Introduction

The case of Thompson & Anor v. Tennant & Anor (Approved) [2020] IEHC 693 was adjudicated in the High Court of Ireland on December 17, 2020. This case primarily revolved around the awarding of costs associated with an interlocutory injunction. The plaintiffs, Emma Thompson and Beautiful Minds Creche and Montessori Limited, sought costs following the successful grant of an interlocutory injunction against the defendants, Stephen Tennant and Promentoria (Aran) Limited. The defendants contested the awarding of costs, arguing for reservation to the trial or costs in the cause, referencing recent jurisprudence to support their position.

Summary of the Judgment

Justice Nuala Butler delivered the judgment, addressing the plaintiffs' application for costs under Order 99, Rule 3(1) of the Rules of the Superior Courts and Section 169(1) of the Legal Services Regulation Act, 2015. The High Court assessed whether costs should follow the event based on the interlocutory injunction granted. The court ultimately ruled in favor of the plaintiffs, ordering the award of costs against the defendants for the interlocutory application. However, considering the ongoing litigation and the possibility of differing outcomes at trial, the execution of the cost order was stayed pending the trial's conclusion.

Analysis

Precedents Cited

The judgment extensively referenced prior cases that have shaped the understanding of costs in interlocutory injunctions:

• AIB v Diamond [2011] IEHC 505: This case highlighted the distinction between interlocutory applications that resolve issues based on factual assertions and those that leave substantive facts to be determined at trial.
• Tekenable Limited v Morrissey [2012] IEHC 391: Reinforced the principles laid out in AIB v Diamond, particularly concerning when costs can be adjudicated at the interlocutory stage.
• ACC v Hanrahan [2014] IESC 40: Further clarified the application of costs in interlocutory matters, particularly differentiating between cases that could foreseeably have different outcomes at trial.
• Hafeez v CPM Consulting Limited [2020] IEHC 583: Introduced the concept of "calibrated" cost orders, although the defendants in the current case did not successfully argue its applicability.
• Glaxo Group Limited v Rowex Limited [2015] IEHC 467: Provided examples where costs follow the event when issues are not revisited at trial.
• Downes and Howard Limited & Ors v Everyday Finance DAC [2020] IEHC 388: Further exemplified the application of costs following the event in interlocutory settings.

Legal Reasoning

The court's legal reasoning centered around the principle that costs should follow the event, as codified in Section 169(1) of the Legal Services Regulation Act, 2015. The High Court examined whether it was justly possible to adjudicate on costs at the interlocutory stage under Rule 99, considering the specific circumstances of the case.

Justice Butler analyzed the plaintiffs' arguments, noting that while one of the issues raised would be revisited at trial and could potentially alter the outcome, the other issue was based on undisputed documentation. This dual nature meant that at least part of the application's costs could be justly determined without awaiting the trial's outcome.

The defendants' reliance on previous judgments suggested that in cases where interlocutory matters heavily depend on factual determinations to be made at trial, costs should be reserved. However, the court found that in this case, it was feasible to assess costs at the interlocutory stage because not all issues were contingent on future factual findings.

Moreover, the court dismissed the defendants' attempt to broaden the interpretation of "justly adjudicate" to mean deferring cost decisions until trial, underscoring that the primary consideration was the possibility of a just determination at the interlocutory stage itself.

Impact

This judgment reinforces the statutory framework that governs cost awards in interlocutory injunctions, particularly emphasizing that costs generally follow the event unless compelling reasons exist to defer the decision to trial. By staying the execution of the cost order pending trial, the court balanced the immediate awarding of costs with the equitable considerations of ongoing litigation.

Future cases involving interlocutory injunctions can look to this judgment for guidance on when courts may exercise their discretion to award costs at the interlocutory stage versus reserving such decisions for the trial's conclusion. It also clarifies the limited circumstances under which defendants can successfully argue against the immediate awarding of costs.

Complex Concepts Simplified

Interlocutory Injunction

An interlocutory injunction is a temporary court order granted before the final resolution of a case, aiming to maintain the status quo and prevent potential harm that could occur if the injunction is not in place during the proceedings.

Costs Follow the Event

This legal principle dictates that the losing party in a lawsuit is typically responsible for paying the legal costs of the winning party. In the context of interlocutory applications, it means that costs are awarded based on the outcome of that specific application.

Order 99, Rule 3(1)

A provision in the Rules of the Superior Courts that governs the awarding of costs in various stages of legal proceedings, integrating statutory principles into the court's consideration of cost awards.

Stay of Execution

A court order that temporarily halts the enforcement of a judgment or order until further clarification or resolution occurs, such as the conclusion of a trial.

Conclusion

The High Court's decision in Thompson & Anor v. Tennant & Anor underscores the judiciary's commitment to the principle that costs should follow the event in interlocutory injunctions. By awarding costs to the plaintiffs while staying execution pending trial, the court balanced immediate equitable relief with the uncertainties inherent in ongoing litigation. This judgment serves as a significant reference point for future cases, clarifying the application of cost principles at different stages of legal proceedings and reinforcing the statutory provisions that guide such decisions.