Thompson & Anor v An Bord Pleanala & Ors (Approved)

Factual and Procedural Background

The Plaintiff, a company in receivership, initiated proceedings claiming damages related to its 2005 purchase of certain lands from the First Defendant. The central dispute concerned ownership of a portion of the lands sold ("the Disputed Property"). The Second Defendant had been registered as owner of the Disputed Property in 2010 following an application to the Property Registration Authority (PRA), based on an affidavit asserting a prior sale agreement and possession. The Court found that the First Defendant was the owner of all lands sold, including the Disputed Property, and that the affidavit evidence relied upon by the Second Defendant was inconsistent with oral testimony, particularly regarding non-payment of the purchase price and consented possession.

Following a judgment dismissing the Plaintiff's claim, the Court ordered the Plaintiff to pay the First Defendant's costs and granted liberty to the First Defendant to seek joinder of a director of the Plaintiff ("Notice Party") for the purpose of making that director liable for costs. The First Defendant applied to join the Notice Party to the proceedings for costs liability. The Notice Party was joined as a notice party, notified of the hearing, but declined to consent or participate and did not attend the hearing. The First Defendant proceeded with the application for costs against the Notice Party.

Legal Issues Presented

1. Whether the Court has jurisdiction to make a costs order against a non-party (the Notice Party) to the proceedings.
2. Whether, on the facts of this case, it is just and appropriate to make the Notice Party personally liable for the First Defendant's costs.

Arguments of the Parties

First Defendant's Arguments

• The Plaintiff is in a precarious financial position, in receivership with multiple charges on assets, and unlikely to be able to pay the costs order.
• The Notice Party is one of two directors and shareholders of the Plaintiff; the other director is bankrupt, diminishing the Plaintiff’s ability to satisfy costs.
• The Notice Party was the "moving force" behind the litigation and had a direct personal financial interest in the outcome.
• The Plaintiff pursued the claim through the Notice Party’s agency, relying solely on flawed affidavit evidence to support ownership of the Disputed Property.
• The Plaintiff and Notice Party failed to uncover or challenge the true ownership facts before trial, resulting in an unreasonable pursuit of the claim.
• The Plaintiff pursued a speculative claim regarding refusal of planning permission, described as spurious and an abuse of process.
• The Notice Party and Plaintiff have been involved in other proceedings dismissed as frivolous or vexatious, suggesting a pattern of unreasonable litigation conduct.

The opinion does not contain a detailed account of the Notice Party’s arguments, as he did not participate in the application.

Table of Precedents Cited

Court's Reasoning and Analysis

The Court began by acknowledging the established jurisdiction in Irish law to make costs orders against non-parties, guided principally by the Supreme Court’s decision in Moorview. The Court applied the enumerated factors from Moorview to the facts:

• The Notice Party was aware of the Plaintiff’s precarious financial position and had accepted the risk that the Plaintiff might not meet a costs order.
• Although the First Defendant alleged the Notice Party had a direct personal financial interest and was the driving force behind the litigation, the evidence did not establish that the Notice Party was the sole interested party or the "real party" to the litigation, especially given the co-director’s bankruptcy and the Plaintiff’s encumbered assets.
• There was no evidence regarding how the litigation was funded, and the First Defendant only sought costs against the Notice Party late in the proceedings, after costs had been incurred.
• The Plaintiff’s reliance on the Second Defendant’s affidavit evidence, although ultimately flawed, was not unreasonable given the circumstances, and the Plaintiff’s claim was not pursued in bad faith or with improper motive.
• The speculative claim related to planning permission was not pursued at trial, and the Plaintiff’s complaints had some substance, undermining a finding of unreasonableness.
• The failure to give timely notice to the Notice Party of the intention to seek a costs order against him strongly weighed against making such an order.
• The First Defendant’s prior application for security for costs was refused as late, and this factor also militated against imposing a non-party costs order.
• The Notice Party’s involvement in other unrelated proceedings was not relevant to the costs application.

Balancing all factors and focusing on the overarching requirement to achieve a just result, the Court concluded that the First Defendant had not met the burden to justify a costs order against the Notice Party.

Holding and Implications

The Court refused the First Defendant's application for a costs order against the Notice Party.

The direct effect is that the Notice Party will not be personally liable for the First Defendant's costs of the proceedings. No order was made as to the costs of the application itself, given the Notice Party’s non-participation. The decision does not establish new precedent but applies the existing framework for non-party costs orders, emphasizing the importance of notice, timing, and a holistic assessment of the non-party’s role and interest in the litigation.