IBRC Ltd & anor v Fingleton (Approved)

Factual and Procedural Background

The Applicant initiated judicial review proceedings challenging domestic legislation prohibiting the sale of certain cannabinol derivatives. These proceedings formed part of a limited number of cases addressing similar legal issues. One related case, designated as the lead case, was decided by the High Court with the judicial review dismissed. The Applicant’s case proceeded after the withdrawal of the appeal in the lead case. The State Respondents offered the Applicant an opportunity to discontinue the proceedings without costs being pursued, which was declined. The Applicant’s judicial review was ultimately dismissed, mirroring the reasoning of the earlier lead case. Subsequent to the principal judgment, the parties submitted written arguments on legal costs, with the court deferring its decision on costs pending a relevant Supreme Court judgment. After the Supreme Court delivered its decision, further written submissions were made, and the court proceeded to determine the allocation of costs.

Legal Issues Presented

1. Whether the Applicant, as the unsuccessful party in public interest judicial review proceedings against the State, should be absolved from the usual order that costs follow the event.
2. Whether the Applicant’s proceedings qualify as public interest litigation warranting a nil costs order under the principles restated by the Supreme Court in Little v. Chief Appeals Officer.
3. The appropriate allocation of legal costs between the parties following dismissal of the judicial review.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Little v. Chief Appeals Officer [2024] IESC 53	Restatement of principles governing costs in public interest proceedings against the State, including the discretion to absolve unsuccessful applicants from costs and the factors to consider in exercising that discretion.	The court applied the principles to assess whether the Applicant’s proceedings qualified as public interest litigation justifying a nil costs order and concluded they did not.
Bogusas v. Minister for Health [2022] IEHC 621	Judgment dismissing an earlier judicial review challenging the same legislation, establishing precedent on the legal position of cannabinol derivatives.	The court relied on this precedent to determine that the Applicant’s case was weak and that the legal position was clear, undermining any basis for a nil costs order.
Kanavape, Case C-663/18, EU:C:2020:938	EU Court of Justice case law concerning classification of substances for free movement of goods under EU law.	The court found the Applicant’s argument based on this case to be tendentious and overridden by subsequent legislative developments.

Court's Reasoning and Analysis

The court began by restating the legal principles governing costs in public interest litigation as articulated by the Supreme Court in Little v. Chief Appeals Officer. These principles provide a discretionary framework allowing courts to depart from the usual rule that costs follow the event in certain exceptional public interest cases. The court explained that the designation of a case as a "lead" or "test case" is a case management tool and does not inherently qualify a proceeding as public interest litigation for costs purposes.

The court then assessed the specific circumstances of the Applicant’s case against the criteria for a nil costs order. It found that the legal issue raised was narrow, technical, and not of systemic or foundational public importance. The case did not engage fundamental constitutional or human rights issues and did not clarify any unsettled area of law. The legal position was clear and well-established, as confirmed by the prior Bogusas decision, which had already rejected similar arguments.

The court noted the Applicant’s arguments ignored the effect of a rejected legislative amendment that definitively classified the substance as a narcotic drug, thereby excluding it from free movement protections. The court emphasized the priority of legislative acts over earlier case law, negating any claimed legal uncertainty.

The court further considered the Applicant’s commercial motivation and the conduct of litigation, including the late abandonment of claims potentially impacting a criminal prosecution, which caused unnecessary costs to the Director of Public Prosecutions. The court also found no admissible evidence of financial hardship to justify departing from the usual costs rule.

Balancing these factors, the court concluded that none of the exceptional circumstances justifying a nil costs order were present. Accordingly, costs should follow the event.

Holding and Implications

The court’s final decision was to ORDER THE APPLICANT TO PAY THE LEGAL COSTS of the State Respondents and the Director of Public Prosecutions. This includes all reserved costs and the costs of written submissions. The costs are to be assessed under the relevant statutory provisions in default of agreement.

The costs order is stayed for 28 days from the date of the order’s perfection, with any appeal or application for leave to appeal extending the stay until determination. The decision does not establish new precedent but applies existing principles to deny a nil costs order in a case lacking the requisite public interest characteristics and legal uncertainty.