Lohan v Hatton (Approved)

Factual and Procedural Background

The Plaintiff, a solicitor practising under the style of Company A Solicitors, commenced proceedings by way of summary summons to recover a sum of €381,277.43 said to be due in connection with legal services provided to the Defendants. These services related to High Court litigation concerning a mortgage in favour of a bank ("the Bank litigation"). The proceedings are based on a bill of costs dated 8 March 2017 addressed to the Defendants and a company known as Company B Ltd. The solicitor's professional fee was €170,000 plus VAT, accompanied by counsel fees totaling €136,100 plus VAT. The bill of costs lacked detailed information, and there was no indication that the Defendants had been informed of the high fees or their entitlement to refer the bill for independent adjudication. The Defendants made a complaint to the Law Society, which declined to investigate further due to the existence of court proceedings. The Plaintiff sought to enter judgment but subsequently accepted that the matter should be remitted to plenary hearing. The Defendants maintained a defence involving a collateral agreement with another company, Company C Ltd, concerning liability for the legal costs.

Legal Issues Presented

1. Whether the proceedings, commenced by summary summons, should be remitted to plenary hearing given the existence of a significant factual dispute regarding a collateral agreement on liability for costs.
2. Whether the summary summons complies with the requirements for summary proceedings as identified by the Supreme Court in Bank of Ireland Mortgage Bank v. O'Malley.
3. Whether the bill of costs is sufficiently detailed to permit reliance on the Solicitors (Ireland) Act 1849 and the Solicitors (Amendment) Act 1994 provisions.
4. Whether the Defendants are entitled to refer the legal costs for adjudication under the court's inherent jurisdiction.

Arguments of the Parties

Plaintiff's Arguments

• The Plaintiff initially sought summary judgment based on the bill of costs and the legal fees claimed.
• The Plaintiff accepted remittal to plenary hearing and consented to the Defendants having liberty to refer the bill of costs for adjudication.
• The Plaintiff denied the existence of any collateral agreement with Company C Ltd to cover the costs.

Defendants' Arguments

• The Defendants did not object to remittal to plenary hearing but highlighted delay in the proceedings.
• The Defendants maintained a defence that a collateral agreement existed whereby Company C Ltd would bear the legal costs and indebtedness to the Bank.

Table of Precedents Cited

Court's Reasoning and Analysis

The Court identified a significant factual dispute concerning the alleged collateral agreement with Company C Ltd, which could not be resolved on affidavit evidence alone, thereby precluding summary judgment. The Court also questioned whether the summary summons complied with Supreme Court standards and whether the bill of costs was sufficiently detailed under relevant solicitors' legislation. Given these uncertainties, the Court concluded that summary judgment was inappropriate and that the matter should proceed to plenary hearing. Additionally, the Court allowed the Defendants liberty to refer the legal costs for adjudication to address the lack of detail and absence of evidence that the Defendants were informed of their adjudication rights. The Plaintiff consented to this condition, and the Court emphasized the Defendants’ right to seek adjudication or to rely on their defence regarding the collateral agreement.

Holding and Implications

The Court's final decision was to REMIT THE PROCEEDINGS TO PLENARY HEARING. The Defendants have liberty to defend the proceedings on any grounds, including the collateral agreement defence. It is a condition of remittal that the Defendants may apply within three months to refer the legal costs for adjudication, with the Plaintiff's consent. The Court set directions for the exchange of pleadings and allowed the parties liberty to seek further directions or motions as necessary. The decision directly affects the parties by denying summary judgment and providing procedural mechanisms to ensure fairness, but it does not establish new legal precedent.