CLM Properties Ltd v Greenstar Holdings Ltd & Ors

Factual and Procedural Background

This judgment concerns costs following a preliminary issue decided by the High Court on 8th April 2014 in a dispute between the Plaintiff and the third named Defendant (the Bank). The preliminary issue addressed the interpretation of section 53A of the Waste Management Act 1996, specifically whether monies collected under that provision were required by law to be used solely for landfill closure and aftercare. The Bank was successful on this issue and now seeks an order for costs against the Plaintiff, including costs related to an additional hearing concerning a request for a reference to the Court of Justice of the European Union (CJEU) under Article 267 of the Treaty on the Functioning of the European Union (TFEU). The Plaintiff contends that the Environment (Miscellaneous Provisions) Act 2011 applies, meaning each party should bear its own costs and no order for costs should be made.

Legal Issues Presented

1. Whether the proceedings instituted by the Plaintiff fall within the scope of section 4(1)(a) of the Environment (Miscellaneous Provisions) Act 2011, i.e., whether they are "for the purpose of ensuring compliance with or the enforcement of a statutory requirement" and whether any failure to ensure such compliance has caused, is causing, or is likely to cause environmental damage.
2. Whether section 3(1) of the 2011 Act, which requires each party to bear its own costs in applicable proceedings, applies to the present case.
3. In the event section 3(1) does not apply, whether the Court should exercise its discretion under Order 99 of the Rules of the Superior Courts to award costs to the Bank.

Arguments of the Parties

Appellant's Arguments (Plaintiff)

• The proceedings are subject to section 3 of the Environment (Miscellaneous Provisions) Act 2011, which mandates that each party bears its own costs in relevant environmental proceedings.
• The nature of the proceedings objectively falls within the scope of section 4(1)(a) of the 2011 Act as they relate to enforcement of statutory requirements linked to environmental protection.
• Given this, the Court should make no order for costs regarding the preliminary issue.

Appellee's Arguments (Bank)

• The Court should follow the approach in Rowan v. Kerry County Council [2012] IEHC 544, considering not only the pleadings but the reality and substance of the proceedings to determine if they are for ensuring compliance with statutory requirements causing environmental damage.
• The proceedings are not genuinely for enforcement or compliance with statutory requirements but are instead aimed at recovering monies allegedly owed to the Plaintiff by the first and second Defendants.
• Therefore, section 3(1) of the 2011 Act does not apply and the Bank is entitled to costs under the Rules of the Superior Courts.

Table of Precedents Cited

Court's Reasoning and Analysis

The Court began by examining the statutory framework of the Environment (Miscellaneous Provisions) Act 2011, particularly sections 3 and 4, which govern costs in environmental proceedings. Section 3(1) mandates that each party bear its own costs in proceedings for enforcing statutory environmental requirements, provided certain conditions are met. Section 4(1)(a) defines the scope of such proceedings as those instituted to ensure compliance with statutory requirements whose breach causes or may cause environmental damage.

The Court acknowledged that the conditions in section 4(1) are cumulative and must be objectively satisfied. Relying on Rowan v. Kerry County Council, the Court emphasized the importance of assessing the reality and substance of the proceedings, not merely the pleadings, to determine whether the proceedings genuinely seek enforcement of a statutory environmental obligation.

Applying this test, the Court found that the Plaintiff's proceedings were primarily aimed at recovering monies allegedly owed for work done at landfill sites, rather than enforcing compliance with statutory environmental obligations. The alleged statutory breaches were part of the legal foundation for the financial claim, not the purpose of the proceedings. The Plaintiff was also aware of the insolvency of the first and second Defendants and the appointment of a Receiver by the Bank, indicating a commercial recovery focus.

Consequently, the Court concluded that section 3(1) of the 2011 Act did not apply. Therefore, the Court exercised its discretion under Order 99, starting from the principle that costs follow the event. Although the Plaintiff’s participation in the preliminary issue was secondary to that of the Environmental Protection Agency in related proceedings, the Plaintiff chose to participate and could have awaited the outcome in those proceedings. Accordingly, the Court ordered that the Plaintiff pay the Bank’s costs of the preliminary issue, including costs related to the Article 267 reference application, to be taxed in default of agreement.

Holding and Implications

The Court held that section 3(1) of the Environment (Miscellaneous Provisions) Act 2011 does not apply to these proceedings. As a result, the Plaintiff is ordered to pay the costs of the preliminary issue to the Bank, including costs related to the Article 267 reference hearing.

This decision directly affects the parties by reversing the Plaintiff’s contention that each party should bear its own costs under the 2011 Act. The ruling clarifies that proceedings primarily aimed at financial recovery, even if involving statutory obligations, do not attract the costs protections of the 2011 Act. The Court did not establish new precedent beyond applying existing statutory interpretation and case law principles.