High Court dismisses constitutional challenge and possession claim, ordering Plaintiffs to pay Defendants' costs.

[2025] IEHC 256

THE HIGH COURT

Record Number 2023 4748 P

Plaintiffs

PATRICK HALPIN, ANN KEANE, ELEKTRON HOLDINGS LIMITED

-and-

Defendants

EVERYDAY FINANCE DAC, STAIRWAY PROPERTY COMPANY LIMITED, THE ATTORNEY GENERAL AND IRELAND

Record no. 2023 5300 P

STAIRWAY PROPERTY COMPANY LIMITED

Between:

Plaintiff

- and –

PATRICK HALPIN, ANN KEANE, ELEKTRON HOLDINGS LIMITED (IN RECEIVERSHIP) AND MADISON MANOR LIMITED

Defendants

JUDGMENT of Ms Justice Nessa Cahill delivered on 2 May 2025

INTRODUCTION

1. By this judgment, I determine the allocation of liability for the costs incurred by the parties in the above proceedings. This determination is made on foot of the substantive judgment delivered on 8 April 2025 in these matters (“the Judgment”).

2. The two cases concerned, in broad terms, the ownership and occupation of a property at Park Avenue, Sandymount in Dublin 4 known as “Aberdeen Lodge” which consists of a sixteenbedroom guesthouse and private residential accommodation (“the Property”).

3. The first case (bearing record number 2023/4748 P) consists of a constitutional challenge to sections 19(1) and 19(21) of the Conveyancing Act 1881 and certain other claims (“the Constitutional Challenge”). The plaintiffs are Mr Halpin, Ms Keane and Elektron Holdings Limited (“Elektron”) (“the Constitutional Plaintiffs”). The defendants are Stairway Property Company Limited (“Stairway”); Everyday Finance DAC (“Everyday”); Ireland and the Attorney General (“the State”).

4. The second case (bearing record number 2023/5300P) is Stairway’s application for possession of the Property, which was issued some five weeks after the Constitutional Challenge (“the Possession Proceedings”). The defendants to the Possession Proceedings (the Constitutional Plaintiffs as well as another company, Madison Manor Limited (“Madison”), referred to for the purpose of this judgment together as “the Plaintiffs”) also issued a counterclaim against Everyday (“the Counterclaim”).

5. There were a number of preliminary applications in the Constitutional Challenge and a number of additional issues arose in the course of the seven-day hearing of the Proceedings which needed to be determined in the Judgment.

6. Following consideration of all issues raised, the Constitutional Challenge and the Counterclaim were dismissed and the relief sought in the Possession Proceedings was granted. Accordingly, the Plaintiffs failed in all of the claims they made and also failed in their opposition to the only relief sought against them, the orders of possession in the Possession Proceedings.

7. Against this background, there was a contested costs application before me on 30 April 2025.

SUMMARY OF THE COSTS APPLICATION

8. Counsel for the Plaintiffs made an initial application for there to be no order as to costs. This application had no basis in fact or in law and was wisely not pressed.

9. The focus of the costs hearing was on the contention that costs should be allocated in a manner that reflected the fact that the Defendants did not succeed in certain preliminary issues they advanced. Reliance was placed on Veolia Water UK plc v. Fingal County Council [2007] 2 IR (“Veolia”).

10. It was said that there should be a reduction of some 20% based on that percentage having been applied to the costs awarded in Pepper Finance Corporation (Ireland) DAC v. Persons Unknown [2022] IECA 170 (a case on which reliance was placed during the hearing: see Judgment ¶410).

11. Counsel for Stairway opposed this application on three grounds. First, it was said that a broadbrush approach should be taken, as mandated by Word Perfect Translation Services Limited v.

Minister for Public Expenditure and Reform [2023] IECA 189 (“Word Perfect”).

12. Second, it was said that many of the preliminary issues (the question of the application of Henderson v. Henderson (1843) 3 Hare 100 in particular) concerned other proceedings which would have needed to be explained and examined as part of the context of these Proceedings even absent any preliminary issue being raised.

13. Third, it was said that the amount of time specifically devoted to the preliminary issues was comparatively limited.

14. Counsel for Everyday also opposed the Plaintiff’s application, echoing the position of Stairway, and adding that it was justified and reasonable to raise the preliminary issues, including because there was an obvious question of the standing of a company to make the constitutional claims made. It was also pointed out that there is a history of serial litigation, as identified in the Judgment, and that the objections based on Henderson v. Henderson were justified and reasonable.

15. The point was made that the vast majority of the evidence and oral submissions were directed to issues on which Everyday was entirely successful and that the preliminary issues on which Everyday did not succeed did not impact on the allocation of costs or warrant any discounted award of costs. It was said that a discount for the proportion of the written submissions that dealt with preliminary issues could at most be contemplated, but this was said not to be justified.

16. The judgment of the Court of Appeal in Scully v. Coucal Limited [2024] IECA 146 (“Scully”)

was opened by counsel for Everyday.

17. Counsel for the State adopted the same position as the other defendants, opposing any reduction in the award of costs, and emphasising the reasonable approach taken by the State in relation to the Proceedings, including in its facilitative approach to the preliminary issues.

LEGAL PRINCIPLES

18. There was – and could be - no dispute between the parties about the Court’s broad discretion with regard to the award of costs, confirmed by Order 99, Rule 2 of the Rules of the Superior Courts and sections 168 and 169 of the Legal Services Regulation Act 2015 (“the Act of 2015”).

19. Order 99, Rule 2(1) sets out the general, overarching principle that, except where otherwise provided, “The costs of and incidental to every proceeding in the Superior Courts shall be in the discretion of those Courts respectively.”

20. Order 99, Rule 3(1) provides,

“The High Court, in considering the awarding of the costs of any action or step in any proceedings, and the Supreme Court and Court of Appeal in considering the awarding of the costs of any appeal or step in any appeal, in respect of a claim or counterclaim, shall have regard to the matters set out in section 169(1) of the 2015 Act, where applicable.”

21. The “matters set out in” section 169(1) of the Act of 2015 include the following:

“A party who is entirely successful in civil proceedings is entitled to an award of costs against a party who is not successful in those proceedings, unless the court orders otherwise, having regard to the particular nature and circumstances of the case, and the conduct of the proceedings by the parties, including— a. conduct before and during the proceedings,

b. whether it was reasonable for a party to raise, pursue or contest one or more issues in the proceedings, c. the manner in which the parties conducted all or any part of their cases….”

22. When a party is partially successful, the relevant provision is section 168, which confers a broad discretion on the court regarding the award of costs:

“(1) Subject to the provisions of this Part, a court may, on application by a party to civil proceedings, at any stage in, and from time to time during, those proceedings— (a)

order that a party to the proceedings pay the costs of or incidental to the proceedings of one or more other parties to the proceedings…”

23. Section 168(2) then elaborates in relevant part that

“…the order may include an order that a party shall pay—

(a) a portion of another party’s costs,

(b) costs from or until a specified date, including a date before the proceedings were commenced,

(c) costs relating to one or more particular steps in the proceedings,

(d) where a party is partially successful in the proceedings, costs relating to the successful element or elements of the proceedings…”

24. In Word Perfect (at ¶62), Donnelly J. (Ni Raifeartaigh and Faherty JJ concurring) confirmed and adopted the summary of the applicable principles as set out by Murray J. in Chubb v The Health Insurance Authority [2020] IECA 183 (at ¶19), including the following: “Even where a party has not been ‘entirely successful’ the court should still have regard to the matters referred to in s.169(1)(a)-(g) when deciding whether to award costs (0.99, r.3(1))”.

25. In Word Perfect, the Court of Appeal overturned a decision of the High Court to award only 50% of the costs of a failed challenge to a public procurement process to the Minister. The

conclusion that was emphasised by Stairway was that,

“It must also be borne in mind that the costs hearing ought not to be an exercise in nitpicking and a broad-brush-stroke approach must be taken. If it is not, there is a danger that costs applications will spiral out of control and have implications for the overall administration of justice. A court, having heard the trial and adjudicated upon the case, will be in an excellent position to make the decision based upon what the court has seen and heard” (¶94).

26. Here, it was accepted that the Defendants were not successful on all points raised, and the question that properly arises is whether they should nonetheless recover the entirety of the costs including in light of the factors listed in section 169(1).

27. Another case referenced at the costs application was Scully. There, the plaintiff sought to resist the recognition of a judgment of a Polish court on two grounds; both grounds failed in the High Court; and the Court of Appeal allowed the appeal on the first ground and did not determine the appeal against the second ground (it being unnecessary to do so).

28. The plaintiff contended that he was entirely successful on appeal and that it was reasonable to raise the second ground of challenge. The defendant alleged that additional costs had been incurred to deal with that second ground in the High Court. The Court of Appeal rejected the defendant’s application for a reduction in the award of costs, finding (at ¶5) “we do not agree that it can be said that a party was “wrong” to raise a ground merely because a court has found against them.” The Court confirmed that “even where a party has not been “entirely successful” the court should still have regard to the matters referred to in s. 169(1)(a)-(g) when deciding whether to award costs” (¶6).

29. The Court of Appeal in Scully also repeated the guidance in Word Perfect that, “…the focus of the trial judge on costs ought to be the big picture rather than a nitpicking of every single item or minute spent by each party in the course of the litigation”. A full order of costs was made in favour of Mr Scully.

30. A similar decision was made by Simons J. in one of the cases cited in Word Perfect, Ryanair DAC v. An Taoiseach [2020] IEHC 673. In that case, the following important findings were made:

“22. The rationale for making a modified costs order is that one side should not have to bear costs which have been incurred unnecessarily by the other side. The raising of multiple issues has the potential to prolong the hearing of proceedings and to add to the volume of documentation, e.g. in terms of pleadings, affidavits or discovery. Whereas a party who has successfully defended proceedings taken against it is entitled, in principle, to recover the reasonable costs so incurred, an adjustment may be necessary to reflect the manner in which it conducted that litigation.

23. No such adjustment is, however, required in the circumstances of the present case. It is correct to say that the respondents did pursue a number of preliminary objections which were not accepted ultimately by the court. The respondents thus cannot be said to have been “entirely successful” in the proceedings. Crucially, however, the raising of these preliminary issues did not, in truth, add materially to the length of the proceedings nor to the volume of documents. This is because, as explained in the principal judgment, these preliminary issues were so enmeshed with the substantive merits of the case that it would be artificial to attempt to separate them out. The approach adopted in the principal judgment was to address the substantive merits of the case first, before returning to the preliminary objections towards the latter part of the judgment. This reflected the fact that the amount of time attributed to the preliminary issues over the course of the three days' hearing was not significant.”

31. In terms of the analysis of the question of success, the circumstances of that case were quite similar to those that pertain here. In each case, the party which ultimately prevailed in relation to the substantive orders sought, was not successful in relation to certain preliminary issues raised.

32. As well as this similarity, the finding by Simons J. that the preliminary issues raised in Ryanair v. An Taoiseach “were so enmeshed with the substantive merits of the case that it would be artificial to attempt to separate them out” is very redolent of the way the issues played out in these Proceedings.

33. This judgment was referenced by the Court of Appeal in Word Perfect. There, the Court noted that in Ryanair v. An Taoiseach (as well as in another similar case) the successful party was not “entirely successful” but was nonetheless entitled to a full award of costs (¶82).

APPLICATION TO THESE PROCEEDINGS

34. The Defendants were unsuccessful in some of the preliminary issues raised and successful in others. The correct analysis is that, while they were successful in the sense that they prevailed in the Proceedings, they were not “entirely successful” within the meaning of section 169.

35. The question then is how the overriding discretion with regard to the award of costs should be exercised. This must involve a consideration of the factors listed in section 169(1), including the conduct of the parties before and during the proceedings (section 169(1)(a)); “whether it was reasonable for a party to raise, pursue or contest one or more issues in the proceedings..”

(section 169(1)(b)); and “the manner in which the parties conducted all or any part of their cases….” (section 169(1)(c)).

36. In weighing the relevant factors, and exercising the broad discretion conferred on me, I remain mindful of the imperative that the overall approach should be a “broad-brush” rather than a forensic one.

37. Adopting this approach, and bearing in mind the points made by the parties and my insights from observing and determining the Proceedings, I make the following findings:

38. First, the background to several of the preliminary objections was necessary terrain to cover.

The time spent in dealing with those objections cannot be said to have been unnecessary. This applies to the analysis of the substantial and voluminous history of litigation regarding the Property, which was relevant to some of the preliminary issues, but also squarely relevant and necessary to understanding and contextualising the Proceedings. Another example can be seen in the finding that, despite the rejection of the argument that the Constitutional Challenge was barred by the doctrine of estoppel, this did “not mean that the prior non-compliance by the Constitutional Plaintiffs with Court orders is not relevant to these Proceedings, but rather that it falls to be weighed as an important part of the factual context of the claims and grounds advanced (particularly those involving considerations of equity and public policy)” (¶192).

39. For these reasons, I am satisfied that the preliminary issues were intertwined with the substantive issues such that the raising of those preliminary objections did not materially or unreasonably contribute to the costs of the Proceedings.

40. Second, the exercise of assessing several of the preliminary issues was important and assisted in framing the scope of the Proceedings and the correct approach to their resolution. For example, the discrete situation of Elektron needed to be assessed to ensure the limits to its constitutional claim were correctly identified (Judgment, ¶170-¶174). The analysis of the standing of Mr Halpin and Ms Keane assisted in defining with clarity the scope of the constitutional challenge that could properly be brought by those individuals (see Judgment at ¶167 to ¶169). While those parties were found to have locus standi in the strict sense, this does not detract from the reasonableness or utility of the objections having been raised.

41. Similarly, the preliminary objection that the Constitutional Challenge was barred by Henderson v. Henderson required a clear distinction to be drawn between the challenge to the constitutionality of legislation and the challenge to the contractual power of sale. The latter was found to be barred by Henderson v. Henderson (¶147, ¶148). If the preliminary objection had not been taken, this clarity in the delineation between the different claims in the Constitutional Challenge may not have been brought to bear. It was in the interests of the efficient conduct of the Proceedings that they were. It certainly cannot be said that the points were unreasonably raised.

42. Third, it must be noted that the Defendants did succeed in relation to certain preliminary issues.

For example, the objections by Stairway that the claim to be entitled to a licence, life estate or other interest in the Property was barred by Henderson v. Henderson and by the doctrine of estoppel were upheld. This shows that there was merit to having a filter in the Proceedings for discrete preliminary arguments to be raised and determined.

43. Fourth, the unsuccessful preliminary objections to the Constitutional Challenge occupy some

13 pages of the 103-page Judgment. Without engaging in forensics, this is a simple illustration that these matters did not contribute materially to the complexity or scale of the Proceedings.

I accept the position of the Defendants in this respect.

44. Fifth, the only misgivings which I identified in the Judgment (and during the hearing) about the conduct of the Proceedings related to how they were approached by the Plaintiffs. By way of example, I had concerns about the relevance of portions of the evidence of Mr Halpin; about the manner in which technical defences were raised for the first time during the hearing (Judgment, ¶47, ¶71, ¶72, ¶76); and about the focus being on the Possession Proceedings rather than the Constitutional Challenge (contrary to how the cases had been prepared). There was also a real question as to the merit of several of the technical questions raised (see, for example, Judgment at ¶80), including points about redactions, admissibility of documents, the execution of deeds, allegations of culpable non-disclosure, all of which were rejected.

45. I do not propose to repeat the findings made, but my view on the unmeritorious nature of such points is clear from the Judgment. They nonetheless did contribute to the length of the sevenday hearing and required determination. I am of the view that the approach taken by the Plaintiffs to these aspects of the conduct of the Proceedings added to their length and complexity and the overall approach taken created a real difficulty in disentangling the issues for determination. This, more than the failed preliminary objections, contributed to the costs of these Proceedings. These factors are not by any means decisive in deciding the question of costs here, but are relevant, and acknowledged as such by section 169(1).

MISCELLANEOUS

46. Two discrete additional points were raised.

47. First, the Plaintiffs questioned the necessity for the State to have incurred costs in attending the entirety of the hearing. Counsel for the State - quite accurately - points to the brevity and concision of the oral submissions made (having been no more than approximately an hour in length). Reference is also made to the reasonableness of the approach taken by the State in relation to the preliminary issues that arose, a point which I fully accept.

48. I have no hesitation in rejecting any attempt to limit the Plaintiffs’ liability in costs to the State.

The reasonableness of the State’s position was confirmed in the Judgment (¶143, ¶163 for example) and the State’s preliminary submissions regarding the application and relevance of the doctrine of jus tertii was a necessary and important contribution to framing these cases.

49. More strikingly, the proposition that the State should only have been present for the Constitutional Challenge ignores the difficulty of disentangling which case was being advanced by the Plaintiffs at different times during the hearing. It was very challenging to identify the boundary between the two cases. This point was raised repeatedly during the hearing, necessitating discussion, debate and a section in the Judgment on the sequence of issues to be determined, which culminated in aspects of the Possession Proceedings (the power of sale)

being assessed first, following by preliminary issues, then the Constitutional Challenge and

then the Possession Proceedings. The State could not have predicted when to attend for the Constitutional Challenge given how intermeshed all issues were at trial.

50. A second point raised by the Plaintiffs concerned the issue of an injunction by Stairway. This was not pressed or elaborated upon and was resisted by Stairway on the basis that a pragmatic view was taken not to pursue the injunction, given the existence of the parallel Constitutional Challenge. No legal authority or substantive argument was presented on this point, and I am satisfied that the issue of the injunction does not alter the correct approach to the award of costs, particularly given the substantive outcome of the Proceedings.

CONCLUSIONS

51. In light of the findings made above, I am satisfied that, while Everyday, Stairway and the State were partially successful in the Proceedings within the meaning of the Act of 2005, the correct orders are that:

a. Mr Halpin, Ms Keane and Elektron are liable for the reasonable costs of each of the Defendants to the Constitutional Challenge, including all reserved costs;

b. Mr Halpin, Ms Keane, Elektron and Madison are liable for the reasonable costs of Stairway and Everyday in the Possession Proceedings, including the costs of the Counterclaim, to include all reserved costs.