Supporting Documents:

THE SUPREME COURT

DETERMINATION

BETWEEN

RESULT: The Court grants leave to the Plaintiff to appeal to this Court from the Court of Appeal

REASONS GIVEN:

1. Introduction

1.1 This determination is directed to the question of whether leave to appeal should be permitted in the somewhat unusual the circumstances of this case. The plaintiff/intended appellant (“Osus”) has brought these proceedings seeking to litigate issues against the defendants/intended respondents (“HSBC”) on the basis that it contends that, as a result of an assignment made in the context of bankruptcy proceedings in New York in the United States of America, it has a legal entitlement to maintain the relevant causes of action in this jurisdiction. However, an issue arose as to whether the assignment in question was capable of conferring the right on Osus to litigate those issues in the Irish courts. In that context an issue was tried in the High Court with judgment being given by Costello J. on the 5th October, 2015 (SPV Osus Limited v HSBC Institutional Trust Services (Ireland) Limited & ors [2015] IEHC 602). The factual background to the proceedings generally and to that application are set out fully in the judgment of Costello J. and it is unnecessary to repeat them here. Suffice it to say that Costello J. concluded that the assignment in question would not be recognised in Irish law.

1.2 From that decision Osus appealed to the Court of Appeal with the judgment of that court being given by Ryan P. on the 2nd March, 2017 (SPV Osus Limited v. HSBC Institutional Trust Services (Ireland) Limited & ors [2017] IECA 56). For the reasons set out in that judgment the Court of Appeal dismissed the appeal and affirmed the order of the High Court. Osus now seeks to further appeal the matter to this Court. However, in circumstances which will be set out in a little more detail, a specific issue arose in the light of the respondent’s notice filed by HSBC in relation to the application for leave to appeal. It was asserted on behalf of HSBC that the issues now sought to be raised by Osus on this appeal had not been raised in either the High Court or the Court of Appeal and, on that basis, and without prejudice to the question of whether those issues might, theoretically, demonstrate that the appeal met the constitutional threshold, it was said that it would be inappropriate to grant leave to appeal.

1.3 It was in those unusual circumstances that the Court directed that there be an oral hearing of the application for leave. It is, therefore, first necessary to address the issues which arose in the written submissions filed for the purposes of that oral hearing and in the oral submissions made by the respective parties. Before going on to consider the precise questions which arose for debate in the particular circumstances of this case it is appropriate to start by making some general comments relating to the new constitutional appellate architecture in the context of the possibility that a party may seek to raise new or different issues on appeal to this Court.

2. Raising New Grounds

2.1 Long before the passage of the 33rd Amendment to the Constitution it has, of course, been the case that appellate courts have been reluctant to permit issues to be canvassed on appeal where the issues concerned had not fairly been raised in the Court below. In Lough Swilly Shellfish Growers Cooperative Society Limited & anor v. Bradley [2013] 1 I.R. 227, O'Donnell J. analysed the principles by reference to which a court might consider whether it was appropriate, in the particular circumstances of the case in question, to permit grounds to be raised which had not been the subject of debate in the High Court. Lough Swilly was, of course, an appeal which came to this Court under the old constitutional appellate architecture.

2.2 It is clear from the judgment of O'Donnell J. in Lough Swilly that the Court was attempting to balance two important values in reaching an overall assessment as to the criteria to be applied in such situations. On the one hand there is the fact that this Court (and, indeed, now the Court of Appeal) are described in the Constitution as appellate courts so that their role should be seen as being focused on determining whether the judgment and order appealed can be said to have been correct. It is hard, at least in most cases, to argue that a decision of a trial court was incorrect on the basis of issues which were not addressed to that court. Furthermore, any undue tolerance of the admission of grounds of appeal relating to issues not previously argued would lead to procedural chaos and would run the risk of causing untold injustice across the range of cases. Those considerations lean very heavily against allowing litigants to reinvent their case on appeal. It has sometimes been observed, and litigants need to keep in mind, that a trial is not a rehearsal. See for example the comments in that regard in the judgments in Ambrose v. Shelvin [2015] IESC 10 and Koger Inc & anor v. O’Donnell [2013] IESC 28.

2.3 On the other side of the coin there is the legitimate aim of attempting to ensure that injustice is not caused by shutting out a party from making a case on appeal which may demonstrate that they should have won the proceedings sought to be appealed. However, as O'Donnell J. points out in Lough Swilly, such considerations may be accommodated a lot more readily where the case is towards the end of the spectrum where what is sought to be deployed as a ground of appeal might be considered to be a purely legal argument which is at least not inconsistent with the case previously made or, indeed, might be regarded as an evolution or refinement of the propositions advanced at first instance. The balance would be very different where there would be a reasonable basis for being concerned that the evidence at the trial might have been different had the issue sought to be raised on appeal been fairly advanced in the court of trial.

2.4 For example, trial judges frequently describe general background facts without analysing those facts in great detail on the basis that the facts concerned are not material to the issues which have to be decided. Likewise, parties may not exercise particular care in relation to facts which do not seem relevant to the issues as they appear at the trial. Evidence, for example, may not be contested, even if not accepted, if it appears to be of no relevance. The potential for injustice in allowing a case to be reinvented on appeal where there is a risk that the approach to the evidence at the trial might have been different had the issues sought to be raised been before the trial court, is all too obvious. In many such cases the only conceivable outcome might be a retrial. But exposing a party, who has fairly presented or met the case in the court of trial in accordance with the issues there raised, with the prospect not only of an appeal but the risk of a further trial (and possibly even a further appeal thereafter) is itself a significant potential injustice which the Court needs to guard against.

2.5 However, it seems to the Court there are even weightier considerations involved in respect of applications for leave to appeal to which the provisions of the 33rd Amendment apply. As has been pointed out in many determinations issued by this Court since the 33rd Amendment came into effect, the new constitutional norm is that a party has an entitlement to a trial in the High Court and, ordinarily, one appeal being to the Court of Appeal. In order for it to be constitutionally appropriate to permit a second appeal the “constitutional threshold” set out in the 33rd Amendment must be met. Leaving aside the additional requirement that there be exceptional circumstances justifying a so-called leapfrog appeal direct from the High Court, the basic constitutional threshold is that the decision sought to be appealed “involves a matter of general public importance” or, alternatively, that it is “in the interests of justice” necessary that there be an appeal to this Court. It is illustrative that it is the decision of the Court sought to be appealed which must involve the matter of general importance. Thus the constitutional wording itself emphasises the need for the issue which is sought to be raised on appeal to be an issue arising out of the decision sought to be appealed against.

2.6 It is, in that context, of the utmost importance to emphasise that this Court would consider highly undesirable any tendency on the part of litigants, who had pursued their proceedings on one basis in the High Court (and, in appropriate cases, in the Court of Appeal), to seek to reinvent their case solely for the purposes of attempting to manufacture a point, not previously raised, which might be said to meet the constitutional threshold. If it proved possible to run the case up to the point of a potential appeal to this Court without raising the issue in question, then it is difficult to see how it would be appropriate for this Court to grant leave to appeal so as to permit such a point to be raised for the first time.

2.7 However, that being said it is also correct to say, as counsel for Osus observed in the course of the oral hearing, that an almost inevitable feature of the new constitutional architecture will be that there will be some evolution of or refinement in the argument as a case progresses through the various courts. For example, many cases involve a wide range of issues when they are commenced although the issues (particularly ones of fact) may disappear both at trial and as a result of the judgment of the court of trial. The issues may come to be further refined as a result of what transpires before the Court of Appeal. Thus the issue of general importance which may come to be decided by this Court in an appropriate case will almost inevitably have been refined to some extent by the process up to that point. For such reasons it is important that this Court does not adopt an overly technical attitude to the question of whether the relevant issues were raised in precisely the same form in the court or courts below.

2.8 Rather the real question is as to whether an issue which is said to meet the constitutional threshold has been fairly advanced in the courts below even though the precise way in which it might now be sought to articulate that issue on an appeal to this Court may have undergone some refinement or evolution. This Court will set its face sternly against permitting the reinvention of cases by the manufacture of new grounds solely for the purposes of seeking to meet the constitutional threshold and thus persuade this Court to allow a further appeal. However, if the relevant issue has generally been properly and fairly addressed in the court or courts below then this Court should not take on overly technical attitude to the precise way in which it is sought to articulate the point both for the purposes of an application for leave and, assuming leave is granted, on the appeal itself. It is that approach which the Court would propose should be applied to the circumstances of this case.

3. The Circumstances of this Case

3.1 As appears from both the judgment of Costello J. in the High Court and that of Ryan P. in delivering the judgment of the Court of Appeal, the core issue under consideration was as to whether it might be said that Osus could not maintain these proceedings because the assignment to it of what was said to be a bare cause of action ought not be recognised in Irish law. That issue is related to the question of the status of champerty recently considered by this Court in Persona Digital Telephony Ltd & anor v. Minister for Public Enterprise & ors [2017] IESC 27, although the issue which arises in this case does not fall to be considered as champerty as such. It appears to have been accepted that there could be circumstances where an assignment of a cause of action might be recognised where it could properly be said that the assignment was for a legitimate purpose such as being incidental or ancillary to other aspects of a more general transaction. Likewise it appears to have been accepted by Osus that there were circumstances where the assignment of a cause of action would not be recognised in Irish law. Thus neither side appears to have adopted a completely black and white position. Both sides accepted that there were some situations in which Irish law would recognise the assignment of a cause of action and others where Irish law would not.

3.2 In the Court’s view it would be fair to characterise the debate, at least insofar as it appears to have evolved before the Court of Appeal, as involving both the question of the precise line in Irish law between those cases where an assignment will be recognised and those where it will not and the application of the principles derived from a consideration of that first question to the facts of the case. It is also clear that, in that context, counsel for Osus did make certain submissions which suggested that there might be some difference between the proper approach in this jurisdiction and the approach identified by the House of Lords in the United Kingdom in Trendtex Trading Corp. v. Credit Suisse [1982] A.C. 697. For reasons which will shortly become apparent it is also of some relevance to note that the House of Lords in that case took a different view to that which had been arrived at in the Court of Appeal.

3.3 The principal focus of the complaint made by HSBC which has led to this issue being considered is based on an assertion that, up to the time of the application for leave to appeal, the position of Osus was that it accepted the principles identified by the House of Lords in Trendtex as representing the law in this jurisdiction but sought to argue that, applying those accepted principles, this case fell on the side of the line where the assignment in question would be recognised. In that context it should be noted that Osus, in its notice of application for leave to appeal, undoubtedly seeks to argue that the view expressed by the Court of Appeal in Trendtex is to be preferred to that adopted by the House of Lords and it would appear that it would be the intention of Osus to invite this Court, if the appeal proceeds, to treat the Court of Appeal view in Trendtex as being more persuasive than that of the House of Lords.

3.4 It is on that basis that HSBC asserts that Osus is attempting to devise a new, and potentially inconsistent, point for the purposes of seeking to meet the constitutional threshold.

3.5 However, having reviewed the various transcript extracts to which the Court was referred in the course of the oral hearing, the Court has come to the view that it is not possible to put matters as far as HSBC has suggested. It is, of course, correct to say that the specific point now sought to be made, which is to the effect that the Court of Appeal view in Trendtex is preferable to that of the House of Lords in the same case, was never advanced either in the High Court or in the Court of Appeal. It is also true to state that, at least to some extent, there was not the same emphasis in at least some of the arguments addressed to date on what might be said to be a potential difference between the law in this regard in Ireland and that in the United Kingdom. However, it cannot, in the Court’s view, be said that Osus did not seek to argue that there was some difference between the law in the respective jurisdictions and, importantly, that such a difference might be material to the resolution of the issue in these proceedings.

3.6 In that context it must, of course, be observed that the precise delineation between circumstances which fall one or other side of a line such as that which marks the boundary between assignments which will or will not be recognised in Ireland, may not always be necessary for the resolution of particular proceedings. It may be clear that the case in question falls well to one or other side of the line such that determining precisely where the line may lie may not be necessary. On the other hand there can be cases where the definition of that line with a much greater degree of precision may at least arguably be decisive.

3.7 In all the circumstances of this case the Court is satisfied that the question of the precise delineation, as a matter of Irish law, between the circumstances in which a cause of action can validly be assigned and those when such an assignment will not be recognised, was fairly before the Court of Appeal such that issues arising from that question can properly be raised for the purposes of seeking to suggest that the constitutional threshold is met in this case. The fact that there may have been something of a refinement or evolution in the precise way in which Osus will seek to argue the question of where that delineation may lie does not lead to the conclusion that the issue was not, nonetheless, fairly before the Court of Appeal. The argument now sought to be advanced is, in the Court’s view, reasonably considered as no more than an evolution or a refinement of the argument which Osus sought to make before the Court of Appeal.

3.8 The Court is, therefore, satisfied that it is open to Osus to seek to suggest that the question of the proper delineation between those circumstances in which a cause of action can be validly assigned in Irish law and those where a cause of action can not, arises in this case and can be considered for the purposes of determining whether the constitutional threshold is met. The Court, therefore, turns to that question.

4. Is the Constitutional Threshold Met?

4.1 The general constitutional threshold is set out and analysed in many determinations of this court since the 33rd Amendment came into effect and it is unnecessary to address that matter again for the purposes of this determination. While this Court has given recent consideration to general issues concerning maintenance and champerty it is also clear that there has been no recent definitive or authoritative determination on the connected question as to where the test for recognition or otherwise of an assignment of a cause of action lies as a matter of Irish law. Given that the determination of that test may well have application to a whole range of circumstances, the Court is satisfied that an issue of general public importance arises in relation to that question. In those circumstances the Court is satisfied that the constitutional threshold is met.

4.2 However, for the avoidance of doubt and, indeed, for the avoidance of any unnecessary dispute in the future, the Court should make clear that the Court has come to that view on the basis that it considers it likely that the argument which Osus will wish to advance on this appeal will be confined to what might reasonably be termed an evolution or refinement of the argument already advanced before the Court of Appeal rather than an entirely new argument. For the avoidance of doubt the Court would not consider reliance on the Court of Appeal decision in Trendtex as breaching that structure. The Court would trust that, in formulating its written submissions, Osus will be mindful to ensure that the argument which it puts forward can be reasonably be said to remain within those bounds. There can be little doubt but that it would be open to the case management judge to require that revised written submissions be filed if the case management judge was persuaded that Osus had, having obtained leave to appeal, then expanded the basis of its submissions beyond those which might reasonably be considered to be an evolution or refinement of the case made before the Court of Appeal.

4.3 However, that is a matter to be dealt with if it arises.

5. Conclusions

5.1 For the reasons set out in this determination the Court is of the view that Osus has raised an issue of general public importance which can fairly be described as representing an evolution or refinement of the argument which it made before the Court of Appeal. The Court has, in the course of this determination, made clear that this Court should be anxious to ensure that parties do not seek to reinvent their case for the purposes of attempting to devise a point which might meet the constitutional threshold. However, the Court has also emphasised that it does not consider that this Court should take an overly technical approach to the question of whether an argument has been made in precisely the same form in the court or courts below but rather should consider whether it can be said that the argument now sought to be relied on has, in general terms, been fairly raised such that the issues before this Court could properly be described as being no more than a refinement or evolution of the issues raised below.

5.2 The Court will, therefore, grant leave to appeal in order to pursue the following issues before this Court:-

(a) the circumstances in which, as a matter of Irish law, an assignment of a cause of action will be recognised as valid (insofar as potentially relevant to the circumstances of this case); and

(b) the application of the principles identified in the answer to (a) to the facts of this case for the purposes of determining whether the Court of Appeal was correct to determine that the assignment on which Osus relies should not be recognised as a matter of Irish law.