Aegon Insurance (UK) Ltd v Lysaght

JurisdictionIreland
JudgeMrs. Justice Macken
Judgment Date06 August 1999
Neutral Citation[1999] IEHC 249
Judgment citation (vLex)[1999] 8 JIC 0603
CourtHigh Court
Date06 August 1999

[1999] IEHC 249

THE HIGH COURT

No. 170 Sp./1998
AEGON INSURANCE (UK) LTD v. LYSAGHT
IN THE MATTER OF THE ATORNEYS AND SOLICITORS (IRELAND)
ACT, 1849

BETWEEN

AEGON INSURANCE COMPANY (UK) LIMITED
PLAINTIFF

AND

LIAM LYSAGHT CARRYING ON PRACTICE UNDER THE STYLE AND TITLE LIAM LYSAGHT & COMPANY, SOLICITORS
DEFENDANT

Citations:

ATTORNEYS & SOLICITORS (IRL) ACT 1849 S2

MELLOWHIDE PRODUCTS LTD V BARRY AGENCIES LTD 1983 ILRM 152

GALLAGHER SHATTER & CO, STATE V DE VALERA 1986 ILRM 3

Synopsis

Practice and Procedure

Bill of costs; delay; defendant solicitor commenced proceedings for satisfaction of bill of costs; plaintiff anxious to have bill of costs submitted to taxation; whether bill of costs should be submitted to taxation nothwithstanding period within which statutory entitlement to submit has elapsed; whether bill should be referred on basis of court's inherent jurisdiction; whether bill of costs queried; whether bill of costs was valid in accordance with act; whether good and valid reason for delay; whether v.a.t payable; whether interest accruing on bill payable; whether fees queried by plaintiff at any time after furnishing of bill; whether bill complies with Act of 1849 since not signed as required by Act; s. 2 Attorneys and solicitors (Ireland) Act, 1849.

Held: Bill of costs remitted to taxation; v.a.t and interest matters to be resolved by taxing master; statutory time limit should not be capable of being invoked to shut a party off from taxation if circumstances such that taxation warranted; bona fide delay; inefficient and undesirable for court to measure costs; signature on covering letter sufficient to validate bill; in any event plaintiff having acted on basis that bill valid cannot now impugn it; both parties granted liberty to re-enter the question of interest and question of v.a.t.

Aegon Insurance Company Limited v. Lysaght - High Court: Macken J. - 06/08/1999

The Attorney and Solicitors (Ireland) Act, 1849 requires that a bill of costs be signed or accompanied by a signed letter to permit a solicitor to sue for his fees. In this case, e the defendant's bill of costs was accompanied by a signed letter and was therefore a valid bill of costs which would permit a solicitor to sue for his fees. In exercising its inherent jurisdiction to remit a bill of costs to taxation, the Court must consider whether the delay in failing to remit within the statutory time limit can be excused. The High Court so held in finding that the delay was excusable and in remitting the bill of costs to taxation.

1

OUTLINE JUDGMENT of Mrs. Justice Macken delivered on the 6th day of August 1999.

2

This matter comes before me by way of a Special Summons issued on the 20th April 1998, by which the Plaintiff seeks declarations that the Bill of Costs dated the 28th February, 1996 and furnished by the Defendant to the Plaintiff for payment, was not a Bill of Costs within the Attorneys and Solicitors (Ireland) Act, 1849 and did not comply with the Rules of the Superior Courts 1996. In addition, the Plaintiff seeks an Order that the Defendant's Bill of Costs be remitted to taxation, either pursuant to Section 2 of the aforesaid Act or pursuant to the inherent jurisdiction of this Court. The Defendant resists this application, on the ground that an inordinately long period of time, well in excess of the statutory period, elapsed prior to the commencement of these proceedings, or even prior to the time when the Plaintiff first sought consent to have the Bill of Costs referred to the Taxing Master.

THE BACKGROUND
3

The background to the matter is fairly readily set out. The Plaintiff is an insurance company, established in the United Kingdom, but carrying on certain business in the State which I will describe in greater detail in a moment.

4

For a considerable number of years, the Defendant acted as Solicitor in Ireland on behalf of the Plaintiff. The Bill of Costs, the subject matter of this application, arose in the course of this relationship between the Plaintiff and the Defendant.

5

The business of the Plaintiff is that of reinsurance. It was, together with other insurance companies (three in all) reinsurers of a professional indemnity risk undertaken by an assurance company, ICI, in respect of an Irish company, Project Management Limited. More correctly, it was the lead reinsurer of the group which together were the 97.5% reinsurers of the risk.

6

Some years ago a dispute arose out of which an arbitration was commenced in respect of the alleged negligence of Project Management. The claimant was Curran Limited, and, for the purposes of this judgment, the details of the claim are not especially material. What is, however, material to this case is the following:-

7

(a) The arbitration hearing was likely to be very complex and complicated, because it was estimated by the Defendant, undoubtedly with the advice or guidance of Counsel, that it would continue at hearing for a period of about 50 days;

8

(b) There were two respondents to the arbitration, and it is likely therefore that the estimate as to time for a complex claim was not unreasonable;

9

(c) The instructions to act commenced in or around the year 1983, although it is uncertain whether that was simply in respect of the claim, or in general;

10

(d) In the course of the arbitration, there had been a "first" hearing, which dealt only with a claim by the claimant for monies due under the contract (I assume with Rohan Construction, the co-respondent to the arbitration) and in respect of which the Defendant held a watching brief;

11

(e) The major but outstanding matter in the arbitration in late 1994/early 1995 was however the undetermined claim by Curran Limited in respect of damages for negligence and breach of duty, which was the expected 50 day arbitration.

12

During the course of his retainer, the Defendant was paid certain sums by the Plaintiff, to which I will return in due course, since the alleged delay in the payment of these, forms part of the Defendant's claim that the Plaintiff has been dilatory and even lacking in bona fides in the manner in which it has dealt with payments to the Defendant over the years. The interim bills furnished by the Defendant to the Plaintiff were during the years 1994 and 1995.

13

The Plaintiff alleges that on the 28th March 1995, it wrote to the Defendant seeking estimated cost details for the arbitration. It is disputed by the Defendant that this letter was received by him. By that latter the Plaintiff sought an estimate of (a) the total incurred costs to date, (b) the Defendant's anticipated costs up to the end of August 1995, and (c) the costs of the arbitration hearing and a potential costs award if there was an unfavourable outcome. This letter referred to the fact that at that time there was still no date fixed for the arbitration, and that the reinsurers would have to consider the possibility of a commercial settlement of the claim.

14

The Defendant wrote on the 6th May 1995, making no reference to the foregoing letter, but in any event setting out some information, on the question of costs, having regard to the Points of Claim delivered in the arbitration and on the basis that the arbitration would continue for 50 days. The amount of the claim at that time was £1.820 million with continuing interest, and the costs were estimated by the Defendant at a global rate of £500,000 for each of the three parties in the event Project Management was held liable at the arbitration. There were certain discussions on possible settlement apparently in the month of July 1995, which were halted, and these resumed in September 1995. In December 1995, a settlement was reached which had, as its result, the fact that the arbitration hearing did not take place. A payment was made to Curran Limited including a contribution made by Project Management through the Plaintiff representing the reinsurers. The precise amount of the payment is not critical.

15

The monies wee paid in early January 1996. On the 28th February 1996, the Defendant wrote to the Plaintiff and included a note of his charges, including a Bill of Costs in total sum of £799,750.53, inclusive of Counsel's fees, outlay and value added tax, and subject to credits in respect of the payments on account referred to above. The Plaintiff, as lead insurers, then sought advices from Solicitors (now their instructing Solicitors) in relation to whether the Bill of Costs could be challenged by the Plaintiff and the manner of such a challenge. They, in turn, engaged Legal Cost Accountants, who advised in June 1996 that the professional fee sought by the Defendant was excessive and that the correct fee should be substantially less than claimed. The Plaintiff says it then sought further advices from its Solicitors as to the procedure involved in requisitioning a taxation of the Bill of Costs, and the possible consequences of adopting such an approach. The Plaintiff also says it was anxious to secure advices as to whether the estimates provided by the Defendant conferred on the Plaintiff any independent right of action against the Defendant. This was based on a claim for negligence arising from a claimed misrepresentation based on the estimate provided and the inadequacy of the same. I do not think I have to consider whether such a claim would succeed. In that regard, advices were sought by senior and junior Counsel, through Solicitors, and the advices were received some time later.

16

Mr. Lysaght, in his replying affidavit, points to the fact that during the course of the retainer, the Plaintiff had paid interim payments to the Defendant. He stated that it was made clear that the request for payment of such fees and expenses was on the basis that at the conclusion of the case the Defendant would submit its papers to its Cost Accountants to prepare a final account. Further, he states that the estimate...

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