D.G. v Hutchinson & Ors (Approved)

Similar statements were made by Advocate General Bot in relation to equitable subrogation and in relation to FBD’s rights to subrogation and a possible claim for Francovich damages against the State. Mr. Collins SC says that Liberty is comes within the CJEU’s description of a party adversely affected by the incompatibility of national law with EU law. As a result, they are entitled to pursue Francovich damages from the State.

Clearly, neither the Advocate General nor the CJEU has jurisdiction to interpret national law or to make findings on national law that could bind this court. However, the determination of this case may not necessarily be limited to questions of national law and there may be more complex arguments about whether mixed questions of national law and European law are involved.

The State contends that none of the statements on which Liberty relies, including those of Hogan J. in the Court of Appeal, the Advocate General and the CJEU in Smith v. Meade (which it accepts were made) are binding on this court. They say that the comments of Hogan J. in the Court of Appeal were obiter dictum and the analysis of subrogation by the Advocate General and the CJEU relate to issues of national law over which the CJEU has no jurisdiction. The State suggests that, insofar as subrogation rights were purportedly recognised by the Advocate General and/or the CJEU, this was based on the factual summary formulated to the CJEU by the Court of Appeal in accordance with the procedure in an Article A267 reference. Even if that is so, it could potentially constitute a finding of the Court of Appeal, but I do not think I need to make any such finding or to find that the statements made were not binding on this Court as I am satisfied that the making of such statements establish, in themselves, that the legal issue that Liberty raise in this case around subrogation, and Francovich damages, fall well short of the standard of unstateable necessary for this Court to find that Liberty’s arguments are bound to fail.

The statements made by the CJEU cannot be rejected and the arguments contained therein could not be found by this Court, at this stage, to be unstateable such that they are bound to fail and constitute an abuse of the court’s process to be permitted to proceed. The issue is one that would be more properly determined by the trial judge following full argument.

In addition, I am told that the Court of Appeal in Smith v. Meade invited submissions on the issue of subrogation but, before the issues were further addressed by the court, the case was settled on the basis as set out above when the State indemnified FBD. The fact that those submissions were sought by the Court of Appeal sits uncomfortably with the arguments now made by the State that Liberty’s arguments around subrogation and Francovich damages are unstateable.

My findings on the potential stateability of Liberty’s arguments in relation to subrogation and Francovich damages in the light of the State’s settlement in Smith v. Meade combined with my acceptance of Liberty’s bona fides in its intentions to call evidence and possibly to seek discovery, satisfies me that the State have not discharged the high burden of proving that Liberty’s case is bound to fail such that it would be an abuse of the court’s process to allow it to proceed.

In addition, the issues raised around equitable subrogation are complex and detailed, covering a jurisdiction that has been recognised in the authorities as broad and can be available as a restitutionary remedy ( Banque Financiere de la Cite v. Parc (Battersea) Ltd & ors. [1999] 1 AC 221 ). Similarly, the issues raised by the State on Liberty having engaged in a bare assignment of a cause of action, effectively an objection on maintenance champerty grounds, is a complicated legal point engaging controversial and complicated arguments about public policy. I make no observation or finding as to the merits of the arguments made by the State or Liberty’s response thereto, but insofar as I have to assess the complexity of them, I find that they rest at the outer degree of complexity. That is not the space within which I could find that they are arguments that are unstateable and bound to fail such that it would be an abuse of the court’s process to allow them to proceed to trial.

The State also relies on Liberty having voluntarily let the MIBI out of the proceedings. That may be a relevant argument at trial, but it does not persuade me at this interlocutory stage that Liberty’s arguments are unstateable.

In all of the circumstances, I find that the complexity of the legal issues involved in this matter bring this case within the type of case that Clarke J. said in Moylist Construction v. Doheny :-

I am, therefore, refusing this application to strike out the proceedings at this stage.

As Liberty have succeeded in defending this application to strike out the proceedings, my indicative view on costs is that, in accordance with s. 167 of the Legal Services Regulation Act 2015, that they are entitled to their costs, but it is also my indicative view that a stay should be put on the execution of those costs pending the outcome of the proceedings. I will put the matter in before me on 10:30am on 12 October 2023 to hear such further submissions as either party may wish to make in relation to costs and any other orders that are required to be made at this stage. If either party wishes to lodge written submissions, these should be lodged with the court at least 48 hours before the matter is back before me.