Factual and Procedural Background
This judgment concerns the question of costs arising from the defendants' application to strike out or dismiss the plaintiffs' proceedings on multiple grounds. The substantive application was addressed in an earlier judgment, which this costs judgment must be read alongside. The defendants sought dismissal on grounds including no reasonable cause of action, res judicata, abuse of process, estoppel, and statute barred claims (the last not pursued). The court found that claims overlapping with earlier proceedings were an abuse of process or estopped, dismissing those parts, but refused to dismiss other claims, including conspiracy and claims against receivers. Additionally, the court stayed the proceedings pending an application in the plaintiffs' English bankruptcies rather than dismissing them outright.
Legal Issues Presented
- Whether the defendants are entitled to costs for their application to strike out or dismiss the plaintiffs' proceedings.
- How the court should apply the principles governing costs under the Legal Services Regulation Act 2015 and Order 99 Rules of the Rules of the Superior Courts.
- Whether either party was entirely successful and the appropriate apportionment of costs given partial success.
- The impact of issues raised unsuccessfully by the defendants on the costs award.
- The appropriateness of a stay on execution of the costs order pending further developments in the plaintiffs' English bankruptcies.
Arguments of the Parties
Defendants' Arguments
- The defendants contend they are entitled to their costs because the plaintiffs' claim cannot proceed without relief in their English bankruptcies and because the majority of the plaintiffs' case was dismissed on grounds of abuse of process or estoppel.
- They argue they were the successful party on the "event" as defined in the jurisprudence, justifying full costs despite not succeeding on every point.
- The defendants assert that unsuccessful points raised by them were not unmeritorious and did not materially prolong the hearing due to substantial overlap with successful points.
- They seek costs of the motion, costs up to any relief obtained in the English bankruptcies, and costs related to the court’s order barring claims subject to earlier proceedings.
Plaintiffs' Arguments
- The plaintiffs argue they are entitled to their costs or alternatively an order for 50% of their costs, with the remainder reserved for trial.
- They contend that the defendants sought a single relief (dismissal of proceedings) and since that relief was not fully granted, the defendants should bear the costs.
- They submit that the defendants' broad, "blunderbuss" approach to the application justifies a proportional costs order, awarding costs for superfluous arguments only if the defendants partially succeeded.
- The plaintiffs rely on the court’s discretion under relevant statutory provisions and established case law to calibrate costs proportionately.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Veolia Water UK plc v Fingal County Council (No. 2) [2007] 2 IR 81 |
Definition of the "event" for costs purposes; costs generally follow the event; partial success and unmeritorious points considerations. |
The court applied Veolia to determine the "event" and held that defendants succeeded in securing substantive or procedural entitlements justifying costs, while also considering unmeritorious points and proportionality. |
| MD v ND [2015] IESC 66 |
Clarification that costs should only be reduced for unmeritorious points if those points materially increased costs. |
The court used MD to assess whether unsuccessful points raised by defendants were unmeritorious and materially increased costs, concluding they were not. |
| Chubb European Group SE v The Health Insurance Authority [2020] IECA 183 |
Distinguishing complex cases for costs allocation and endorsing Veolia principles under the 2015 Act. |
The court referred to Chubb for guidance on complex case costs and the application of statutory provisions on costs discretion. |
| Connelly v An Bord Pleanála [2018] IESC 36 |
Emphasis on broad-brush approach to costs and discouraging raising numerous unmeritorious points. |
The court invoked Connelly to support a broad approach to costs rather than detailed parsing of each issue. |
| Moffitt v Agricultural Credit Corporation plc [2007] IEHC 245 |
Analogy for allowing amendment to pleadings to save a claim rather than dismissal affecting costs considerations. |
The court used Moffitt to justify staying proceedings pending an application in English bankruptcies rather than dismissal, influencing costs outcome. |
| Jackson Way Properties Ltd v Smith & Ors [2023] IECA 234 |
Confirmation that costs follow the event remains the starting point under the statutory regime. |
The court cited Jackson Way Properties to affirm the principle that costs generally follow the event within the statutory framework. |
| Word Perfect Translation Services Ltd v Minister for Public Expenditure and Reform [2023] IECA 189 |
Endorsement of broad-brush approach to costs hearings to avoid spiralling costs and complexity. |
The court relied on Word Perfect to emphasize practicality and judicial economy in costs adjudication. |
| Fyffes plc v DCC plc [2006] IEHC 32 |
Example of withholding costs from a successful party in respect of issues on which it failed. |
Referenced as a precedent for exceptions to the general rule that the winning party receives costs. |
Court's Reasoning and Analysis
The court began by identifying that neither party was entirely successful under the statutory framework or the traditional "costs follow the event" approach. The defendants achieved significant success by persuading the court that parts of the plaintiffs' claims were an abuse of process or estopped, justifying dismissal of those parts. The stay of the entire proceedings pending an application in the plaintiffs' English bankruptcies was recognized as a procedural benefit for the defendants, though not the relief originally sought.
The court considered the defendants' unsuccessful points, finding that these were not unmeritorious and that there was significant overlap in issues, making it impossible to separate costs attributable to unsuccessful points. The court emphasized the reasonableness of raising those points and rejected the notion that the hearing was unduly prolonged by them.
Applying the principles from Veolia and subsequent cases, the court acknowledged the defendants' partial success but declined to award full costs due to the plaintiffs' partial success and the procedural complexities. The court favored a broad-brush approach to costs, consistent with recent jurisprudence, and concluded that a 50% costs award in favor of the defendants was appropriate.
The court also addressed the defendants' request for costs related to the entire proceedings and amendments to pleadings, concluding that only costs related to the amendments should be awarded to avoid duplication and undue harshness, especially since the proceedings were not dismissed in full.
Finally, the court provisionally decided to stay the execution of the costs order pending further developments in the English bankruptcy proceedings, allowing submissions from the parties within a specified period.
Holding and Implications
The court ORDERED that the defendants are entitled to 50% of the costs of the application to strike out or dismiss the proceedings and the costs occasioned by the amendment of the pleadings.
The court provisionally stayed the execution of this costs order pending determination of the proceedings or further order, reflecting the partial success of both parties and the ongoing nature of the litigation contingent on relief in the plaintiffs' English bankruptcies.
This decision directly affects the parties by apportioning costs in a manner reflecting their respective degrees of success without setting new precedent beyond applying established principles. The court emphasized a practical and proportionate approach to costs consistent with statutory provisions and relevant case law.