D v D

Factual and Procedural Background

This Supreme Court judgment concerns only the allocation of legal costs arising out of long-running matrimonial litigation between the parties. The High Court had previously ordered that the Applicant was to receive 80 % of the costs of a five-day hearing and 80 % of outstanding interlocutory costs. The Appellant challenged that award. A joint substantive decision on the division of assets had already been delivered in D. v D. [2015] IESC 16. The present opinion (principally by Judge Clarke with a separate concurring/dissenting opinion by Judge MacMenamin) addresses:

• Whether the High Court’s costs order should be varied.
• How the costs of the Supreme Court appeal itself should be distributed.

Legal Issues Presented

1. What default approach should a court adopt when allocating costs in family law proceedings that involve an equal or near-equal division of assets?
2. How, and to what extent, should the Veolia principles on unmeritorious conduct alter that default position?
3. Did the High Court err in principle by awarding the Applicant 80 % of the costs of the substantive hearing and interlocutory applications?
4. How should the costs of the present appeal be apportioned between the parties?

Arguments of the Parties

Appellant's Arguments

• The trial judge wrongly began from the premise that the Applicant should obtain costs and then applied an arbitrary reduction; the correct starting point should have been that each party bear their own costs.
• Most of the five-day hearing was prolonged by issues (notably capital gains tax) advanced unsuccessfully by the Applicant; consequently, any uplift in costs lay at her door.
• The Applicant’s financial position (liquid assets and a secure public-sector pension) meant she was better placed to absorb her own costs, whereas the Appellant’s assets were primarily tied up in his home, business premises and farmland.
• Several interlocutory applications had been caused by the Applicant’s litigation tactics, so the Appellant should not be penalised for their expense.

Applicant's Arguments

• The Appellant’s obstruction of court-ordered asset sales (e.g. erecting signs, placing gravel on access roads) had protracted proceedings and markedly increased costs.
• The High Court was entitled to treat such conduct, together with repeated non-compliance with orders, as justification for departing from an equal-costs approach and for awarding the majority of costs to the Applicant.
• Under Veolia, costs can be adjusted to reflect unmeritorious conduct, and the Appellant’s actions clearly met that threshold.

Table of Precedents Cited

Court's Reasoning and Analysis

Judge Clarke agreed with Judge MacMenamin that family law cases require a modified approach to costs because any order directly reduces the assets available for distribution. He distilled the reasoning into the following steps:

1. Default Position. In cases of broadly equal division of resources, the starting point should be “no order as to costs,” each party bearing its own costs.
2. Departure via Veolia. The court may depart from that default when unmeritorious conduct by a party has clearly and materially increased overall costs. The trial judge has a wide “margin of appreciation” in deciding how to quantify the departure.
3. Error in the High Court. The High Court judge began from the wrong premise—granting the Applicant 80 % of costs and then reducing them—rather than starting from “each bear own costs” and adding or subtracting by reference to conduct.
4. Three-Way Cost Segmentation. On the evidence, the Supreme Court identified: (a) 20 % of costs inevitable in any event; (b) 20 % attributable to unmeritorious issues raised by the Applicant; and (c) 60 % attributable to unmeritorious issues or obstruction by the Appellant.
5. Set-Off Mechanism. Applying those percentages, each party bears the inevitable 20 % of its own costs; the Appellant recovers 20 % of his costs from the Applicant; the Applicant recovers 60 % of her costs from the Appellant, producing a net 40 % recovery for the Applicant.
6. Appeal Costs. The substantive appeal (first day) failed; hence the Applicant is entitled to those costs. The Appellant succeeded on the costs issue heard on a separate second day and is entitled to those costs. The two sums are to be set off.

Holding and Implications

Holding: The Supreme Court ALLOWED IN PART the Appellant’s challenge to the High Court costs order. The substituted orders are:

• High Court: Applicant to recover a net 40 % of her High Court costs after set-off.
• Interlocutory matters: Same 40 % approach applied.
• Supreme Court: Applicant awarded costs of the substantive appeal; Appellant awarded costs of the separate costs-day hearing; the two awards to be set off and taxed in default of agreement.

Implications: The judgment clarifies that in family law cases involving equal asset distribution, “no order as to costs” is the presumptive starting point. Courts may then adjust that position—upwards or downwards—by applying the Veolia test of demonstrably increased costs through unmeritorious conduct. The decision reinforces trial judges’ broad discretion but also signals appellate willingness to intervene where the wrong starting premise is adopted. No new substantive precedent was set, but existing cost-management principles were refined and restated.