A Cork dairy farmer turned developer will not be compelled to pay €6.3m to the Irish shareholders who invested in a shopping centre in Poland.

Michael Scully was successful in his appeal against Coucal, a group of Irish investors, who had invested “considerable sums” in the form of share capital in the project with a company owned by Scully, from Ardfield, Clonakilty, and his wife Helen Scully, called Castle Carbery Properties Ltd.

They said they had invested their money in a Polish special purpose vehicle, which was to undertake the construction project.

It borrowed around €48m and it was expected that the shopping centre would be completed in 2009.

In 2010, the investors, it is alleged, expected a return on their investment.

They allege that they were defrauded by Scully when he induced them to divest themselves of their investments in the shopping centre, on terms which the court judgment states were “very unfavourable to them and very favourable to Scully”.

The investors, some of them farmers, say they have never received any proceeds of the investments, including from the sale of the shopping centre in March 2015.

In June of 2021, the Warsaw Court of Appeal found that Scully had wrongfully and without authority purported to enter into agreements on behalf of Coucal shareholders and awarded judgment against Scully to the sum of approximately €6.3m.

It was this judgment that Coucal sought to enforce in the courts in Ireland and in July 2021, Coucal notified Scully that it intended to commence enforcement proceedings in Ireland against his assets, including his farm in Cork.

Scully claimed that the judgment issued in Poland against him violates Irish public policy in two ways.

Irish law

He argued that the assignment of the debt to Coucal savoured champerty under Irish law, which prohibits third-party funding of legal proceedings for a percentage of the outcome.

He also said the judgment issued by a court in Poland was contrary to the principle of judicial independence.

In her judgment issued on 30 April, Justice Aileen Donnelly, ruling on behalf of the Court of Appeal, allowed the appeal in relation to the champerty argument put forward by Scully, ruling in his favour.