Mandatory Award of Costs on Interlocutory Injunctions under O.99 r.2(3): Philpott v Pepper Finance [2025] IEHC 274

Introduction

Philpott & Anor v Pepper Finance Corporation (Ireland) DAC & Anor [No. 2] ([2025] IEHC 274) was heard in the High Court of Ireland before Ms Justice Stack and delivered on 9 May 2025. The applicants, Liam Philpott and Anne Pounds, sought an order for costs arising from two layers of interlocutory relief—an interim injunction granted on 17 July 2024 and an interlocutory injunction granted on 3 April 2025. The defendants, Pepper Finance Corporation (Ireland) DAC and Colin Gaynor, resisted the costs application, arguing that costs should be reserved to the final trial or remain “in the cause.” The key issue was the proper interpretation and operation of Order 99, rule 2(3) of the Rules of the Superior Courts, as amended, which requires the High Court to award costs when determining interlocutory applications, unless injustice would result.

Summary of the Judgment

Justice Stack held that, under O. 99, r. 2(3), award of costs at interlocutory stage is mandatory unless it is impossible to do justice on the basis of the application alone. She rejected the defendants’ reliance on ACC Bank plc v Hanrahan [2014] IESC 40 to argue for a default position that costs should await trial. Instead, she found the defendants had acted unreasonably in contesting the interlocutory injunction, given the documentary evidence available on limitation and the absence of a clear loan offer letter. Accordingly, she awarded the plaintiffs their costs of the interim injunction, the interlocutory application, and the costs hearing on 7 May 2025, including today’s sitting.

Analysis

Precedents Cited

Order 99, r. 2(3) RSC 1986 (as amended by S.I. No. 584 of 2020)
Imposes a general rule that costs must be awarded on interlocutory applications unless it is not possible “justly to adjudicate upon liability for costs on the basis of the interlocutory application” alone.
Order 99, r. 3(1) RSC 1986 & section 169(1) Legal Services Regulation Act 2015
Requires the Court to consider success, conduct of the parties, reasonableness of raising or contesting issues, and other factors when awarding costs.
ACC Bank plc v Hanrahan [2014] IESC 40
Although concerned with summary judgment, Clarke J. likened costs principles for summary judgment motions to those for interlocutory injunctions. Para 10–14 were cited for the proposition that costs allocation may properly turn on whether a party acted unreasonably in resisting or pursuing an interlocutory application.

Legal Reasoning

Justice Stack’s analysis proceeded in three stages:

Mandatory Costs Rule: She began by reaffirming O. 99, r. 2(3)’s presumption in favour of immediate costs awards on interlocutory applications, subject only to the requirement of justice.
Role of Hanrahan: She rejected the defendants’ contention that Hanrahan mandates reservation of costs to trial, observing that Clarke J. expressly retained judicial discretion to penalize unreasonable interlocutory conduct.
Assessment of Reasonableness: Applying section 169(1) factors, she concluded that the defendants had unreasonably contested the injunction:
- No clear basis was shown for the critical loan offer terms or the “due date” of the mortgage debt.
- The limitation question and effect of an August 2012 letter raised serious issues properly determined at interlocutory stage.
- The defendants persisted in a “hard-fought” one-day hearing despite the modest claim and their failure on multiple points.
- Damages would have been an adequate alternative remedy for the plaintiffs.

Impact

This decision clarifies that:

Court costs for interlocutory injunctions must ordinarily be awarded immediately under O. 99, r. 2(3).
Parties resisting interlocutory relief risk a costs penalty if they unreasonably prolong or contest applications without a sound evidential or legal basis.
The court will scrutinize the available documentary evidence at interlocutory stage—especially where fundamental questions (e.g., limitation, validity of security) can be resolved without trial.
Defendants in mortgage enforcement cases should secure and review all original documentation (loan letters, payment records) before seeking possession or appointing a receiver, failing which they may face cost sanctions.

Complex Concepts Simplified

Interlocutory Injunction: A temporary court order preventing a party from acting (e.g., selling land) until the main dispute is heard.
Order 99, rule 2(3): Procedural rule requiring immediate costs awards on interlocutory applications unless doing so would be unjust.
Section 169(1) Legal Services Regulation Act 2015: Sets out factors for awarding costs—success, conduct, reasonableness, and related circumstances.
Statute of Limitations (Statute of Limitations 1957): Governs the time limit within which a party may bring a claim—once expired, the court may find the debt “statute barred” and unenforceable.

Conclusion

Philpott v Pepper Finance [2025] IEHC 274 establishes an important precedent on the application of O. 99, r. 2(3), reinforcing that costs awards on interlocutory applications are not a matter of judicial courtesy but of statutory obligation, with room only to decline costs when justice demands it. The judgment underscores the importance of parties conducting interlocutory proceedings reasonably and securing essential documentation before seeking drastic remedies, such as mortgage enforcement. Future litigants and practitioners should take heed: resisting an interlocutory injunction without firm evidential footing invites immediate cost penalties, and parties should be diligent in reviewing and producing the documentation that underpins their case.