Irish Bacon Slicers Ltd v Weidemark Fleischwaren GMBH & Co

Factual and Procedural Background

The Plaintiff company received a letter dated 14th June 2013 from solicitors representing the Defendant company demanding payment of nearly €800,000, threatening High Court proceedings and reserving the right to petition for the winding up of the Plaintiff company if payment was not made by 19th June 2013. The Plaintiff denied owing the sum or any sum to the Defendant and requested the basis for the claim, also seeking an undertaking that no winding-up petition would be presented. The Defendant did not provide such an undertaking. Consequently, the Plaintiff initiated proceedings seeking an interlocutory injunction to restrain the Defendant from presenting a winding-up petition. After affidavits were filed by both parties, the matter was listed before a judge on 23rd July 2013, where the Defendant, through counsel, offered an undertaking not to present a winding-up petition pending substantive proceedings to recover the debt. The Plaintiff accepted the undertaking but sought its costs of the interlocutory injunction motion. The issue of costs was reserved for determination by the current judgment.

Legal Issues Presented

1. Whether the Plaintiff is entitled to its costs of the interlocutory injunction motion following the Defendant’s undertaking to refrain from presenting a winding-up petition.
2. How the Court should apply Order 99 Rule 1(4A) of the Rules of the Superior Courts (RSC) concerning costs awards on interlocutory applications where the matter is resolved by an undertaking rather than a court determination.

Arguments of the Parties

Appellant's Arguments (Plaintiff)

• Costs should follow the event under Order 99 RSC, with the event being the Defendant’s undertaking which satisfied the Plaintiff’s original request.
• The undertaking was not the result of negotiation but a unilateral concession by the Defendant at the hearing.
• The Defendant was aware the claim was contested and should have given the undertaking earlier, avoiding the need for injunction proceedings.
• The threat to present a winding-up petition was serious and potentially abusive given the lack of a contractual relationship and the absence of grounds for winding up.
• The Plaintiff was justified in seeking interlocutory relief to protect its reputation and prevent abuse of process.

Respondent's Arguments (Defendant)

• The Defendant took a pragmatic approach by giving the undertaking and pursuing the debt claim through ordinary proceedings.
• There has been no 'event' for costs to follow, as the substantive issues remain undetermined.
• The undertaking should not be seen as a concession of the Plaintiff’s non-indebtedness; the Defendant maintains the Plaintiff owes the money and has no bona fide defence.
• Costs of the interlocutory injunction should be reserved until the substantive debt claim is resolved.

Table of Precedents Cited

Court's Reasoning and Analysis

The Court examined the procedural history and the relevant provisions of Order 99 Rule 1 of the Rules of the Superior Courts, particularly the 2008 insertion of Rule 1(4A), which requires the Court to make an award of costs upon determining interlocutory applications unless it would be unjust to do so. The Court rejected the Defendant’s submission that no 'event' had occurred to trigger costs, reasoning that the acceptance of the Defendant’s undertaking by the Court constituted a determination of the application, effectively ending it.

The Court distinguished prior cases where costs were reserved due to negotiated settlements or discontinuances, emphasizing that here the Defendant unilaterally offered the undertaking only at the hearing, after the Plaintiff had repeatedly sought it. It found that the Plaintiff was justified in seeking interlocutory relief to prevent an abusive winding-up petition, and that the Defendant’s delay in providing the undertaking caused unnecessary proceedings and costs.

Furthermore, the Court interpreted the new rule as not requiring costs to follow any specific event but rather empowering the Court to exercise its discretion to award costs upon determination of interlocutory applications. The Court concluded that awarding costs to the Plaintiff was just, given the circumstances.

Holding and Implications

The Court awarded costs of the interlocutory injunction motion to the Plaintiff.

The direct effect of this decision is that the Defendant must pay the Plaintiff’s costs incurred in the interlocutory injunction proceedings. The Court emphasized that the Plaintiff was entitled to costs despite the absence of a formal hearing on the merits because the Defendant’s unilateral undertaking effectively resolved the motion. No new precedent was established beyond affirming the Court’s discretion under the amended Order 99 Rule 1(4A) RSC to award costs upon interlocutory applications concluded by undertakings rather than court determinations.