The National Museum of Ireland v The Minister for Social Protection

Factual and Procedural Background

This case arises from an appeal pursuant to section 327 of the Social Welfare Consolidation Act 2005 concerning the employment status of the Notice Party. The Applicant challenged the Respondent’s decision that the Notice Party was in insurable employment. The Court previously set aside the Respondent’s decision and remitted the issue for further consideration. Three issues were before the Court:

• whether the Notice Party’s employment status was res judicata due to a prior decision by a rights commissioner;
• whether there was a want of fair procedures, including failure to consider all relevant evidence and failure to give reasons;
• whether there was a breach of the principle of audi alteram partem due to the Applicant not being allowed to address certain evidence.

The Court rejected the res judicata argument but upheld the claims relating to fair procedures and breach of audi alteram partem. The present judgment concerns a costs application following that decision.

Legal Issues Presented

1. Whether the general rule that costs follow the event should be departed from because both parties are emanations of the State.
2. Whether the Applicant is entitled to costs despite losing on the res judicata issue but succeeding on the alternative grounds.
3. Whether the Notice Party is entitled to a costs award.

Arguments of the Parties

Applicant's Arguments

• The Applicant contends that the successful party is normally entitled to costs and this entitlement should only be departed from where special circumstances exist.
• Being an emanation of the State does not constitute a special circumstance to displace the general rule on costs.
• The Applicant’s funding is largely from the State, and denial of costs would negatively impact its budget and statutory functions.
• The Applicant argues that the Respondent’s decision-making process is statutory and that there is no statutory mechanism to offset costs between State bodies.
• The Applicant relies on precedent that any special category exempting State parties from costs must be created by legislation, not courts.
• The Applicant emphasizes that it succeeded on the core issue of lawfulness despite losing the res judicata point.
• The Applicant submits that the res judicata issue constituted only a small part of the hearing and that a split order on costs is not appropriate.
• The Applicant requests a costs order against the Respondent and partial costs for the Notice Party, as her participation was necessary due to the res judicata plea.

Respondent's Arguments

• The Respondent submits that no order as to costs should be made because the Applicant lost on the res judicata issue, which was a significant part of the hearing.
• The Respondent argues that the Court should consider each issue separately under the relevant procedural rule and offset costs accordingly.
• The Respondent refers to a case where costs were refused against an impecunious litigant but does not provide substantive authority on the issue of State parties litigating each other.
• The Respondent suggests the Applicant’s pleadings were prolix, noting abandonment of many grounds on the hearing’s first day.

Table of Precedents Cited

Court's Reasoning and Analysis

The Court acknowledged the general rule that the successful party is entitled to costs and that exceptions require special circumstances supported by reasoned basis. It considered whether the fact that both parties are emanations of the State constituted such a special circumstance. The Court recognized the undesirable nature of State bodies litigating each other due to public resource burdens, but held that this issue is for the executive and legislature to address, not the courts. There is no statutory or judicial basis to depart from the general rule on this ground.

The Court analyzed the parties’ successes and failures on the issues. The Applicant failed on the res judicata issue but succeeded on the core issues of fair procedures and breach of audi alteram partem. The Court found that approximately 25% of hearing time was devoted to the unsuccessful res judicata argument and that the Applicant abandoned many pleaded grounds, which materially affected costs.

Applying the principles from Veolia Water, the Court concluded that the Applicant’s partial failure justified a reduction of the costs award by 25%. Regarding the Notice Party, the Court found her participation necessary due to the Applicant’s res judicata plea, which, if successful, would have severely prejudiced her interests. Consequently, the Court awarded the Notice Party 25% of her costs to be paid by the Applicant.

Holding and Implications

The Court awarded costs to the Applicant against the Respondent, subject to a 25% reduction to reflect the partial failure on the res judicata issue and abandonment of grounds. The Court also awarded 25% of the Notice Party’s costs against the Applicant, recognizing the necessity of her participation.

The Court held that the status of the parties as emanations of the State does not amount to a special circumstance permitting departure from the general rule that costs follow the event. The Court emphasized that resolution of intra-State disputes and costs allocation remains a matter for the executive and legislature. No new precedent altering the general principles on costs was established; the decision applies the existing jurisprudence to the facts presented.