Factual and Procedural Background
The proceedings originated from a specific performance action initiated by the Plaintiff concerning the sale of licensed premises. The Defendant consented to judgment for €49,541 on 16th June 2008. Costs taxed on 5th December 2009 amounted to €41,109, making the total sum owed by the Defendant to the Plaintiff €90,650. A judgment mortgage was registered against the Defendant’s interest in his family home in February 2011. The Defendant made partial payments in 2010 and 2012. The Plaintiff commenced further proceedings by special summons in May 2011, seeking a well charging order and an order for sale of certain premises.
The Plaintiff experienced difficulties with service, but the High Court granted a well charging order in January 2012, subsequently amended in March 2012. The matter appeared multiple times before the Examiner’s List between August 2012 and March 2013, during which the Defendant sought time to address the debt. The Plaintiff issued a motion for possession in September 2013, which was adjourned three times. The matter was heard in April 2014 and adjourned for mention in May 2014. By then, the Defendant had sold two sites and paid €75,655, with a remaining balance of €5,006 paid in November 2014. The Defendant’s illness between 2010 and 2011 contributed to delayed payments. Interest payments totaling approximately €28,000 were also made.
At the hearing on 3rd November 2014, the only issue remaining was the costs of the 2011 well charging proceedings and motion for possession. The motion was struck out, and judgment mortgages were about to be discharged. Counsel for the Defendant argued no order for costs should be made or, alternatively, that costs be measured at €8,000. Counsel for the Plaintiff submitted a bill of costs claiming €47,000 and urged a standard order for taxed costs. Barrett J. measured costs at €20,000, including VAT. The Plaintiff appealed this decision, contending the judge erred in law and should have ordered taxation of costs.
Legal Issues Presented
- In what circumstances is it appropriate for the High Court to measure costs pursuant to Ord. 99, r.5(2)(a) of the Rules of the Superior Courts 1986?
- Whether the trial judge erred in law by measuring costs at €20,000 without ordering taxation or affording the parties an opportunity to make submissions.
Arguments of the Parties
Appellant's Arguments
- The trial judge had no proper basis to measure costs at €20,000.
- The judge should not have adjudicated on an appropriate sum without ordering taxation of costs.
- The Plaintiff maintained that costs should follow the normal order and be taxed in the usual manner.
Respondent's Arguments
- The trial judge was entitled to measure costs to avoid the additional transaction costs and delays associated with taxation.
- Measuring costs was within the court’s jurisdiction and discretion under the relevant rules.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Taaffe v. McMahon [2011] IEHC 408 |
Clarification of the jurisdiction and appropriate exercise of discretion for measuring costs in straightforward cases to avoid costly taxation. |
Used as leading authority to explain the purpose of the measured costs jurisdiction and to distinguish the present case as more complex than the straightforward case in Taaffe. |
| Leary v. Leary [1987] 1 All E.R. 261 |
A judge must not arbitrarily fix a figure for costs without any indication or evidential basis. |
Emphasized that the power to measure costs must be exercised judicially and with some objective basis, which was lacking in the present case. |
Court's Reasoning and Analysis
The Court acknowledged that the jurisdiction to measure costs under Ord. 99, r.5(2)(a) is well-established and intended to bring finality to litigation by avoiding protracted and costly taxation processes, especially in straightforward cases. The Court relied on the reasoning in Taaffe v. McMahon, where a judge may make an “educated estimate” of costs in simple cases. However, the Court found that the present case was not straightforward due to multiple applications over three years and complexity involved.
The trial judge lacked sufficient material to make a proper assessment of the costs to be measured. The Court noted that Ord. 99, r.5(3) permits the court to require parties to produce estimates of costs, which was not done here. Furthermore, the judge did not indicate an intention to measure costs or provide the parties an opportunity to make submissions on this departure from the usual order that costs follow the event and be taxed.
Consequently, the Court held that Barrett J. erred in measuring costs in the manner and circumstances without proper procedure and evidential basis. The exercise of discretion to measure costs must be judicial, informed, and fair to all parties, especially the party adversely affected.
Holding and Implications
The Court ALLOWED THE APPEAL and substituted the High Court’s order for measured costs of €20,000 with an order for payment of the Plaintiff’s taxed costs.
This decision directly affects the parties by requiring costs to be taxed rather than measured in gross. The Court did not establish a new precedent but reinforced the principle that measuring costs requires proper procedure, evidential basis, and fairness to all parties.