Irish investors who lost money in a Polish supermarket venture they invested in through Castle Carbery Properties Limited can now pursue a €6.3m judgment against Castle Carbery’s founder Michael Scully.

On Monday, the Supreme Court overruled a decision made in the Court of Appeal that blocked a group of investors from enforcing a judgment here in Ireland, the judgment having been gained in a Polish Court.

The decision means that the €6.3m judgment made against Michael Scully in Poland can now be pursued by the 63 members of Coucal Limited.

In his judgment, chief justice Donal O’Donnell explains how in 2006, Castle Carbery Properties Limited, owned by husband and wife Michael and Helen Scully of Ardfield, Clonakilty, created a special purpose vehicle fund named Coucal SPV. Through this fund, 78 investors invested in the purchase of land and the development of a shopping centre at Opole in Poland.

The judgment continues “however, the investment was unsuccessful, in circumstances however, where the investors claimed Mr Scully had nevertheless benefited from the transaction, while the investors experienced total loss”.

Sixty-three of the investors set up an Irish company named Coucal Limited, mirroring the name of the SPV, with the intention of taking action against Mr Scully in Poland.

In 2021, the Polish Court of Appeal found in favour of Coucal, awarding approximately €6.33m.

The court found that Mr Scully had wrongfully and without authority purported to enter into agreements on behalf of Coucal shareholders.

Coucal then sought to enforce that judgment in Ireland. Mr Scully contested on grounds that assignment of the debt to Coucal savoured champerty under Irish law, which prohibits third-party funding of legal actions in exchange for a share of the proceeds.

While Mr Scully failed in his action in the High Court, justice Aileen Donnelly found in Mr Scully’s favour in the Court of Appeal last year.

Now the Supreme Court has reversed that decision. Five judges presided over the case, with written judgments from both chief justice Donal O’Donnell and justice Gerard Hogan. There was no dissenting voice among the five justices.

Chief justice O’Donnell stated that “the present circumstances had none of the characteristics of commodification or trading in litigation that underpin the public policy objection in Irish law in this area” and that “no onward assignment to an unconnected third party had in fact taken place in the circumstances”.

Justice Gerard Hogan held that “the court should not refuse to recognise the Polish judgment for reason of the existence of the assignment agreement and accordingly allowed the appeal, subject to a caveat concerning further submissions on the Polish independence/rule of law issue.”

Michael Scully still maintains a high-profile within the Irish agri-business sector. In 2016, he founded Clonakilty Distillery.

Simon Coveney, then Tánaiste and Foreign Affairs Minister, performed the opening ceremony in 2019.