Ford (orse Egan) v Personal Insolvency Acts 2012-2015

JurisdictionIreland
JudgeMr. Justice Denis McDonald
Judgment Date02 March 2020
Neutral Citation[2020] IEHC 102
Docket Number[2019 No. 1 C.A.]
CourtHigh Court
Date02 March 2020

IN THE MATTER OF THE PERSONAL INSOLVENCY ACTS, 2012-2015 AND IN THE MATTER OF REBECCA FORDE EGAN (A DEBTOR)

[2020] IEHC 102

Denis McDonald J.

[2019 No. 1 C.A.]

THE HIGH COURT

CIRCUIT APPEAL

MIDLAND CIRCUIT

COUNTY OF LAOIS

Costs – Personal insolvency arrangement – Personal Insolvency Act 2012 s. 115A – Personal insolvency practitioner seeking an order for costs against the objecting creditor bank – Whether the bank should be immune from costs in respect of the appeal

Facts: Bank of Ireland Mortgage Bank brought an appeal in respect of an order made by the Circuit Court on 20th December, 2018 under s. 115A (9) of the Personal Insolvency Act 2012 by which the Circuit Court judge confirmed the coming into effect of a personal insolvency arrangement proposed on behalf of Ms Egan, the debtor, by Mr Duffy, her personal insolvency practitioner. In a judgment delivered by the High Court on 20th December, 2019, McDonald J dismissed the appeal brought by the bank and affirmed the order made by the Circuit Court judge. Subsequent to delivery of judgment by McDonald J, he heard argument on behalf of both the bank and the practitioner on 16th January, 2020 in relation to the costs of the appeal. On that occasion, counsel for the practitioner sought an order for costs against the bank on the basis that the bank, in bringing this appeal, was “on the hazard in relation to costs”. Counsel drew attention to s. 97 (4) of the 2012 Act which provides, in the specific context of the right of appeal in respect of a protective certificate, that the court is to have regard to the objective “that all the parties to such an application should bear their own costs unless to do so would cause a serious injustice to the parties to the application”. Counsel for the practitioner made the point that there was no similar provision elsewhere in the Act in relation to applications under s. 115A or in relation to appeals from decisions of the Circuit Court under s. 115A. Counsel for the practitioner submitted that, in the particular circumstances of this case, it would be appropriate to apply the “costs follow the event” principle.

Held by McDonald J that at the time the appeal was lodged, there was comprehensive evidence available to strongly support the grant of relief under s. 115A. Having regard to the extent of that evidence, McDonald J was of the view that the bank could not plausibly contend that it should be immune from costs in respect of the appeal. In the circumstances, McDonald J was satisfied that this was not a case in which it would be appropriate to make no order as to costs. On the contrary, this seemed to McDonald J to be an appropriate case which, in the exercise of the discretion of the court, it would be appropriate to make an order for costs against the bank in relation to the appeal, such order to include the costs of the written submissions, the hearing which took place in October 2019, and the further hearing which took place in relation to costs in January 2020.

McDonald J held that he would therefore make an order to that effect, such costs to be sent for adjudication before the legal costs adjudicator in the event that the parties were unable to agree the costs.

Costs awarded against the objecting creditor bank.

JUDGMENT (ON COSTS) of Mr. Justice Denis McDonald delivered on 2 March, 2020
1

This judgment deals solely with the costs of this appeal. The appeal in question was brought by Bank of Ireland Mortgage Bank ( “the bank”) in respect of an order made by the Circuit Court on 20th December, 2018 under s. 115A (9) of the Personal Insolvency Act, 2012 ( the 2012 Act) by which the learned Circuit Court judge confirmed the coming into effect of a personal insolvency arrangement proposed on behalf of the above-named debtor by Mr. Daragh Duffy, her personal insolvency practitioner ( “the practitioner”). In a judgment delivered by me on 20th December, 2019 I dismissed the appeal brought by the bank and affirmed the order made by the learned Circuit Court judge.

2

Subsequent to delivery of judgment by me, I heard argument on behalf of both the bank and the practitioner on 16th January, 2020 in relation to the costs of the appeal. On that occasion, counsel for the practitioner sought an order for costs against the bank on the basis that the bank, in bringing this appeal, was “on the hazard in relation to costs”. Counsel drew my attention to s. 97 (4) of the 2012 Act which provides, in the specific context of the right of appeal in respect of a protective certificate, that the court is to have regard to the objective “that all the parties to such an application should bear their own costs unless to do so would cause a serious injustice to the parties to the application”. Counsel for the practitioner made the point that there was no similar provision elsewhere in the Act in relation to applications under s. 115A or in relation to appeals from decisions of the Circuit Court under s. 115A.

3

Instead, s. 115A (14) provides in simple and straightforward terms that:-

“The court, in an application under this section, shall make such other order as it deems appropriate, including an order as to the costs of the application.”

That subsection, in contrast to s. 97 (4) clearly envisages that costs will be at the discretion of the court. In Varvari (a debtor) [2020] IEHC 23, counsel for the parties were agreed that s. 115A (14) can be seen as displacing, at least to some extent, what counsel for the objecting creditor in that case correctly described as the presumptive rule under 0. 99 r.1 that costs should “follow the event”.

4

For completeness, it should be noted that the substantive hearing of the s. 115A application in Varvari took place prior to 7th October, 2019 when Part 10 of the Legal Services Regulation Act, 2015 ( “the 2015 Act”) came into operation pursuant to the Legal Services Regulation Act, 2015 (Commencement of Certain Provisions) No. 2 Order 2019 (S.I. No. 502 of 2019). In contrast, the substantive hearing of the present appeal took place on 18th October, 2019 after the 2015 Act came into force. In these circumstances, it would appear to me that s. 169 of the 2015 Act would now be the operative provision which replaces 0. 99 r.1 and gives effect, by way of primary legislation, to the principle that costs should ordinarily follow the event. No submissions were made to me at the hearing on 16th January, 2020 as to the possible application of s. 169 of the 2015 Act. It may well be important, in a future case, to determine whether s. 169 can be said to have any application to the specific statutory jurisdiction of the court under s. 115A (14) of the 2012 Act in relation to costs. In circumstances where I have not heard any argument on the issue, it would be inappropriate for me to attempt to express any definite view in relation to the potential interaction between s. 115A (14) of the 2012 Act, on the one hand, and s. 169 of the 2015 Act, on the other. I merely observe that, given the wide terms of s. 115A (14) in the specific context of applications under s. 115A, it would seem to me to be unlikely that s. 169 could be said to override the exercise of the court's jurisdiction under s. 115A (14). That said, courts dealing with costs issues under s. 115A (14) may well be influenced by the approach taken in s. 169 and in particular may think it appropriate to take into account, in any individual case, some or all of the factors in the non-exhaustive list of factors enumerated in s. 169 (1). In this context, it seems to me that the factors identified in s. 169 (1) are matters which a court would be fully entitled to take into account, in a costs application, even in the absence of any statutory provision. As the decision of the Supreme Court in Dunne v. Minister for the Environment [2008] 2 I.R. 775 demonstrates, the court is always entitled, even in cases where the “costs follow the event” principle applies, to depart from that principle, if in the special circumstances of an individual case, the interests of justice require that it should do so.

The submissions on behalf of the practitioner
5

Counsel for the practitioner submitted that, in the particular circumstances of this case, it would be appropriate to apply the “costs follow the event” principle. Counsel for the practitioner drew attention to the fact that, in the Circuit Court, the learned judge made no order as to costs. In the case of first instance proceedings, counsel submitted that the approach taken by the learned Circuit Court judge was correct and in accordance with the practice which has developed subsequent to the judgment of Baker J. in Re, Meeley ( a debtor) [2019] 1 I.R. 235. Counsel acknowledged that, subsequent to the decision in Meeley, a practice had developed to the effect that, in respect of a first instance hearing, the courts generally make no order as to costs on a s. 115A application irrespective of the outcome of that application. However, he submitted that the position must be different where an objecting creditor appeals that decision to a higher court. He argued that, having had the benefit of no costs penalty at the first instance hearing, it would not be appropriate to take the same approach on appeal where the court confirms the decision made at first instance. Counsel also sought to rely on a letter sent by the solicitors for the practitioner to the bank on 17th October, 2019 in which an offer was made that, if the bank agreed not to pursue the appeal, the practitioner would not seek his costs of the appeal. Counsel for the practitioner argued that the failure of the bank to take up this offer added force to his application for the costs of the appeal.

6

Counsel for the practitioner also drew attention to the decision of Simons J. in Tanager v. Ryan [2019] IEHC 694 in which Simons J. held that the unsuccessful respondent, Tanager DAC ( “Tanager”) should be...

To continue reading

Request your trial
3 cases
  • Michael O' Flynn v John O'Driscoll and Others
    • Ireland
    • Supreme Court
    • 15 May 2024
    ...not raise his objection to the PIA. Reference was made in this context to the decision in the case of Re Rebecca Forde Egan (A Debtor) [2020] IEHC 102, in which McDonald J. stated at para. 22: “ It seems to me that a distinction may need to be drawn between appeals where the principal argum......
  • Fergus Byrne v Revenue Commissioners
    • Ireland
    • High Court
    • 17 June 2021
    ...argument is made by her lawyers which are not justifiable in light of the state of the applicable law. This is clear from Re Forde Egan [2020] IEHC 102 where it is clear that court time was wasted on legal submissions which were inconsistent with the pre-existing case law. That was another ......
  • Personal Insolvency Acts 2012-2015 v Fay (a Debtor)
    • Ireland
    • High Court
    • 8 May 2020
    ...In these circumstances, I believe that Pepper is correct to draw attention to the observation made by me in Forde Egan (A Debtor) [2020] IEHC 102, at para. 22, in relation to appeals where the objecting creditor makes submissions which concentrate on addressing genuine concerns in relation ......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT