O'Connor & Anor v Lackabeg Ltd & Anor (Approved)

Factual and Procedural Background

The plaintiffs initiated motion proceedings in the Circuit Court seeking an order compelling the directors of the defendant company to attend for oral examination and make discovery in execution of two earlier judgments. The Circuit Court refused the relief sought. The plaintiffs appealed this decision to the High Court, where they were successful in obtaining the relief. The High Court reserved judgment on the costs of the appeal and associated motions.

Legal Issues Presented

1. Whether the directors of the defendant company should be personally liable for the legal costs incurred by the plaintiffs in the motions in aid of execution and the appeal.
2. The appropriate allocation and measure of costs in respect of the motions and appeal proceedings.
3. Whether any limitation or reduction of costs was justified due to procedural delays caused by the plaintiffs' late affidavit.

Arguments of the Parties

Plaintiffs' Arguments

• The plaintiffs were entirely successful in obtaining the relief sought and therefore entitled to recover costs against the two directors personally.
• Reliance on sections 168 and 169 of the Legal Services Regulation Act 2015 and Order 99 of the Rules of the Superior Courts to support costs recovery.
• Precedents such as Pena-Herrera v. Green Label Short Lets Ltd and Moorview Developments Ltd v. First Active plc were cited to underpin the principles governing costs liability of individuals linked to corporate litigants.

Defendant Company and Directors' Arguments

• The costs order should be made against the company alone, not against the directors personally, relying on the High Court and Supreme Court decisions in Moorview Developments Ltd v. First Active plc and commentary in Delany and McGrath on Civil Procedure.
• Any costs order should be limited because the hearing and determination of the appeal were prolonged by the plaintiffs’ late filing of an affidavit, which should have been introduced earlier in the process.

Table of Precedents Cited

Court's Reasoning and Analysis

The court emphasized that the sole issue was the allocation of costs arising from the interlocutory motions in aid of execution and the appeal, not the substantive dispute between the parties. It distinguished the present case from precedents concerning non-party funders of corporate litigation, noting that the directors were respondents personally joined to ensure fair procedures given the relief sought against them individually.

The directors opposed the motions and appeal, principally arguing that the Circuit Court lacked jurisdiction to grant the relief sought. This argument was rejected by the court. Since the directors chose to oppose the relief personally and were unsuccessful, the court applied the default principle that costs follow the event, extending this to interlocutory applications.

The court found no justification to depart from this principle. Although the directors argued for limitation of costs due to procedural delays caused by the late affidavit, the court held that these delays did not warrant excluding costs related to the initial hearing and other specified proceedings. The court exercised its discretion under Order 42, rule 38 of the Rules of the Superior Courts, applying the general principles under Order 99 RSC and the Legal Services Regulation Act 2015.

Holding and Implications

The court ordered that the plaintiffs are entitled to recover their costs of the motions and appeal personally against the two directors of the defendant company. The costs include all costs of the motion before the Circuit Court and specified costs of the appeal before the High Court, measured primarily by the single one-hour hearing on 18 December 2023. Costs related to subsequent listings were disallowed.

This decision directly affects the parties by imposing personal costs liability on the directors for opposing the motions and appeal, but it does not establish any new legal precedent beyond the immediate costs allocation. The substantive dispute concerning the defendant company’s assets remains to be resolved in further proceedings.