Re:Thomas Finnegan (a debtor)

Factual and Procedural Background

This case concerns an application by a personal insolvency practitioner ("the practitioner") for costs relating to a preliminary issue arising under section 115A(2) of the Personal Insolvency Act 2012 (as amended). The issue, raised by an objecting creditor ("Mars"), was whether an application lodged within the 14-day period prescribed by the statute but served after that period could be considered "made" within time. The Circuit Court judge ruled in favor of Mars, dismissing the practitioner’s application as out of time. The practitioner appealed this decision to the High Court. Following the Circuit Court decision, numerous other objectors relied on the same point, resulting in a backlog of appeals. The High Court heard detailed submissions on 21 January 2019 and delivered judgment on 11 February 2019, ruling in favor of the practitioner that the application was made within the prescribed period by lodging it in the court office within 14 days. Subsequently, submissions on costs were heard on 25 February 2019.

Legal Issues Presented

1. Whether an application under section 115A of the Personal Insolvency Act 2012 (as amended) is considered "made" within the 14-day period if lodged with the court within that period but served on statutory notice parties only after the period expired.
2. Whether, in the context of a test case affecting numerous similar proceedings, the ordinary rule that costs follow the event should apply or whether no order as to costs should be made.
3. The applicability of the exception to the ordinary costs rule as discussed in Cork County Council v Shackleton [2011] 1 IR 443, particularly whether the practitioner’s costs funded by the Legal Aid Board affect the costs order.

Arguments of the Parties

Appellant's Arguments (The Practitioner)

• The issue raised by Mars was a "technical issue" among many raised to defeat a meritorious application.
• Even if this was a test case, as per Cork County Council v Shackleton, the ordinary principle that costs follow the event should apply in private party litigation.
• The practitioner is not equivalent to a public authority and thus the exception for public bodies in costs does not apply.
• Section 33(2) of the Civil Legal Aid Act 1995 requires courts to treat costs in proceedings involving legally aided parties as if all parties had retained lawyers at their own expense, negating any special consideration for publicly funded costs.

Appellee's Arguments (Mars)

• The issue raised was effectively a test case affecting a large number of similar cases, justifying no order as to costs.
• Mars had not sought costs in the Circuit Court despite success, suggesting a reasonableness in not pursuing costs here.
• Relied on Shackleton to argue that where one party is effectively funded by a public authority responsible for the legislation, a different approach to costs may be appropriate.
• Suggested an analogy between the practitioner’s costs funded by the Legal Aid Board and public authority funding considered in Shackleton.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began by affirming the general principle that costs follow the event, identifying the practitioner as the successful party on the s. 115A(2) issue. It acknowledged that in personal insolvency proceedings, the application of this principle requires caution, as illustrated by Niamh Meeley, but found no special circumstances here to depart from the ordinary rule. The court rejected Mars’s characterization of the issue as merely "technical," recognizing the legitimacy of raising any legal issue to defend interests.

The court carefully examined the reasoning in Shackleton, where costs exceptions were made for public law cases or test cases involving public authorities responsible for complex or poorly drafted legislation. It found no parallel here: the Personal Insolvency Acts 2012-2015 were not "opaque" or "ill thought out," and the practitioner was not a public authority but a private party whose costs were funded by the Legal Aid Board. The court emphasized that the Civil Legal Aid Act 1995 requires courts to treat legally aided parties as if they had privately retained counsel, negating any special costs considerations based on funding.

While the case could be described as a test case, the court noted that the issue had not previously generated significant doubt or debate and was raised for the first time in the Circuit Court hearing by counsel's ingenuity. Therefore, the test case rationale for no costs order did not apply. The vigorous inter partes nature of the litigation further supported applying the ordinary costs rule.

The court also considered procedural conduct affecting costs. The practitioner’s submissions were filed late, risking adjournment and delay of numerous related appeals. Mars’s counsel’s cooperative approach avoided adjournment, which the court took into account by disallowing costs related to the late written submissions but otherwise maintaining the normal party and party costs order.

Holding and Implications

The court’s final decision was to ORDER Mars to pay the party and party costs of the appeal to the practitioner in respect of the section 115A(2) issue, but with no order as to costs for the late written submissions filed by the practitioner.

This decision applies the ordinary principle that costs follow the event in private party litigation involving personal insolvency proceedings, rejecting exceptions applicable to public law or public authority funded cases. The ruling clarifies that funding by the Legal Aid Board does not alter costs principles. No new precedent was established beyond the application of existing principles, and the direct effect is a costs award against Mars in favor of the practitioner for this appeal.