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2026 IEHC 317

THE HIGH COURT COMMERCIAL [2026] IEHC 317 Record No. 2026/159 COS IN THE MATTER OF PERMANENT TSB GROUP HOLDINGS PUBLIC LIMITED COMPANY AND IN THE MATTER OF THE COMPANIES ACT 2014 AND IN THE MATTER OF A PROPOSAL FOR A SCHEME OF ARRANGEMENT PURSUANT TO PART 9, CHAPTER 1 OF THE COMPANIES ACT 2014 AND IN THE MATTER OF THE IRISH TAKEOVER PANEL ACT 1997 AND IN THE MATTER OF PERMANENT TSB GROUP HOLDINGS PLC AND IN THE MATTER OF THE COMPANIES ACT 2014 AND MATTER OF SECTIONS 450, 451, 452, 453 AND 1087D OF THE COMPANIES ACT 2014 AND MATTER OF A PROPOSAL FOR A SCHEME OF ARRANGEMENT CONCERNING THE PROPOSED ACQUISITION OF PERMANENT TSB GROUP HOLDINGS PLC BY BAWAG P.S.K. 1 JUDGMENT of Mr Justice Mark Sanfey delivered on the 13th day of May 2026. 1. This is an application by Permanent TSB Group Holdings plc ('the Company') by Notice of Motion dated 1st May 2026 for an order pursuant to Order 63A sub-rule

(4)of the Rules of the Superior Courts, entering the proceedings in the Commercial List of the High Court, and for an order pursuant to Section 450
(3)of the Companies Act 2014 directing the convening of a scheme meeting of shareholders and for certain directions in relation to the notification and holding of the meeting.
  1. The proceedings were commenced by Originating Notice of Motion issued also on 1st May
  2. Essentially, the Company seeks ultimately the sanction of the Court in relation to a scheme of arrangement between the Company and the holders of the scheme shares. The purpose of the scheme is to effect the acquisition of the company by BAWAG PSK, an Austrian stock corporation ultimately owned by the BAWAG Group, one of Austria's largest international banking groups. The grounding affidavit of Eamonn Crowley, the Chief Executive Officer of the Company, sets out the background to the transaction.
  3. The acquisition is the culmination of a formal sale process which was announced on 30th October
  4. BAWAG PSK and the Company entered into a transaction agreement on 14 April 2026 which contained assurances in relation to the implementation of the scheme. The timetable appended at Schedule 1 to the Transaction Agreement provides for an “earliest date” for the scheme meeting of 27 July 2026, unless otherwise agreed in writing by the parties, and “an anticipated completion date” of “Q4 2026/Q1 2027.” 2
  5. It is sufficient for present purposes to say that the entire issued share capital of the Company is valued at approximately €1,618,638,
  6. Under the terms of the acquisition, scheme shareholders will be entitled to receive €2.97 in cash for each scheme share.
  7. The application for entry was listed in the Commercial List on Monday, 11 May 2026, although the Originating Notice of Motion had a return date of 15 June
  8. However, another application was made in relation to the scheme of arrangement. Mr. Piotr Skoczylas, a shareholder in the Company, initiated proceedings by way of Originating Notice of Motion in relation to the proposed scheme. Mr. Skoczylas sought a declaration pursuant to Section 450
(5)of the Act that the scheme meeting would proceed on the basis that the Minister for Finance, on the one hand, and other members of the Company, on the other, would constitute separate classes of members. A number of other orders were also sought.
  1. These proceedings by Mr. Skoczylas and two other individual applicants and a limited company (Record Number 2026/165 COS) were instituted on 7th May
  2. The matter came before Kennedy J. in the Chancery List on Friday 8th May
  3. He directed that the matter be listed in the Commercial List, along with the Company's proceedings, on Monday 11th May
  5. When the matters came before me on that date, I determined that the Company should proceed with its application but indicated that I would hear Mr. Skoczylas in reply. Counsel for the Company indicated that, in view of Mr. Skoczylas's opposition to the application of the Company for a direction pursuant to Section 450
(5)of the 2014 Act 3 that all of the shareholders comprise one class for the purpose of the scheme meeting, the Company had decided not to pursue that relief but would continue to ask the Court to convene the meeting with appropriate directions as to matters such as notice, etc. 8. The net dispute, then, is as follows: the Company wishes to convene the scheme meeting of shareholders which it will conduct on the basis that all of the holders of the scheme shares, including the Minister for Finance who holds 57.5% of the shares, comprise a single class. The Company accepts that Mr. Skoczylas and certain other shareholders who have joined to his proceedings can raise the issue of class composition in opposition to the Company's application pursuant to Section 453
(2)(c) for the sanction of the High Court. This application would take place after the scheme meeting and obviously only if the scheme attained the requisite majority.
  1. The Company says that Mr. Skoczylas and the other applicants suffer no prejudice by the Company proceeding in this way. If the Court considers the Company's view that all members comprise a single class for the purpose of the scheme meeting to be inappropriate, it can refuse sanction of the scheme.
  2. Mr. Skoczylas, on the other hand, argues that to hold the meeting before the Court determines the issue of class composition is, as he puts it, “to put the cart before the horse”. He considers that he and the other applicants are in fact prejudiced by this way of proceeding. He contends that the size of the Minister's shareholding will mean that dissenting shareholders will consider that they have little chance of preventing the attainment by the Company of a special majority if there is only one class, whereas if there are two classes, the chances of preventing a special majority among shareholders 4 other than the Minister are increased. Section 453
(2)(a) requires that each of the meetings, if more than one, attain a special majority. Mr. Skoczylas's view is that, for reasons he set out in detail in his affidavits, the Minister does not come within the classic formulation by Bowen LJ. in Sovereign Life Assurance Company v Dodd1 that he is a person whose rights are not so dissimilar as to make it impossible for him to consult together with other shareholders with a view to their common interest. 11. The directors of the Company can convene the appropriate scheme meetings of members or classes of members (Section 450
(1)(b)). If they do not do so, Section 450
(3)states that: “...the court may...order a scheme meeting or scheme meetings of the creditors or members (or, as the case may be, the class of either of them concerned) to be summoned in such manner as the court directs.” 12. The Company invokes Section 450
(3)to ask the Court to direct a meeting of the scheme shareholders. It does not pursue its request that the Court order that there be a meeting of a single class of shareholders only. The Law
  1. It would be instructive to consider what are the principles which govern class composition and when and how they have been considered by courts in this jurisdiction in the past. In Re Colonia Insurance (Ireland) Ltd.2, Kelly J. (as he then was) set out the appropriate principles to be applied by the Court in considering whether or not to 1 2 Sovereign Life Assurance Company v Dodd [1892] 1 QB
  2. Re Colonia Insurance (Ireland) Ltd. [2005] 1 IR
  3. 5 sanction a scheme of arrangement. These have been approved and applied on numerous occasions by this Court.
  4. At paragraphs 11 to 12 of his judgment in Re Allergan plc3, Barniville J. (as he then was) states as follows: "
  5. The test to be applied by the court in deciding whether to sanction a scheme of arrangement is well established and has been considered and applied in a number of recent judgments of the Irish courts. In Re Colonia Insurance (Ireland) Ltd [2005] 1 IR 497 (“Colonia”), the High Court (Kelly J.) set out the test to be applied in the case of a scheme of arrangement in relation to a solvent company. The test was subsequently applied to takeover or acquisition schemes, such as the scheme at issue in the present case: In Re Depfa Bank plc [2007] IEHC 463 (“Depfa”) (Kelly J.) and In Re SCISYS Group plc [2019] IEHC 904 (“SCISYS”) (Barniville J.). The test has also been applied to schemes of arrangement providing for corporate restructuring in other situations (In Re UBS EFTs public limited company [2019] IEHC 860 (“UBS”) (Barniville J.) and to schemes of arrangement concerning insolvent companies (In Re Ballantyne plc [2019] IEHC 407 (Barniville J.)). I am satisfied that the test set out in Colonia and referred to, and applied, in those other cases is the appropriate test to be applied in considering the Company's application for court sanction in respect of the proposed scheme and I apply it here.
  6. In summary the test requires the court to be satisfied that the following five requirements have been fulfilled, namely, that: 3 Re Allergan plc [2020] IEHC
  7. 6
  8. Sufficient steps have been taken to identify and notify all interested parties;
  9. The statutory requirements and all directions of the court have been complied with;
  10. The class of members (in the case of a scheme of arrangement between the company and its members) has been properly constituted;
  11. There is no improper coercion of any of the members concerned; and
  12. The scheme is such that an intelligent and honest person, being a member of the class concerned, acting in his or her interest, might reasonably approve of it."
  13. It will be noted that the test requires that the Court be satisfied that "the class of members (in the case of a scheme of arrangement between a company and its members) has been properly constituted." These principles have been applied invariably in authorities dealing with applications for sanction, as can be seen from the following cases: Re Depfa Bank4, Re Millstream Recycling5, Re SCISYS Group plc6, Re UBS EFTs plc7, Re Allergan8, Re Nordic Aviation DAC9, Re Xtrackers (IE) plc10 and Re Dalata Hotel Group plc.11 Re Depfa Bank plc [2007] IEHC
  14. Re Millstream Recycling [2010] IEHC
  15. 6 Re SCISYS Group plc [2019] IEHC
  16. 7 Re UBS EFTs plc [2019] IEHC
  17. 8 Re Allergan [2020] IEHC
  18. 9 Re Nordic Aviation DAC [2023] 3 IR
  19. 10 Re Xtrackers (IE) plc [2020] IEHC
  20. 11 Re Dalata Hotel Group plc [2025] IEHC
  21. 4 5 7
  22. Only some of those cases involved a challenge to class composition. Some challenged the fairness of the scheme or perceived procedural deficiencies or other matters. However, in each case the Court acknowledged that it had to be satisfied as to the Colonia criteria.
  23. In Allergan, Barniville J. conducted a thorough analysis of the class composition criterion notwithstanding that, as he acknowledged at paragraph 28 of his judgment: "No objection has been taken by any person to the fact that the scheme meeting was conducted on the basis of a single class of members."
  24. At paragraph 30 of his judgment, Barniville J. stated as follows: "As discussed by me in UBS and in SCISYS, the leading statement on the question of the class composition of meetings is that made by Bowen LJ. in the English Court of Appeal in Sovereign Life Assurance Company v Dodd [1892] 1 QB 405, where he stated: “It seems plain that we must give such meaning to the term 'class' as will prevent the section being so worked as to result in confiscation and injustice, and that it must be confined to those persons whose rights are not so dissimilar as to make it impossible for them to consult together with a view to their common interest.”
  25. Barniville J. then went on to say as follows at paragraph 31: "The test has been considered and applied in numerous subsequent cases. The relevant principles were very helpfully summarised by Lord Millett in the Court of Final Appeal of Hong Kong in Re UDL Argos Engineering Ltd [2001] 8 HKCFA 54, by the English Court of Appeal in Re BTR plc [2000] 1 BCLC 740 and Hawk Insurance and by Lloyd J. in the English High Court in Re Equitable Life Assurance Society [2002] EWHC
  26. In that case the court noted that it was necessary to balance the power of the majority and that of the minority and stated that: “...whereas unnecessary subdivision of a class may thwart a proper scheme altogether because of a veto thereby afforded to a small minority, on the other hand if it is said that there has been a unfairness or oppression on the part of the majority in a larger undivided class, the control mechanism is the court's scrutiny at the sanction stage: See Re Hawk insurance Co Ltd... and Nordic Bank plc v International Harvester Australia Ltd...” [Paragraph 46 of the judgment in Equitable Life Assurance Society.]
  27. I am unaware of any authority in this jurisdiction in which class composition was raised as an issue at the convening stage. Mr. Skoczylas relied heavily on the judgment of Quinn J. in Re EFW21 Renewable Energy Limited
  28. In that case, a number of creditors opposed the making of a convening order. As Quinn J. put it at paragraph 4 of his judgment: “The principal ground of opposition was that the scheme circular exhibited by the Companies and intended to accompany the notification of meetings to consider and vote on the proposed scheme was manifestly deficient and did not 12 Re EFW21 Renewable Energy Limited [2023] IEHC
  29. 9 comply with the requirements of s. 452 concerning the information to be provided with a notice convening a meeting.”
  30. Quinn J. also commented at paragraph 5 of his judgment that: “Unusually therefore the convening hearing was a contested hearing.” The Court acknowledged at paragraph 131 of the judgment that: “No controversy was raised at the hearings regarding the proposal by the Companies that all of the scheme investors in each case comprise one class for the purpose of the scheme meetings.” The Court did, however, examine the issue briefly, applying the test in Sovereign Life Assurance -v- Dodd, ultimately approving the Company's decision that all of the scheme investors comprised one class.
  31. Mr. Skoczylas relied heavily on a passage cited in the judgment of Quinn J. at paragraph 24 of the judgment of Sir Alistair Norris in Re DTEK Energy BV [2022] 1 BCLC 247, which suggests that the function of the Court at the convening application requires it to consider “matters of class composition.” Mr. Skoczylas also referred to a further case cited by Quinn J. at paragraph 23 in his judgment, Re Noble Group Ltd13., in which Mr. Justice Snowden (as he then was), in discussing the function of a convening hearing, said: “The primary function of the convening hearing is to consider the question of the proper formulation of classes for the scheme meeting(s) that the court is 13 Re Noble Group (No. 1) [2019] 2 BCLC
  32. 10 being asked to order be convened... It is not, however, limited to that issue: other jurisdictional or quasi-jurisdictional issues may be raised.”
  33. Mr. Skoczylas also relies on a passage from O'Dea on Schemes of Arrangement: Law and Practice 2012 at paragraph 4.12, which suggests that the Court will look at “whether more than one meeting of creditors... is required and, if so, what is the appropriate composition of those meetings.” This last quote is attributed by O'Dea to Practice Statement (Companies Schemes of Arrangement) [2002] 3 All England Reports
  35. There is in fact a practice statement issued by the Judiciary of England and Wales of 18 September 2025 which updates previous practice statements regarding the practice and procedure regarding schemes of arrangement. This practice direction is lengthy and imposes onerous obligations on the Applicant in advance of the convening hearing. There is a specific duty to identify “any issues which may arise as to the proper constitution of the meeting(s) of members or creditors or which otherwise may affect the conduct of such meetings.”14 Issues as to the Court's statutory and international jurisdiction have to be identified and "any other issue which might lead the court to refuse to sanction the scheme or plan (other than issues going to the merits or fairness of the scheme or plan).”15 14 Judiciary of England and Wales, Practice Statement - Companies: Schemes of Arrangement and Restructuring Plans under Part 26 and 26A of the Companies Act 2006, 18 September 2025, at [12 (a)]. 15 Ibid, at [12 (e)]. 11
  36. There are then extensive obligations on the Applicant to “notify in writing any person affected by the scheme or plan”16 of a list of matters, including “the meetings of creditors and/or members which the applicant considers will be required and their composition.”17
  37. It is clear from this very lengthy and comprehensive practice direction that the courts in England and Wales require a very full hearing at the convening stage, with a full debate in relation to all procedural matters which affect the conduct of the scheme meeting, if such is required by any person affected by the scheme. The objective of the practice direction is expressed at paragraph 3 as follows: “The objectives of this Practice Statement are:
(1)to enable issues concerning the jurisdiction of the Court to sanction the scheme or plan, the composition of classes of creditors and/or members and the convening of meetings to be identified and, if appropriate, resolved early in the proceedings; and
(2)to facilitate the early identification and active case management of contested issues with a view to such issues being resolved in an efficient and orderly manner which involves a proportionate allocation of the Court's time and resources.”18 27. There is no such practice direction in this jurisdiction. The application by a company to convene a scheme meeting is more often than not an ex parte application. The Applicant usually grounds its application on a substantial affidavit which sets out the background to the matter, details of the scheme involved, the implications for members, creditors Ibid, at [13]. Ibid, at [13(c)]. 18 Ibid, at [3]. 16 17 12 and employees and other matters. The Court may, on an appropriate application, order under Section 450
(3)a scheme meeting of creditors or members. As we have seen, this was the original intention of the Applicant in the present case. Section 450
(5)is of particular importance here. It says as follows: “Without prejudice to the court's jurisdiction under section 453
(2)(c) to determine whether the scheme meetings that have been held comply with the general law referred to in subsection
(2), the court, in exercising its jurisdiction to summon meetings under subsection
(3), may, in its discretion, where it considers just and convenient to do so, give directions as to what are the appropriate scheme meetings that must be held in the circumstances concerned.”
  1. There are some important inferences to be drawn from this subsection:
  2. The Court “may, in its discretion, where it considers just and convenient to do so” ... give directions as to the scheme meetings to be held.
  3. The Court, therefore, has an unfettered discretion whether or not to direct what scheme meetings should take place.
  4. Any directions are “without prejudice to the Court's jurisdiction under Section 453
(2)(c),” i.e. whether the Court makes directions or not, it must still exercise its jurisdiction under Section 453
(2)(c) to sanction, or not as the case may be, the compromise or arrangement.
  1. As we have seen, the Colonia principles govern whether or not sanction of the scheme should be given. These principles include an examination of whether or not the class of 13 members has been correctly constituted. The Court is obliged to carry out this examination at the sanction application.
  2. It seems to me that case law from England and Wales relating to the application to convene a meeting must be approached with caution. There is no lengthy prescriptive practice direction in this jurisdiction, such as there is in England and Wales, which determines what issues must be addressed at the hearing of the application. Virtually all of the authorities in this jurisdiction on class composition deal with the issue pursuant to the Colonia principles at the sanction stage — not at the convening stage. Practical Considerations
  3. Counsel for the Applicant emphasised some practical difficulties which would result if the class composition issue were to be dealt with at the convening hearing. They may be summarised as follows:
  4. The hearing on the class composition issue would make it impossible, in practical terms, to have a scheme meeting on 30th July, as there would have to be further affidavits, written submissions, a hearing, a reserved judgment and possibly an appeal.
  5. There would be no certainty as to when the acquisition would be completed or as to whether the Applicant could comply with its indicative timetable in Schedule 1 to the agreement.
  6. All shareholders would have to be notified, as all would be as affected by the issue as Mr. Skoczylas and the other applicants. This would lead to more delay and expense, in circumstances where those shareholders will, in any event, be 14 notified of the scheme meeting and their right to oppose the scheme at the sanction application.
  7. As the Court is required by Colonia to consider class composition at the sanction stage, there is no guarantee that a shareholder who had not raised the issue at the convening stage would not raise it also at the sanction stage. In this way, the Applicant would have to address the issue twice.
  8. It is clear from proceedings 2026/165 COS that Mr. Skoczylas and the other applicants propose to challenge the scheme on grounds other than class composition. Paragraph 8 of the Originating Notice of Motion in that case seeks a declaration that PTSB provide the minority shareholders with “adequate information addressing specifically all the material aspects of the fairness of the proposed consideration to minority shareholders in PTSB, including an independent valuation.” At paragraph 25 et seq. of his grounding affidavit, Mr. Skoczylas addresses the theme “[S]eparately, the proposed acquisition of PTSB is a bad deal for PTSB shareholders.” It is clear from paragraph 27 of his affidavit that he considers that further information should be furnished by PTSB with a view to a likely challenge to the fairness of the scheme.
  9. Accordingly, if Mr. Skoczylas and the other applicants are to challenge the scheme, PTSB say that he should do so at one sitting rather than running part of his challenge before the scheme hearing and the other part after it at the sanction application.
  10. Mr. Skoczylas submits that not to determine the class composition issue in advance of the scheme meeting is contrary to fair procedure and would be a “travesty”. He is concerned that small shareholders will be less likely to vote in the event that there was 15 only one class of shareholders, as they may regard the attainment of a special majority by the Company in such circumstances as inevitable. The Applicant, however, says that this is purely "speculation" on Mr. Skoczylas's part. That is certainly the case, as no evidential basis has been proffered in support of this contention. Conclusion
  11. At the heart of any fair procedures argument lies the question of prejudice. There is something to be said for determining the issue of class composition before the scheme meetings. The issue would be determined, at least as far as the objections of Mr. Skoczylas and his fellow applicants would go. As things stand, the Company has withdrawn its request that the Court order that only one class of members be convened. It proposes to proceed on this basis and run the risk that the Court refuses to sanction the scheme on the basis that the Minister should have constituted a separate class. It is likely, therefore, that a doubt will remain over the validity of the scheme until the class composition issue is resolved at the sanction stage.
  12. As against that, the Court is bound to consider the class composition issue at the sanction stage in any event. There can be no suggestion that the Court will not conduct a close analysis based on evidence and submissions by all interested parties as to whether there should have been more than one class of member at the scheme meeting. It does not seem to me that, from the point of view of the parties or the Court, there is any difference between this issue being determined at the convening stage or at the sanction stage. The Court will conduct the same analysis. By doing so at the sanction 16 stage, the possibility of separate challenges at the convening application and the sanction application will be precluded.
  13. As the case law shows, Irish courts consider the question of class composition at the sanction stage. There is no recognised procedure, as there is in England and Wales, for doing so at the convening stage, although it is certainly the case that Section 450
(3)empowers the Court to order scheme meetings “to be summoned in such manner as the Court directs,” and in my view therefore has power to deal with the issue of class composition at the convening application stage if it so wishes. Nonetheless, I do not consider that I should depart from the usual practice of class composition issues being considered at the sanction stage rather than in advance of the scheme meeting. I do not consider that Mr. Skoczylas and the other applicants are prejudiced by such a procedure. The facts and legal issues surrounding class composition are the same whether argued before or after the scheme meeting.
  1. I do consider that the Applicant would be prejudiced by a hearing of the issue at the convening application which is likely to cause a level of doubt and uncertainty as to when or if the Company will be in a position to comply with its contractual obligations. I am concerned with the prospect of different challenges being brought at different times by shareholders who object to the scheme. It is far preferable to hear all challenges to the sanction of the scheme at the same hearing. 17
  2. The Company readily accepts that Mr. Skoczylas and the other applicants, and indeed any other shareholders who wish to challenge the Company's application for sanction, may do so at the hearing of the Company's application for sanction. Orders
  3. The Company has an application by Notice of Motion issued on 1 May 2026 for entry to the Commercial List. I am satisfied that I should accede to that application and will make the order pursuant to Order 63A Rule 1(b).
  4. I will make an order pursuant to Section 450
(3)of the 2014 Act directing the convening of the scheme meeting in the terms of paragraph 1 of the Originating Notice of Motion, and I will hear counsel in relation to the appropriate directions in relation to the notification and holding of the meeting. The relief at paragraph 2 of the Originating Notice of Motion pursuant to Section 450
(5)is not being sought. 40. I will hear the parties as to what order should be made in relation to the proceedings 2026/165 COS initiated by Mr. Skoczylas and the other applicants. 18

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