Clarke v Commissioner of an Garda Síochána

JurisdictionIreland
CourtSupreme Court
JudgeFENNELLY J.
Judgment Date31 July 2001
Neutral Citation[2001] IESC 201
Docket Number[S.C. No. 226 of 1999]
Date31 July 2001

[2001] IESC 201

THE SUPREME COURT

Keane, C.J.

Murray, J.

Hardiman, J.

Geoghegan, J.

Fennelly, J.

Record No. 226/99
CLARKE & MCCARTHY v. COMMISSIONER OF AN GARDA SIOCHANA

BETWEEN

BRENDAN CLARKE AND FERGUS McCARTHY
Plaintiffs

AND

THE COMMISSIONER OF AN GARDA SIOCHANA, THE ASSISTANT COMMISSIONER OF AN GARDA SIOCHANA, RICHARD O. WALSH, JOHN GERAGHTY, THE MINISTER FOR FINANCE, THE MINISTER FOR JUSTICE, IRELAND AND THE ATTORNEY GENERAL
Defendants

Citations:

COURTS OF JUSTICE ACT 1947 S16

O'SULLIVAN V O'DWYER (N 0 2) 1973 IR 81

MCGARRY, AG V SLIGO CO COUNCIL (NO 2) 1991 IR 99

COOKE V WALSH 1989 ILRM 322

HICKEY V NORWICH UNION FIRE INSURANCE SOCIETY LTD EX-TEMP MURPHY 23.10.87

BEST V WELCOME FOUNDATION LTD 1995 2 IR 393

DEBTORS IRELAND ACT 1840 (3 & 4 VIC C105) S26

DEBTORS IRELAND ACT 1840 (3 & 4 VIC C105) S27

RSC O.41 r6

JUDGMENTS ACT 1838

GAUNT V TAYLOR 3 MYL & K 302

COURTS (SUPPLEMENTAL PROVISIONS) ACT 1961 S47

COURTS ACT 1981 S21

COURTS ACT 1981 S22

COURTS ACT 1981 S26

LIDWELL V LIDWELL 7 IR EQ REP 91

TAYLOR V ROE 1894 1 CH 413

PYMAN V BURT 1884 WN 100

RSC APPENDIX H

RSC APPENDIX F PART II

RSC O.42 r13

SCHROEDER V CLEUGH 46 LJCP 365

ALEXANDER V CURRAGH 1915 1 IR 273

K V K 1977 1 AER 576

ERVEN WARNINK BV V TOWNEND 1982 3 AER 312

HUNT V DOUGLAS LTD 1988 AER 823

COURTS ACT 1981 S27

Synopsis

PRACTICE AND PROCEDURE

Costs

Taxation of costs - Case stated - Payment of interest - Equity -Date of settlement - Allocatur rule - Incipitur rule - Statutory interpretation - Whether interest on costs payable from date of judgment or order awarding them or from date of taxation - Courts of Justice Act, 1947 section 16 - Debtors Ireland Act, 1840 - Courts Act, 1981 section 21- Rules of the Superior Courts, 1986 Order 42, rule 13 (226/1999 - Supreme Court - 31/7/01)

Clarke v Commissioner of An Garda Síochána - [2002] 1 IR 207 - [2002] 1 ILRM 450

The plaintiffs had initiated proceedings claiming damages and costs. A settlement had been reached and although the point was not clear the court assumed that the settlement had been made a rule of court and that an order of taxation of costs was made. The plaintiffs sought the payment of interest on the costs from the date of judgment. The defendants' principal argument was that interest should run only from the date or dates upon which the successful party had discharged the costs in respect of which he sought interest. A case stated was set down for a decision by the Supreme Court. Mr. Justice Fennelly, delivering judgment, held that the point at issue was the extent of the right to interest on costs awarded by an order of the court, not the exercise of discretion to provide for interest. The law was far from clear and the authorities were in a state of some confusion. The matter should be decided on the basis of the interpretation of sections 26 and 27 Debtors Ireland Act, 1840. Costs constituted the liability of the unsuccessful party from the moment of the decree or judgment. Although they were not payable until quantified but when quantified the debt related back to the date of the judgment, with interest running from that earlier date. These views were consistent with the wording of sections 26 and 27 of the Debtors (Ireland) Act. Section 26 gave the right to interest from the date of entering up of judgments. The case stated was answered: Yes. Interest was payable on costs from the date of the judgment which awarded them.

1

31st day of July, 2001 by FENNELLY J. [nem diss]

2

A Case Stated from the Circuit Court raises the question of whether interest is payable on costs from the date of the judgment order awarding them or only from the date of taxation. Surprisingly, the law is far from clear and the authorities are in a state of some confusion.

3

The facts are simple. The plaintiffs are members of An Garda Siochana and were plaintiffs in a High Court action (Record No. 8228P) which was settled on 15th May 1996, on terms one of which was that the defendants "pay to the Plaintiffs their costs of the said action when taxed and ascertained". Although the Case Stated is silent on the point, it can be assumed that the settlement was made a rule of court and that an order for taxation of costs was made.

4

The Taxing Master of the High Court issued a Certificate of taxation on 20th March 1997 certifying £130,388.27 as the sum due for party and party costs. This was paid on 8th May 1997. No interest was paid. Interest at the prevailing rate of 8% per annum from 15th May 1996 to 8th May 1997 is agreed to amount to £ 10,215.01. The plaintiffs claim this sum as due from the date of the settlement. The defendants argued that interest was payable only to the extent that the plaintiffs were out of pocket. The plaintiffs had paid £64,000 to their solicitors an account of fees in February 1996. His Honour Judge Kevin Haugh at the request of the defendants stated the following question of law to the Supreme Court pursuant to section 16 of the Courts of Justice Act, 1947:

"When costs have been taxed on a party on [sic] party basis, is the party responsible for discharging those costs liable to discharge a sum in respect of interest on those costs, between the date upon which the costs order was made and the date of payment in circumstances where the interest sought does not relate to a sum of money in relation to which the party to whom costs are to be paid is out of pocket, nor in relation to which an agreement exists between the said party and his Solicitor regarding the payment of interest on such costs?"

5

Although this question does not expressly ask whether interest should run from the date of judgment and thus prior to the amount being determined in taxation, it is clear that this is the essential legal issue.

6

The parties have referred principally to the following cases: O'Sullivan v O'Dwyer (No 2) [1973] I.R. 81; Attorney General (McGarry) v Sligo County Council (No 2) [1991] IR. 99 785 ("McGarry"); Cooke v Walsh and Attorney General [1989] I.L.R.M 322 (Cooke v Walsh); Hickey v Norwich Union Fire Insurance Society Ltd (High Court Unreported 23rd October 1987, Murphy J); Best v Welcome Foundation Ltd [1995] 2 I.R. 393( "Best"). Reference was also made to a number of older Irish cases and to some English ones.

7

The plaintiffs argument is that interest is payable by virtue of the sections. From the moment of the judgment, the successful party is entitled to interest, which represents the price of money which one party has and which is owned to the other. The defendants" principal argument is that interest should run only from the date or dates upon which the successful party has discharged the costs in respect of which he seeks interest.

8

The point at issue is the extent of the right to interest on costs awarded by an order of the court, not the issue which the court had to determine in some of the cases, namely the exercise of discretion to provide for interest. Self-evidently interest runs from the time when taxation of costs fixes the amount due from the losing party. What is in dispute is whether it runs from the making of the order. This right is governed by statute.

9

The relevant statutory provisions are to be found in two sections ( "the sections") of the Debtors Ireland Act 1840 (otherwise 3 and 4 Vict Chapter 105). They are, so far as relevant:

10

2 "26. Every judgment debt due upon any judgment not confessed or recovered for any penal sum for securing principal and interest shall carry interest at the rate of four pounds per cent annum from the time of entering up the judgment ........; and such interest may be level under a wait of execution on such judgment.

11

27. All decrees and orders of the Court of Chancery .... and all rules of any of the superior courts of common law ........ whereby any sum of money or costs, charges or expenses shall be payable to any person shall have the effect of judgments of the superior courts of common law ....."

12

The entry of a judgment for the purposes of those provisions is governed by Order 41, rule 6 of the Rules of the Superior Courts which provides:

"Particulars of every judgment or order of the High Court...shall be entered in proper books to be kept for that purpose and the judgment or order shall be field in the Central Office.......... Every judgment or order pronounced or made by the High Court..... when so filed shall be deemed to be duly entered..."

13

At common law and, therefore, prior to the passing of the Act of 1840 and its equivalent in England, the Judgments Act, 1838, no interest was payable on a judgment as such. A new action at law had to be started ( Gaunt v Taylor 3 Myl & K. 302)

14

These venerable provisions remain, surprisingly, the key to the question raised in the Case started. They have been adapted to the Circuit Court by section 47 of the Courts (Supplemental Provisions) Act, 1961and sections 21 of the Courts Act, 1981and as the point of reference for the award of interest on damages in section 22 of the latter act.

15

Unfortunately, as remarked by Murphy J at page 397 of his judgment in Best, "issues with regard to the payment of interest on costs in legal proceedings have been debated in this country and in England over many years and there have been conflicting decisions within both jurisdictions." I might add that there appears to have been variation not only between Irish and English Practice but also between the courts of common law and of equity. More Confusingly still, some of the decision turn, not on the terms of the sections but on versions of footnotes to the forms attached to the Rules of Court.

16

The plaintiff relief of Cooke v Walsh; the defendant relies on McGarry. However, the first of the modern cases is O'Sullivan v O'Dwyer. Where, on appeal, a High Court judgment awarding damages for personal injuries was, in part,...

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