Treasury Holings & Ors v The National Asset Management Agency & Ors

Factual and Procedural Background

The applicants ("Treasury") sought leave pursuant to sections 182 and 193 of the National Asset Management Agency Act 2009 ("the Act") and Order 84 of the Rules of the Superior Courts to challenge two decisions of the first and second named respondents ("NAMA") by way of judicial review. The application included an interlocutory relief request, primarily an injunction restraining receivers appointed by NAMA and the first named notice party, KBC Bank Ireland plc ("KBC"), from acting pending determination of the proceedings.

The leave application was initially made ex parte on 25th January 2012, with a motion returnable the next day. Subsequently, Ireland and the Attorney General were joined as respondents, and KBC, Irish Bank Resolution Corporation Limited ("IBRC"), and the receivers were joined as notice parties with no objection from Treasury.

The leave application hearing lasted six days. Treasury was granted leave on the majority of grounds advanced but refused on grounds alleging improper purpose and bad faith. The interlocutory relief application was discontinued during the hearing. The statement of grounds included claims for damages and declarations of unconstitutionality of certain sections of the Act, but these were not pursued at the oral hearing and not decided upon.

The present judgment concerns subsequent applications for costs following the determination of the leave application.

Legal Issues Presented

1. Whether Treasury is entitled to an order for its full costs of the leave application against NAMA and KBC.
2. The appropriate approach to costs orders for interlocutory applications for leave under the National Asset Management Agency Act 2009, particularly when the leave application is mandatory and includes interlocutory relief.
3. The extent to which costs should be apportioned where some grounds for leave were refused and interlocutory relief was discontinued.
4. Whether the State (Ireland and the Attorney General) is entitled to costs against Treasury for defending aspects of the leave application relating to declarations of unconstitutionality and interlocutory relief.

Arguments of the Parties

Applicants' (Treasury) Arguments

• Sought an order for full costs of the leave application against NAMA and KBC.
• Submitted that any reduction in costs due to not pursuing interlocutory relief or failure on improper purpose and bad faith grounds should be limited to approximately one-fifth.
• Argued that the leave application was effectively a five-day hearing, although transcripts showed six days including a half-day.

Respondent NAMA's Arguments

• Submitted that there should be no order for costs between itself and Treasury regarding the leave application.
• Alternatively, requested that Treasury's costs be reserved or that costs be in the cause.
• Did not seek an order for its own costs.

Respondent KBC's Arguments

• Submitted that there should be no order for costs between itself and Treasury.
• Did not seek any order for its own costs.

State's (Ireland and Attorney General) Arguments

• Applied for an order for costs against Treasury based on a four-day hearing.
• Relied on the fact that their involvement was primarily due to the interlocutory injunction application and Treasury’s reliance on the principles in Pesca Valencia Ltd. v. Minister for Fisheries [1985] IR 193.

Table of Precedents Cited

Court's Reasoning and Analysis

The Court recognized that the leave application was a mandatory step governed by ss. 182 and 193 of the Act and Order 84 of the Rules of the Superior Courts. It acknowledged the long-standing practice of reserving costs of leave applications to the ultimate determination of the judicial review proceedings, especially when leave is granted ex parte.

However, the Court noted the complexity arising when leave applications are made on notice and contested, as here. It considered that respondents have a genuine choice to contest or not, and if a respondent contests unsuccessfully, the Court may order costs immediately for additional expenses caused by contest.

The Court divided Treasury's costs into four categories: those incurred regardless of opposition, costs related to interlocutory relief not pursued, costs arising from contest by NAMA and KBC, and costs related to unsuccessful or unpursued grounds (improper purpose, bad faith, damages, unconstitutionality).

Balancing these factors, including costs incurred by NAMA and KBC for interlocutory relief and unsuccessful grounds, the Court concluded that Treasury was entitled to 50% of its costs of the leave application as costs in the cause against NAMA and KBC. This means these costs will be recoverable if Treasury ultimately succeeds in the substantive proceedings but not otherwise.

Regarding the State's costs, the Court found Ireland and the Attorney General entitled to reasonable costs for defending the interlocutory application and constitutional declaration aspects, based on a four-day hearing. The Court emphasized the difficulty of compartmentalizing costs when a party is involved only in part of the proceedings and invited parties to agree on quantum or make submissions.

Holding and Implications

Holding:

• Treasury is entitled to 50% of its costs of the leave application as costs in the cause against NAMA and KBC.
• An order is made in favour of Ireland and the Attorney General against Treasury for their reasonable costs defending the interlocutory application and the constitutional declaration aspects of the leave application, based on a four-day hearing.

Implications: This decision apportions costs in judicial review leave applications where leave is contested on notice and interlocutory relief is sought but not pursued. It underscores that costs of mandatory leave applications are generally reserved to the substantive hearing outcome, but immediate costs orders may be appropriate for additional expenses caused by contest or interlocutory applications. The ruling does not establish new precedent but applies existing principles to a complex statutory and procedural context. The costs awarded are conditional on the ultimate success of Treasury in the substantive proceedings, and no order for costs is made against Treasury in respect of the leave application if Treasury is unsuccessful.