Summary judgment refused due to material factual disputes; costs reserved for final trial determination.

THE HIGH COURT

[2025] IEHC 439

Record No: 2023/446S

BETWEEN:-

XEROTECH LIMITED

Plaintiff

-and-

AYRO INCORPORATED

Defendant

Ruling of Ms. Justice Emily Farrell delivered on the 31st July 2025

1. By Notice of Motion dated 14th May 2024 the Plaintiff (which is now in liquidation) sought summary judgment on foot of a summary summons issued on 5th December 2023, liberty having been granted to serve the proceedings out of the jurisdiction. The Plaintiff claimed judgment in the amount of €US$1,830,059 plus interest pursuant to the contract relied upon. I delivered judgment ex tempore on 10th July 2025 refusing the application for summary judgment and adjourning the proceedings for plenary hearing.

2. After the Defendant was served with the summons but prior to the motion for summary judgment issuing, the Defendant wrote to the Plaintiff on 25th January 2024 and 12th April 2024. It was stated in the letter of 25th January 2024 that no monies were due and that the Defendant did not understand the basis on which the proceedings had been commenced by summary summons as “There is clearly a dispute between our respective clients regarding the amounts claimed by your client the calculation of which is unclear and confusing from the summary summons.” The letter of 12th April 2024 also stated:

“Furthermore, even if any such contract were held to exist (which for the avoidance of doubt our client strenuously rejects), it is evident from the very manner in which your client has pleaded its case to date that there is a clear factual dispute as between our respective clients. As such, this is clearly not a matter which is appropriate to be adjudicated by way of the summary summons procedure.”

3. The defence put forward in the replying affidavit sworn the 3rd October 2024 by David Hollingsworth was that a contract had not been entered into between the Plaintiff and Defendant. At the hearing, the Defendant advanced the argument, for the first time, that if the Court finds that a contract had been entered into, there had been repudiation by the Defendant and that the only appropriate cause of action is an action for damages for breach of contract. This argument had not been made in the written submissions filed in advance of that hearing but was open on the evidence before the Court.

4. I refused the application for summary judgment and adjourned the proceedings for plenary hearing, on the basis that it is not clear that the Defendant does not have a bona fide defence to the proceedings. I was not satisfied that the entry of an appearance or the defence advanced by the Defendant were solely for the purpose of delay nor could I be satisfied that an injustice would not be caused by the entry of summary judgment. I found that the Defendant had surpassed the threshold to defend the proceedings on the basis that a contract had not been concluded and noted the disputes of fact in the affidavits. I was also satisfied that the Defendant was entitled to argue that the appropriate cause of action was an action for damages rather than a liquidated sum. That defence was advanced as a secondary defence and no finding was made as to the effect in law of the email of 13th June 2023 which the Defendant contends would amount to a renunciation or repudiation of the contract, if indeed the Court were to hold that a contract had been concluded.

5. The Defendant seeks the costs of the proceedings to date on the basis that it contends that the institution of the proceedings and the bringing of the application for summary judgment were unreasonable. The Defendant submits that, if it was not unreasonable to have sought summary judgment, it was unreasonable to pursue the application once the affidavit of David Hollingsworth sworn the 3rd October 2024 was filed. The Plaintiff submits that the appropriate order is that the costs of summary proceedings to date should be made costs in the cause. This judgment addresses only the issue of costs.

6. The jurisdiction of the High Court to award costs is governed by the Rules of the Superior Courts, subject to statute, in particular sections 168 and 169 of the Legal Services Regulation Act, 2015. Order 99 RSC provides inter alia:

“2. Subject to the provisions of statute (including sections 168 and 169 of the 2015 Act)

and except as otherwise provided by these Rules:

(1) The costs of and incidental to every proceeding in the Superior Courts shall be in the discretion of those Courts respectively.

..

(3) The High Court, the Court of Appeal or the Supreme Court, upon determining any interlocutory application, shall make an award of costs save where it is not possible justly to adjudicate upon liability for costs on the basis of the interlocutory application.

3.(1) 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.”

7. Section 169 of the 2015 Act provides:

“(1) 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,

…

(2) …………………..

(4) Unless the court before which civil proceedings were commenced orders otherwise, or the parties to those proceedings agree otherwise, a party who discontinues or abandons the proceedings after they are commenced (including discontinuance or abandonment of an appeal) is liable to pay the reasonable costs of every other party who has incurred costs in the defence of the civil proceedings concerned until the discontinuance or abandonment.”

8. There was no dispute between the parties as to the test to be applied on an application for summary judgment, but the dispute related to the application of that test to the Plaintiff’s claim and the evidence which was before the Court.

9. The parties agree that the applicable principles in relation to the costs of the application for summary judgment are those set out in ACC v. Hanrahan [2014] IESC 40; [2014] 1 IR 1.

10. The Defendant described the general principle as follows:

“..the best course of action in most cases is to make the costs of the application for summary judgment ‘costs in the cause’ because:

i The application for summary judgment is an integral part of the summary summons procedure.

ii The threshold for being granted leave to defend is relatively low;

iii The plaintiff may well succeed at the full hearing.”

11. The Plaintiff agrees with this summary but submits that their application to the circumstances of this case should lead to an order making the costs of the application costs in the cause. The Defendant also relies on Cabot Financial (Ireland) Ltd v. Kearney [2022] IEHC 247 and urges that a similar order is appropriate.

12. Clarke J. (as he then was) approved the following passage from Delany and McGrath, Round Hall, 3rd Ed. at para. 26-87:

“Where the motion for judgment is unsuccessful and the defendant obtains leave to defend, the court's discretion is circumscribed by Order 99, rule 1(4A) which requires the court, upon determining any interlocutory application, to make an award of costs save where it is not possible justly to adjudicate upon liability for costs on the basis of the interlocutory application. It can be argued that a defendant should be entitled to costs on the basis that he has been successful in defeating the motion for summary judgment. However, given that an application for summary judgment is an integral part of the summary summons procedure, that the threshold for being granted leave to defend is relatively low and that the plaintiff may well succeed at the full hearing, it would seem that the best course of action in most cases is to make the costs of the application for summary judgment costs in the cause.”

13. As Clarke J. noted, part of the reason the costs regimes under Order 99 RSC and the 2015 Act were introduced was to “to discourage parties from bringing unreasonable applications or resisting reasonable ones.” He also highlighted the distinction between interlocutory applications, such as an application for discovery or to compel replies to particulars, where the issues considered were unlikely to be revisited at the substantive hearing, with other interlocutory applications. Where the issues are unlikely to arise again at the trial of the action, the judge hearing an interlocutory motion will often be in a better position than the trial judge to decide where the costs of the motion should lie. However, Clarke J. held that slightly different considerations apply where, at least to a material extent, some of the issues which are before the Court at an interlocutory stage arise, or are likely to arise again, at the trial in some form.

14. Clarke J. stated:

“3.6 ..it may well not be just that a defendant should get the costs of a summary judgment motion (even if it was clear, on the basis of the affidavit evidence, that the matter would have to go to plenary hearing) if, with the benefit of hindsight after trial, it was clear that the facts asserted as providing a defence were not correct.

3.7 For those reasons it seems to me that, certainly in cases where a material part of the defence put forward is based on an assertion of facts which are contested by the plaintiff, there will be many cases where it will not be possible to justly determine the costs of a summary judgment motion for a trial judge may be in a much better position to reach a judgment on such matters in the light of the ultimate outcome of the case on the facts.”

15. While a motion for summary judgment is “an integral part of the summary summons procedure”, there are cases where the motion requires separate allocation of court time and incurs significant additional costs. The Court retains a discretion to award some or all of the costs of the motion for summary judgment on an unsuccessful plaintiff if the Court is satisfied that the plaintiff acted unreasonably in the way in which the motion was approached, including any unreasonable failure to agree to a matter going to plenary hearing in light of the affidavits filed. As Clarke J. held that the plaintiff must be at risk of an adverse costs order in respect of any additional costs incurred by virtue of a lengthy and disputed summary judgment application (which becomes a centre of costs in itself).

16. The principle, as set out by Clarke J. at para. 3.9, is that:

“in the majority of cases, the costs of a summary judgment motion as a result of which the proceedings are remitted to plenary hearing should either be reserved or become costs in the cause. Costs in the cause may be the appropriate measure unless it may be the case that the judge adjudicating on the summary judgment motion feels that it is possible that the detail in which the trial judge determines the ultimate issues in the case could have a bearing on the justice of where the costs should lie. In those circumstances a reservation of the costs may be more appropriate.”

17. The Court retains a discretion, in accordance with the Rules and the 2015 Act. In Hanrahan it was held that in cases where the Court finds that an unsuccessful plaintiff has acted in a particularly unreasonable manner in not consenting to the application going to plenary hearing, “the Court should consider whether the justice of the case requires that some or all of the costs of the summary judgment motion should be borne by the plaintiff who has acted in such a manifestly unreasonable way.”

18. The Defendant submits that the Plaintiff has acted in a manifestly unreasonable way in issuing and proceeding with the application for summary judgment, particularly after the replying affidavit of Mr. Hollingsworth was filed. That affidavit was filed before the application was transferred from the Master’s List.

19. The Defendant submits that the appropriate order in this case, as in Cabot Financial (Ireland) Ltd v. Kearney, is an order awarding the costs of the proceedings to date to the Defendant. Cabot v. Kearney was a very different case. In Cabot v. Kearney, Holland J.

found that the summary summons was deficient and that this should have been obvious as it was issued after judgment had been delivered by the Supreme Court in Bank of Ireland Mortgage Bank v. O’Malley [2019] IESC 84; [2022] 2 IR 487; [2020] 2 ILRM 423.

Holland J. noted that that case was adjourned to plenary hearing by consent because the plaintiff accepted that it had not pleaded its summary summons to the O’Malley standard.

It was also accepted by Cabot that, at that time, it could not establish a prima facie case that it was entitled to summary judgment in the amount claimed. If a plaintiff had not established a prima facie case on the summons or in the evidence, the nature of the defence relied upon by the defendant is immaterial. In Cabot, Holland J. was not persuaded that the Hanrahan principles applied to proceedings, which were sent forward for plenary hearing, where a prima facie claim was not demonstrated. He held, lest he was wrong in that, that the plaintiff had acted in a manifestly unreasonable manner and that if the Hanrahan principles applied, the defendant was still entitled to his costs. Cabot could not have obtained summary judgment even if the application had been unopposed. Holland J.

held that issuing proceedings in which an entitlement to summary is asserted in the knowledge that the plaintiff cannot adequately plead or prove a prima facie case for judgment is inconsistent with the invocation of the summary process. Where that occurs, it is a legitimate factor to be weighed in exercising the Court’s discretion as to costs.

20. There is a very significant difference between a plaintiff failing to obtain summary judgment, and a finding that seeking that relief was manifestly unreasonable. Were that not the case, the order made in most unsuccessful applications for summary judgment would be an order for costs in favour of the defendant. As Clarke J. noted in Hanrahan failure to obtain summary judgment “falls quite a distance short of establishing that ACC acted so unreasonably in putting forward argument on the matter that costs should be awarded against them.”

21. The Defendant submits that it advanced both a defence on the facts, that there was no concluded contract, and a defence that the appropriate remedy if the Court ultimately rejects that defence, would be a claim for damages for breach of contract and not a liquidated sum. The latter is relied upon as “an important element” of the application for costs and it was submitted that this ought to have alerted the Plaintiff that it could not reasonably have sought summary judgment. It is submitted that the Plaintiff “ought to have understood that what they were dealing with was – ‘at best’ – a renunciation (or repudiation) of a contract.” As noted above, this argument was advanced for the first time at the hearing of the application for summary judgment. Save insofar as this issue was argued at the hearing, it was not contended that a prima facie case for summary judgment had not been advanced. Whilst the Defendant had challenged the use of the summary procedure in correspondence prior to the issuing of the motion for summary judgment, that was not done for the reason advanced at the hearing but was done on the basis of the conflict of the facts as maintained by the parties. I do not accept the contention that it ought to have been sufficiently obvious to the Plaintiff that any claim against the Defendant arising from the alleged contract, was limited to a claim for damages on the basis that the Plaintiff had renunciated or repudiated the contract. This is particularly in view of the correspondence which issued prior to the motion for summary judgment and the contents of the affidavit of Mr. Hollingsworth, who was adamant that a contract had not been concluded.

22. The second basis on which it was submitted that costs should be awarded to the Defendant is that the Defendant submits that it ought to have been clear from the affidavit of Mr Hollingsworth, if not the correspondence, that the conflict of fact was such that the matter would need to be sent for plenary hearing. Nothing in the judgment in Hanrahan points to proceedings which are sent forward on the basis of a dispute of facts in the affidavits falling outside the category of cases where costs should normally be costs in the cause. The materiality of the facts which were in issue was challenged and considered in the application for summary judgment. A number of conflicts of fact, which I considered are material, were evident once the replying affidavit of Mr. Hollingsworth was filed in response to the application for summary judgment. It is true that it was open to the Plaintiff to have consented to plenary hearing at that stage. However, if the Court ultimately accepts the facts as presented by the Plaintiff rather than those relied upon by the Defendant, it would not be appropriate that the Defendant should have recovered the costs of the application for summary judgment before the Court has the opportunity of resolving the factual disputes. That is a significant part of the rationale for the principles identified in Hanrahan (which case also ran for a day and a half in the Non-Jury List).

23. Taking both arguments advanced by the Defendant together, I do not consider that it was manifestly unreasonable for the Plaintiff to issue or proceed with its application for summary judgment. Therefore, I do not consider that it is appropriate to award the

Defendant the costs of succeeding in overcoming the low threshold for the proceedings to be sent for plenary trial.

24. Whilst it is more usual that the costs would be made costs in the cause rather than reserved, I consider it appropriate to reserve the costs in this case. It appears clear, at this stage, that the question whether a contract had been concluded, and if so, the nature and effect of the terms thereof will fall to be considered at the trial of the action. It is not possible to preempt the findings which may be made at the trial, nor would it be appropriate to attempt to do so. The Plaintiff’s case is that it is entitled to the sum claimed in accordance with the terms of the contract, but the Defendant’s position is that if a contract did come into existence (which it denies), there was repudiation or renunciation thereof and as a result the Plaintiff would be entitled to damages for breach of contract not the payments which were demanded in reliance on the contract. The Court at the trial of the action will be in a better position than I to decide which party should bear the costs of this application.

25. Therefore, I consider that an order reserving the costs of proceedings to date best meets the interests of justice. I will make that order.

Emily Farrell