High Court allows costs on Circuit Court scale despite High Court jurisdiction due to legal uncertainty.

[2018] IEHC 387

THE HIGH COURT

[2016 No. 3444 P.]

BETWEEN

THOMAS CONDRON

PLAINTIFF

AND

GALWAY HOLDING COMPANY LIMITED AND DANMAR CONTRUCTION LIMITED AND STEPHEN TRACEY AND MAUREEN TRACEY

DEFENDANTS

Judgment of Mr. Justice McDermott delivered on the 19th day of June, 2018

1. The plaintiff has succeeded in his action for injunctive relief and damages against the defendants for trespass upon a small track of

land on his premises at Malahide, County Dublin. The area consisted of a grass margin beside the public highway. The court

determined that in constructing a footpath on the grass margin the defendants had committed an act of trespass for which they were

liable in damages. The court assessed damages in the amount of €10,000.00. The applicant now seeks the costs of the proceedings

and these would include the costs of a counterclaim brought by the defendants for substantial damages which they claim against the

plaintiff.

2. The plaintiff claims that costs must follow the event in accordance with O. 99 of the Rules of the Superior Courts. The defendants

submit that the plaintiff, if entitled to costs, is only entitled to the costs appropriate to the level of damages awarded which was well

within the jurisdiction of the Circuit Court where it should have been initiated and maintained. Therefore, it is submitted that pursuant

to s. 17 of the Courts Act 1981, as substituted by s. 14 of the Courts Act 1991 and amended by s. 19 of the Courts and Civil Law

(Miscellaneous Provisions) Act 2013, the plaintiff’s claim should more appropriately have been brought in the Circuit Court.

3. Section 17 provides for a limitation on the amount of plaintiff’s costs in certain proceedings:-

“17(1) Where an order is made by a court in favour of the plaintiff … in any proceedings (other than an action specified in

subs. (2) and (3) of this section) and the court is not the lowest court having jurisdiction to make an order granting the

relief the subject of the order, the plaintiff shall not be entitled to recover more costs than he would have been entitled

to recover if the proceedings had been commenced and determined in the said lowest court.”

4. In addition, s. 17(5)(a) provides:-

“17(5)(a) Where an order is made by a court in favour of the plaintiff … in any proceedings … and the court is not the

lowest court having jurisdiction to make an order granting the relief the subject of the order, the judge concerned may, if

in all the circumstances he thinks it appropriate to do so, make an order for the payment to the defendant or respondent

in the proceedings by the plaintiff … of an amount not exceeding whichever of the following the judge considers

appropriate;

(i) the amount, measured by the judge, of the additional costs as between party and party incurred in the

proceedings by the defendant … by reason of the fact that the proceedings were not commenced and determined in

the said lowest court, or

(ii) an amount equal to the difference between –

(I) the amount of the costs as between party and party incurred in the proceedings by the defendant …

as taxed by a Taxing Master of the High Court or, if the proceedings were heard and determined in the

Circuit Court, the appropriate County Registrar, and

(II) the amount of the costs as between party and party incurred in the proceedings by the defendant

… as taxed by a Taxing Master of the High Court or, if the proceedings were heard and determined in

the Circuit Court, the appropriate County Registrar on a scale that he considers would have been

appropriate if the proceedings had been heard and determined in the said lowest court.

(b) A person who has been awarded costs under paragraph (a) of this subsection may, without prejudice to his right to

recover the costs from the person against whom they were awarded, set off the whole or part thereof against any costs

in the proceedings concerned awarded to the latter person against the first mentioned person. …”

5. The defendants seek an order for costs in their favour under s.17(5) because the plaintiff did not bring these proceedings in the

lowest court having jurisdiction to make an order granting damages in the amount of €10,000.00 for trespass, calculated on the basis

set out in the subsection.

6. The plaintiff submits that there was considerable uncertainty surrounding the jurisdiction of the Circuit Court to hear claims in

relation to land and in particular whether the court’s jurisdiction fell to be exercised on the basis of rateable valuation. The land in

issue was part of domestic premises which did not have a rateable valuation. An issue arose as to whether it could be established in

the absence of a rateable valuation that the Circuit Court had jurisdiction. There was an ongoing legal controversy in respect of the

issue which resulted in conflicting High Court judgments. Consequently, it was submitted that it was appropriate to issue the

proceedings in the High Court pending the resolution of that controversy. The conflicting High Court decisions concerning the matter

were Bank of Ireland Mortgage Bank v. Laura Finnegan and Christopher Ward [2015] IEHC 304 a judgment delivered by Murphy J. on

20th May, 2015 and Bank of Ireland Mortgage Bank v. Shane Hanley and another [2015] IEHC 738, a judgment of Noonan J. delivered

on the 26th November, 2015. In Finnegan Murphy J. determined that the Circuit Court did not have jurisdiction in relation to property

without a rateable valuation. In Hanley Noonan J. reluctantly reached the opposite conclusion and held that the Circuit Court did have

jurisdiction to hear proceedings related to property without a rateable valuation.

7. The Supreme Court determined this issue conclusively in Permanent TSB v. Langan and the Attorney General [2017] IESC 71

following a case stated from the High Court (Baker J.) to the Court of Appeal holding that the Circuit Court had jurisdiction to

entertain possession proceedings in cases where the relevant property either had a rateable valuation which was shown not to

exceed €253.95 or the property is shown not to actually have a rateable valuation at all. The basis upon which jurisdiction is asserted

may be established by admissible evidence.

8. It is not necessary for the purposes of this application to consider the relevant statutory provisions or the reasons underpinning

the Supreme Court determination. It is sufficient to note that the plaintiff claims that these proceedings were initiated in the High

Court because of the uncertainty surrounding the appropriate jurisdiction in which to commence the proceedings having regard to the

conflict of authorities referred to in respect of that matter. That conflict continued during the course of the pleading of the case and

up to and during the course of the hearing.

9. It is clear that no application was made by either party to remit the case to the Circuit Court at any stage on the basis that it was

the appropriate court to exercise jurisdiction. It should be noted that the Court of Appeal delivered its judgment on the matter on

28th July, 2016: the Supreme Court delivered its judgment on 12th December 2017.

10. It is clear in the light of Langan that the Circuit Court was the appropriate jurisdiction in which to initiate these proceedings but

the controversy surrounding the Circuit Court jurisdiction was a live one and it is difficult to criticise the plaintiff for initiating these

proceedings in the High Court in the light of that controversy.

11. The court is satisfied on the basis of the authorities that this action ought to have been instituted in the Circuit Court based upon

the nature of the claim, the issues arising in relation to the margin of land the subject matter of the proceedings and the amount of

damages ultimately awarded. I am therefore satisfied that the plaintiff is entitled to the costs of the proceedings on the basis of the

Circuit Court scale with a certificate for senior counsel.

12. I have considered the question of whether an order should be made under section 17(5). The surrounding circumstances and legal

uncertainty concerning jurisdiction satisfy me that though the claim fell within the jurisdiction of the Circuit Court there is no

particular feature of this case which as a matter of fairness requires the court to make such an order in favour of the defendants.

This is not a case in which a significant element of the case ought not to have been pursued at all. In fact, the plaintiff succeeded in

proving his substantive right to title and ownership of the margin of land which was the main focus of the evidence adduced during

the course of the hearing and the submissions of law made in the case. I take into account that the legal issue of jurisdiction was not

resolved until the Supreme Court decision in Langan. I am not therefore satisfied that it would be correct or fair to exercise my

discretion in making such an order having regard to all the circumstances of the case (see Delaney & McGrath in Civil Procedure,

paras. 24-210 to 24-221).