Lyons & Anor v McDonagh & Ors (Approved)

Factual and Procedural Background

The proceedings concern commercial premises located on Ennis Road, The City. The premises are owned by Company A, with part leased to the Applicants and used as a restaurant, and the larger portion operated as a bowling alley by Company B under the style "Funworld". The Applicants initiated an application in the Circuit Court pursuant to section 160 of the Planning and Development Act 2000 ("PDA 2000") alleging that the Respondents were in breach of planning control in two respects: the permanent closure of an internal door connecting the two parts of the premises and the installation of a commercial kitchen with an associated extractor system without planning permission.

The planning authority issued a statutory warning letter to Company B regarding the closure of the internal door, considering it unauthorised development. The Respondents replied asserting the door closure was exempted development under section 4(1)(h) of the PDA 2000, a position later accepted by the planning authority.

The Applicants made an ex parte application for interim relief which the Circuit Court refused on 16 March 2023, effectively dismissing the application for a planning injunction. The Circuit Court's refusal was influenced by the view that the Respondents were actively engaging with the planning authority to regularise the planning position, including the possibility of seeking retention planning permission.

The Applicants appealed to the High Court on 22 March 2023. Before the appeal hearing date, the planning authority confirmed in June 2023 that the closure of the internal door was exempted development but indicated that the kitchen installation required planning permission. Company B submitted an application for retention planning permission in September 2023, which was granted formally in February 2024, shortly before the scheduled High Court hearing.

On the day of the High Court hearing in March 2024, the Applicants withdrew the appeal, referencing a late-filed affidavit that included the planning authority's June 2023 letter. Disputes arose concerning whether the Applicants had received this letter earlier. The court subsequently reserved judgment on costs and later heard further submissions and evidence before delivering the present judgment.

Legal Issues Presented

1. Whether the costs of the withdrawn appeal should be allocated under the special costs regime applicable to environmental enforcement proceedings or the conventional costs regime.
2. The appropriate allocation of costs between the parties given the withdrawal of the appeal and the developments during the proceedings, including the grant of retention planning permission.
3. The relevance and impact of the Applicants’ late knowledge of the planning authority’s June 2023 letter on the costs order.

Arguments of the Parties

Applicants' Arguments

• The Applicants were unaware of the planning authority's June 2023 letter until receipt of the Respondents' affidavit in March 2024, which justified the withdrawal of the appeal.
• The Applicants contended that they acted reasonably in pursuing enforcement proceedings, particularly regarding the kitchen installation, which was unauthorised development necessitating retention permission.
• The Applicants criticized the Respondents for failing to disclose the June 2023 letter before the appeal hearing date and for filing fresh evidence without seeking the court's leave.
• The Applicants sought an order for costs in their favor or, alternatively, no order as to costs.

Respondents' Arguments

• The Respondents submitted that the Applicants' architect had been in constant contact with the planning authority and that the planning authority would have sent the June 2023 letter to the architect, implying the Applicants could not have been surprised by its contents.
• The Respondents acknowledged the failure to seek leave to file fresh evidence but argued that even absent the late affidavit, the appeal would not have succeeded.
• After further inquiries, the Respondents contended that the Applicants had knowledge of the June 2023 letter prior to March 2024, challenging the Applicants' claim of surprise.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Hughes v. Revenue Commissioners [2021] IECA 5	Framework for court’s discretion in awarding costs where proceedings are rendered moot by unilateral act of a party.	Applied to determine that the party whose unilateral act rendered the proceedings moot should bear the costs, subject to the court's discretion.
Narconon Trust v. An Bord Pleanála [2021] IECA 307	Clarification on the status of determinations on references pursuant to section 5 of the PDA 2000.	Used to explain that the planning authority’s letter was a non-statutory opinion without formal determination status.
RAS Medical Ltd v. Royal College of Surgeons [2019] IESC 4	Standard for assessing affidavits and the absence of cross-examination in factual disputes.	Applied to accept the architect’s affidavit as credible in the absence of cross-examination.

Court's Reasoning and Analysis

The court first determined that the special costs regime under the Environment (Miscellaneous Provisions) Act 2011 did not apply, as the proceedings did not involve damage to the environment. Thus, the conventional costs regime under the Legal Services Regulation Act 2015 governed the allocation of costs.

The court recognized that the grant of retention planning permission rendered the proceedings largely moot, as the planning status of the premises had been regularised. The Applicants had been reasonable in pursuing enforcement proceedings concerning the kitchen installation, which was confirmed as unauthorised development requiring retention permission.

Regarding the closure of the internal door, the Applicants withdrew this complaint on the appeal hearing day, accepting the planning authority’s non-statutory opinion that it was exempted development. The court noted this opinion had no special legal status and did not preclude the Applicants from pursuing the issue.

The court found on the balance of probabilities that the Applicants’ architect did not receive the June 2023 letter contemporaneously, supported by corroborative IT evidence. However, the architect was aware of the planning authority’s general stance on the door closure by late 2023, so the Applicants could not claim complete surprise.

The court concluded that the Applicants’ withdrawal of the second issue did not justify full recovery of costs. It applied a one-third discount to reflect the additional costs incurred by pursuing the withdrawn issue, reasoning that much of the legal work would have been necessary regardless.

Concerning costs incurred after 7 March 2024, the court found the Respondents acted unreasonably by pursuing the disputed question of when the Applicants became aware of the June 2023 letter, including obtaining non-party discovery and filing affidavits. These additional costs were deemed unnecessary and thus were ordered to be paid by the Respondents.

The court also emphasized the importance of parties notifying the court of significant developments at call-over lists to ensure judicial resources are efficiently allocated.

Holding and Implications

The court ORDERED that:

• The Applicants are entitled to recover two-thirds of their costs incurred up to 29 February 2024 from the Respondents, reflecting the partial withdrawal of one issue.
• The Applicants are entitled to recover all costs incurred from 7 March 2024 onwards, including costs related to non-party discovery against the planning authority, from the Respondents.
• The costs are to be taxed by the County Registrar if not agreed, limited to one counsel’s fees, and cover all proceedings including the Circuit Court and High Court.
• The costs order will likely exclude the individual Respondent personally and be confined to the two corporate Respondents unless the Respondents notify otherwise.
• A formal order will be made striking out the proceedings following the withdrawal of the appeal.

The decision directly affects the parties by finalizing the costs liability in light of the appeal withdrawal and procedural conduct. No new legal precedent was established, but the judgment reinforces established principles governing costs in enforcement proceedings and the importance of procedural transparency.