Larkin v Groeger

• Jurisdiction: Ireland
• Judgment Date: 01 January 1990
• Date: 01 January 1990
• Docket Number: [1987 No. 162 Sp.]
• Court: High Court

High Court

[1987 No. 162 Sp.]

[1984 No. 45 SS]

Larkin v. Groeger

In re the Arbitration Acts, 1954-1980, Michael Larkin

Plaintiff

and

Richard Groeger and George Eaton

Defendants

Larkin v. Groeger

The Governor and Company of the Bank of Ireland

Plaintiff

and

Michael Larkin

Defendant

Cases mentioned in this report:—

Puddephatt v. Leith (No. 2) [1916] 2 Ch. 168; 85 L.J. Ch. 543; 114 L.T. 1159; 60 S.J. 568.

Young v. Mead [1917] 2 I.R. 258.

Practice and Procedure - Set-off - Costs - Whether costs of proceedings to set aside arbitrator's award can be set off against the award - Rules of Superior Courts, 1986 - Arbitration Act, 1954 (No. 26), s. 32.

Practice and Procedure - Costs - Solicitor's lien - Conditional order of garnishee pre-dating claim for declaration of solicitor's lien - Priorities - Legal Practitioners (Ireland) Act, 1876 (39 & 40 Vict., c. 44), s. 3.

Notice of Motion.

By special summons, dated the 13th February, 1987, the plaintiffs sought to set aside an arbitrator's award in the plaintiff's favour and made against the defendants on 29th December, 1986. On the 26th April, 1988, the High Court (Barrington J.) declined to set aside the award and awarded costs in the High Court to the defendants against the plaintiff. The defendants applied to set-off their costs of the High Court proceedings against their liability on foot of the arbitrator's award.

In separate proceedings between the Governor and Company of the Bank of Ireland, plaintiff, and Michael Larkin, defendant, the Bank of Ireland had obtained judgment against the present plaintiff in the sum of £94,397.50 plus costs on the 6th February, 1984.

By an application made on 4th March, 1987, the bank had sought and obtained from the High Court a conditional order of garnishee attaching the proceeds of the arbitration in part satisfaction of a debt due by the plaintiff to the bank. By notice of motion adjourned and now re-entered the bank applied to have that order made absolute.

By notice of motion dated the 6th May, 1988, the solicitors for the plaintiff in the arbitration and in the High Court, applied, inter alia, for an order pursuant to s. 3 of the Legal Practitioners (Ireland) Act, 1876, declaring that they were entitled to a charge in respect of their costs charges and expenses of those proceedings, upon the proceeds of the arbitrator's award.

The motions on notice and the application were heard by the High Court (Barrington J.) on the 7th June, 1988.

Order 99, r. 4 of the Rules of the Superior Courts, 1986, provides that "a set-off for damages or costs between parties may be allowed notwithstanding the solicitor's lien for costs in the particular cause or matter in which the set-off is sought."

Section 3 of the Legal Practitioners (Ireland) Act, 1876, provides that it shall be lawful for a court to declare that a solicitor, involved in proceedings before it, is entitled to a charge for his costs in such proceedings upon property preserved or recovered therein and that ". . . all conveyances and acts done to defeat or which shall operate to defeat such charge or right shall, unless made to a bona fide purchaser for value without notice, be absolutely void and have no effect against such charge or right." That section is applied to arbitrations by s. 32 of the Arbitration Act, 1954.

In an arbitration concluded in December, 1986, the plaintiff was awarded a sum of money against the defendants. Being dissatisfied with the amount of the award the plaintiff instituted these proceedings to set it aside on grounds of technical misconduct by the arbitrator. These proceedings were unsuccessful and costs in the High Court were awarded to the defendants against the plaintiff. The defendants sought to set-off their High Court costs against their liability on foot of the arbitrator's award.

In addition to the defendants' claim for costs there were outstanding against the plaintiff a number of claims including:—

• (a) a judgment in favour of L., secured by way of an undertaking given by the plaintiff's then solicitors, dated February, 1985, to discharge same out of any damages awarded in the arbitration then pending. This undertaking included no reservation as to the solicitor's own costs. It was therefore accepted that L. would be paid out of any monies recovered by the said solicitors in priority to their own costs;

• (b) a judgment in favour of a bank, secured by way of a conditional order of garnishee attaching the proceeds of the arbitration and granted on the 4th March, 1987;

• (c) the claim, for their costs, of the plaintiff's solicitors, Messrs. J. & Co., in the arbitration and in the High Court proceedings. Messrs. J. & Co., sought to be secured by way of an application to the court, first made in May, 1988, for an order pursuant to s. 3 of the Act of 1876.

The defendants' application for a set-off was opposed by Messrs. J. & Co. who argued that as their costs exceeded the arbitrator's award any set-off would be at the expense of their lien, which lien they now sought to have confirmed by the court. The bank, seeking to have their conditional order of garnishee made absolute argued that as that order pre-dated the solicitors' application for a declaration of their lien, it should take priority over the lien in securing any balance of the award which was not to be retained by the defendants by way of set-off. In addition, the bank argued that the lien should not be allowed to defeat the garnishee, where it was admitted that it would have the effect of securing payment for J.L., in advance of the bank, J.L. being an...