Dundon [p/a Dundon Callanan Solicitors] v Butler Homes

• Jurisdiction: Ireland
• Judge: Mr Justice Max Barrett
• Judgment Date: 05 May 2017
• Neutral Citation: [2017] IEHC 265
• Court: High Court
• Docket Number: [2016 No.249MCA]
• Date: 05 May 2017

IN THE MATTER OF

AN APPLICATION PURSUANT TO

THE LEGAL PRACTITIONERS (IRELAND) ACT 1876, SECTION 3

AND THE ARBITRATION ACT 2010, SECTION 21(7)

BETWEEN

JAMES ST JOHN DUNDON, MAEVE CALLANAN

AND

GLENN COOPER (PRACTISING UNDER THE STYLE AND TITLE OF DUNDON CALLANAN, SOLICITORS)

APPLICANTS

AND

BUTLER HOMES LIMITED

RESPONDENT

[2017] IEHC 265

[2016 No.249MCA]

THE HIGH COURT

Professional Ethics & Conduct – The Legal Practitioners (Ireland) Act 1876 – The Arbitration Act 2010 – Grant of award – Payment of costs – Liberty to solicitor to charge over property for costs

Facts: The applicant firm of solicitors represented the respondent/company in relation to compulsory acquisition of certain company's land by the local city council wherein an arbitration award was made in favour of the respondent coupled with the award of costs made against the said council. The applicant now sought declarations from the Court to the effect that the applicant firm was entitled to the payment and receipt of the said costs and to charge over the said costs. The respondent/company objected to the said declarations and denied the receipt of any monies from the applicant firm in relation to which separate proceedings between the parties had already been commenced.

Mr. Justice Max Barrett granted an order permitting the applicants to settle the amount of costs owed by the city council under the arbitration award. The Court also granted liberty to the applicants to enforce the said award of costs and execute the same against the city council. The Court, however, held that the aforesaid orders would be subject to the outcome of the separate proceedings pending between the applicant and the respondent and till then the applicants would hold such funds. The Court held that if the parties made any agreement in relation to such funds, it would seek the approval of the Court. The Court held that the applicant firm was entitled to charge over the arbitration award under s. 3 of the Legal Practitioners (Ireland) Act 1876 as there was failure of the board members of the respondent company to act appropriately in relation to the recovery of costs from the city council.

JUDGMENT of Mr Justice Max Barrett delivered on 5th May, 2017.

I. Representation of Butler Homes

(i) Overview.

1 Butler Homes Limited is the respondent to the within proceedings. It is not represented by any legal advisors. The reason it is not represented, it is asserted by Mr Michael Butler, a director of the company, is because it does not possess the necessary funds to pay for professional legal fees, and its board and shareholders do not possess the necessary resources to put the company in sufficient funds to afford professional legal representation. Mr Butler attended in court when the within application came on for hearing and sought to speak for the company; however, counsel for the applicant contended that Mr Butler, as a director of the company, had no right to be heard. The position, with respect, is not quite so stark. The Court of Appeal's recent decision in Allied Irish Banks plc v. Aqua Fresh Fish Limited [2017] IECA 77 makes this clear. There the Court of Appeal held that the longstanding rule identified by the Supreme Court in Battle v. Irish Art Promotion Centre Ltd [1968] IR 252 still applies, albeit that, following the decision of the Supreme Court in In the Matter of Applications for Orders in Relation to Costs in Intended Proceedings by Stella Coffey and Others [2013] IESC 11, in exceptional circumstances a trial judge may depart from the rigours of the rule in Battle. Although the decision in Aqua Fresh Fish issued after the hearing of the within application, it represents precedent that is binding on this Court and also offers a useful prism through which to view the longstanding decision of the Supreme Court in Battle and its more recent decision in Coffey.

2 The judgment in Aqua Fresh Fish helpfully examines the rationale for the rule in Battle in some detail. It indicates that that rule: is anchored in the legal personality of a company; and proceeds on the rationale that as the incorporation of an incorporated entity is a voluntary decision, those who regulate their business activities in such a manner have to accept the consequences of same. It might, perhaps not unreasonably, be contended by some that it does not follow as a logical consequence of this proposition (as opposed to a consequence of the rules of precedent that bound the Court of Appeal in Aqua Fresh Fish and which bind this Court in the within proceedings) that a company or other corporation should not be capable of being represented in civil proceedings by, e.g., a director who is not a practising legal professional, if such person has been authorised by the company or corporation to appear on its behalf and the trial court permits it. Indeed, as was acknowledged by the Court of Appeal in Aqua Fresh Fish, the current civil procedure rules in both England and Northern Ireland expressly allow such an arrangement, albeit that the Court of Appeal was able to identify two English cases which suggest that the granting of such permission may remain uncommon in England. The reason separate legal personality is considered to have the logical consequence aforesaid, apart from being the result, ultimately, of (a) the binding decision in Battle, as modified by Coffey, and (b) the consequential effect of the rules of precedent, might therefore be contended by some, and perhaps not unreasonably, to be attributable to a choice of logic. The discussion in Aqua Fresh Fish of self-representation by humans and the role of so-called McKenzie friends points to one rationale, perhaps the pre-eminent rationale, why the logic-choice made in Battle was settled upon, being the practical difficulties that self-representation is perceived by some to yield as regards the efficient despatch of court proceedings. But while courts possibly may be better able to administer justice fairly and efficiently when all sides are represented by legal professionals, it might, perhaps not unreasonably, be contended by some that it is inimical to the proper administration of justice that (a) a defendant company should face going unheard from in proceedings to which it is party and where its interests stand to be affected adversely, simply because (b) that company and its shareholders and directors cannot afford the substantial funds necessary to engage the services of professional legal advisors on a prolonged basis. A legal system that, in the context under consideration, chooses to favour a logic which, in its practical effect, favours the richer over the poorer, renders itself open to due criticism; and there is also the point, to which the Court of Appeal in Aqua Fresh Fish draws attention, in its reference to the Opinion of Lord Clarke in Secretary of State for Business, Enterprise and Regulatory Reform v. UK Bankruptcy Limited [2010] CSIH 80, that there may well be force in the observation that the strict application of a Battle-like rule, in particular in circumstances where a company is genuinely unable to pay for representation and has a prima facie valid claim or defence which cannot be vindicated, could be incompatible with Article 6 of the European Convention on Human Rights...