Supreme Court allows appeal against costs order against absent District Judge due to lack of notice and jurisdiction.

THE SUPREME COURT

[Appeal No. 167/2012]

[Record No. 798JR/2010]

Denham, C.J.

O’Donnell J.

McKechnie J.

MacMenamin J.

Charleton J.

BETWEEN:

BRENDAN KILTY

APPLICANT

AND

JUDGE CORMAC DUNNE

RESPONDENT

AND

CAMPION PROPERTY CONSULTANTS LIMITED

NOTICE PARTY

Judgment of Mr. Justice John MacMenamin dated the 7th day of December, 2015

1. On the 13th October, 2011, the High Court (Hedigan J.) delivered an ex tempore judgment in judicial review proceedings brought by

the respondent to this appeal (Mr. Brendan Kilty). In those proceedings Mr. Kilty sought to quash certain orders made by the

appellant (the District Judge) in an application to renew an auctioneers’ licence held by the notice party herein (Campion Property).

The learned High Court judge, holding there had been objective bias, decided to quash orders made by the District judge. The issue

now in controversy concerns the ancillary order for costs made in the High Court judicial review. The District judge was not

represented in the judicial review hearing. He had been absolved from participation by a direction of the High Court. Nonetheless, the

learned High Court judge made costs orders against him. The District judge now appeals that order.

The Appellant’s Submissions

2. In summary, counsel for the appellant District judge submits to this Court:

(i) That the High Court judge failed to consider the established rule of law that in the absence of a finding of mala fides or

impropriety, costs should not be awarded against a respondent judge;

(ii) That a principle of immunity of this type applies a fortiori, in circumstances where, such as here, the District judge did

not defend the application for judicial review, and where the notice party was the only legitimus contradictor;

(iii) That, prior to the High Court judge making his award of costs, no submission was made to the High Court judge on the

general principle of judicial immunity to costs orders, despite the fact that correspondence from the Chief State Solicitor,

written on behalf of the District judge, and sent to the other parties, had identified the generally applicable principles

regarding judicial immunity from costs, and made clear that the judge did not contend to be an active party in the

hearing;

(iv) That the letters referred to at (iii) above were not brought to the attention of the High Court judge at the time of the

costs application.

Background Circumstances

3. Mr. Brendan Kilty (who is a senior counsel), became involved in a legal dispute with Campion Property. The issues centred around

that firm’s role in the disposal of properties which Mr. Kilty had owned. Mr. Kilty was concerned that Campion Property had had a

conflict of interest and sold at undervalue. Ultimately, Campion Property sued for fees which they said they were owed. Mr. Kilty

counter-claimed, claiming the company’s directors had acted in breach of duty, and in bad faith. After a 10 day plenary hearing, the

auctioneers succeeded in the High Court action. They obtained judgment in the sum of €356,386.99. Mr. Kilty unsuccessfully appealed

that judgment to this Court. The District Court licence application, which forms the background to this judicial review, occurred after

the High Court plenary proceedings, but before the appeal therefrom to this Court.

The District Court Proceedings

4. The proceedings before District Judge Dunne concerned the renewal of Campion Property’s licence. The hearings took place over 3

separate days from October, 2009 to January, 2010. Two men, who were acquaintances of Mr. Kilty, were the original objectors to

the licence renewal.

5. The District judge heard and granted the application to renew the licence. He rejected the objections. On the third day of the

hearing, Mr. Kilty sought to be added as an objector. The District judge held that his objection came too late.

6. In what follows, I summarise a series of allegations and counter-allegations made in the judicial review. They are a necessary part

of the narrative. They are not findings by this Court.

7. In the judicial review, Mr. Kilty deposed that he subsequently found out that there had been a professional and business

relationship between the District judge and Messrs. Eversheds O’Donnell Sweeney (EODS), the solicitors firm, which acted for Campion

Property in the licensing renewal application. He said the firm had also acted for the District judge in significant commercial litigation in

which he, (the judge), was involved. It appears that Mr. Kilty also had concerns as to the manner in which the same firm acted for

himself in a commercial/property matter. Mr. Kilty considered there was an undisclosed business relationship between the District

judge and EODS which gave rise to a reasonable apprehension of objective bias. He alleged his concern was more acute because he

was of the view that Mr. Rory O’Donnell, a senior solicitor and partner in EODS, had “shown support” for Campion Property’s directors

during the renewal hearings. Mr. O’Donnell denied that he had acted in any way improperly, or with an intent to influence the District

judge. Moreover, Mr. O’Donnell denied that he had ever known the District judge, or that he had been aware that his firm had acted

for the latter. The affidavits in the judicial review contain much other material that is irrelevant to the issue.

The Judicial Review Proceedings

8. Later it emerged that the District judge had not only granted the certificate of renewal to Campion Property, but also made a

number of further orders which came into focus in the judicial review hearing. It is necessary to set out how this occurred.

9. On the 21st June, 2010, counsel then acting for Mr. Kilty applied for, and were granted, leave to seek judicial review of the District

judge’s order, essentially on the grounds of objective bias. The District judge was named as respondent, and Campion Property as a

notice party. On the leave application, Mr. Kilty’s then counsel was directed by the High Court to serve an originating notice of

motion, returnable for the 8th July, 2010, on the Chief State Solicitor representing the District judge, and on the notice party.

10. Correspondence took place between the parties. This exchange was partly intended precisely to identify the role which the

District judge was to play in the judicial review. The Chief State Solicitor’s office took the view, first, that, in accordance with case

law, a District judge should not actively participate in such proceedings. Second, the correspondence drew attention to jurisprudence

concerning judicial immunity against costs awards made in the performance of judicial functions. None of this correspondence

mentioned certain unusual orders which, it transpired, the District judge made during the licence renewal application.

The Applicant’s Motion for Directions

11. Before the judicial review hearing proper, Mr. Kilty’s counsel took the somewhat unusual course of bringing a motion for directions.

This application raised a number of matters. All were focused on the role envisaged for the District judge in the forthcoming judicial

review. Questions raised included:

“1. Is it appropriate to join a District Court judge to judicial review proceedings against him/her?

2. Should a judge be served, and should a judge be struck from the proceedings once leave is granted?

3. Should a judge be joined where the applicant is making an allegation of bias against the judge?”

12. Under each heading, the motion paper set out, and, by way of submission, quoted from, a number of legal authorities which

considered the appropriateness of District judges’ active participation in judicial review proceedings in which their orders were

impugned. Brief reference is made to these authorities later in this judgment. But, as part of the motion application, and in response

to the last rhetorical question (3 above), Mr. Kilty’s legal advisors acknowledged the following:

“… The applicant accepts that costs cannot be awarded against a District judge when he does not take an active part in

proceedings. But this rather begs the question, where there is an allegation of bias, should the judge take an active part

in proceedings.” (emphasis added)

There is no doubt that, by then, Mr. Kilty’s advisors were alive to the fact that the general question of judicial immunity from costs

orders was part of the consideration.

13. This motion for directions was heard by the High Court on the 14th October, 2010. Hedigan J. declined to make any order to the

effect that the District judge should actively participate. His order provided, rather:

“The Court doth direct that this matter proceed without the participation of the Respondent at this time, and the Court

doth reserve the Costs of this Application.” (emphasis added)

The Judicial Review Hearing

14. One year later, on the 13th October, 2011, the judicial review proceedings came on for hearing again before Hedigan J. Mr. Kilty

was, by then, represented by different counsel. Prior to the full hearing, his counsel sought and obtained a subpoena duces tecum

directing the attendance of a District Court Clerk, and the production of the District Court file on the licence application. The file, and

other documents, including emails, were produced in court. It then emerged from email correspondence on file dated the 19th

January, 2010, that, as well as granting the renewal application, the District judge had also placed a “warning note”, on the file. This

purported to warn other District Court judges, who might deal with any future renewals, of Mr. Kilty’s role in the application which

Judge Dunne had heard. It also emerged that the District judge had purported to make an ‘Isaac Wunder’ order both against Mr. Kevin

Buggle (one of the two objectors), and Mr. Kilty himself.

Amendment During the Judicial Review Hearing

15. During the hearing before him, the High Court judge amended the statement of grounds on one point. This was to include an

added claim, based on the information which had by then emerged. The amendment was to the effect that the Isaac Wunder order

was ultra vires. No other amendment to the statement of grounds was sought or granted. The statement of grounds did not contain

any claim that costs should be awarded personally against the District judge. Holding that there were grounds for finding objective

bias on the basis of non-disclosure of the professional relationship, the High Court judge granted a declaration that the respondent

had breached the applicant’s right to fair procedures, and quashed the other orders, which he held to be ultra vires. He made no

finding of subjective bias.

The Costs Order

16. The High Court judgment was delivered ex tempore. The judge noted that the notice party had been effectively “caught in the

crossfire”, had not had any knowledge of the “warning note”, and had not had any “hand, act or part in the so-called Isaac Wunder

order that was made”. But, when he came to deal with costs, he said:

“The order for costs, therefore, will be an order in favour of the applicant [Mr. Kilty] against the respondent [the District

judge], and an order in favour of the third party [Campion Property] also against the respondent in this matter.”

This conclusion was reflected in the order of the High Court dated 30th March, 2012. The judge was not reminded that he had

previously made an order to the effect that the District judge need not participate in the judicial review.

Submissions

17. The primary question which arises in this appeal is, whether the costs order can stand? Counsel for the District judge submits a

costs order should never have been made in his client’s absence. He refers to decided authority on judicial immunity for costs.

18. Counsel for Mr. Kilty makes essentially two alternative arguments. First, he submits, the costs order should stand, as having been

lawfully made. Alternatively, he contends that this Court should now make a wide range of orders in order to ascertain the full

circumstances surrounding the making of the impugned District Court orders. He suggests that this Court should order further

discovery against the District Court clerk, and against the other parties. I infer from this that the intent is that this Court might find

that, even in light of some procedural frailty, it would be nonetheless justified in making a costs award against the District judge.

Additionally, counsel sought to argue that a number of judgments of this Court, including McIlwraith v. Fawsitt [1990] 1 I.R. 343,

should now be reviewed as being no longer in accordance with ECHR jurisprudence. No such argument appears in the High Court

transcript. There is strong authority that an argument should not be permitted to be made for the first time in this Court, save in

exceptional circumstances, which do not arise. (On the general principle, see K.D. (otherwise C) v. M.C. [1985] I.R. 697, per Finlay

C.J.).

The Primary Issue

19. But, antecedent to any other question, there arises the question of fair procedures. The learned High Court judge made a costs

order against a party who was unrepresented when the order was made. It is entirely understandable that Hedigan J. would not

recollect that, in the motion for directions, he himself had made the order dispensing with the need for the District judge to be

represented. Judging from the transcript, he felt that the District judge had simply chosen not to participate in the judicial review.

Here the judge was under a misapprehension.

20. It is only fair to point out there had been a change of legal team. But nevertheless, there was a duty on the party who had

brought the motion for directions to remind the High Court judge as to his previous order. This order was made one year earlier,

doubtless in a busy list. As a matter of first principle, a court should not make an adverse order against an absent or unrepresented

party, or one who is not on notice of the application. Such a course of action breaches the principle of audi alteram partem.

Further Submissions by Mr. Kilty’s Counsel

21. I do not disregard the fact that counsel for Mr. Kilty now points out that the District judge must have been well aware that he

had made the ‘warning note’, and of the fact that he had also made the Isaac Wunder order, and that these had only come to light

on the day of the full judicial review hearing. He submits these matters were within the District judge’s knowledge, and could have

been acknowledged earlier. He contends that were the matter to proceed further in this Court, a number of areas would require to be

more fully explored. This would require the production of a range of further documentation and communications. (I make no comment

as to whether these materials would have been privileged). I can only infer this as an application that this Court should embark on a

fact finding hearing. The Supreme Court is the Court of Final Appeal under the Constitution. The ascertainment of issues of fact and

law should be dealt with in the High Court, as the Court of First Instance, designated as such under the Constitution.

Decision

22. The determinative questions in this appeal go to constitutional justice and fair procedures. An unrepresented party cannot be the

subject of an adverse costs order, unless such party is on notice of an application for that purpose (See, by analogy, Staunton v.

Toyota [1996] ILRM 171, at 177).

23. In Staunton, this Court held that a third party joined to the proceedings, but who did not participate in the hearing between the

plaintiff and the defendant, had a right to be heard in the determination of the liability question in a personal injury case before the

trial judge, and that a failure to allow the third party to be heard amounted to a denial of fair procedures.

24. In Clarke v. District Judge Hogan [1995] 1 I.R. 31, heard in the High Court, Barron J. held that in circumstances where a District

judge was minded to bind over a witness to keep the peace, he should have so indicated, and that the District judge by making such

an order, in the absence of notice to the witness, had acted unlawfully. I would adopt the observations of O’Hanlon J. in S v. S

[1983] I.R. 75, at 81, that the combined effect of Articles 34.1, 38.1 and 40.3 of the Constitution, gives rise to a constitutional right

to fair procedures in court proceedings (See, generally, Re Haughey [1971] I.R. 217).

25. Taking these principles together, it is clear that, on this occasion, the High Court judge erred in making the costs order. A party

potentially affected by a final court order is entitled to be given adequate notice of the possibility of such an order being made. Such

an order should not be made, at least in the absence of notice to a party that such application might be made. This is not, of course,

to say that by failing to attend a court proceeding, a party, who is on notice, can prevent an adverse order being made. What is

necessary in such a context is that a court be satisfied a party is on notice of the application, and the potential orders which might

foreseeably be made.

26. It would be inappropriate for this Court to embark on the form of enquiry which is urged by counsel on behalf of Mr. Kilty. The

Supreme Court is not a Court of First Instance. Furthermore, no application was made at any stage to amend the statement of

grounds, to seek costs against the District judge (see AP v. DPP [2011] IESC 2). As this Court emphasised in AP, it is the duty of an

applicant in judicial review to set out, clearly, each of the reliefs claimed against a respondent, or a party who might be affected. It is

not open to this Court, at this stage, to make an order amending the statement of grounds. There is no cross-appeal, or notice to

vary, filed by the respondent.

27. The question of judicial immunity arose in McIlwraith v. Fawsitt [1990] 1 I.R. 343; and O’Connor v. Carroll [1999] 2 I.R. 160. I

express no further view thereon. Any further issue, and the extent of any immunity arising, are matters which fall to be determined by

the High Court, in the first instance, utilising well established procedures for fact finding. By remitting the matter, neither party will be

debarred from a right of appeal on a matter, potentially, of some gravity.

Proposed Order

28. The present order for costs made against the respondent District judge, having been made in the absence of jurisdiction, cannot

stand. I would, therefore, allow the appeal, and remit the question of the costs award to the High Court.