render the proceedings moot was to be found to be correct then there would be no need for further evidence for that argument can be made on the law and on the facts stipulated by counsel for the Competition Authority 5 6 However both counsel accepted that this was to a very large extent new territory There have been no mergers cases before this court under the existing statutory regime The issues which this court will have to address on the substantive appeal under the mootness argument are therefore at least in significant part novel It follows that both counsel were prepared to accept at least for the purposes of argument that there was a possibility that the court might conclude that neither pure position was correct but that the question of mootness might arguably depend on just how far integration had gone and how difficult it might be to reverse any such integration For example it might be argued that what came to be described as merger lite in the course of argument i e a merger where the formal takeover took place but no significant integration measures were adopted might not lead to an appeal being moot but that a different case in which significant integration had occurred which would be difficult to reverse might give rise to a different conclusion It is in that context that counsel for Rye indicated that it was considered desirable that the court have available to it some evidence as to the integration steps which have actually occurred 5 7 One further nuance in the arguments put forward needs to be noted While not conceding that the evidence sought to be tendered would be relevant even then counsel for the Competition Authority accepted that there might be a different issue as to the relevance of the evidence in question to a situation which might arise in the event that the Competition Authority were successful on their appeal thus reversing the decision of the High Court and in substance reinstating the original decision of the Competition Authority In those circumstances the question might arise as to what happens next On that basis counsel argued the merger again becomes unlawful because it does not have the requisite consent But the merger has actually taken place The court might then have to consider what is to happen and what measures should be put in place to as it were unscramble the egg Again the primary argument of counsel for the Competition Authority was that any problems which might be encountered in unscrambling the egg were problems which Rye has brought on itself by completing the merger even though an appeal was at the early stages anticipated and during much of the integration process actually in being 5 8 That question of course begs the contentious issue between the parties as to whose fault the current situation now is a question on which I have already touched However both counsel accepted contrary to their respective primary positions that there might at least be an argument that the court would have to consider in determining what order or directions it might have to give the practicalities of a de merger In simple terms it is I think fair to summarise the argument put forward on behalf of the Competition Authority as being one which said that the proposed evidence could never be relevant but that if contrary to that view there were circumstances in which the evidence could be relevant same only would arise after the appeal had been determined on the merits that is to say as the legislation seems to require on the materials which where before the Competition Authority and on the basis of the decisions of the Competition Authority and the High Court on those materials Should the appeal be allowed and in the context of deciding what practical measures were required to be adopted as a result of a successful appeal by the Competition Authority which rendered a merger which had actually taken place as being one which no longer had the requisite consent it was accepted as arguable although contrary to the principal position adopted by the Competition Authority that post High Court evidence might be relevant 5 9 It seems to me that it is not possible to resolve those very important issues on a motion such as this Whether and if so to what extent the precise level of integration which has been achieved and perhaps any difficulties that might be encountered in disentanglement could be relevant to a mootness question is one which will require careful consideration at the trial It seems to me that it would be premature to seek to determine on a motion such as this that there were no circumstances in which the level of integration of two corporate entities that have merged in circumstances such as had occurred in this case might not be relevant to a mootness issue I make that point without in any way indicating any views on the merits of the arguments which have been outlined in this judgment However it seems to me that having concluded that there

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  • Defendants were aware that they would lose control of the company the following day I am also advised and believe that the appellant was in Kiev on 30 August 2011 and attended meetings with Peter Quinn in the QPU building that day 24 Mr Woodhouse referred to the instructions and banking documents which led to the payment out of US 500 000 from the account of QPU on 5th September 2011 The payment was not he said in the ordinary course of business having regard to the stated reason for which Ms Puga s employment was terminated namely commitment of guilty actions 25 Replying affidavits were sworn by Sean Quinn Sr the appellant and Peter Quinn Each of them denied in the strongest terms that they participated in or even knew of the US 500 000 payment They explicitly denied that any of them had attended at such a meeting as Minute No 21 purports to record Sean Quinn Sr expressed his belief that no such meeting took place and that no such resolution was ever passed The appellant believed that the Minute was not a genuine document 26 The hearing of the contempt motion took place before Ms Justice Dunne in the High Court over 15 days Each of the three respondents to the motion gave evidence and was cross examined Each maintained his denial of having any knowledge of or role in the US 500 000 payment 27 Peter Quinn accepted that the signature on the minute looked like his Thus he did not claim that it was forged He did however claim that the minute itself was a forgery in effect a fabrication In cross examination he was reminded that his solicitors in their letter in reply to McCann Fitzgerald had stated that the signatures on the minute were not those of Sean Quinn Sr or of Peter Quinn 28 He said that there were a couple of reasons for the visit to Kiev He knew that on the next day he would be removed from any involvement in QPU He had been working with the QPU people for five years and did not want to be in a position where I disappeared off the face of the earth He wanted to thank them for all their efforts over the years because they worked very hard for me he said that the meeting between himself and the appellant had taken place in the Leonardo building and lasted an hour or an hour and a half He said that everyone was concerned about their own future and that he tried to reassure them He said I tried to reassure Ms Puga that her position wouldn t be affected because she had done a very good job so I assumed incorrectly as the case was that she d be kept on It would have been my wish that she was kept on because I feel that she would have had a benefit to the business 29 He was challenged in cross examination on his statement that he had never denied the meeting of 30th August 2011 because his solicitors had not mentioned it He said that this was a play on words 30 The appellant in evidence repeated his denial of any knowledge of the resolution or the payment of US 500 000 He was examined and in particular cross examined about his explanations for travelling to Kiev He said I suppose since the injunction was got on 27 June Peter would have Peter Quinn would have spoke to me on a number of occasions and explained that he was becoming concerned with Ms Puga s bona fides On hearing that also he told me that he was travelling to the Ukraine on 30 August and I suggested I would attend with him I suppose more or less for a second opinion to have a view of what Ms Puga was or was not actually doing 31 His account of the meeting in the Leonardo building was similar to that of Peter Quinn His explanation of the reason for that was however at least so it was suggested in cross examination quite different from that of Peter Quinn When he learned from Peter Quinn about his intended trip to Kiev on 30thAugust he made the decision to travel with him He said that Peter Quinn had told him that his contact with Ms Puga was diminishing that he was sceptical of what she was doing and that his relationship with her was deteriorating It was pointed out to him that Peter Quinn had said nothing about Ms Puga s bona fides Nonetheless he insisted in several answers that Peter Quinn had spoken in these terms to him He is said that the shares in QPU were owned by his extended family former work colleagues and friends and that if anything happened to QPU they would be affected Thus he went to Kiev not only on his own behalf but in the Quinn family interests 32 The Bank attaches particular significance to what it describes as a number of admissions made by the appellant of his knowledge of the existence of a co ordinated plan or scheme put into effect largely by Peter Quinn to extract cash or other assets from companies in the Quinn Property Group with the object of putting them beyond the reach of the Bank In this context the appellant accepted that Peter Quinn was not only his cousin but also his friend and that he regularly spoke to him The appellant was aware of a plan from late April 2011 to get unsecured assets into the control of the Quinn family He was aware at an overall level that there was things being done in from April 2011 to try and take assets out of the QIS structure and put them beyond the reach of Anglo The High Court judgment 33 Dunne J delivered a judgment on 26th June 2012 in which she found all three respondents to the notice of motion guilty of contempt of court More specifically she found all three in contempt in respect of the 500 000 payment from the account of QPU This was of course the sole allegation made against the appellant 34 She emphasised that the appellant was not alleged to be in contempt of court in respect of any breach of the Orders of Clarke J of the 27th June 2011 and the 20th July 2011 in any other respect 35 She made it clear that she had considered the lengthy submissions made on behalf of the respondents She had also considered all the evidence although she made reference to the evidence on the principal issues before her she did not find it necessary to rehearse it all She noted that she had to be satisfied beyond reasonable doubt in respect of each of the allegations of contempt and that the criminal standard of proof applied to each and every allegation 36 In the result she expressed herself satisfied that the Bank had produced compelling evidence to establish beyond reasonable doubt that the attempted payment to Ms Puga was brought about by the respondents She conducted a comprehensive and detailed analysis of the evidence upon which the Bank had relied Furthermore she found that both Peter Quinn and the appellant had been untruthful in the evidence they had given 37 I will discuss the main points in the evidence and the learned judge s findings at a later point At this point I will present a short summary of the essence of her findings and her reasoning It is as follows 38 At the beginning of September 2011 US 500 000 was paid out of the account of QPU apparently for the benefit of Ms Puga a transaction clearly not in the ordinary course of business Ms Puga s employment contract had been backdated and essentially fabricated in such a way as to justify that payment Minute No 21 of the purported meeting of directors of QPU appeared to authorise the payment It appeared to bear the signatures of Sean Quinn Sr and Peter Quinn Each accepted that the signature appeared to be his while denying any participation in or knowledge of the transaction The date of the meeting coincided with the arrival in Kiev on 30th of August 2011 of Peter Quinn and the appellant Each of them knew that on the following day the Quinn family would be deprived of any control of QPU Sean Quinn had no previous involvement in QPU and no apparent reason for visiting Kiev Peter Quinn and the appellant gave inconsistent and contradictory accounts of their reasons for being in Kiev on that day They both attended a meeting in the Leonardo building with Ms Puga The learned judge did not believe either of them The coercive orders 39 Having delivered her judgment in which she had made findings of contempt of court on 26th June the learned judge adjourned the matter to enable the parties to consider her judgment further until 29th June In particular insofar as the Bank was concerned this provided time for it to propose coercive orders arising out of the findings of contempt Counsel for the appellant invited counsel for the Bank to indicate what coercive measures would be sought It was agreed that these would be notified by close of business on the following day 27th June The learned trial judge said that it would be very difficult to persuade her that there should not be a punitive element in her order 40 By a letter dated 27th June McCann Fitzgerald informed the appellant s solicitors of the very extensive coercive orders it proposed to seek The orders sought were set out over sixteen pages and several schedules They made no distinction and gave no reason for failing to make any distinction between the three respondents to the notice of motion of 13th February Notably it took no account of the fact that the Bank had alleged contempt of court against the appellant in respect of one transaction only For example it proposed to require the appellant to cause various named entities in the Russian Federation to enter into unconditional and irrevocable agreements terminating some thirty purported assignments dated 26th November 2011 connected with Galfis That was an entity or company in Belize in respect of which allegations of contempt had been made against the other two respondents to the motion but not the appellant 41 No notice of motion was served However one schedule to the letter listed Mareva Type Reliefs sought by IRBC under Notice of Motion dated 14 June 2012 42 The order made on 29th June gave effect very largely to the coercive orders sought in the letter of 27th June It suffices at this point to note three points Firstly the orders sought did not differentiate between the three respondents to the contempt motion in particular so far as the appellant was concerned he was treated as if he had also participated the matters in respect of which contempt finding as had been made against Sean Quinn Sr and Peter Quinn secondly the appellant was to be required to reverse or undo transactions in which it had not been alleged in the contempt motion that he had taken part thirdly as was conceded some of the reliefs did not flow from any finding of contempt against any party but were justified by the general need to police the order of Clarke J 43 At the same time it does not appear that objection was taken on behalf of the appellant at least to a procedure whereby the Bank would give notice of the sort of coercive orders it would seek arising out of the findings of contempt 44 At the hearing on the 29th June counsel for the Bank argued that the coercive orders were necessary for the purpose of remedying the specific contempt which had been found Counsel for the Bank said that some of the reliefs sought were such as a court could grant irrespective of any finding of contempt He further submitted that the court was not confined to making orders specifically relating or confined to the particular findings and that the orders could be broader and could be made to protect the terms of the order which had been made by Clarke J in their entirety that in circumstances where a number of breaches of the order had been established beyond reasonable doubt the coercive orders sought were appropriate to protect the remaining parts of the order rather than have a situation where each individual contempt must be alleged proved and brought back before the court for that purpose and a further order sought 45 Counsel for the appellant who also appeared for the other two respondents to the contempt motion made a fundamental objection which was applicable to the great majority of the orders sought by the Bank He argued strenuously that any coercive measures which the court could impose must be directed towards the purging of the contempt which the court had found and be confined to the specific and particularised allegation made in the notice of motion To act otherwise would be to condemn a person without being heard 46 It was said that the Bank was moving for these orders without bringing any application by way of notice of motion or amendment of the existing notice of motion and without putting its complaints of further acts of contempt on affidavit 47 Counsel submitted that no authority had been cited for this procedure so as to justify depriving a person of his liberty for breach of a court order going beyond the allegations which had been made Counsel referred to a number of specific examples In particular he referred to the allegations that had been made in the notice of motion against Sean Quinn Sr and Peter Quinn but not against the appellant of responsibility for assignments from Demesne a Northern Ireland company to Galfis a Belize company but that coercive measures were now being sought against him in respect of matters in which he had not been alleged to be involved 48 The learned trial judge responded to the submission that the appellant had been the subject of only one allegation of contempt by saying that all three of the respondents to the motion were involved in a conspiracy to deprive Anglo of access to assets Although the appellant was involved in one aspect only he was involved in the overall strategy Therefore she held that he was somebody against whom such orders should be made On the other hand she expressed herself as reluctant to grant injunctive relief She was mindful of the fact that there was a separate application pending before the Commercial Court She thought that matter should be dealt with at that venue The learned judge referred to the inherent jurisdiction of the court and held that she was not confined to dealing with the orders solely on the basis of the relief that had been sought in the notice of motion for contempt She stated that the Quinn family were acting in a way to put matters beyond the reach of the Bank in circumstances where there would be a breach of the orders of the court 49 The order of 29th June 2012 gave effect to the application for coercive measures in the Bank s letter of 27th June It was made without distinction against Sean Quinn Sr the appellant and Peter Quinn The order runs with its schedules to some thirty pages It includes 33 paragraphs and many subparagraphs Only paragraph 31 relates to the payment of US 500 000 by QPU to Ms Puga The order provides for disclosure of all assets worldwide the appointment of a receiver with extensive powers over all properties It directs the appellant to issue instructions to take all steps necessary to terminate and withdraw legal proceedings in Russia Ukraine India BVI Belize and Panama to take steps in relation to companies in various countries to resign from boards of directors to transfer shareholdings to assign or reassign loans to cause various companies particularly in Russia to withdraw claims to cancel powers of attorney and very many other things In general terms all the requirements of the order are designed to secure the return to the Bank or protection of the interests of the Bank in assets in various jurisdictions Orders of 20th July 2012 imprisonment 50 The appellant swore an affidavit dated 20th July 2012 outlining the extent of his compliance with the coercive measures made on 29th June Counsel for the Bank expressed the view that there had been a very significant failure to comply with the orders and that nothing material had been done in terms of the return of the assets He suggested that while it was a matter for the court the matter might be dealt with in the following week The learned judge however expressed a preference to have the matter dealt with on that day which was also the preference of counsel for the appellant In the result there was no further affidavit from the Bank before the court although the Bank expressed concern at certain matter that had been disclosed in the affidavits of disclosure of the appellant and of Peter Quinn 51 The appellant in his affidavit of 20th July said that he wished to outline for the court the steps that he had taken or which he had caused to be taken since the judgement of 26th June to comply with the order of the court He referred to a separate affidavit of disclosure sworn on the same date and said that he had cooperated with the receiver appointed pursuant to that order 52 His affidavit contained the following striking paragraph As is clear from the evidence adduced in the hearing of this application I along with certain other of the Defendants herein took steps to remove assets from the IPG in order to frustrate the Bank s efforts to enforce its security against those assets in circumstances where we disputed the validity of the Bank s security 53 The appellant outlined in some detail the manner in which the Quinn family had acted so as to as he put it protect the assets from recovery by the Bank For reasons which will appear later it is in my view unnecessary to relate the matter is detailed in that very lengthy affidavit It is right to note however that the Bank claimed at the hearing in this court firstly that the affidavit itself discloses further very serious breaches of the order of Clarke J and secondly that it did not disclose that the appellant had taken any sufficient steps to comply with the order of 29th June 54 The learned trial judge held on 20th July that there had been contempt of court of the most serious kind in relation to a scheme to put assets beyond the reach of the Bank She explained the background to the orders of 29th June as follows the matter was adjourned to the 29th June and at that stage a list of proposed coercive orders were put before the Court in relation to how the Bank would see matters moving on with a view to undoing the scheme or conspiracy or whatever word one wants to use to put the assets beyond reach of the Bank and for that reason a series of orders were made by the Court The purpose of that was to facilitate the Plaintiff in getting information which would allow the policing effectively of what was going on and would also effectively set in train the undoing or unravelling of the scheme that had been put in place 55 Throughout her remarks the learned judge expressed herself as being unconvinced that the appellant and other members of the Quinn family had taken effective steps to fulfil the requirements of the coercive measures and what she saw as a lack of co operation She was not impressed by the suggestion that what the Quinns have done to date is a satisfactory way of dealing with matters While she accepted that a great number of letters had been written she was not sure to what extent that is in practical terms dealing with matters efficiently and effectively Her conclusion was as follows So in effect the position of the Court is that this a case where it seems to me that a the contempt that has occurred to date is a contempt that could be described as outrageous to use the type of language that is used in some of the judgements such that it is a contempt of court that gives rise to the possibility of a punitive order being made But there is a very strong and important and desirable element in this case having regard to the nature of the case and what is at stake for the parties as a general observation and that is also there should be a strong coercive element And as I have indicated imprisonment with a view to a coercive element is generally intended to be indefinite in nature Given the fact that I am of the view that matters should be dealt with for the purpose of coercion in the first instance what I propose to do is make an order today imprisoning Peter Quinn and Sean Quinn Junior for a period of time until they come before the Court and purge their contempt In that regard I am also minded to build into that period of time a period which recognises the punitive element in relation to the matter And to that extent it seems to me that what I should do at this stage is to indicate for the purpose of clarity what that period should be And in that regard the period I have in mind is a period of three months 56 Thus the appellant had imposed upon him a fixed period of three months imprisonment by way of punishment for his contempt of Court in committing a breach of the order of Clarke J In addition he was imprisoned indefinitely until he should satisfy the court that he had purged his contempt by complying with all the coercive orders of 29th June 57 When pressed by counsel to indicate the precise ground for the imposition of the term of three months imprisonment particularly in the light of the single allegation of his involvement in the payment of US 500 000 the learned judge added The only thing I will say in regard to that is that yes there was one allegation made against him I made various findings in the course of the decision in relation to the way in which he gave evidence and I am taking that into account 58 This statement made it clear that the sentence of three months imprisonment was imposed only in respect of the finding of contempt made on 26th June i e taking part in the payment of US 500 000 to Ms Puga 59 Counsel for the appellant applied for a stay in respect of the order of imprisonment which was refused following opposition on behalf of the Bank on the basis that a stay would not have the effect of giving support for the objective of the Court s order The appeal 60 There are three aspects of the appeal Firstly the appellant submits that there was no sufficient evidence before the High Court to justify the finding of contempt made against him in respect of the payment of US 500 000 from the account of QPU in favour of Ms Puga Secondly he submits that even if the finding of contempt was justified it was not permissible to make the coercive orders insofar as they went beyond the subject matter of that finding so as to encompass matters in respect of which no allegation of contempt had been made against him Thirdly he submits that even if he is incorrect in making each of those submissions the High Court was not justified in making the order for his indefinite imprisonment because there was no sufficient evidence that he failed in his efforts to purge his contempt 61 Clearly the second and third points are each respectively dependent in turn on the outcome of the preceding issue If the appellant succeeds on the first point there was no basis for either the coercive measures or the imposition of imprisonment Similarly if the coercive measures were not properly imposed there could be no basis for punishing the appellant for breach of them 62 Before proceeding it should be noted that the order of 20th July 2012 records that the appellant was found guilty of contempt of the orders of Clarke J as well as of the order of 29th June 2012 although it would not appear that the learned trial judge intended at least to impose the sentence of three months imprisonment for breach of the latter order Conclusion on the finding of contempt 63 The appellant contends that there was no sufficient evidence before the High Court to enable it to make a finding that the appellant had participated in any way in the payment of US 500 000 at the end of August or beginning of September 2011 from the account of QPU in Kiev to Ms Puga The learned trial judge did not identify any act on the part of the Appellant which did or was necessary to effect the transfer of US 500 000 to Ms Puga and there was no finding of fact sufficient to provide a basis for finding the appellant guilty of contempt of court The appellant points out that the appellant had no role in the company QPU that he had no power in that company and that there was no evidence that he had ever taken any action in relation to that company 64 It is accepted on the part of the Bank that the evidence of the appellant s involvement in the transaction was entirely circumstantial It is submitted nonetheless that there was more than adequate evidence to sustain the finding Circumstantial evidence can lead to clear findings of guilt even of criminal offences 65 The correct approach to resolution of this issue is to ask whether there was sufficient evidence before the High Court to enable it as the forum with the exclusive role of determining the facts to decide beyond reasonable doubt that the appellant was guilty of contempt The first stage is whether there was sufficient prima facie evidence which if taken at its highest was accepted by the court to permit the court to go to the second stage and consider whether the case is proved beyond reasonable doubt It was a matter for the learned trial judge to decide whether or not she believed the witnesses Likewise only she could determine whether the case had been proved to the criminal standard This Court performs the appellate function of deciding whether there was sufficient prima facie evidence 66 It is true and was accepted by the Bank that the appellant had no formal role on the board or in the management of QPU He claimed in evidence that he had no involvement whatsoever in the Ukraine Nonetheless it is clear from his own evidence that he was interested in the affairs and business of QPU Although the Quinn family had only a 15 share in QPU he said that the asset was owned by former work colleagues friends and extended family and that he wanted to see nothing happen to that He was aware of discussions involving QPU and or Anglo regarding management of that asset It was he who decided at his own initiative to travel to Kiev in the company of Peter Quinn at the end of August 2011 On his own admission the trip was clearly related to QPU 67 The appellant said that he had had discussions with Peter Quinn or with his father about QPU and the Leonardo building He was aware of the impending changes to the board of QPU which would take place on 31st August which would remove the Quinns from any control of the company That was to happen the day after his own planned visit to Kiev in the company of Peter Quinn Indeed in that respect he said that we meaning the Quinns had suggested to Anglo that they were better capable of managing the asset He went to Kiev he said on his own behalf but also in the Quinn family interests 68 He mentioned several times in evidence that Peter Quinn had expressed concern to him about his deteriorating relationship with Ms Puga his contact with her was diminishing she was becoming more distant he was losing his relationship with her He said that he had gone to Kiev with the express intention of trying to understand what Ms Puga may or may not be doing or as he said at another point to provide a second opinion to have a view of what she was doing Although this account differed sharply from that of Peter Quinn a fact which may have its own significance it does not suggest that the appellant was entirely uninvolved with or unconcerned about QPU 69 Against this background the learned trial judge had regard to the two significant documents in the case Firstly there was the employment contract Strikingly that document though dated 25 February 2009 appeared to provide for a payment of US 500 000 to Ms Puga in the event of the termination of her employment as from June 2011 The learned judge found this document at least in that respect to have been fabricated Although there was no direct evidence of who did so that finding does not seem open to doubt The second document is of course Minute No 21 While there is no direct evidence of the events it purports to record it was found in the files of QPU appears to bear the signatures of Sean Quinn Sr and of Peter Quinn and the seal of the company 70 The learned trial judge had regard to these facts to the fact that the appellant and Peter Quinn travelled to Kiev the day before the Quinn interests would be removed from the board of QPU and that the sum of US 500 000 was in fact removed from the account of QPU on or about 5th September pursuant apparently to the resolution recorded in the minute 71 Two further points were that in response to the initial letter from McCann Fitzgerald of 2nd December 2011 which alleged that the meeting recorded in the Minute had taken place at the Leonardo building on 30th August the appellant s solicitors did not admit as was the fact in their letter in reply of 13th December that the appellant and Peter Quinn had attended a meeting in the Leonardo building on that day They limited themselves to denying that they had attended such a meeting While that might be considered correct if they were referring to the shareholders meeting it was not in the circumstances a complete answer to the inquiries from McCann Fitzgerald Furthermore the solicitors denied in the same letter that the signatures on the Minute were those of their clients In evidence however neither Sean Quinn Sr nor Peter Quinn denied the authenticity of the actual signatures 72 The learned trial judge had the advantage of hearing the evidence of the appellant and of Peter Quinn There was significant inconsistency between their accounts of their reasons for traveling to Kiev The appellant repeatedly quoted Peter Quinn as having expressed concern regarding the behaviour and attitude of Ms Puga Peter Quinn expressed no such concern On the contrary according to his version the trip was more in the nature of a good will mission The judge did not believe either of them Nor did she believe that the appellant and Peter Quinn had not discussed between themselves on the long flight to the Ukraine their reasons for going there 73 Finally the learned judge was not satisfied with the appellant s explanation of the meeting in the presence of Ms Puga at the Radisson Hotel of unknown Ukrainian businessmen 74 At the end of the day the learned judge had before her the two documents If authentic they purported to provide justification for the payment by QPU to Ms Puga The two Quinns travelled to Kiev the day before as they knew the Quinns would be ousted from any position or control in the company The money was in fact paid out of the company account within days The situation called for an explanation Two inconsistent explanations were provided The learned judge disbelieved both She was entitled to do so That left the trip unexplained As she said there was no apparent reason for the appellant to be in Kiev 75 In addition to all these points the appellant admitted in evidence that he was aware of the scheme or plan to place assets beyond the reach of the Bank While the learned judge did not include this in her analysis of the evidence regarding this transaction so far as the appellant was concerned she did emphasise that she had considered all the evidence She must be taken to have borne this evidence in mind 76 In my view the learned judge had ample evidence before her from which she could make the finding beyond reasonable doubt that the appellant was party to the payment out of the US 500 000 from the account of QPU 77 In all of the circumstances she was also entitled to reach the conclusion that the contempt of court was outrageous The learned judge had before her on 20th July when she imposed that sentence the affidavit of the appellant sworn on that day in which he expressly admitted that he along with certain other defendants had taken steps to remove assets from the IPG in order to frustrate the Bank s efforts to enforce its security against those assets in circumstances where we disputed the validity and enforceability of the Bank s security This combined with his acceptance during the contempt hearing of his knowledge of that plan was confirmation that the appellant was knowingly engaged in the patently unlawful activity of interfering with the secured assets of the Quinn group of companies for the avowed purpose of defeating the Bank s claim However I think it is clear that the sentence of three months imprisonment related only to the US 500 000 transaction 78 The sentence of three month imprisonment was in these circumstances amply justified I would dismiss the appeal on this point Conclusion on the coercive orders 79 The respective contending submissions regarding the making of the coercive orders are well expressed in the summary already given of the arguments before the learned trial judge on 29th June 80 The appellant submits that it is axiomatic that the purpose of a coercive order must be to persuade the contemnor to purge his contempt or to remedy the breach of a Court Order In the present case the purpose of inviting the Bank following delivery of judgment on 29th June was to enable it to formulate orders or directions which the learned judge might make in order to reverse the breaches of the orders of which they had been found guilty 81 As can be seen from the summary of the arguments advanced on behalf of the Bank it appears that the Bank contends that the court is not limited to the making of coercive orders related to the purging of the contempt actually found or the reversal of the particular transaction with which that finding was concerned but

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  • Criminal contempt is not new law Criminal contempt consists in behaviour calculated to prejudice the new course of justice such as contempt in facie curiae words written or spoken or acts calculated or prejudiced the due course of justice or disobedience to a writ of habeas corpus by the person to whom it is directed to give but some examples of this class of contempt Civil Contempt usually arises where there is a disobedience to an order of the Court by a party to the proceedings and in which the Court has generally no longer interest to interfere unless moved by the party for whose benefit the order was made He continued Criminal contempt is a common law misdemeanour and as such is punishable by both imprisonment and fine at discretion that is to say without statutory limit its object is punitive see the judgment of this Court In Re Haughey Civil contempt on the other hand is not punitive in its object but coercive in its purpose of compelling the party committed to comply with the order of the Court and the period of committal would be until such time as the order is complied with or until it is waived by the party for whose benefit the order was made 28 But in Shell E P Ltd v McGrath and Ors 2007 1 IR 671 Finnegan P held that the classic passages quoted above were merely obiter insofar as they concerned civil contempt And he held that the definition of civil contempt was not completely accurate The learned President felt that there might be in a civil or coercive order a criminal or punitive element In so holding he followed the decision of Ross Company Ltd v Swan and Ors 1981 ILRM 417 a decision of O Hanlon J in the High Court This if followed would tend to blur the distinction between Criminal and Civil contempt 29 This divergence of view perhaps derived from what Keane C J said in Flood v Lawlor 2002 3 IR 67 there may be some room for a difference of view as to whether a sentence imposed in respect of civil contempt is exclusively as distinct from primarily coercive in its nature in civil proceedings generally Emphasis added 30 But the learned Chief Justice concluded that whereas here the proceedings are inquisitorial in their nature and the legislature has expressly empowered the High Court to secure compliance with the orders of the Tribunal it cannot be said that a sentence imposed in respect of a contumelious disregard of the orders of the Tribunal and the High Court is coercive only in its nature 31 In Lawlor v Flood the proceedings in question were those of a Tribunal of Inquiry so that the case is not directly relevant to the present one In relation to non inquisitorial proceedings such as the civil proceedings between the appellant here and his relations and the Bank one cannot do more than echo Keane C J in holding that there may be some room for a difference of view This difference of view does not suggest the clarity and precision normally required in a procedure which can lead to loss of liberty 32 This appears to me to be a very unsatisfactory situation especially from the point of view of one at risk of his liberty It is twenty years now since the Law Reform Commission urged the need for statutory reform in this area and some thirty one years since such reform took place by statute in the neighbouring jurisdiction It is most unfortunate that no positive steps have been taken here with the result that this fraught matter has come on for resolution in an uncertain state of the law 33 However in my view the authority of Keegan v De Burca is unaffected by the later decisions Two of these are High Court decisions and the more recent Supreme Court decision does not purport to resolve the issue except in relation to Tribunal proceedings Accordingly I propose to follow the judgment of this Court in Keegan v De Burca which in my view remains the authoritative statement of the law until reversed by this Court or overruled by statutory intervention Accordingly I adhere to the clear distinction between criminal contempt and civil contempt which is there set out This requires a clear distinction to be explicitly made as to whether an order for imprisonment is civil or criminal in nature 34 In Keegan the defendant was attached and committed for contempt of court when she refused to answer a relevant question which the judge had asked She was imprisoned indefinitely until she purged her contempt The Supreme Court held that the contempt disclosed on the above facts was a criminal contempt and that the penalty should have been by way of imprisonment for a fixed period and not an indefinite period So the order was vacated 35 The application of this authority to the present case will be considered below It is first necessary to turn to some other aspects of the law of contempt which are well and uncontroversially established in Irish law 36 The most recent Irish authority is the decision of this Court in Dublin City Council v Thomas McFeely 2012 IESC 45 There Fennelly J quoted Order 44 Rule 3 of the Rules of the Superior Courts as follows Save in respect of committal for contempt in the face of the Court or committal under Rule 4 no Order of Attachment or Committal shall be issued except by leave of the Court to be applied for by Motion on Notice to the party against whom the attachment or committal is to be directed 37 He continued at para 10 of the judgment The object of these rules is to comply with the obvious need to respect fair procedures where a person is at risk of being imprisoned that is to respect the rule of audi alteram partem It is inherent in this system that the person be put on notice of the nature of the contempt alleged against him In a case where the charge is that he is in breach of a court order he should be told what the order is and how he is alleged to be in breach It seems to me axiomatic that these procedures must be observed before the Court makes a finding that the person is in breach of the Order That is what the contempt consists of Emphasis supplied 38 In my judgment in McFeely I asserted the importance of the contempt jurisdiction and continued at para 8 But the exercise of this power must in my opinion always be a matter of last resort embarked on with manifest caution and great reluctance This is because the contempt of court procedures have the potential to deprive a citizen of his or her liberty not to mention property without their being accorded the elaborate but very necessary protections normally provided by the procedures of a criminal trial 39 There then followed this significant passage which I wish to reiterate in the present case If a citizen could be summarily imprisoned or fined a huge sum of money without all proper meticulous attention being paid to the procedures which exist for his protection then the liberties of citizens generally would be undermined Everyone threatened with imprisonment for contempt whether protestor picketer or property developer is entitled in the public interest to a meticulous observation of procedural justice all the more so since the nature of the procedures involved deprive him of the right to trial by jury It is important that the Court Order allegedly breached should be indicated with absolute clarity and precision in the Motion for attachment and committal and that the evidence alleged to establish breach of that Order should be led in proper form after due and timely service of the Motion for attachment and committal This Motion will normally be issued by a party and adjudicated upon quite independently by a judge 40 These passages are of vital importance to the resolution of the present case In my view they are merely an exposition of the law as it stood and by no means a new departure One could find legal authority for the proposition that an application to commit for contempt has to be approached with great caution over a period of many centuries This is because it is a procedure which allows a person to be locked up sometimes without limit of time without the procedures and protection which normally apply when a person is on risk of his liberty It is therefore essential in the public interest and not simply to protect the rights of an individual that there be a meticulous observation of procedural justice in such a case The most important aspect of procedural justice is as Fennelly J put it In a case where the charge is that he is in breach of a court order he should be told what the order is and how he is alleged to be in breach It seems to me axiomatic that these procedures must be observed before the Court makes a finding that the person is in breach of the order The nature of this obligation to notify the person whose imprisonment is sought is that the order allegedly breached should be indicated with absolute clarity and precision in the Motion for Attachment and Committal and the evidence alleged to establish breach of that order should be led in proper form after due and timely service of the motion The Bank seeks the imprisonment of Sean Quinn Junior 41 The Notice of Motion seeking the attachment and committal of the appellant was in a particular form and that form is also of great importance to the issues on this appeal The appellant was one of three people against whom orders for attachment and committal were sought The other two Sean Quinn Senior and Peter Quinn were alleged to have committed breaches of Court Orders in six different ways A single allegation only was made against the appellant Sean Quinn Junior This was in relation to the payment of 500 000 in the Ukraine The appellant was not alleged to have participated in a wider conspiracy or to be responsible vicariously or otherwise for the other actions alleged against the other respondents If it were intended to make such an allegation that would have to be explicitly stated Nature of the proceedings 42 The proceedings against the appellant are contained in para 3 of the Notice of Motion dated the 13th February 2012 There it is stated that his attachment and if necessary committal is sought for his contempt in failing to comply with the interim and interlocutory Orders of this Honourable Court made on various dates between the 27th June 2011 and the 20th July 2011 by directing or participating in a process whereby on the 30 August 2011 U S 500 000 cash at Bank of an IPG subsidiary company was paid into the personal Bank account of the General Director of that Company contrary to the interests of the plaintiff and other than in the ordinary course of business immediately prior to the defendant losing control of the subsidiary company on 31 August 2011 43 This was the allegation against the appellant There is no other The remedy sought was his attachment and committal i e his imprisonment He was in fact imprisoned on foot of this application it appears for a fixed period of three months 44 The conclusion which I draw from the foregoing facts is that the proceedings in the High Court on foot of the Notice of Motion which led to an Order for the appellant s imprisonment were a summary criminal trial in the High Court I say this for the following reasons 1 The proceedings were expressly directed at securing the imprisonment of the appellant and they succeeded 2 The appellant was therefore imprisoned on foot of the proceedings and this imprisonment was for a fixed definite period This is the effect of the first and third orders above 3 The proceedings were accordingly proceedings for the offence of criminal contempt a Common Law misdemeanour 4 The proceedings were summary proceedings They were not conducted on indictment and were not conducted with a jury The appellant was not furnished with Statements of Evidence and was given no particulars at any time of any specific acts he was alleged to have performed to bring about the transfer in question It could not be contended and was not contended that his presence or participation was necessary in order to bring about that transfer The case against him was entirely circumstantial 5 The Supreme Court in Keegan v De Burca referred to In Re Haughey 1971 IR 217 for the proposition that criminal contempt is a Common Law misdemeanour and as such is punishable by both imprisonment and fine at discretion that is without statutory limit its object is punitive In the judgment of the Court in Haughey the Supreme Court identified two cases which it considered to establish that the High Court tried charges of contempt without a jury i e summarily pp 252 3 45 The significance of the foregoing is that the assessment of the conduct of the proceedings in the High Court and of the appellant s complaints about them must proceed on the basis that those proceedings were in the nature of a summary criminal trial conducted by a judge sitting alone 46 The classic Irish authority on the conduct of an appeal to this Court from the decision of a judge sitting alone is the very well known case of Hay v O Grady 1992 IR 210 This decision was given not long after the passing of the Courts Act 1988 which provided that actions of certain kinds would be tried by a judge sitting alone rather than as theretofore by a judge and jury This development required the Supreme Court in turn to consider the proper conduct of an appeal from a decision reached by a judge alone The principles to be applied are set out in four numbered paragraphs on p 217 of the Report They emphasise the great deference to be accorded to clear findings of primary fact made by a trial judge which findings can rarely be overturned on appeal and the much greater scope for an appellate court to draw its own conclusions from the combination of primary fact and proper inference 47 Having set out the principles referred to McCarthy J speaking for a unanimous Court went on to make a finding of great significance for the present case at numbered para 5 These views emphasise the importance of a clear statement by the trial judge of his findings of primary fact the inferences to be drawn and the conclusion that follows 48 In my view the approach mandated to the conduct of an appeal of the decision of a judge sitting alone in a negligence action as Hay v O Grady was are also relevant to an appeal against the decision of a judge conducting a summary criminal trial in the High Court Because it is a criminal trial it must to comply with the Constitution be conducted in due course of law see Article 38 1 of the Constitution The procedures to be applied and the obligations of the trial judge are not less onerous in such a trial than in a civil action for damages for negligence Those obligations relate both to the conduct of the trial the admission or rejection of disputed evidence and other decisions incidental to the conduct of a criminal trial where the defendant disputes the allegation and also to the obligation to make at the conclusion a clear statement firstly of the findings of primary fact secondly of the inferences to be drawn from those findings of fact and thirdly of the conclusions that follow 49 Hay v O Grady has now held sway unchallenged for twenty years It is possibly the most frequently cited decision on the hearing of appeals in this Court It would be an understatement to say that it is an extremely well known case It was cited by counsel for the appellants in the present case It was not specifically addressed by the Bank 50 Summary criminal trials for contempt are not a common form of litigation and when they do arise they do not often take the form that this one did That is because as the reported cases show the factual issues that arise in practice on an application for attachment and committal are usually very simple Of the three modern Irish cases cited above two related to a refusal to answer a question before a court or a tribunal the scope for dispute on the basis facts was very limited Other contempt applications relate to circumstances where the facts are not disputed or where there is very limited scope to dispute such as refusal to obey orders to leave premises or to convey premises to another party or to abstain from picketing or protesting in a particular way 51 The present case is of quite a different nature The appellant was alleged to be in contempt of court by reason of directing or participating in a process whereby a sum of money in a foreign Bank account was paid into another foreign Bank account This was very hotly disputed in evidence over fifteen days and several days of argument There was no direct evidence of an act found to be an act of direction or participation The issues were complex went on over a very long period were the subject of most extensive legal submissions and were fought tooth and nail on either side In those circumstances there was a manifest need for a clear statement of the primary facts found

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  • of rules governing qualified majority voting in respect of certain decisions including the decision to provide financial assistance in circumstances deemed as an emergency pursuant to Article 4 4 of the ESM Treaty Critical decisions may be taken regardless of and in opposition to Ireland s views b by the absence of any provision regarding its termination and the absence of any provision for denunciation or withdrawal The ESM Treaty is therefore not subject to denunciation or withdrawal within the meaning of Article 56 of the Vienna Convention on the Law of Treaties 1969 The Treaty is intended to be permanent c by virtue of the imprecise undefined and open ended provisions of the ESM Treaty so that its operational and structural parameters are unforeseeable for example what constitutes special circumstances within the meaning of Article 8 2 of the ESM Treaty or what circumstances constitute an emergency within the meaning of Article 4 4 of the ESM Treaty that would not also be covered by the principles set out in Article 12 of the Treaty d by virtue of the unaccountability and the questionable and limited possibility of judicial and or parliamentary scrutiny of the decisions of the ESM Institution e by virtue of the generally recognised principles of public international law that would determine the interpretation application and effect of the ESM Treaty including the doctrine of pacta sunt servanda and the principle that a State entering into a treaty must act in good faith as referred to in the judgment in the case of Crotty v An Taoiseach that further serves to restrict the discretion of the organs of the State with respect to national procedures required to give effect to decisions of the ESM Institution such as for example is contemplated in Article 10 1 of the ESM Treaty ix A Treaty that irrevocably commits the State to divert its budgetary resources to finance and guarantee potentially unlimited borrowing in order to bail out Member States and or their banks for the purposes of safeguarding the euro currency is a Treaty that restricts the capacity of the organs of State to determine policy in the future and requires the mandate of the people by referendum x The ESM Treaty and the European Stability Mechanism Act 2012 are incompatible with Articles 5 6 15 2 1 15 4 17 28 2 28 4 and 29 4 of the Constitution 9 b The State submitted that the issue for consideration at this time by the Court was Having regard to the various arguments advanced by the appellant does the ESM Treaty involve a transfer of sovereignty to a degree that makes it incompatible with the Constitution when one applies the principles set out by this Court in Crotty v An Taoiseach and Others I R 713 such that a referendum amending the Constitution is necessary to permit the State to ratify the ESM Treaty on behalf of Ireland In particular would ratification absent such a referendum be incompatible with Articles 5 6 15 2 1 15 4 17 28 2 28 4 and 29 4 of the Constitution Submissions Submissions of Appellant 10 i The appellant filed written legal submissions to the Court and a written summary of the appellant s claim which I have considered carefully Inter alia it was submitted that the determination of constitutional issues entail a prior interpretation of the EU treaties and EU law more generally It was submitted that the issues of EU law arising ought first to be referred to the Court of Justice before this Court considered the constitutionality of the ESM Treaty 10 ii In oral submissions counsel for the appellant stressed several points concerning the ESM Treaty It was submitted that the ESM Treaty was making a permanent provision for the ESM and its policy The fixed policy is the saving and stability of the common euro currency Counsel argued with reliance on the Recitals to the ESM Treaty that the complementariness or connectedness and dependence of the ESM Treaty on the Fiscal Stability Treaty indicated the true nature of the mechanism that has been established A binding policy on the states had been formulated and agreed which was not merely a funding mechanism nor a bank but rather per Article 3 of the ESM Treaty was the expression of the collective decision of the 17 states to pool resources so as to mobilise funding with the purpose of giving financial assistance i e stability support where a member state has severe financial problems but with a governing clause regarding the safeguarding of the financial stability of the euro zone as a whole and of its member states In concise terms the purpose and policy of the ESM Treaty was to provide support to states if necessary to protect the euro area as a whole Counsel submitted that the Oireachtas cannot commit the sum of more than 11 billion in pursuit of this policy because of the Constitution and in particular the application of Crotty Counsel argued that in addition to the policy being fixed the State s commitment was irreversible and its capacity to say no was restricted Counsel particularly focused on provisions where decisions could be taken and expenditure made without the consent of the State such as when unanimous decision making was not required The Court was referred to Article 4 8 of the ESM Treaty which provides that if the State fails to meet any part of its payments due then the State will be unable to exercise its voting rights for so long as the payment is due Counsel argued that this provision would cause the State to lose its sovereignty in the decision making of the ESM and this loss could be at a moment of the State s greatest peril when the State would need its voice more than ever in a situation where the State could not make the payment required The Court was also referred to the emergency voting procedure outlined in Article 4 4 where only 85 of the votes cast are necessary to decide to grant or implement financial assistance to a state A consequence of these provisions is that the other states may decide to grant financial support to a state that the State does not support Counsel also referred the Court to the decisions that could be taken by a qualified majority which could be decisions of substantive content Reference was also made to Article 8 which provides that the full amount of the State s capital subscription is liable to be called in and that the State irrevocably and unconditionally agrees to provide its contribution if called in and to provide such amount in a timely basis Counsel also made submissions as to Article 37 and argued that it cannot have the effect of giving jurisdiction to the Court of Justice of the European Union He argued that the ESM is not a member state of the EU and cannot go to the Court of Justice under Article 273 of the TFEU In conclusion counsel submitted that the totality of the provisions of the ESM Treaty constituted a trenching on the sovereignty of the State 10 iii Counsel made submissions on Crotty v An Taoiseach 1987 I R 713 especially referring to and adopting the judgments of Walsh J and Henchy J and argued that they applied to this case Counsel submitted that in this case the Government decided it would commit itself into the future and that that is what Crotty said the Government could not do it could not restrain its discretion into the future the policy of the Government must be capable of being changed Counsel submitted that the ESM Treaty circumscribes the policy of the Government 10 iv Inter alia counsel also stressed that the precise nature of the borrowing power is ill defined Counsel submitted that the ESM is a transfer of sovereignty to an independent institution acting corporately which may make decisions that the State may not have participated in and that these decisions may involve commitment of the State s money to the rescue of other states and significant borrowing to that end Counsel stressed that the principle in Article 5 of the Constitution i e that sovereign is an imperative word that insofar as this procedure involves a departure by the State to act as a sovereign the State has lost its sovereignty Counsel stated that he adopted the Crotty principles that a government could not render itself hamstrung to pursue the common good as to do so requires a mandate from the people Submissions of State 11 i The State filed written submissions to the Court It was stated that the most urgent claims that this Court had to decide at this juncture are constitutional claims 11 ii It was submitted by the State that there were three constitutional law based issues a The first limb being that the ESM Treaty constituted such a degree of delegation of sovereignty that it is incompatible with the Constitution and that a referendum was necessary to permit its ratification by Ireland This is the Crotty limb based primarily on the majority judgments of the Supreme Court in that case b The second limb was that the ESM or more properly its implementation entails transfer from the Oireachtas of an impermissible degree of monetary and budgetary power to the Executive in particular to the Minister for Finance The High Court recognised that this ground was not pleaded The State relied on this fact Further no permission to amend the statement of claim was sought by the appellant in his notice of motion of the 26th June 2012 which the High Court dealt with on the 27th June 2012 It was submitted by the State that in the circumstances it was unnecessary to consider this limb of the constitutional argument In all the circumstances this issue does not arise for decision at this time c The third limb was the contention that because the ESM Treaty breaches EU law it would also comprise a discrete breach of Article 29 4 4 of the Constitution The learned High Court judge acknowledged that this limb was also not pleaded The High Court did not address its admissibility nor the claim itself given the conclusion it arrived at as to the compatibility of the ESM Treaty with EU law It was a claim that the High Court considered it did not have to address Consequently this third issue does not arise for determination at this time 11 iii Therefore this judgment addresses the first limb the first constitutional issue only 11 iv On the first limb the Crotty issue the State distinguished aspects of the SEA in issue in the Crotty case and the ESM Treaty at issue in this case It was submitted that there is nothing in the ESM Treaty such that its ratification would breach the principles established in Crotty Specifically that there was nothing in the ESM Treaty such that its ratification by the State would a constitute or result in a transformation let alone a fundamental transformation in the relations between Ireland and its fellow euro area member states or between Ireland and other EU member states more generally b undermine the essential nature of Ireland s residual sovereignty in relation to the exercise of foreign policy powers i e those which have not in the meantime been limited by virtue in particular of what is now Title V of the TEU and the Union s external action powers It was submitted that the ESM Treaty has nothing to do with foreign policy and therefore that it has nothing to do with exercising the right to say yes or to say no in respect of foreign policy c fetter in any way executive or legislative powers that remain bestowed unfettered by the Constitution on the organs of government of the State 11 v The State submitted that the analysis of the majority judgments in Crotty by the learned High Court judge was correct 11 vi The State endorsed the conclusions of the learned High Court judge on the basic features of the ESM Treaty as set out in the High Court judgment and which are referred to above The State submitted that of particular note in the conclusion of the judgment of the High Court was that any increase in the State s call able up capital contribution to ESM cannot come about without the consent of the State and that it would involve the consent of the Minister for Finance acting on behalf of the Government as Ireland s representative on the Board of Governors of the ESM and the approval of Dáil Éireann as well in effect as the approval of the Oireachtas through the requirement to amend the ESM Act of 2012 Counsel for the State also drew attention to the finding of the High Court that there would be no compulsion on Ireland to accept financial assistance that may be on offer if the terms by way of conditionality imposed were not acceptable to the Government of the day Further that the instances where Ireland would not have a veto on a decision of substance namely under Article 4 4 are strictly limited to an emergency procedure necessary to address financial crises and could not on any common sense basis be regarded as a diminution of sovereignty The Constitution 12 The Articles of the Constitution of Ireland relevant to this appeal commence with Article 5 which provides Ireland is a sovereign independent democratic State Article 6 states 1 All powers of government legislative executive and judicial derive under God from the people whose right it is to designate the Rulers of the State and in final appeal to decide all questions of national policy according to the requirements of the common good 2 These powers of government are exercisable only by or on the authority of the organs of State established by this Constitution Article 28 2 states The executive power of the State shall subject to the provisions of this Constitution be exercised by or on the authority of the Government Article 29 4 1 states The executive power of the State in or in connection with its external relations shall in accordance with Article 28 be exercised by or on the authority of the Government Article 29 4 2 states For the purpose of the exercise of any executive function of the State in or in connection with its external relations the Government may to such extent and subject to such conditions if any as may be determined by law avail of or adopt any organ instrument or method of procedure used or adopted for the like purpose by the members of any group or league of nations with which the State is or becomes associated for the purpose of international co operation in matters of common concern Article 29 5 1 which deals with international agreements other than agreements and conventions of a technical or administrative character requires that every international agreement to which the State becomes a party shall be laid before Dáil Éireann Article 29 5 2 provides The State shall not be bound by any international agreement involving a charge upon public funds unless the terms of the agreement shall have been approved by Dáil Éireann 13 Thus Ireland is a sovereign independent democratic State The powers of government are exercisable only by the organs of State established by the Constitution The executive power of the State is exercised by the Government The Decision The Crotty Decision 14 Limitations on the exercise of the executive power were addressed in Crotty v An Taoiseach 1987 I R 713 where this Court by a majority held that the Government had acted beyond its powers 14 i At the core of this appeal are the principles stated in Crotty Both the appellant and the State relied on the majority judgments in that case which both parties asked the Court to apply 14 ii At issue in Crotty were treaties made in Luxembourg on the 17th February 1986 and at the Hague on the 28th February 1986 collectively called the Single European Act referred to as the SEA by which the twelve member states resolved to amend the treaties of the European Communities Article 33 of the SEA provided This Act will be ratified by the High Contracting Parties in accordance with their respective constitutional requirements The instruments of ratification will be deposited with the Government of the Italian Republic This Act will enter into force on the first day of the month following that in which the instrument of ratification is deposited of the last signatory State to fulfil that formality 14 iii Title III of the SEA embodied a separate treaty whereby each of the High Contracting Parties agreed to adapt its foreign policy positions to those of the others and refrain from impeding a consensus and joint action within a structured framework known as European Political Cooperation Title II included structural changes to the treaties of and governing the European Communities and in the case of the European Economic Community referred to as the EEC provided for increased use of voting by qualified majority in the European Council the enumeration of objectives of the EEC and a new court of first instance inferior to the Court of Justice Most of the provisions of the SEA with the excepting of Title III were inserted into the European Communities Act 1972 by the European Communities Amendment Act 1986 referred to as the Act of 1986 and became part of the domestic law of the State on the 24th December 1986 Section 3 3 of the Act of 1986 provided that the Act should come into operation on such date as the Minister for Foreign Affairs would appoint 14 iv Mr Crotty issued a plenary summons on the 22nd December 1986 seeking declarations that any purported ratification of the SEA would be void having regard to the provisions of the Constitution and he sought injunctions restraining ratification He also sought a declaration that the European Communities Amendment Bill 1986 would if enacted be repugnant to the Constitution and null and void in purporting to enact certain parts of the SEA into domestic law 14 v On the application for injunctions the High Court Barrington J granted interlocutory injunctions 14 vi On the matter being heard by a Divisional Court of the High Court Hamilton P Barrington and Carroll J J the reliefs sought were refused and the injunctions were discharged 14 vii Mr Crotty appealed to this Court and obtained similar interim and interlocutory injunctions pending the hearing of the appeal 14 viii This Court held that the plaintiff had locus standi to challenge the Act in the circumstances where its coming into force would affect every citizen This Court considered that Article 29 4 3 should be interpreted as giving authorisation to the State not only to join the European Communities as they stood in 1973 but also to join in amendments of the treaties so long as such amendments do not alter the essential scope or objectives of the European Communities Following consideration of the essential nature of the scope and objectives of the European Communities and the amendments that the Act of 1986 made to incorporate the SEA the Court held that the European Community was a developing organism with diverse and changing methods for making decisions and an inbuilt and clearly expressed objective of expansion and progress including the terms of the mechanics to be used in the achievement of its agreed objectives and that the amendments were permissible and thereby the Act of 1986 was valid according to the Constitution 14 ix On the issue of Title III by which Treaty Ireland agreed to adopt its foreign policy positions within the framework of European Political Cooperation it was held by a majority of the Supreme Court Walsh J Henchy J and Hederman J that the appeal be allowed and a declaration was made that the ratification of Title III was unconstitutional 14 x It was held by all the members of the Court that the Constitution vested in the Government the executive power of the State in its external relations subject to the provisions of the Constitution 14 xi As both parties in this appeal relied on the majority judgments in Crotty it is necessary to analyse that decision carefully 14 xii The judgments of Walsh J Henchy J and Hederman J hold the essence of the decision 14 xiii The core issue in Crotty and in this case is whether the State in attempting to ratify the Treaty before the Court is endeavouring to act free from the restraints of the Constitution 14 xiv The position was described by Walsh J at p 777 to 778 as The Constitution confers upon the Government the whole executive power of the State subject to certain qualifications which I will deal with later and the Government is bound to take care that the laws of the State are faithfully executed In its external relations it has the power to make treaties to maintain diplomatic relations with other sovereign States The Government alone has the power to speak or to listen as a representative of the State in its external relations It is the Government alone which negotiates and makes treaties and it is the sole organ of the State in the field of international affairs For these functions it does not require as a basis for their exercise an Act of the Oireachtas Nevertheless the powers must be exercised in subordination to the applicable provisions of the Constitution It is not within the competence of the Government or indeed of the Oireachtas to free themselves from the restraints of the Constitution or to transfer their powers to other bodies unless expressly empowered so to do by the Constitution They are both creatures of the Constitution and are not empowered to act free from the restraints of the Constitution To the judicial organ of government alone is given the power conclusively to decide if there has been a breach of constitutional restraints The powers of external sovereignty on the part of the State do not depend on the affirmative grant of this in the Constitution They are implicit in the provisions of Article 5 of the Constitution The State would not be completely sovereign if it did not have in common with other members of the family of nations the right and power in the field of international relations equal to the right and power of other states These powers of the State include the power to declare war or to participate in a war to conclude peace to make treaties and maintain diplomatic relations with other states 14 xv At issue in the Crotty case was and in this case is whether the Government was acting within its executive power under the Constitution Walsh J set out in detail the nature of the SEA pointing out that the essential nature of sovereignty is the right to say yes or say no but that that right would be materially qualified by the SEA which committed the State and therefore all future Governments and the Oireachtas to the other member states to do the following things 1 To endeavour to formulate and to implement a European foreign policy 2 To undertake to inform or consult the other Member States on any foreign policy matters of general interest not just of common interest so as to ensure that the combined influence of the States is exercised as effectively as possible through co ordination the convergence of their positions and the implementation of joint action 3 In adopting its position and in its national measures the State shall take full account of the position of the other Member States and shall give due consideration to the desirability of adopting and implementing common European positions 4 The State will ensure that with its fellow Member States common principles and objectives are gradually developed and defined 5 The State shall endeavour to avoid any action or position which impairs the effectiveness of the Community States as a cohesive force in international relations or within international organisations 6 The State shall so far as possible refrain from impeding the formation of a consensus and the joint action which this could produce 7 The State shall be ready to co ordinate its position with the position of the other Member States more closely on the political and economic aspects of security 8 The State shall maintain the technological and industrial conditions necessary for security of the Member States and it shall work to that end at national level and where appropriate within the framework of the competent institutions and bodies 9 In international institutions and at international conferences which the State attends it shall endeavour to adopt a common position with the other Member States on subjects covered by Title III 10 In international institutions and at international conferences in which not all of the Member States participate the State if it is one of those participating shall take full account of the positions agreed in European Political Cooperation One other matter expressed in somewhat ambiguous terms at Article 6 c in Title II is as follows Nothing in this Title shall impede closer cooperation in the field of security between certain of the High Contracting Parties within the framework of the Western European Union or the Atlantic Alliance 14 xvi Walsh J held that In my view it would be quite incompatible with the freedom of action conferred on the Government by the Constitution for the Government to qualify that freedom or to inhibit it in any manner by formal agreement with other States to qualify it 14 xvii Walsh J described the boundary on the Government to determine matters of foreign policy He stated at p 783 to 784 In enacting the Constitution the people conferred full freedom of action upon the Government to decide matters of foreign policy and to act as it thinks fit on any particular issue so far as policy is concerned and as in the opinion of the Government the occasion requires In my view this freedom does not carry with it the power to abdicate that freedom or to enter into binding agreements with other States to exercise that power in a particular way or to refrain from exercising it save by particular procedures and so to bind the State in its freedom of action in its foreign policy The freedom to formulate foreign policy is just as much a mark of sovereignty as the freedom to form economic policy and the freedom to legislate The latter two have now been curtailed by the consent of the people to the amendment of the Constitution which is contained in Article 29 s 4 sub s 3 of the Constitution If it is now desired to qualify curtail or inhibit the existing sovereign power to formulate and to pursue such foreign policies as from time to time to the Government may seem proper it is not within the power of the Government to do so The foreign policy organ of the State cannot within the terms of the Constitution agree to impose upon itself the State or upon the people the contemplated restrictions upon freedom of action To acquire the power to do so would in my opinion require a recourse to the people whose right it is in the words of Article 6 in final appeal to decide all questions of national policy according to the requirements of the common good In the last analysis it is the people themselves who are the guardians of the Constitution In my view the assent of the people is a necessary prerequisite to the ratification of so much of the Single European Act as consists of title III thereof On these grounds I would allow this appeal 14 xvii Henchy J analysed the SEA and held that the essence of the treaty was a fundamental transformation in the relations between the member states of the European Communities that they would no longer have separate foreign policies but as far as possible merge their natural foreign policies in a European foreign policy so as to implement European Political Cooperation with a view to achieving European Union Henchy J held that the Government could not cede sovereignty to such an institution He stated at p 786 Those and other commitments expressed in Article 30 make manifest that although the approach to the ultimate aim of European Union is to be reached by a pathway of gradualism each Member State will immediately cede a portion of its sovereignty and freedom of action in matters of foreign policy Henchy J stated that pursuant to Article 1 of the Constitution The Irish nation hereby affirms its inalienable indefeasible and sovereign right to determine its relations with other nations in accordance with its own genius and traditions It appears to me that this affirmation means that the State s right to conduct its external relations is part of what is inalienable and indefeasible in what is described in Article 5 as a sovereign independent democratic State It follows in my view that any attempt by the Government to make a binding commitment to alienate in whole or in part to other states the conduct of foreign relations would be inconsistent with the Government s duty to conduct those relations in accordance with the Constitution The ultimate source and limits of the Government s powers in the conduct of foreign relations are to be found in Article 6 s 1 of the Constitution All powers of government legislative executive and judicial derive under God from the people whose right it is to designate the rulers of the State and in final appeal to decide all questions of national policy according to the requirements of the common good It follows that the common good of the Irish people is the ultimate standard by which the constitutional validity of the conduct of foreign affairs by the Government is to be judged In this and in a number of other respects throughout the Constitution the central position of the common good of the Irish people is stressed as one of the most fundamental characteristics of Ireland as a sovereign independent democratic state A perusal of Title III of the SEA satisfies me that each ratifying Member State will be bound to surrender part of its sovereignty in the conduct of foreign relations 14 xix Hederman J stated at p 794 I agree with the judgments of Walsh J and Henchy J for the reasons given by them There is little I can usefully add It appears to me that the essential point at issue is whether the State can by any act on the part of its various organs of government enter into binding agreements with other states or groups of states to subordinate or to submit the exercise of the powers bestowed by the Constitution to the advice or interests of other states as distinct from electing from time to time to pursue its own particular policies in union or in concert with other states in their pursuit of their own similar or even identical policies The State s organs cannot contract to exercise in a particular procedure their policy making roles or in any way to fetter powers bestowed unfettered by the Constitution They are the guardians of these powers not the disposers of them For the reasons already stated I would allow the appeal Principles 15 i An important aspect of the sovereignty of the State is the exercise of the fundamental powers of the state by the organs designated in the Constitution Under the Constitution the Government has been given the power to exercise the executive functions of state ii Foreign policy is an important aspect of executive power and is a function of the Government iii It is a routine exercise of executive power for the Government to enter into a treaty as a matter of foreign policy for the State iv All treaties involve an element of policy That is the nature of a treaty v Thus the Constitution empowers the Government to exercise executive policy which includes a decision to enter into a treaty as a matter of policy However in Crotty there was a specific aspect of the treaty in issue which took it outside the norm As was stated in Crotty the Government may not abdicate its power as the executive organ of the State If such a decision is required it may be taken only by the people as the ultimate authority in the State If a treaty involves a fundamental transformation such as a ceding of sovereignty then it would require a mandate of the people vi As Hederman J pointed out the organs of State including the Government cannot enter into an agreement to subordinate its powers to another The Government may not qualify sovereign power to formulate foreign policy by abdicating such decisions to a foreign institution vii In the Crotty case the Court held that Title III of the SEA would bind the State to concede part of its sovereignty in foreign policy by conducting foreign policy in the future future decisions on foreign policy without reference to the common good and that such a step required authorisation by the people through a referendum ESM 15 It is thus necessary to consider the ESM treaty to determine how the principles in the Crotty decision apply to this treaty 16 i As the ESM is at the heart of the appellant s submissions I refer to it in some detail 16 ii The Recitals to the Treaty state 1 The European Council agreed on 17 December 2010 on the need for euro area Member States to establish a permanent stability mechanism This European Stability Mechanism ESM will assume the tasks currently fulfilled by the European Financial Stability Facility EFSF and the European Financial Stabilisation Mechanism EFSM in providing where needed financial assistance to euro area Member States 2 On 25 March 2011 the European Council adopted Decision 2011 199 EU amending Article 136 of the Treaty on the Functioning of the European Union with regard to a stability mechanism for Member States whose currency is the euro 2 adding the following paragraph to Article 136 The Member States whose currency is the euro may establish a stability mechanism to be activated if indispensable to safeguard the stability of the euro area as a whole The granting of any required financial assistance under the mechanism will be made subject to strict conditionality 3 With a view to increasing the effectiveness of the financial assistance and to prevent the risk of financial contagion the Heads of State or Government of the Member States whose currency is the euro agreed on 21 July 2011 to increase the flexibility of the ESM linked to appropriate conditionality 4 Strict observance of the European Union framework the integrated macro economic surveillance in particular the Stability and Growth Pact the macroeconomic imbalances framework and the economic governance rules of the European Union should remain the first line of defence against confidence crises affecting the stability of the euro area 5 On 9 December 2011 the Heads of State or Government of the Member States whose currency is the euro agreed to move towards a stronger economic union including a new fiscal compact and strengthened economic policy coordination to be implemented through an international agreement the Treaty on Stability Coordination and Governance in the Economic and Monetary Union TSCG The TSCG will help develop a closer coordination within the euro area with a view to ensuring a lasting sound and robust management of public finances and thus addresses

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  • agree to be bound to recognise a new State if some particular State or 80 or 85 of a group of States decided to give recognition Nor would it be possible for the government to agree not to recognise a new State except after consultation with other States and after taking full account of their views 66 This is so because to enter into any agreements of the kind described would be to enter into binding agreements with other States to exercise Irelands sovereign power in a particular way or to refrain from exercising it save by particular procedures as Walsh J put it in a passage already quoted More fundamentally it would be to change Ireland s point of reference for the determining of a question of relations with other States from the interest of the Irish people to a new point of reference viz the interests or the declared positions of some other State or States to adopt the language of Henchy J also quoted above 67 There is always a risk of distortion in adopting a single phrase or series of phrases to epitomise the ratio of a multi judgement decision of the Court Nevertheless having considered the judgments in Crotty as a whole I believe that the phrase I have quoted more than once from the judgment of Hederman J is a fair epitome of the ratio of Crotty This is The State s organs cannot contract to exercise in a particular procedure their policy making roles or in any way to fetter powers bestowed unfettered by the Constitution They are the guardians of these powers not the disposers of them 68 I wish also respectfully to express my agreement though it is in some respects a statement of the obvious with the insight of Finlay C J and of Walsh J that the essential nature of sovereignty is the right to say yes or to say no Obvious it may be but it is a precise and memorable statement of an essential quality of constitutional sovereignty which is asserted in the Constitution and which may otherwise be liable to erosion by the pressure of events or by unreasoning enthusiasm for novelties or by a desire please others from whom some advantages is expected or at least hoped for Summary on Constitutional Constraints 69 The right to determine its relations with other nations is expressed to be a part of the inalienable indefeasible and sovereign right attaching to the State by virtue of its nature and affirmed in Article 1 of the Constitution 70 Moreover the Nation in which this right exists is by Article 5 a sovereign independent democratic State Emphasis added 71 By Article 29 4 the Executive power of the State in or in connection with its external relations is to be exercised by or on the authority of the Government 72 The power of the people of Ireland in final appeal to decide all questions of national policy is to be exercised according to the requirements of the common good Article 6 73 Henchy J in Crotty at p 787 found that the common good referred to in that Article is the common good of the Irish people This is the ultimate standard by which the constitutional validity of the conduct of foreign affairs by the Government is to be judged ibid 74 Accordingly the Executive power of the State in connection with its external relations is to be exercised by or on the authority of the Government but in so exercising that power the Government is subject to the provisions of the Constitution and to the judicial organ of government alone is given the power conclusively to decide if there has been a breach of constitutional restraints per Walsh J 75 It therefore appears to me that the fundamental approach mandated by the Constitution in relation to the external relations of the State is what Henchy J called a purely national approach to foreign policy and the point of reference for the determination of the final position on any issue of foreign relations is the common good of the Irish people Ibid at 787 76 In Crotty it was held speaking of the restrictions of the Irish Government s freedom of action contained in the Single European Act The foreign policy organ of the State cannot within the terms of the Constitution agree to impose upon itself upon the State or upon the people the contemplated restrictions upon freedom of action 77 Walsh J continued To acquire the power to do so would in my opinion require a recourse to the people This is because it would be quite incompatible with the freedom of action conferred on the Government by the Constitution for the Government to qualify that freedom or to inhibit it in any manner by formal agreement with other States so as to qualify it This in turn is because clearly the framers of the Constitution refrained from granting to the Government the power to bind the State by agreement with such groups of nations as to the manner or under what conditions that Executive function of the State would be exercised 78 Accordingly in the words of Hederman J the organs of the State who enjoy the various individual power set out in the Constitution such as the Oireachtas and the Government are the guardians of these powers not the disposers of them ibid 794 Other Constitutional Provisions 79 The foregoing summary focuses on the Executive power of the State in relation to the Nation s external relations This of course is only one amongst many powers of the Executive branch of government The exercise of Executive power generally is subject to the restrictions or checks and balances on the exercise of Executive power notably in relation to the exercise of that power in a manner which is accountable to the Dáil and through it to the people The Constitution therefore lays down democratic processes and procedures for the exercise of that power 80 The plaintiff relies on certain of these provisions and says broadly that the European Stability Mechanism would interfere with the established Irish governmental and parliamentary procedures mandated by the Constitution and designed to ensure accountability to the Irish people as opposed for example to a financial institution based in Luxembourg 81 In this connection it is relevant to recall the provisions of Article 11 of the Constitution which provide as follows All revenues of the State from whatever source arising shall subject to such exception as may be provided by law form one fund and shall be appropriated for the purposes and in the manner and subject to the charges an liabilities determined and imposed by law 82 In particular the plaintiff relies on Article 17 of the Constitution which provides Article 17 1 1 As soon as possible after the presentation to Dáil Eireann under Article 28 of this Constitution of the Estimates of Receipts and the Estimates of Expenditure of the State for any financial year Dáil Eireann shall consider such Estimates 2 Save insofar as may be provided by specific enactment in each case the legislation required to give effect to the Financial Resolutions of each year shall be enacted within that year Article 17 2 Dáil Eireann shall not pass any vote or resolution and no law shall be enacted for the appropriation of revenue or other public moneys unless the purpose of the appropriation shall have been recommended to Dáil Eireann by a message from the Government signed by the Taoiseach 83 The plaintiff also refers to Article 28 4 of the Constitution and in particular on the following provisions Article 28 4 1 1 The government shall be responsible to Dáil Eireann 2 The government shall meet and act as a collective authority and shall be collectively responsible for the Departments of State administered by the members of the Government 4 The government shall prepare Estimates of the Receipts and Estimates of the Expenditure of the State for each financial year and shall present them to Dáil Eireann for consideration Article 28 12 provides The following matters shall be regulated in accordance with law namely the organisation of and distribution of business amongst departments of State the designation of member of the government to be the Ministers in charge of the said departments 84 I interpret Article 6 of the Constitution as requiring that the Ministers in discharging the responsibilities they have been given by the Constitution and by the law are exercising the powers of government acknowledged by Article 6 and are accordingly required to exercise them according to the requirements of the common good Following the passage already quoted in this judgment from Henchy J I consider the common good referred to be the common good of the people of Ireland 85 The plaintiff likewise relies on Article 29 4 4 which affirms Ireland s commitment to the European Union within which the Member States work together to promote peace shared values and the well being of their people and Article 29 4 5 which authorised the State to ratify the Treaty of Lisbon of 13 December 2007 86 The plaintiff also relies on what one might call a negative way on Article 29 4 6 which provides that No provision of this Constitution invalidates laws enacted acts done or measures adopted by the State before on or after the entry into force of the Treaty of Lisbon that are necessitated by the obligations of membership of the European Union referred to in subsection 5 of this Section or of the European Atomic Energy Community or prevent laws enacted acts done or measures adopted by i The said European Union or the European Atomic Energy Community or institutions thereof ii The European Communities or European Union existing immediately before the entry into force of the Treaty of Lisbon or institutions thereof or iii Bodies competent under the Treaties referred to in this section from having the force of law in the State 87 The negative points made by the plaintiff arising from this last constitutional provision are firstly the obvious point that the Treaty in question here is not necessitated by the obligations of membership of the European Union and is therefore not protected by Article 29 4 6 This much is agreed by the State The Treaty is therefore in the plaintiff s submission established outside the legal order of Ireland and outside the legal order of the European Union The plaintiff strongly contends that these facts render the defendants repeated contention that the world has changed a great deal since Crotty was decided a generation ago simply irrelevant In particular the plaintiff alleges the constitutional changes which have trenched upon Ireland s sovereignty in the context of European Union measures are wholly irrelevant to the standing in Irish law of the present Treaty because of that Treaty s existence outside the Irish and European legal orders The fact that the Treaty confers a certain status on organs of the E U for example on determining when the ESM shall use an emergency voting procedure does not in any way detract from the nature of the ESM as an extra E U body I did not understand the State to argue the contrary 88 Finally the plaintiff relies on Article 29 6 of the Constitution which requires that no international agreement shall be a part of the domestic law of the State save as may be determined by the Oireachtas 89 It is of course true that Article 29 of the Constitution has been amended on a number of occasions to provide constitutional immunity for measures necessitated by the State s membership of what is now the European Union and in relation to certain more specific European Union Instruments This is acknowledged in a passage from the judgment of Walsh J quoted above But these exempting provisions suggestive in themselves of a felt necessity to amend the Constitution by referendum are specific in their scope and do not extend to what the State describes in its written submissions as the residual sovereignty unaffected by the amendments in question for example measures not necessitated by membership of the E U Point of divergence 90 Since I have the misfortune to differ from my colleagues in this case it seems appropriate to indicate with some precision the precise nature of the divergence 91 As mentioned above and mentioned also in the judgments of my colleagues see for example the judgment of the Chief Justice at paragraphs 14 and 14 i the authority of the case of Crotty v An Taoiseach 1987 IR 713 has not been doubted or challenged by either side in this case On the contrary each side urged that that case properly understood would lead to a resolution of the present litigation in its favour Accordingly the precise meaning of Crotty and the correct identification of the ratio of that case lies at the heart of the present judgment and of the divergence of it with those of my colleagues 92 At p 7 of his judgment in this case Mr Justice O Donnell declares In the words abdicate alienate subordinate and indeed also transfer is to be found in my view the essence of what was considered impermissible in Crotty 93 This seems to me quite consistent with what is said by Mr Justice Clarke At p 26 of his judgment quoting from Walsh J he identified the substance of the limitation on the Executive power in the relevant area to be one which did not permit the government to abdicate that freedom or to enter into binding agreements with other States to exercise that power in a particular way Similarly he cites Henchy J for the proposition that government is not permitted to alienate in whole or part to other States the conduct of foreign relations nor to subordinate or to submit the exercise of the powers bestowed by the Constitution to the advice or interests of other States 94 Even viewing the phrases quoted above as being exhaustively descriptive of the limitations on Executive power in connection with external relations I would consider for the reasons given elsewhere in this judgment that adherence to the present Treaty would trespass on those limitations But I do not consider that those limitations are exhaustively stated in the passages quoted In the first place I consider that to adopt the words of Henchy J in Crotty a purely national approach to foreign policy is incompatible with accession to this Treaty To similar effect is the statement of that learned judge that in regard to Ireland while under the Constitution the point of reference for the determination of a final position on any issue of foreign relations is the common good of the Irish people under the Treaty the point of reference is required to be the common position determined by the Member States 95 What Henchy J said there about the Single European Act and the Treaty whereby Ireland came bound by it seems to me manifestly to be true of the European Stability Mechanism which requires Ireland to contribute to a fund to be expended in the interest of the Euro area and its members I am far from saying that this is a lower or less worthy criterion than that of the common good of the Irish people I am merely saying that it is different from that other criterion 96 I do not consider that the essence of what is impermissible by virtue of the Crotty is comprehensibly epitomised in the word of abdicate or the other words cited by O Donnell J These words it appears to me are firstly not exhaustive of what is impermissible under the Crotty regime they are also somewhat vague and open to interpretation Thus the word abdicate is classically used of a Monarch resigning his crown and its other usages are by analogy from that The judgments in Crotty certainly preclude abdication but also precludes more specific acts such as to make a binding commitment to alienate in whole or in part to other States the conduct of foreign relations More and very significantly to enter into binding agreements with other States to exercise that power in a particular way or to refrain from exercising it save by particular procedures 97 It appears to me with great respect to be beyond argument that in the ESM Treaty the State has agreed to exercise its power which is of its nature sovereign and unfettered in relation to making financial advances to other countries from the sum authorised in the 2012 Act in compliance with the rules of the European Stability Mechanism That manifestly appears to me to be a binding commitment to exercise that power in a particular way 98 This interest may very well be a worthy one but it is manifestly not identical to the purely national approach which is mandated in the Constitution Whether the change is worth making or not is a political question on which I abstain from comment but if it is to be made it must in my opinion be made by the people 99 Equally it appears to me that the prohibitions contained in Crotty extend not merely to substantive decisions such as whether or not to advance money from a particular fund alone or in conjunction with others to a particular country but to the procedures whereby such a decision can be taken To quote a passage of Hederman J which is fully set out above The State s organs cannot contract to exercise in a particular procedure their policy making roles or in any way to fetter powers bestowed unfettered by the Constitution 100 It appears to me to be clear to demonstration that the provisions of the ESM Treaty which are set out in this judgment do just what is prohibited there they bind the State to exercise in a particular procedure their power to decide for example whether or not to advance a particular sum of money to a particular State alone or in conjunction with others Those particular procedures are those laid down in the Treaty The procedures lay down the constitution and the nature of the body which is to take those decisions at least with regard to the 11 2 billion fund authorised by the Act of 2012 the nature of the majority of the Member States of that body necessary to take such a decision and even the circumstances in which Ireland will lose its right to participate in the voting procedures while still being bound by its financial obligations 101 Certain of my colleagues have referred to the State s adherence to other international bodies such as the United Nations This is by way of suggestion that if adherence to this Treaty requires a vote of the people adherence to those other Treaties or organisations might or even must do so as well I believe this form of argumentation is inadmissible No one has challenged the State s action in assuming the obligations of a member of the United Nations or any other such body If such a challenge were made it would no doubt be met by the organs of the State with arguments appropriate to the particular Treaty or organisation in question It is not prudent proper or even logical to assume that those arguments would replicate those deployed in the present case 102 Finally I wish to emphasise that the right of the people as opposed for example to the Government the Oireachtas or the European Union in final appeal to decide all questions of national policy is enshrined in the Constitution and must be respected and upheld by the Courts 103 That right can of course be changed qualified or even abolished by the procedures laid down in the Constitution but it is the people and not the Government or the bureaucracy or the European Union who must do this I would regard an interpretation of Crotty which undermines this basic principle as emptying that great case of meaning Areas of agreement 104 There were certain areas of agreement between the parties which removed certain issues from the field of debate in this case It has already been noted that the State conceded that Mr Pringle had locus standi to raise the points which he did in fact raise 105 It was also agreed that the ratification by the State of the ESM Treaty is not something which is necessitated by the obligations of membership of the European Union Accordingly the State was unable to rely on Article 29 4 6 of the Constitution which provides an immunity from constitutional challenge to measures necessitated by that membership On the contrary the European Stability Mechanism is a proposed new financial institution whose headquarters happen to be in Luxembourg and which is established by agreement of some members but by no means all members of the European Union Membership of it from the point of view of domestic and European law is voluntary and is not in any way required by membership of the European Union or by Irish or European law 106 The next area of agreement which requires to be noted is a very significant one indeed The State did not contend that the Government or indeed the Oireachtas was immune from judicial control in the conduct of the State s external relations Indeed on the hearing of this appeal the State specifically conceded that both are liable to judicial control in that area based on the authority of Crotty v Ireland The Court was not invited by either party to depart from that precedent but on the contrary we were invited by both sides to apply it to the facts of this case insofar it is relevant to them 107 The foregoing are important matters which require to be borne in mind throughout the discussion which follows In the course of the argument on the hearing of this appeal certain other areas of agreement on specific points arose which however are more comprehensible if discussed in the particular context in which they arose There is however one area of mixed agreement and disagreement which it is convenient to set out and resolve now Permanence of the Treaty Provisions 108 It was agreed between the parties that there is no provision in the ESM Treaty to bring its provisions to an end and no provision in the Treaty permitting a party to withdraw from the Treaty 109 It is also agreed that Article 56 1 of the Vienna Convention on the Law of Treaties applies a presumption against a capacity to withdraw from a Treaty where there is no specific provision providing for denunciation or withdrawal 110 The State however contends that because all of the parties to the Treaty are members of the European Union and because the ESM Treaty is separate from but closely interlinked with the E U Treaties and because any Member State may withdraw from the European Union that there is an implied power to withdraw or as the State s written submissions put it its nature must be regarded as allowing for withdrawal This is on the basis either that the parties to the Treaty intended to admit the possibility of withdrawal or a right of denunciation or that withdrawal may be implied by the nature of the Treaty 111 In my view these submissions are wholly lacking in logical force and are without legal merit 112 The ESM Treaty is not despite what is said at para 73 of the State s submissions an international Treaty that has emerged from the participation of the Member States in the E U Treaties If it were so then in my view that would imply that all members of the European Union were party to the present Treaty but they are not It would be true to say that the Treaty arises from the participation of some member States in the Euro currency But this is a wholly different thing it is not required by membership of the European Union nor does membership of the European Union imply that a Member State will necessarily or ever at any stage adopt the Euro The present Treaty indeed arises directly from the notorious crisis which has afflicted that troubled currency Throughout the States submissions were marked by attempts subliminally to assimilate the E U Treaty to an E U document Those efforts cannot succeed because it is not a European Union measure 113 The State s submissions do not in any way seek to address the question of why if there is a power to withdraw from the Treaty after it has been ratified that power is not made express in the Treaty itself In this regard the position is in sharp contrast to the express power to withdraw from the European Union see Article 50 TEU 114 I believe that logic and prudence alike require one to proceed on the basis that the Treaty once ratified will not permit the withdrawal of a State from the obligations set out in the Treaty This is wholly consistent with the wording of the ESM Treaty itself In Article 8 4 the States which are party to it irrevocably and unconditionally undertake to make their capital contributions This language is of course radically inconsistent with a power to withdraw just as irrevocably is inconsistent with revocably 115 Finally on this topic it is to be noted that the long title of the European Stability Mechanism Act 2012 recites inter alia that the Act is too A TO MAKE PERMANENT PROVISION TO PROVIDE FOR MATTERS RELATING TO THE PARTICIPATION BY THE STATE IN THE EUROPEAN STABILITY MECHANISM PURSUANT TO THE TREATY ESTABLISHINGTHE EUROPEAN STABILITY MECHANISM DONE AT BRUSSELS ON 2 FEBRUARY 2012 BETWEEN THE EURO AREA MEMBER STATES 116 I do not believe that once in this mechanism Ireland will be able by its own act to leave it or to terminate its obligations under the Treaty once it has taken them on The European Stability Mechanism 117 Some members of the European Union those who are also members of the Euro area but not the others agreed on the 11th July 2011 a Treaty establishing the European Stability Mechanism The Treaty establishes what is described as a new international financial institution called the European Stability Mechanism to be based in the Grand Duchy of Luxembourg 118 By Article 3 of the Treaty the purpose of the ESM is to mobilise i e raise from the taxpayers of each member country under compulsory process and transfer out of the national jurisdiction to the new financial institution funding to be used to provide support to members of the Eurozone in financial difficulty It contemplates that this support will be provided only where such support is indispensable to safeguard the financial stability of the Euro area as a whole and of its Member States 119 Thus to borrow the language of Henchy J the point of reference for the provision of support in the financial stability of the Euro area as a whole and its Member States as opposed to the common good of the Irish people This change may be worth making that is a political matter but change it self evidently is either from the purely national approach envisaged by the Constitution or from an E U point of reference envisaged in the SEA and other Treaties The ESM is a tertium quid so far uncontemplated in the Irish Constitution or the original European Treaties 120 The European Stability Mechanism Treaty is a treaty then outside the structures of the Irish Constitution and also outside the structures of the European Union It is to operate in the interests of the financial stability not of Ireland or of the European Union but of the Euro area and its Member States as determined or certified by powers external to Ireland see below Of course these interests may or they may not overlap in any particular case There is for example no provision requiring equality of treatment amongst different support receiving States Thus Ireland or some other state might find itself in the odd position of funding support to another ESM country on terms less onerous than on which the funding country itself had had to accept support 121 According to the defendants the Treaty originated in discussions amongst Euro Area Member States following the establishment of the Greek loan facility and the European Financial Stability facility in 2010 122 According to the learned High Court judge Laffoy J the ESM has two interrelated functions 1 To mobilise funding and 2 To enter into agreements to provide funding and stability support to ESM members experiencing or threatened by severe financing problems Such support may be given only where it is indispensable to safeguard the financial stability of the Euro area as a whole or of its Member States Operation of the ESM 123 The ESM operates by using a capital stock comprising paid in contributions of ESM members to support its borrowing and lending operations The authorised capital stock is fixed by the Treaty at 700 billion The initial paid in capital is to be 80 billion The subscription of each ESM member to capital stock is set out at Annex II of the Treaty and is calculated in accordance with a contribution key set out in Article 11 and Annex I of the European Stability Mechanism Treaty 124 Ireland s contribution key is 1 5922 To give an idea of scale that of Germany is 27 1464 and that of France is 20 3859 Spain and Italy also have contribution keys above 10 These four States between them account for 77 3497 of the total The four smallest states by contrast account in aggregate for only 0 8849 If Ireland s contribution key were added to those of this group the aggregate would be 2 4771 125 Ireland s subscription to the authorised capital stock mentioned above is the sum of 11 1454 billion Ireland would have a share holding in the ESM in proportion to that 111 454 shares compared with 1 900 248 shares in the case of Germany 1 427 013 shares in the case of France 1 253 959 in the case of Italy and 833 259 in the case of Spain The entire schedule of contribution keys and of shareholdings and subscriptions is set out in the Annexes to the Treaty Working of the ESM 126 The necessity for mentioning these figures arises from the provisions of Article 4 2 of the Treaty which provides The decisions of the Board of Governors and the Board of Directors shall be taken by mutual agreement qualified majority or simple majority as specified in this Treaty In respect of all decisions a quorum of 2 3rds of the members with voting rights representing at least 2 3rds of the voting rights must be present 127 One might wonder why a member whose vital interests might be affected by a decision of the ESM might not always be present and ready to exercise its vote But this situation might arise by reason of the terms of Article 4 8 of the Treaty If any ESM member fails to pay any part of the amount due in respect of its obligations in relation to paid in shares or calls of capital under Articles 8 9 and 10 or in relation to the reimbursement of financial assistance under Article 16 or 17 such ESM member shall be unable for so long as such failure continues to exercise any of its voting rights The voting thresholds shall be recalculated accordingly Emphasis added 128 Thus failure to pay one s subscriptions or additional subscriptions which might arise in the way set out below or total or partial failure to repay assistance received from the mechanism at the times agreed will result in the automatic loss of voting rights One or other of these events does not seem entirely improbable in certain cases 129 Article 4 3 provides that The adoption of a decision by mutual agreement requires the unanimity of the members participating in the vote Abstentions do not prevent the adoption of a decision by mutual agreement 130 It will be seen therefore that if a member looses its ability to participate in the vote under Article 4 8 its consent is not necessary to a decision requiring unanimity either The requirement of mutual agreement is further limited by Article 4 4 which provides as follows By way of derogation from paragraph 3 an emergency voting procedure shall be used where the Commission and the ECB both conclude that a failure to urgently adopt a decision to grant or implement financial assistance would threaten the economic and financial sustainability of the Euro area The adoption of a decision by mutual agreement by the Board of Governors and the Board of Directors under that emergency procedure requires a qualified majority of 85 of the votes cast 131 By Article 4 5 is provided that The adoption of a decision by qualified majority requires 80 of the votes cast 132 The following paragraph provides that the adoption of a decision by simple majority requires a majority of the votes cast 133 Portion of the reality underlying these provisions is illustrated by the provisions for the coming into effect of the Treaty It will come into effect when ratified by the holders of 90 of the paid up shareholding in the ESM See Article 48 of the Treaty This means in practice that it will come into effect if and when ratified by Germany and will not come into effect at all unless ratified by Germany 134 Chapter 2 of the Treaty deals with the governance of the Stability Mechanism It provides for a Board of Governors a Board of Directors a Managing Director and other dedicated staff By Article 5 1 the Governor nominated by each member must be the Finance Minister Further the ESM is given immunity from regulation and its officials are given diplomatic type immunities Funding 135 Article 41 1 payment of paid in shares of the amount initially subscribed by each ESM member shall be made in five annual instalments of 20 each of the total amount The first instalment shall be paid by each ESM member within fifteen days of the date of entry into force of this Treaty The remaining four instalments shall each be paid on the 1st 2nd 3rd and 4th anniversary on the payment date of the first instalment 136 Article 41 2 however provides During the five year period of capital payment by instalments ESM members shall accelerate the payment of paid in shares in a timely manner prior to the issuing State in order to maintain a minimum 15 ratio between paid in capital and the outstanding capital of ESM issuances and guarantee a minimum combined lending capacity of the ESM and of the EFSF of 500 000 million 137 Article 42 makes provision for a temporary correction of a contribution key in the event of a Member State s gross domestic product being less than 75 of the European average In that event by Article 42 4 the relevant proportion of shares allocated to an ESM member shall be reallocated amongst the ESM members not benefiting from a temporary correction on the basis of their share holding in the ECB Increase in authorised capital 138 It is also necessary to take account of the provisions of Articles 8 9 and 10 of the Treaty in relation to the authorised capital of the ESM These provide ARTICLE 8 Authorised capital stock 1 The authorised capital stock shall be EUR 700 000 million It shall be divided into seven million shares

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  • procedures and so to bind the State in its freedom of action in its foreign policy In my view the words abdicate alienate subordinate and indeed also transfer contain the essence of what was considered impermissible in Crotty 11 This conclusion is I think consistent with a fair reading of the case as a whole and in particular when considered in the light of what was in issue between the parties In the Supreme Court the State parties had taken up an absolute position that the Government s exercise of the Executive function of making treaties could never be the subject of judicial scrutiny which was rejected by the entirety of the court What divided the court itself was a narrower issue and essentially one of timing There was little disagreement on the fundamental legal principle The minority comprised of Finlay C J and Griffin J accepted that if the SEA created a form of political union then there could be no doubt that in the words of Finlay C J at p 771 it would constitute an alteration in the essential scope of and objectives of the Communities to which Ireland could not agree without an amendment to the Constitution However the minority considered that this point had not yet been reached The majority for its part in the words of Henchy J considered that the SEA was a significant and decisive step along a path of gradualism towards that objective There was no dispute therefore that to agree to adopt a single European foreign policy would be inconsistent with the Irish Constitution since the Irish Government would no longer be exercising that power alone The question which did divide the Court was whether that point had been reached 12 I accept of course that there are elements of the judgment of Walsh J which if taken out of both their specific and general context might suggest that it is not possible for the Government to enter into any international agreement which precludes it from saying no at some future stage and that such freedom of action is of the essence of sovereignty For a number of reasons I do not consider that the judgment should be so understood and still less that such a test can be asserted to be part of the ratio decidendi of the case as a whole or indeed could provide any workable test that is consistent with history common sense or the structure of the Constitution 13 First for reasons already identified the issue in Crotty was not the question now raised as to whether the essence of sovereignty is to be found in an obligation not to alienate or abdicate the power to make foreign policy generally or alternatively in maintaining a complete freedom of action in the future in respect of any individual decision The issue which divided the parties in Crotty was whether or not the courts could enforce any limitation on Governmental activity in the field of foreign affairs The issue which divided the Court was not whether the creation of a European wide foreign policy would be an alienation of Irish sovereignty but rather whether such a development had occurred 14 Second as Clarke J points out in his judgment any agreement made by a country or an individual almost necessarily limits the freedom of the parties It certainly restrains the party from saying no to what has been agreed Furthermore in many cases the entry into an agreement may also create restraints on the freedom to enter into any inconsistent agreement It is indeed in the nature of international relations and expressly contemplated by the Constitution that states will make treaties enter into trade agreements form alliances join groups and assist in the setting up of international bodies with agreed mandates and which on occasion may have adjudicative functions There is no sense in which Ireland or any other state can remain completely free to say no once it has entered into any such agreement alliance grouping or body It is the decision to enter into an agreement or alliance which is the exercise of sovereignty Indeed as a matter of history Ireland was a member of the League of Nations at the time that the Constitution was adopted and in the early years of the Constitution s life became a member of the United Nations 1955 subscribed to the World Bank and International Monetary Fund IMF 1957 became a member of the Council of Europe 1949 and accepted the jurisdiction of the European Court of Human Rights 1959 To take only one example it cannot be suggested that Ireland retains a freedom not to abide by sanctions imposed by a UN resolution even if Ireland considered that the sanctions were misguided or that it stood to gain considerably by continuing to trade with the State in question I do not see however that that involves any loss of sovereignty indeed I consider that the Constitution contemplates matters such as membership of the UN as an exercise in the sovereignty of a small country which at the time of the adoption of the Constitution was anxious to secure international recognition of its status as a nation It is entirely inconsistent with the Constitution and in particular the first two sub articles of Article 29 to conceive of Ireland being obliged to adopt a position of splendid isolation from other countries so that it could only engage in agreements in which Ireland perhaps alone insisted upon a veto over all future decisions and indeed the right to resile from decisions already made and matters already agreed The fallacy is perhaps to conceive of the breadth of the power accorded to the Government in the field of foreign affairs as amounting itself to a constraint on this reading the Government only has freedom of action so long as it does not use it Quite apart from the fact that such a conception makes little sense and has not historically been the position taken by the State in the field of foreign affairs it also appears to me to be inconsistent with what is explicitly contemplated both by the words and structure of the Constitution 15 The understanding of Crotty contained in the judgments of Denham C J and Clarke J is I think fortified by a consideration of the underlying concept of sovereignty and particularly the manner in which such sovereignty is expressed in the 1937 Constitution The concept of sovereignty was traditionally defined as containing not just the positive requirement of a political superior to whom the population was in the habit of obedience but also and importantly for present purposes the negative requirement that such superior owe no obligation of obedience to the dictates of any other body Thus John Austin famously asserted in The Province of Jurisprudence Determined London Weidenfeld Nicholson 1954 at p 193 that The superiority which is styled sovereignty and the independent political society which sovereignty implies is distinguished from other superiority and from other society by the following marks or characters 1 The bulk or the given society or the habit of obedience or submission to a determinative and a common superior let that common superior be a common individual or a certain body or aggregate of individual persons 2 That certain individual or that certain body of individuals is not in a habit of obedience to a determinative human superior Emphasis added Such a sovereign can of course enter into binding alliances with other sovereigns even those which commit their respective countries to war However a ruler cannot be a sovereign if he or she habitually acts in obedience to the wishes of another body or person or to use the language of the majority judgments in Crotty abdicates alienates subordinates or indeed transfers its decision making power to that body This is I think consistent with the use and understanding of the word ceannasach used in the Irish text of the Constitution 16 Sovereignty as being a condition of owing no allegiance or duty of obedience to any other entity is in my view asserted very deliberately by the 1937 Constitution and for obvious reasons once the historical context is recalled The new polity being established in essence although not in name a republic was one that consciously asserted all the attributes of sovereignty This was a very deliberate contrast with even the expanded Dominion status which had existed prior to 1937 The Constitution reflected a fundamental truth as to the source of the sovereignty of the State namely the people The legal source of the Constitution was to be the decision of the People rather than a grant by a foreign Parliament The preamble to the Constitution records that it came into being by virtue of the declaration that the people Do hereby adopt enact and give to ourselves this Constitution Accordingly Article 1 states that The Irish nation hereby affirms its sovereign right to choose its own form of Government Consistent with this assertion of sovereignty Article 6 declares that all powers of government legislative executive and judicial derive from the people Among the key attributes of such sovereignty was the right to conduct international relations on an equal basis with other countries and the exclusive exercise by the organs of government of the powers of government 17 Both Clarke and Hardiman J J have in their judgments delivered today emphasised that the Constitution recognises the exclusive powers of the Legislative Executive and Judicial branches within their proper spheres This is of course true But it is perhaps noteworthy as the late Professor Kelly was wont to observe that the form of separation of powers adopted in the Irish Constitution was not the hermetically sealed branches of Government posited by Montesquieu but rather involved points of intersection interaction and occasional friction between the branches of Government so established Thus by way of illustration only the Executive appoint the Judiciary and the courts rely on the Executive to execute their judgments the courts for their part review the acts of both the Legislature and the Executive for compatibility with the Constitution and the Executive in turn is accountable to the Dáil and in practice commands it and the members of the Government are required to be drawn from the Legislature In the architecture of the 1937 Constitution therefore the respective branches did not exclude each other entirely On the other hand however the Constitution did assert the exclusive right of those organs to exercise their respective powers of Government as against any executive legislative or judicial competitor internal or external Again the historical context makes this clear Not only did the new State face an internal challenge from groups seeking to deny it legitimacy and assert their own title to govern but perhaps even more significantly the legal status of a dominion which was how Ireland was viewed by the United Kingdom was such that the Imperial Parliament still claimed at least in theory the right to legislate for Ireland a claim contained in s 4 of the Irish Free State Constitution Act 1922 the army and navy of the United Kingdom still occupied the Treaty Ports and the entitlement of the Privy Council to hear appeals from the Irish Supreme Court had only recently been removed in Ireland This then was a very real context in which the exclusive power of the organs of Government was being asserted in the Constitution alongside the assertion in Article 29 of Ireland s entitlement to take its place among nations and conduct international relations with them Thus at the very outset of the Constitution in Article 1 it is stated The Irish nation hereby affirms its inalienable indefeasible and sovereign right to choose its own form of Government to determine its relations with other nations and to develop its life political economic and cultural in accordance with its own genius and traditions Emphasis added To the same effect are the statements in Article 28 that the Executive power is exercised by the Government and it follows by no one else in Article 34 that justice is administered in courts and nowhere else and in Article 15 2 1 that the Legislature has the sole and exclusive power to make laws for the State adding for good measure that no other legislative authority has power to make laws for the State 18 The interesting historical background to the late adoption of the words sole and exclusive in Article 12 of the Constitution of the Irish Free State 1922 and the addition in 1937 of the words no other legislative authority has the power to make laws for the State contained in Article 15 2 1 is reviewed in Morgan The Separation of Powers in the Irish Constitution Dublin Roundhall 1987 at pp 262 263 and in Hogan The Origins of the Irish Constitution 1928 1941 Dublin RIA 2012 at p 335 which provide additional historical support for the conclusion contained in the judgment of Keane J in Laurentiu v Minister for Justice 1999 4 I R 26 at p 83 that Historically this Article can be seen as an uncompromising reassertion of the freedom from legislative control by the Imperial Parliament at Westminster of the new State But this conclusion is in my view also apt mutatis mutandis for the assertion of executive and judicial power in the new Constitution 19 Returning then to Crotty it is perhaps clear why the majority considered that the SEA was at the very minimum a subordination of Irish sovereignty In the first place it is plain that the provision affected the entirety of the foreign policy of the State and not simply one area of agreed cooperation Once enacted such foreign policy would no longer be made by the Government alone but would be arrived at under a requirement of convergence with the policy of other member states Seen in this way it is perhaps easy to see why it was claimed that the Executive power of the State in relation to the entirety of its foreign policy was being subordinated and at least to some extent alienated and transferred and to that extent abdicated Ireland would no longer make its own determination of its relationship with other states to use the language of Article 1 but would make decisions in the light of an embryonic collective foreign policy into which other countries would necessarily have an input There would therefore have been to that degree a diminution of the sovereignty asserted and established under the Constitution and effected without the assent of the People 20 This also demonstrates in my view why the provisions of the ESM are distinct from and in constitutional terms markedly less significant than the provisions of the SEA The ESM does not concern Ireland s foreign policy as a whole Instead it relates solely to a decision by Ireland to invest alongside other member states in an institution which may make those funds available in accordance with the terms and criteria established by the Treaty to contracting states including Ireland The decision to participate in the ESM was in my view an exercise in sovereignty rather than an alienation of it and was taken by the organ of Government to which such decisions are consigned by the Constitution In one sense it is a one off decision by Ireland to invest up to a defined maximum pursuant to a scheme which prescribes the countries to whom funds can be lent the procedure under which any decision to lend will be made and the criteria for such a decision It is no more a breach of Irish sovereignty asserted under the Constitution and defended in Crotty than a person who decides to invest a large portion of his or her wealth in a limited company with a defined investment objective could be said to lose his or her status as a citizen 21 There is no doubt that the figures involved here are very substantial and the decision to ratify the ESM is one which may have significant consequences for the Irish economy but the quantum of a decision does not alter the identity of the actor required by the Constitution to make the decision As a matter of history Irish Governments have expended very considerable sums indeed in for example the education and health sectors pursuant to departmental circulars and without even the benefit of legislation still less the approval of the People in referenda In more recent times Governments have made decisions involving both the expenditure and borrowing of enormous sums of money In none of these cases has it been suggested that the approval of the People in a referendum is required Under the Constitution Governments are expected and required to make decisions which on occasion may be momentous including indeed the declaration of war albeit in that case with the agreement of Dáil Éireann In my view there is no reason to conclude that the decision to join the ESM is not one within the Executive power of the Government for which it is answerable to the Dáil 22 In my view this approach also demonstrates why it is not possible to read the majority decision in Crotty as requiring that individual decisions made by the Government in the field of foreign policy must if they are to be valid make provision for future decisions to be made by unanimity or alternatively accord to Ireland alone a veto over any such future decision First it is plain that no such individual decision was in issue in Crotty on the contrary the case concerned the requirement to bend Ireland s foreign policy in general towards a common European policy For the reasons already set out I do not consider that any such supposed principle could be required by the Constitution and in my view it is not required by Crotty There is nothing in Crotty or indeed in logic to suggest that the concept of sovereignty contained in the Irish Constitution requires that Ireland while it may enter into agreements must insist that it retain the capacity to change its mind Even if the judgment of Walsh J in Crotty could be interpreted differently and for the reasons already set out I do not accept that that is the case there is in my view no basis for attributing to that judgment still less a phrase from it a position of primacy within the case The ratio decidendi of a decision made by a collegiate court is in my view to be determined by that proposition or reason which decides the particular case and on which it can be said a majority of the court is agreed In my view that ratio decidendi is that already set out above and as addressed in the judgments of the Chief Justice and Clarke J 23 This is sufficient to dispose of the centre piece of the plaintiff s case But it is also suggested that the ESM is not compatible with the Irish Constitution at least without the approval of the People in a referendum on two interrelated grounds first that it involves Ireland committing a very large of sum of money to be expended by a body outside the Irish legal order and second in reliance on dicta contained in the judgment of Henchy J that it involves an expenditure of monies for a purpose quite different from that of furthering the common good of the People of Ireland It is necessary to consider these points separately 24 It is true that the ESM fund including that portion subscribed by Ireland may be expended outside the territory of Ireland But it is commonplace for public funds to be extended to and expended by bodies outside the Irish legal order whether under the guise of overseas aid specific grants in cases of national emergencies or subscriptions to international bodies such as the IMF the World Bank or any international body In my view what the Constitution requires is that the decision to subscribe such funds should be taken by the correct organ of Government on its own and not in subordination to any other body That decision cannot be transferred alienated or abdicated to another body The relevant decision however is the decision to subscribe the funds for an identified purpose Here that decision was made by the appropriate organ of government in accordance with the procedures and accountability provided for in the Constitution 25 Second I very much doubt that the judgment of Henchy J is to be understood as suggesting that the courts can review the actions of the Government in the field of foreign relations and if appropriate restrain Governmental action on the grounds that the Court considers by some standard not identified that the action or agreement is not in pursuance of the common good of the Irish People I consider that this portion of the judgment of Henchy J is really an illustration of the central holding that the SEA if enacted without constitutional amendment would involve Ireland in an impermissible alienation or subordination of Governmental authority since the Irish Government would by definition have to take account of considerations outside Ireland s national interest To borrow a concept from administrative law the Irish Government would to that extent be making decisions by reference to a consideration which was constitutionally irrelevant and indeed impermissible I do not think that this could be taken without much more elaborate and detailed argument and consideration as an authority for the proposition that the Court can review individual decisions of the Government on the grounds that the decision to adhere to any particular international agreement are not within the interests of the common good of the People of Ireland Such a proposition would raise very serious issues indeed as to the standard of review and more fundamentally the constitutional justification for it But it is not necessary to address and resolve such issues here because in my view it is very clear that the Government was fully entitled to conclude that it was in the national interest of Ireland a country whose currency is the euro and which has suffered significant financial instability to enter into an agreement which provides for support of the Eurozone generally or for the economies of individual countries therein In the circumstances I would dismiss the appeal on this issue Interlocutory Injunction 26 The plaintiff s application for an interlocutory injunction was refused by Laffoy J for reasons set out at section VII of her judgment That decision has been appealed to this Court However although formulated as an appeal against the refusal of the injunction by the High Court the application here was in substance a fresh application for an interlocutory injunction pending the determination of the appeal akin to that granted by the Supreme Court in Crotty after the refusal by the Divisional Court of the plaintiff s claim and pending the hearing of the appeal by the Supreme Court See Crotty v An Taoiseach 1987 I R 713 at p 763 27 Much jurisprudence has grown up around the grant of interlocutory injunctions Such orders can be of very considerable and sometimes decisive significance The grant of an interlocutory injunction is often a difficult decision particularly in the field of public law That difficulty becomes more acute where as here matters of fundamental constitutional significance both in relation to Bunreacht na hÉireann 1937 and the Treaties establishing the European Union are asserted Nevertheless an injunction remains a flexible remedy designed essentially to control a temporary situation pending the final determination of a dispute by a court A basic element in the calculation that the court must make therefore is to identify and if possible limit the period of time during which any temporary regime must be in place 28 Here the plaintiff made a number of different claims which required determination in plenary hearing This raises further difficulties for the analysis of the interlocutory injunction application because it is necessary to identify and analyse the differing arguments on the harm that will be occasioned by the grant or refusal of an injunction in respect of each different claim The manner in which the Court has dealt with this case has however usefully sharpened the focus of the hearing Thus as is recounted in more detail in the judgment of Clarke J the Court fixed a time for the hearing of what might be described as the pure Crotty point that is the argument that the ratification of the ESM Treaty was an impermissible ceding of sovereignty by the Government of Ireland and was accordingly something that could only be permitted by approval of the People in a referendum This in the helpful terminology adopted by Clarke J is the sovereignty claim The Court heard the full appeal on that point on Tuesday 24th July Not only was it a useful exercise in case management since it allowed for focussed debate upon a single important issue but this approach also had the effect of reducing the number of variables that the Court had to consider on the application for an interlocutory injunction if the plaintiff s Crotty argument had succeeded he would have been entitled to a permanent injunction and no issue of an interlocutory injunction would have arisen conversely it was only if his Crotty argument failed or was not determined that it would be necessary to consider the interlocutory application but without reference to the Crotty issue That is the basis upon which the argument proceeded on the 24th In the event the Court announced its decision on the 31st July rejecting the plaintiff s claim based upon Crotty Accordingly the issue for this Court became whether an interlocutory injunction should be granted pending the final resolution of the remaining issues in the case 29 The most significant issues which remain are matters of EU law The logical sequence of the issues might be first whether the ratification by Ireland of the ESM Treaty as a stand alone international agreement is itself a breach of this country s obligations under the Treaty Establishing the European Union TEU or the Treaty on the Functioning of the European Union TFEU and hereafter collectively referred to as the Treaties the ESM Treaty claim If not the remaining questions are less relevant If however ratification of the ESM Treaty is contrary to the Treaties then a question arises whether the Treaties may be amended by a Council decision such as that contained in Council Decision 2011 199 EU so to permit relevant member states to accede to the ESM Treaty Finally even if such amendment is permissible in principle an issue would remain as to the validity of the individual decision particularly the use of the accelerated procedure these two related issues are the Council Decision claim The Court has decided that it was necessary in conformity with Art 267 of the TFEU to refer questions to the European Court of Justice ECJ on these issues and requested the Court to consider adoption of its accelerated procedure given the asserted urgency of the situation The ECJ will hear argument on this issue on the 23rd of October Accordingly the question to be addressed on the interlocutory injunction application now becomes more limited again both by reference to the legal issues in play which are now largely matters of European law and the period of time before a definitive answer can be given to those legal issues 30 In analysing the issues in this way I do not lose sight of the argument made on behalf of the plaintiff that a breach of the Treaties is ipso facto a breach of the Irish Constitution because it is said that it is only to the Treaties in their unamended forms that the Irish People have given approval in the Constitution and to that extent the relevant treaties have become part of the constitutional law of Ireland It is apparent however that this constitutional point is an entirely consequential one It is completely dependent on and follows ineluctably from the European law argument The alleged breach of the Constitution occurs because there is an alleged breach of the Treaties The European issue is therefore logically anterior to the constitutional argument and whatever that constitutional argument adds in terms of rhetoric and significance it adds nothing in scope Unless the European law argument succeeds the constitutional argument cannot succeed It also follows and this is important in the context of an interlocutory injunction application in particular that if it is possible to remedy a breach of the European law then the constitutional breach is also remedied In my view therefore and even assuming for the purposes of this stage of the argument that there is or may be merit in the contention that a breach of the Treaties is a breach of the Constitution on which I express no view it adds nothing to the calculation the court must carry out on an application for interlocutory injunction to say that the European law argument can also be framed in domestic constitutional terms 31 Finally an argument was also made described helpfully by Clarke J as the power transfer claim to the effect that the European Stability Mechanism Act 2012 being the statutory mechanism utilised to implement the ESM Treaty in Irish law involved an impermissible transfer of power from the Dáil to the Minister for Finance However like Clarke J I consider that this claim whatever its merits could not itself give rise to any plausible claim for an interlocutory injunction On the assumption that all other more substantive claims failed but this succeeded then the matter would be purely the method of implementation of the ESM Treaty which is both capable of adjustment in accordance with any judgment of this Court and as a purely domestic matter is in any event within the power of these courts This in my view is fatal to any allegation of irreparable damage which is the starting point for any claim for an injunction Accordingly it is not necessary to address the question which might otherwise arise as to what considerations should apply to an application to restrain the operation of legislation validly enacted and presumed constitutional pending a trial or as in this case an appeal 32 The Court must therefore assess how best the situation should be managed pending the determination of these issues on foot of the reference to the European Court which will as a matter of a practicality resolve the European law points and therefore in all probability the litigation It is argued by the Plaintiff that this was essentially the same task as faced the court in Crotty and it was pointed out that in a short judgment in that case at p 763 the Supreme Court per Finlay C J granted an interlocutory injunction restraining ratification of the Single European Act after the dismissal of the Plaintiff s claim in the Divisional Court of the High Court and pending the hearing of the Supreme Court appeal It was also suggested that the appropriate test was that set out in the decision of the ECJ in Zuckerfabrik Süderdithmarschen Case 143 88 and 92 89 1991 E C R 1 415 and restated in case Atlanta Fruchthandelsgesellschaft mbH and others v Bundesamt für Ernährung und Forstwirtschaft Case 465 93 1995 E C R 1 3761 at p 3795 where it is provided that a national court should only grant interim relief with respect to a national administrative measure adopted in the implementation of a community regulation if 1 that court entertains serious doubts as to the validity of the Community act and if the validity of the contested act is not already an issue before the Court of Justice itself refers the question to the Court of Justice 2 there is urgency in that the interim relief is necessary to avoid serious and irreparable damage being caused to the party seeking the relief 3 the court takes due account of the Community interest and 4 in its assessment of all those conditions it respects any decisions of the Court of Justice or the Court of First Instance ruling on the lawfulness of the regulation or on an application for interim measures seeking similar interim relief at Community level Some doubt was expressed as to whether this test differs in substance from the well known test in Campus Oil v Minister for Industry and Energy No 2 1983 I R 88 There may be cases in which it is necessary to address that point and in particular to determine whether some higher threshold should be established before an injunction is granted restraining the implementation of a measure asserted to be invalid but for the reasons as expressed by Clarke J I consider it is possible to resolve this case by reference to the balance of convenience or balance of justice as it is sometimes expressed 33 Counsel on behalf of the plaintiff also relied on the well known passage from Amministrazione delle Finanze dello Stato v Simmenthal SpA Case 106 77 1978 E C R 629 at p 644 It follows from the foregoing that every national court must in a case within its jurisdiction apply Community law in its entirely and protect rights which the latter confers on individuals and must accordingly set aside any provision of national law which may conflict with it whether prior or subsequent to the Community rule Accordingly any provision of a national legal system and any legislative administrative or judicial practice which might impair the effectiveness of Community law by withholding from the national court having jurisdiction to apply such law the power to do everything necessary at the moment of its application to set aside national legislative provisions which might prevent Community rules from having full force and effect are incompatible with those requirements which are the very essence of Community law The first question should therefore be answered to the effect that a national court which is called upon within the limits of its jurisdiction to apply provisions of Community law is under a duty to give full effect to those provisions if necessary refusing of its own motion to apply any conflicting provision of national legislation even if adopted subsequently and it is not necessary for the court to request or await the prior setting aside of such provision by legislative or other constitutional means The essence of the Plaintiff s case was that he considered that what he described as respect for the rule of law required that the Court grant an injunction It was said if the plaintiff was correct in his legal argument and that was the assumption upon which the interlocutory injunction application must be approached then ratification of the ESM Treaty would involve the creation of a permanent and irreversible arrangement that was itself a breach of EU law 34 The Plaintiff swore a detailed affidavit in support of his application The thrust of the affidavit was to assert that unless an injunction was granted the State would have entered into an irreversible binding commitment in international law and the court would be deprived of jurisdiction to grant remedies in the event the Plaintiff succeeded Furthermore the State would then be bound permanently to a breach of European law and consequently Irish constitutional law and to financial commitments totalling 11 144 billion with the possibility of subsequent increases The Plaintiff also referred to an unsuccessful challenge in the Estonian courts and a pending challenge in the German Constitutional Court both of which appear to be by reference to provisions of the domestic constitutions He also asserted that there was no particular urgency in ratification because Ireland would be fully funded under the Memorandum of Understanding with the so called Troika until

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