Factual and Procedural Background
The present proceedings concern an application to enforce an adjudicator's award under section 6 of the Construction Contracts Act 2013. The applicant initiated summary enforcement proceedings by originating notice of motion. The respondent successfully resisted enforcement, arguing that the adjudication process was a nullity due to non-compliance with statutory provisions relating to service.
The proceedings were first listed on 28 November 2024, at which time the respondent did not appear. The court subsequently listed the matter for a full hearing on 19 December 2024. The respondent appeared on that date and disclosed its intended defence for the first time, based on a jurisdictional objection concerning service. The hearing was adjourned to 20 December 2024 due to logistical reasons unrelated to the parties.
On 19 December 2024, the respondent offered a settlement with each party bearing its own costs, which the applicant did not accept. The proceedings were part-heard on 20 December 2024 and adjourned to allow written legal submissions on the service point. The hearing resumed on 20 February 2025, and the court delivered its principal judgment on 13 March 2025, finding in favour of the respondent and dismissing the enforcement application as the adjudication process was nullified by failure to comply with service requirements.
Legal Issues Presented
- Whether the respondent was entitled to recover legal costs as the successful party under section 169 of the Legal Services Regulation Act 2015.
- Whether the court should exercise its discretion to modify the default costs order in light of the respondent’s delay in disclosing its intended defence.
- The proper approach to costs in enforcement proceedings under the Construction Contracts Act 2013, particularly regarding the timing and manner of raising jurisdictional objections.
Arguments of the Parties
Applicant's Arguments
- The respondent failed to engage with the proceedings initially and only disclosed its intended defence on the day of the scheduled hearing (19 December 2024), causing prejudice.
- The jurisdictional objection based on service should have been raised earlier, either during the adjudication process or as a preliminary issue in the enforcement proceedings.
- The respondent’s conduct in delaying disclosure should be taken into account in the exercise of the court’s discretion over costs, potentially limiting the respondent’s entitlement to recover costs.
Respondent's Arguments
- The adjudication process was a nullity due to the applicant's failure to comply with statutory service requirements, and the respondent was not obliged to engage with or raise objections during the invalid adjudication process.
- Raising the jurisdictional objection as a preliminary issue in the enforcement proceedings would be inconsistent with the statutory objective of expedition and summary determination under the Construction Contracts Act 2013.
- The respondent’s litigation conduct was reasonable, including making a settlement offer to bear own costs, and the delay in disclosing the defence did not materially prejudice the applicant.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Word Perfect Translation Services Ltd v. Minister for Public Expenditure and Reform [2023] IECA 189 |
Principles governing entitlement to costs under section 169 of the Legal Services Regulation Act 2015, including that a successful party is generally entitled to costs but must conduct litigation fairly, reasonably, and proportionately. |
The court rejected any broad requirement that a party conduct litigation in the most cost-effective manner possible, applying the test of objective reasonableness to the respondent’s conduct in not raising a preliminary issue. |
| Aakon Construction Services Ltd v. Pure Fitout Associated Ltd [2021] IEHC 562 |
The limited discretion of the court to refuse enforcement of an adjudicator’s award when formal proofs are made out under the Construction Contracts Act 2013. |
The court noted that enforcement proceedings are summary and usually resolved on affidavit evidence, emphasizing the limited scope for factual disputes and preliminary issues. |
| Mahon v. Keena [2009] IESC 78, [2010] 1 IR 336 |
Serious litigation misconduct such as deliberate destruction of documents justifying denial of costs. |
Referenced to illustrate the high threshold of misconduct required to deny costs to a successful party, which was not met in the present case. |
| Flannery v. Dean [1995] 2 ILRM 393 |
Unreasonable litigation conduct characterized as advancing claims described as "pure fantasy." |
Used to contrast with the respondent’s conduct, which was not of comparable severity. |
| Hanrahan v. Waterstone [2021] IEHC 274 |
Litigation misconduct involving a witness resiling from crucial evidence at trial. |
Referenced to demonstrate the level of misconduct required to justify modified costs orders, not present here. |
Court's Reasoning and Analysis
The court began from the statutory presumption under section 169 of the Legal Services Regulation Act 2015 that the successful party is entitled to recover costs from the unsuccessful party. The respondent was entirely successful in resisting enforcement because the adjudication process was a nullity due to failure to comply with statutory service requirements.
The court considered the applicant’s argument that the respondent’s delay in disclosing its intended defence should affect the costs order. It rejected the notion that the respondent was obliged to raise the jurisdictional objection earlier, either during the adjudication or as a preliminary issue in the enforcement proceedings. This was because the adjudication was a nullity, and the enforcement procedure is designed to be summary and expeditious, making preliminary issues inappropriate.
The court also clarified that the Legal Services Regulation Act 2015 does not impose a strict requirement that litigation be conducted in the most cost-effective manner, only that it be fair, reasonable, and proportionate. The respondent’s conduct was deemed objectively reasonable, especially as the jurisdictional objection was the sole defence and the respondent made a reasonable offer to settle on a costs-each-side basis.
While the respondent’s delay in disclosure was acknowledged and might have caused some inconvenience, the court found no material prejudice to the applicant, who had ample opportunity to consider the defence and choose whether to continue. The court therefore exercised its discretion to modify the costs order to exclude costs related to the hearings on 19 and 20 December 2024, but otherwise allowed the respondent to recover its costs.
Holding and Implications
The court held that the respondent is entitled to recover its costs of and incidental to the proceedings as against the applicant, subject to a modification excluding costs related to the listings on 19 and 20 December 2024.
The costs are to be adjudicated on the basis of a one-hour hearing on 20 February 2025, which serves as the benchmark for the fees recoverable. The order is made pursuant to section 169 of the Legal Services Regulation Act 2015, with quantum to be determined under Part 10 of that Act if the parties cannot agree.
Regarding the costs of the costs application itself, the court’s provisional view is that the respondent is also entitled to recover those costs, given the applicant’s unsuccessful attempt to recover costs incurred prior to 20 December 2024. The applicant may seek a different order by notifying the registrar within 14 days.
No new legal precedent was established; the decision applies existing principles regarding costs entitlement, the summary nature of enforcement proceedings under the Construction Contracts Act 2013, and the court’s discretion in modifying costs orders based on litigation conduct and procedural fairness.