Fyffes Plc v DCC Plc, S & L Investments Ltd, James Flavin and Lotus Green Ltd

• Jurisdiction: Ireland
• Judge: Miss Justice Laffoy
• Judgment Date: 10 February 2006
• Neutral Citation: [2006] IEHC 32
• Court: High Court
• Date: 10 February 2006

FYFFES PLC v DCC PLC & ORS

BETWEEN/

FYFFES PLC

PLAINTIFF

AND

DCC PLC S & L INVESTMENTS LIMITED JAMES FLAVIN AND LOTUS GREEN LIMITED

DEFENDANTS

[2006] IEHC 32

No. 1183 P/2002

THE HIGH COURT

PRACTICE AND PROCEDURE

Costs

Court's discretion - Costs follow event - Test to be applied in departing from rule that costs follow events - Burden of displacing rule that costs follow events - Whether court should have regard to facts of particular case -Whether court could have regard to fact that defendant who was successful overall was not successful on substantive issue raised and prosecuted in defence in application for costs- Grimes v Punchestown Developments Co Ltd [2002] 4 IR 515 considered - Rules of the Superior Courts 1986 (SI 15/1986), O 99, r 1- Partial order for costs made (2002/1183P -Laffoy J - 10/2/2006) [2006] IEHC 32

Fyffes plc v DCC plc

Facts: The defendants argued that they won the case and should get full costs. While the plaintiff did not dispute that the event had been decided in favour of the defendants it was submitted that the Court, in the exercise of its discretion, should exclude the costs of the dealing issue, which was decided against the defendants, from the award of costs in favour of the defendants.

Held by Laffoy J. in making an order that the defendants have the costs of the proceedings except for 80% of the costs of making discovery and the costs of 25 hearing days that the defendants’ approach to the dealing issue added considerably to the complexity and duration of the case and it would be just and fair to take that fact into account in the exercise of the court’s discretion in relation to costs.

Reporter: R.W.

RSC O.99 r1(1)

RSC O.99 r1(3)

RSC O.99 r1(4)

COOPER-FLYNN v RADIO TELEFIS ÉIREANN (RTE) & BIRD & HOWARD 2004 2 IR 72

REYNOLDS v TIMES NEWSPAPERS 1998 3 AER 961

GRIMES v PUNCHESTOWN DEVELOPMENTS CO LTD & MCD PROMOTIONS LTD 2002 4 IR 515

LOCAL GOVERNMENT (PLANNING & DEVELOPMENT) ACT 1976 S27

BYRNS v DAVIE 1991 2 VR 568

DONALD CAMPBELL & COMPANY v POLLAK 1927 AC 732

RITTER v GODFREY 1920 2 KB 47

GOLD v PATMAN & FOTHERINGHAM LTD 1958 2 AER 497

1 Judgment of Miss Justice Laffoy delivered on 10th February, 2006.

2 I have considered the submissions made on behalf of the defendants and the plaintiff on the issue of the costs of the proceedings on 26th January, 2006.

3 It is common case that the right to costs is governed by Order 99 of the Rules of the Superior Courts, 1986. Rule 1(1) of Order 99 provides that the costs of and incidental to the proceedings are at the discretion of the Court. Rule 1(3) deals with the costs of an action, question or issue tried by a jury and stipulates that the costs shall follow the event unless the Court, for special cause, to be mentioned in the order, shall otherwise direct. Rule 1(4), which is the relevant sub-rule in this case, provides as follows:

"The costs of every issue of fact or law raised upon a claim or counterclaim shall, unless otherwise ordered, follow the event."

4 It was submitted on behalf of the defendants that there is no reason why the normal rule, that costs follow the event, should not be applied in this case. The defendants won and they should get full costs, including all reserved costs. While the plaintiff did not dispute that the event had been decided in favour of the defendants, it was submitted on its behalf that the court, in the exercise of its discretion, should exclude the costs of the dealing issue, which was decided against the defendants, from the award of costs in favour of the defendants.

5 Counsel were able to point to very little in the way of authority, which would give guidance as to how the discretion provided for in Order 99 should be exercised.

6 Counsel for the defendants relied primarily on the decision of the Supreme Court in Cooper-Flynn v. Radio Telefis Éireann [2004] 2 I.R. 72. That decision arose out of an action tried by a jury, in which the issue of costs fell to be determined in accordance with rule 1(3), rather than rule 1(4), of Order 99. That being the case, it seems to me that it is not apposite. There is a difference in terminology between rule 1(3) and rule 1(4), which governs the issue of costs here. The extent to which that difference is significant, if at all, was not addressed by counsel. In any event, it was not contended on behalf of the plaintiff that it obtained "something of value" (the terminology used in Reynolds v. Times Newspapers [1998] 3 all E.R. 961, which was also relied on by counsel for the plaintiff) from the findings on the dealing issue.

7 Counsel for the plaintiff relied on one Irish authority, the decision of the Supreme Court in Grimes v. Punchestown Developments Co. Ltd. [2002] 4 I.R. 515. In that case, which concerned an application under s. 27 of the Local Government (Planning and Development) Act, 1976, as amended, for an injunction restraining the respondents from holding a "rave" concert at Punchestown Racecourse, the unsuccessful applicant was ordered to pay the respondents” costs. The appeal to the Supreme Court, which related only to the order for costs, was dismissed. Counsel for the plaintiff relied on the following passage from the judgment of Denham J., with whom the other judges agreed, at p. 522, as setting out the principles by which the court should be guided in exercising its discretion:

"In this application the High Court was exercising its discretion in relation to the remedy provided under s. 27 … This discretion was also exercised by the High Court in its determination on the issue of costs. The discretion is exercised in accordance with law. The normal rule is that costs follow the event. However, there are circumstances when a court on the facts of a case determines that the normal rule will not apply. Indeed, a successful applicant may not succeed in obtaining an order for costs if the facts indicate features which are unsatisfactory as to the way in which they acted, see for example Donegal County Council v. O'Donnell (Unreported, High Court, O'Hanlon J., June 25th, 1982). The burden is on the party making an application to show that the order for costs should not follow the general rule. In this case I am of the opinion that the applicant has not discharged this burden so as to take it out of the general rule. There are no such circumstances in this case which would take it out of the general rule."

8 Denham J. then outlined certain factors which the trial judge had identified as discretionary factors relevant to the substantive issue and stated that it could be inferred that these were relevant also to his determination as to costs. If they were, they were not inappropriate, she stated. They indicated a careful analysis of the facts and surrounding circumstances of the case. They were reasonable factors to consider in the circumstances.

9 Counsel for the plaintiff submitted that the judgment in the Grimes case acknowledges an entitlement in the exercise of the court's discretion to take into account substantive factors distinct from the issue as to which side wins the event.

10 Counsel for the defendants advanced a different analysis of the judgment in the Grimes case. He suggested that the true analysis was that it was a case in which discretionary factors which were relevant to the substantive matter were said to be appropriate in exercising the court's discretion as to costs. That is not, it was submitted, authority for the proposition that the court looks to the substantive issues in the case or, that, where, as here, the party which was unsuccessful overall has won on one or more of the substantive issues, that of itself is a factor to be taken into account in the exercise of the discretion in relation to costs.

11 Aside from the statement of principle in the judgment of Denham J., which I have quoted, the decision in the Grimes case turned very much on its own facts. It would appear that the applicant/appellant was endeavouring to have the award of costs against him reversed on the basis that it was a public interest challenge, a point which had not been made in the High Court.

12 The only other authority to which the plaintiff referred is an Australian case, a decision of the Supreme Court of Victoria in Byrns v. Davie [1991] 2 V.R. 568. Counsel properly drew the court's attention to the statutory provision or rule in relation to costs which was being applied in that case. The relevant statutory provision which was quoted in the judgment of Gobbo J., was to the effect that, unless otherwise expressly provided by the Act or any other Act or by the rules, the costs of and incidental to all matters in the court were in the discretion of the court and the court had full power to determine by whom and to what extent the costs were to be paid. The relevant rule was not quoted, but it is to be inferred that it replicated, in substance, the statutory provision. In other words, unlike Order 99(1), the rule did not point to a position of general application, that costs follow the event, which might be displaced in the exercise of the court's jurisdiction.

13 In his judgment Gobbo J. referred to a number of English authorities. One was a decision of the House of Lords in Donald Campbell & Company v. Pollak [1927] A.C. 732, which he used to distinguish a decision of the Court of Appeal, which had been relied on by the defendants: Ritter v. Godfrey [1920] 2 K.B. 47. He quoted the following passage from the judgment of Viscount Cave L.C. at p. 811:

"A successful defendant in a non-jury case has no doubt, in the absence of special circumstances, a reasonable expectation of obtaining an order for the payment of his costs by the plaintiff; but...