Higgins v The Irish Aviation Authority

JurisdictionIreland
JudgeMr. Justice Murray
Judgment Date09 October 2020
Neutral Citation[2020] IECA 277
Docket NumberRecord Number: 2019/515CA
CourtCourt of Appeal (Ireland)
Date09 October 2020
BETWEEN/
PADRAIG HIGGINS
RESPONDENT
-AND-
THE IRISH AVIATION AUTHORITY
APPELLANT

[2020] IECA 277

Noonan J.

Murray J.

Binchy J.

Record Number: 2019/515CA

THE COURT OF APPEAL

CIVIL

Costs – Distribution – Appeal – Parties seeking costs – Whether costs should follow the event

Facts: Binchy J, in his judgment delivered on 16 June 2020, identified four issues that fell for resolution in this appeal ([2020] IECA 157 at para. 33): (i) whether the Court should set aside the award made by the jury to the respondent, Mr Higgins, in the sum of €300,000 in respect of general compensatory damages; (ii) whether the Court should set aside the award made by the jury in the sum of €130,000 in respect of aggravated damages; (iii) in the event that the Court answered either of the foregoing in the affirmative, whether it should substitute its own award for that of the jury; and (iv) whether the Court should increase the discount of 10% on the damages awarded to reflect the offer of amends. In answering the first three of these questions in the affirmative, the Court agreed with the position adopted by the appellant, the Irish Aviation Authority, while the answer to the fourth as determined by the Court was that urged by the respondent. However, in reducing the damages to €70,000 in respect of general compensatory damages, and in awarding an additional sum of €15,000 by way of aggravated damages (the total sum being reduced by 10% to reflect the offer of amends) the Court (a) rejected the contention advanced by the appellant that it would be unreasonable to impose aggravated damages in the circumstances of the case and (b) awarded the respondent a sum that was – when costs are taken into account – less than an offer made by the respondent without prejudice save as to costs shortly before the trial. It was also higher than the €50,000 urged by counsel for the appellant at the hearing of the appeal. The question that arose was how the costs of the appeal should be disposed of having regard to all of these considerations. Both parties contended that they had won ‘the event’ and that the costs of the appeal should in consequence be ordered in their favour.

Held by Murray J that the respondent was presented by the appellant with an offer which it refused, and in resisting the appeal (and incurring consequent costs) it obtained a better award than the appellant had tendered; however, he failed in critical parts of the appeal (both in not holding the quantum awarded by the jury and in not having the matter remitted to the High Court for a new hearing before a jury). Murray J held that he could have protected his costs by making his own offer or counter-offer but failed to do so. In those circumstances, making no order as to costs appears to Murray J to be the option that most fairly distributed the cost burden of the appeal.

Murray J held that he would make the following order: (i) an order allowing the appeal and substituting the amount of €76,500 as the award to the respondent; (ii) an order that the respondent recover the costs of the proceedings in the High Court, to include any reserved costs, based on the award made by the Court of Appeal; and (iii) an order that there be no order as to the costs of this appeal.

Appeal allowed.

JUDGMENT of Mr. Justice Murray delivered on the 9 th day of October 2020
1

In his judgment delivered on 16 June 2020 (with which Noonan J. and I both agreed), Binchy J. identified four issues that fell for resolution in this appeal ( [2020] IECA 157 at para. 33):

(i) Whether the Court should set aside the award made by the jury to the respondent in the sum of €300.000 in respect of general compensatory damages;

(ii) Whether the Court should set aside the award made by the jury in the sum of €130.000 in respect of aggravated damages;

(iii) In the event that the Court answered either of the foregoing in the affirmative, whether it should substitute its own award for that of the jury; and

(iv) Whether the Court should increase the discount of 10% on the damages awarded to reflect the offer of amends.

2

In answering the first three of these questions in the affirmative, the Court agreed with the position adopted by the appellant, while the answer to the fourth as determined by the Court was that urged by the respondent. However, in reducing the damages to €70.000 in respect of general compensatory damages, and in awarding an additional sum of €15.000 by way of aggravated damages (the total sum being reduced by 10% to reflect the offer of amends) the Court (a) rejected the contention advanced by the appellant that it would be unreasonable to impose aggravated damages in the circumstances of the case and (b) awarded the respondent a sum that was - when costs are taken into account – less than an offer made by the respondent without prejudice save as to costs shortly before the trial. It was also higher than the €50.000 urged by counsel for the appellant at the hearing of the appeal. The question that now arises is how the costs of the appeal should be disposed of having regard to all of these considerations.

3

Both parties contended that they had won ‘the event’ and that the costs of the appeal should in consequence be ordered in their favour. The appellant says that it had sought two reliefs on appeal – the setting aside of the award, and the substitution by the Court of its own award. It emphasises that the damages payable by the appellant to the respondent had been reduced from €387.000 to €76,000. Referring to the judgments of Clarke J. in Veolia Water UK plc v. Fingal CC (No. 2) [2007] 2 IR 81, in Christian v. Dublin City Council [2012] IEHC 309 and in MD v. ND [2016] 2 IR 438 the appellant says (a) that this is not the type of case in which it is appropriate to split costs as it was not ‘complex litigation’ of the kind referred to by Clarke J. in Veolia, and (b) that is not appropriate to engage in an exercise in ‘adding up the points’ in order to allocate costs.

4

The appellant also relies upon the ‘Calderbank letter’ to which I have referred, noting in that connection to the decision of the Supreme Court in MN v. SM (costs) [2005] IESC 30 [2005] 4 IR 461. In that letter the appellant proposed that the respondent retain €100.001 of the damages awarded in his favour, that he would keep the benefit of the order for costs made in the High Court, and that the parties would each bear their own costs of the appeal. The offer (dated 14 April) was open for acceptance until 21 April (the appeal being listed for hearing on 28 April). The letter said:

‘In the event that the Plaintiff refuses to accept the offer set out in this letter or if the Plaintiff neglects to respond to this letter within the period outlined above, whereupon the offer lapses, the Defendant reserve [sic.] the right to rely on this letter at the conclusion of the Appeal in relation to the issue of costs and the Defendant will refer, in addition to the terms of previous correspondence making proposals to the Plaintiff to resolve this matter.’

5

The respondent did not reply to this letter. In his submissions, he says that the effect of this correspondence was that the parties had ‘narrowed’ the substance of “the event” on appeal. He explains the position as follows:

‘The Calderbank offer made by the Appellant relieved the Respondent of making a so called “reverse” Calderbank offerbecause the Respondent was confident that this … Court would not reduce the award below a sum of 100,001.00 inclusive of the costs of the appeal.’

6

The respondent further says that there were three issues in the case, and that he succeeded on all of them. The issues as he defines them were as follows:

(a) The award of general damages;

(b) The award of aggravated damages (and the amount of that award); and

(c) The amount of the discount allowed in respect of the offer of amends.

7

The respondent's position on the second and third of these is straightforward. He notes that the verdict of the jury that the respondent was entitled to aggravated damages was upheld as was the verdict of the jury that the award of damages should be reduced by 10%. As to the first, the respondent focusses on the Calderbank offer made by the appellant. Effectively, it is his case that by making This offer the appellant imposed on itself, and afforded to the respondent the benefit of, a new constraint. On this construct, if the respondent ‘beat’ the offer he was entitled to his costs. For the purposes of contending that the respondent did in fact ‘beat’ the offer, he treats it as a cost inclusive proposal. So, because the €76,000 plus the costs of the appeal was more than the €100,001 offered in the letter of 14 April, it is said that the appellant has prevailed and should have all his costs. The ‘event’ (he says) for the purposes of the costs of the appeal must be determined by reference to the Calderbank offer so that he succeeded if he obtained an award, inclusive of costs, greater than the sum offered.

8

The respondent presents an alternative argument in the event that he does not succeed in this aspect of his submission. He says that the Court should take a ‘graduated approach’ to the costs, in which connection he stresses seven features of the case:

(i) This was an assessment of (unliquidated) damages in an offer of amends case.

(ii) Despite the offer of amends, the appellant did not apologise for six and a half years for what the Court found was a serious defamation. The High Court found that the delay on the part of the respondent approving the apology was at the door of the appellant in answering correspondence and their refusal to identify who in Gardai and Revenue should receive the apology.

(iii) The conduct of the appellant in the proceedings was such that it resulted in an award of aggravated damages.

(iv) The finding in relation to the discount to be allowed was upheld by this Court and...

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