Supreme Court dismisses appeal on costs, upholding default rule that successful party normally recovers costs.

AN CHÚIRT UACHTARACH

THE SUPREME COURT

Supreme Court Record No. 2023/119

Dunne J. O’Malley J. Woulfe J. Hogan J. Donnelly J.

Between/

IRISH BANK RESOLUTION CORPORATION LIMITED

(IN SPECIAL LIQUIDATION)

and

IRISH NATIONWIDE BUILDING SOCIETY

Plaintiffs/Respondents

-and-

MICHAEL P. FINGLETON

(ACTING THROUGH HIS LAWFULLY APPOINTED ATTORNEYS EILEEN

FINGLETON AND MICHAEL FINGLETON JNR.)

Defendant/Appellant

RULING of the Court as to Costs delivered on the 3rd day of March, 2025

1. This is the ruling of the Court in relation to costs arising from the substantive appeal judgment delivered by this Court on the 19th December, 2024 (see: [2024] IESC 59). The Court dismissed the appellant’s appeal against a decision of the Court of Appeal delivered on the 10th May, 2023, which had dismissed his appeal against the judgment and order of the High Court (Hunt J.) delivered and made on the 14th May, 2021. The High Court refused the appellant’s application to dismiss or permanently stay these proceedings against him pursuant to the inherent jurisdiction of the Court in the interests of justice where, by reason of the passage of time and the severe health of the appellant, it was said that there is a real or substantial risk of an unfair trial or an unjust result.

2. On the same date the Court made an order for costs in favour of the respondents unless the appellant filed written submissions to the contrary. The appellant subsequently filed written submissions dated the 13th January, 2025, and the respondents filed written submissions dated the 27th January, 2025.

3. In his submissions the appellant asks the Court to reserve the question of costs to the trial judge, or to direct that costs be costs in the cause. His core submission is that there would be a potential unfairness in awarding costs in favour of the respondents. He contends that if the appellant succeeds in defending the proceedings on their merits, or if the appellant succeeds at trial in demonstrating that the proceedings are beyond the reach of a fair trial, then it would be potentially unjust for the appellant to bear the burden of the costs of this appeal.

4. The appellant states that there is one further significant feature of the litigation which bears mentioning in the context of costs. While Woulfe J. stated (at para. 95 of his judgment) that he agreed with the Court below that this case had become more rather than less document dependent, the appellant argues that recent witness depositions in Northern Ireland have demonstrated that the documents which are available to the respondents are severely deficient. It is submitted that this additional evidence will likely inform the trial judge’s view both in relation to the substance of the respondents’ claim and in relation to costs, and that this illustrates the potential risk should this Court make a final order as to the costs of this interlocutory application now, based only upon the outcome of this appeal, and divorced entirely from the underlying merits (or outcome) of the High Court proceedings.

5. In the alternative, if the Court considers it appropriate to award costs to the respondents, the appellant requests a stay on the order for costs pending the determination of the proceedings. He submits there are strong pragmatic reasons for directing a stay, the most prominent being the possibility of there being a set-off and reconciliation of all costs orders at the conclusion of the trial, and that adjudicating upon and executing a discrete costs order before the conclusion of the proceedings would be inefficient and potentially wasteful.

6. In their submissions the respondents state that it is clear that the default position is that the Court should determine the costs of this interlocutory application, and that the successful respondents are entitled to their costs. It is said that in order to depart from this default position, the unsuccessful appellant must establish that there are exceptional circumstances to justify such a departure. As regards the appellant’s first argument, i.e. that he may be successful in defending the proceedings on the merits, the respondents submit that the appellant must show that it is not possible for this Court to justly make an award of costs on this interlocutory application, and this assessment cannot be altered by inviting the Court to speculate on what the ultimate outcome of the proceedings might be. They also observe that the appellant’s argument is one that could be advanced by the unsuccessful party in any interlocutory application.

7. The respondents then refer to the alternative argument advanced by the appellant, i.e. that he may succeed at the trial of the action in establishing that there is an intolerable risk of an unfair trial. They point out they argued successfully in the Courts below that the issue of risk of an unfair trial was a matter for the trial judge, and how that issue is ultimately resolved by the trial judge does not alter this, and it had been acknowledged in the judgments appealed by the appellant that he might raise this issue at the trial of the action. It is submitted, therefore, that this is not a logical basis to justify a departure from the default costs position in the present case.

8. As regards the appellant’s argument that the documentary record is deficient, the respondents submit that they argued during the course of this application, and that this Court agreed, that this issue should not be determined in advance by this Court, and that it is difficult to see therefore what possible relevance this might have to the present application for costs.

9. Lastly, the respondents refer to the appellant seeking a stay on any costs order made against him until the determination of the proceedings. They submit that the appellant does not assert any prejudice that would arise from a costs order not being stayed, but rather asserts pragmatic reasons for seeking a stay. They submit that the appellant’s argument in support of a stay is an argument that can be made by the unsuccessful party to any interlocutory application, and that this does not justify invoking the exceptional jurisdiction to depart from the default position as set out above.

Decision

10. It seems clear, and accepted by both parties, that the default position, under s. 169 of the Legal Service Regulation Act, 2015 and the re-cast O. 99, r. 2 of the Rules of the Superior Courts, is that the Court should normally determine the issue of the costs of any interlocutory application, and that the successful party is normally entitled to their costs. In order to depart from this default position, the unsuccessful party must establish, as per O. 99, r. 2(3), that “it is not possible justly to adjudicate upon liability for costs on the basis of the interlocutory application”.

11. The Court is of the view that the appellant has failed to establish that there are any exceptional circumstances to justify a departure from the default position in this case. As regards the appellant’s first argument that he may succeed in defending the proceedings on their merits, this argument runs contrary to the rationale for providing in the Rules that the Court should normally make an award of costs upon determining any interlocutory application, and the Court accepts the respondents’ submission that this argument is one that could be advanced by the unsuccessful party in any interlocutory application. In the present case the interlocutory issue was a self-standing discrete issue, and therefore it should be treated as such for costs purposes, unless there are some exceptional circumstances.

12. As regards the appellant’s argument that he may succeed at the trial of the action in establishing that there is an intolerable risk of an unfair trial, the Court is of the view that this argument is also misconceived. It had been acknowledged in the judgments appealed by the appellant that he might raise this issue at the trial of the action, and the respondents also accepted this proposition and relied upon it in this appeal.

13. As regards the appellant’s argument that the documentary record is deficient, as was stated in the judgment of this Court (at para. 97) this is a potential issue for the trial judge at the hearing of the action, and has very limited relevance to the present application for costs.

14. The final matter is the alternative application by the appellant for a stay on any order for costs, pending the determination of the proceedings. In circumstances where the trial of the action is listed for hearing on the 6th May, 2025, the Court is prepared to grant a stay on the costs order for the pragmatic reasons advanced by the appellant, relating to the possibility of there being a set-off and reconciliation of costs orders at the conclusion of the trial.