Kelly Dunne & Ors v Guessford Ltd T/A Oxigen Environmental (Costs) (Approved)

Factual and Procedural Background

The present case concerns enforcement proceedings initiated under Section 160 of the Planning and Development Act 2000 ("PDA 2000") relating to the planning status of a waste facility located at Barnan, Daingean, County Offaly ("the waste facility"). The applicants are a group of individuals residing near the waste facility, and the respondent is the operator of the facility, Company A.

The High Court delivered a reserved judgment on the substantive merits of the enforcement proceedings on 21 September 2021 ("the principal judgment"). Following this, the parties submitted an agreed draft order which was formally drawn up on 15 November 2021, with an eight-week compliance period expiring on 10 January 2022.

The applicants contended that Company A had not complied with this court order and subsequently issued a motion in February 2022 seeking the attachment and committal to prison of two directors of Company A for alleged disobedience ("the contempt motion"). This motion was unsuccessful, as set out in a reserved judgment delivered on 2 June 2022 ("the contempt judgment").

The contempt motion was opposed solely by Company A; the directors only formally engaged legal representation after the hearing concluded. One director was represented, while the motion against the other director was withdrawn due to lack of proof of personal service. The hearing was prolonged due to cross-examination arising from deficiencies in the affidavits filed by the applicants.

The principal judgment has been appealed to the Court of Appeal, with the appeal scheduled for hearing on 20 July 2022.

Legal Issues Presented

1. Whether the special costs protection regime under Part 2 of the Environment (Miscellaneous Provisions) Act 2011 ("the 2011 Act") applies to the enforcement proceedings and the subsequent contempt motion.
2. Whether an application for a costs-protection determination under Section 7 of the 2011 Act is a condition precedent to the availability of costs protection.
3. Whether the applicants' conduct in pursuing the contempt motion justifies a departure from the default position that costs protection applies.
4. The appropriate quantum and allocation of legal costs arising from the unsuccessful contempt motion.

Arguments of the Parties

Applicants' Arguments

• The applicants asserted a right to costs protection pursuant to Part 2 of the Environment (Miscellaneous Provisions) Act 2011.
• They contended that costs protection applies both to the substantive enforcement proceedings and the contempt motion, as the latter is part of the same proceedings seeking to ensure compliance with planning permission.
• The applicants did not make an advance application for a costs-protection determination but argued this was not a prerequisite for costs protection to apply.

Respondents' Arguments

• The respondents contended that costs protection does not apply because the applicants failed to make an advance application for a costs-protection determination under Section 7 of the 2011 Act.
• They argued that without such an application, the general rule applies, and the applicants should bear the respondents’ costs of the unsuccessful contempt motion.
• The respondents further argued that the applicants failed to provide financial evidence demonstrating that the costs would be prohibitively expensive, which they claimed was necessary to establish entitlement to costs protection.
• The respondents submitted that the applicants’ conduct during the contempt motion, including failure to respond to requests for specifics, introduction of new arguments, and failure to serve one director, justified awarding costs against the applicants.

Table of Precedents Cited

Court's Reasoning and Analysis

The court began with the general principle that a successful party is entitled to recover costs from the unsuccessful party. However, it recognized that the special costs regime under Part 2 of the Environment (Miscellaneous Provisions) Act 2011 provides costs protection to applicants in environmental enforcement proceedings, shielding them from paying the winning party’s costs if unsuccessful, while allowing recovery if successful.

The respondents argued that an advance application for a costs-protection determination was a precondition for costs protection, and that the applicants failed to provide financial evidence of inability to pay costs. The court rejected these arguments, relying on the Court of Appeal’s decision in O'Connor v. Offaly County Council, which clarified that costs protection may apply even without a prior determination, and that financial evidence is not required on a costs application at the conclusion of proceedings.

The court held that the contempt motion is part of the enforcement proceedings and thus costs protection applies equally to it. The purpose of enforcement proceedings is to ensure compliance with planning permission, and costs protection must extend to enforcement steps such as contempt motions to give effect to that purpose.

Regarding whether the applicants’ conduct justified a departure from the default costs protection, the court acknowledged that while the applicants acted reasonably in seeking enforcement, there were procedural and substantive deficiencies in the contempt motion. These included failure to comply with Section 53 of the Companies Act 2014, lack of proper penal endorsement on the court order, and failure to properly serve one director.

Despite these deficiencies being fatal to the contempt motion, the court found they were not so obvious or serious as to render the applicants’ conduct unreasonable. The respondents had not emphasized these points during the contempt hearing but only in the costs application.

However, the court identified a separate issue with the affidavits filed by the applicants, which were deficient and inaccurate in some respects, necessitating prolonged cross-examination and extending the hearing. This conduct was attributable to the applicants collectively and justified a partial departure from costs protection.

The court decided that the applicants should bear the additional costs incurred due to the deficiencies in the affidavits, awarding costs against them to be paid to Company A, with the directors not separately involved as they allowed the company to represent their interests.

In measuring costs, the court applied the principle from Klohn v. An Bord Pleanála regarding non-prohibitively expensive costs and expressed a provisional view that a gross sum of €10,000 (plus VAT if recoverable) was appropriate. The court allowed parties to make submissions on this amount and provided procedural directions for such submissions.

Holding and Implications

The court held that the enforcement proceedings and the subsequent contempt motion attract costs protection under Part 2 of the Environment (Miscellaneous Provisions) Act 2011.

It held that it is not a condition precedent to costs protection that a party must have applied in advance for a costs-protection determination under Section 7 of the 2011 Act.

The court held that the applicants’ conduct, although containing procedural deficiencies in the contempt motion, was not unreasonable enough to justify a general departure from costs protection.

However, due to the inadequate affidavits filed by the applicants, a partial departure from costs protection was warranted, and the applicants were ordered to pay Company A a sum of €10,000 (plus VAT if applicable) as a set-off against existing costs orders.

The decision directly affects the parties by confirming costs protection applies but allows for cost liability in respect of certain procedural shortcomings. No new precedent was established beyond clarification of the application of the 2011 Act to contempt motions within enforcement proceedings and the non-necessity of advance costs-protection determinations.