English v O'Driscoll

JurisdictionIreland
JudgeMr. Justice Twomey
Judgment Date15 November 2016
Neutral Citation[2016] IEHC 659
Docket Number[2007 No. 4129P]
CourtHigh Court
Date15 November 2016

[2016] IEHC 659

THE HIGH COURT

Twomey J.

[2007 No. 4129P]

BETWEEN:
BARRY ENGLISH
PLAINTIFF
-AND-
NIALL O'DRISCOLL, GEAROID O'DRISCOLL

AND

DAN MURPHY, A FIRM PRACTISING UNDER THE STYLE AND TITLE OF NIALL

AND

GEAROID O'DRISCOLL & COMPANY ACCOUNTANTS AND REGISTERED AUDITORS, ODM ASSET MANAGEMENT LIMITED

AND

LIBERTY ASSET MANAGEMENT LIMITED
DEFENDANTS

Revenue – Investment in illegal scheme – Dismissal of claim of professional negligence – Order for costs – Identification of event

Facts: The third named defendant sought an order for costs in relation to the dismissal of a claim of professional negligence filed by the plaintiff against the defendants. The third named defendant argued that since the plaintiff knew about the legality of the investment scheme before investment, the plaintiff had unnecessarily put the burden of costs upon the first named defendant by filing an action for professional negligence and thus, the first named defendant should be paid the costs incurred by him in defending that action.

Mr. Justice Twomey made no order as to the costs. The Court held that both the plaintiff and the third named defendant were aware of the nature of the investment scheme, the purpose of which was to defraud the Revenue in order to claim capital allowances and therefore, the costs could not be awarded in those circumstances. The Court held that any order for costs, if made in favour of the third named defendant, would be contrary to the public interest as it would mean approving the participation in an unlawful scheme.

EX TEMPORE JUDGMENT of Mr. Justice Twomey delivered on the 15th day of November 2016.
Costs where litigation relates to an illegal transaction
1

This is a decision in relation to the costs of a professional negligence action by the plaintiff, Mr. English, against his accountant, Mr. Murphy, in relation to an investment scheme whereby Mr. English was claiming capital allowances from the Revenue.

2

While that litigation was primarily concerned with professional negligence, this Court found (see the judgement of English v. O'Driscoll [2016] IEHC 584), that the scheme in which Mr. English invested was in fact an illegal investment scheme, since it was designed to claim capital allowances from the Revenue Commissioners based on a sham and a fraud. This Court also found that both Mr. Murphy and Mr. English knew or should have known of the illegal nature of the scheme. The issue for this Court now is the impact that this finding of illegality has on the costs of that unsuccessful professional negligence action.

3

On grounds of public policy, this Court refused to grant the plaintiff the orders he sought regarding the alleged negligence of Mr. Murphy, since to do so would amount to this Court...

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