Lett & Company Ltd v Wexford Borough Council

• Jurisdiction: Ireland
• Judge: Ms. Justice Dunne,Mr. Justice William M. McKechnie
• Judgment Date: 10 March 2015
• Neutral Citation: [2015] IESC 24
• Docket Number: [S.C. No. 196 of 2007],[S.C. No: 196/2007]
• Court: Supreme Court
• Date: 10 March 2015

Between

Lett & Company Limited

Plaintiff

and

Wexford Borough Council, the Minister for Communications, Marine and Natural Resources, Ireland and the Attorney General

Defendants

[2015] IESC 24

[S.C. No: 196/2007]

THE SUPREME COURT

Costs - Charge upon costs - Professional fees, charges, expense and outlay incurred - s. 3 of Legal Practitioners (Ireland) Act 1876 - Ancillary relief - Notice of motion - Jurisdiction of the Court

Facts An application was brought by solicitors of the plaintiff pursuant to s. 3 of Legal Practitioners (Ireland) Act 1876 declaring that they were entitled to a charge upon the costs awarded to the plaintiff pursuant to an order of the Court in respect of professional fees, charges, expense and outlay incurred in representing the plaintiff together with ancillary relief of their notice of motion. The solicitors for the plaintiff also sought a declaration that they had a common law lien over the costs awarded to the plaintiff pursuant to the Court order dated 17 ^th February 2012.

The application pursuant to s. 3 of the 1876 Act was grounded on an affidavit of Stuart Margetson, a consultant in the firm of Matheson Solicitors. Matheson had represented the plaintiff in the proceedings before the High Court. The plaintiff was a company involved in mussel farming in Wexford. A decision was taken to upgrade sewage facilities for Wexford town and its environs together with the construction of a waste treatment plant. The plaintiff issued the proceedings seeking damages for a breach of its legitimate expectation that it would receive compensation by reason of the imposition of an exclusion zone of five hundred metres radius around an outfall pipe for the proposed waste treatment plant which encompassed the plaintiff”s mussel beds in Wexford Harbour. The proceedings were heard over 29 days and on 23rd May 2007 damages in the sum of €1,150,000 were awarded to the plaintiff to be paid by the second named defendant and the order for costs was made in favour of the plaintiff as against the second and third named defendants.

The second, third and fourth named defendants appealed the judgment of the High Court and the appeal was allowed as to quantum only with the result that the award to the plaintiff was reduced to the figure of €650,000 by way of compensation. An order for costs was made in favour of the plaintiff in respect of the appeal. Matheson sought a charge over the costs pursuant to s. 3 of the Legal Practitioners (Ireland) Act 1876 given that Matheson was instrumental in obtaining the order for costs in favour of the plaintiff.

Held The reliefs sought were confined to the costs of the proceedings. No issue arose as to any disbursements made out of the sum awarded for damages together with interest. Therefore, the application before the Court concerned only the sum of €500,000 already paid on account in respect of costs. The judge emphasised this judgment was only concerned with the jurisdiction of the Court to consider an application pursuant to s.3 of the 1876 Act. The merits of the application were to await a further hearing. The judge was satisfied that the Court had jurisdiction to deal with an application by virtue of s. 3 of the 1876 Act and to make any appropriate ancillary orders, but he was not of the view that Matheson was entitled to enforce its common law lien before the Court. There was no statutory provision conferring jurisdiction on the Court to grant such relief.

JUDGMENT of Mr. Justice William M. McKechnie delivered on the 10th day of March, 2015

Background:

1 The firm of solicitors, Matheson, Ormsby, Prentice, now Matheson (‘the solicitors’), acting as such, represented the plaintiff company in complex and lengthy commercial proceedings, at both trial and appeal level. These proceedings were finalised on the 17th February, 2012 with this Court affirming a finding of liability in its favour and in awarding it damages, albeit reduced by the substitution of a sum of €650,000.00 for the €1.15m granted in the High Court, all against the second and third named defendants (‘the Minister’). The company was also awarded its costs of the appeal against the same parties with this Court in addition, ‘affirming’ the existing cost order in its favour as made in the High Court.

2 The plaintiff company, whose family name has been well respected and well recognised for decades in the South East of this country and elsewhere, has in recent times suffered from serious financial disability. In January, 2014, LSF VIII Pine Investments Limited (‘Pine Investment’) purchased from Irish Bank Resolution Corporation (‘IBRC’) and the joint special liquidators of that corporation, a portfolio of loans and related securities which included the plaintiff's debt to the former Anglo Irish Bank Corporation (‘Anglo’) and the security, by way of mortgage debenture, given in respect thereof. It is therefore self evident that this company, although not named in the title, is the principal legitimus contradictor on the application next mentioned, even if the directors of the plaintiff company also retain a vested interest, by reason of the personal guarantees which they have given for this particular debt.

3 Following the conclusion of the proceedings, the plaintiff's legal cost accountant drew up a bill of costs on a party and party basis which was submitted to the Minister in February, 2013: the bill, which was referred to taxation, is presently before the Taxing Master with the process of taxation not yet concluded. However, in recognition of the evident fact that its liability in respect of costs will be substantial no matter what, the State, in October, 2013 agreed to pay, in part discharge and on account, the sum of €500,000, which it did, directly to the solicitors. This money remains in the client's account, and has not been distributed by way of disbursement, because of the plaintiff's insistence in controlling its destination and the recipients thereof: the same very much forms part of the present application.

4 Prior to October, 2007 it is readily acknowledged that the plaintiff company made periodic payments in respect of fees totalling almost €1,098,471.55. However, since that date, apart from obtaining an agreed sum in respect of counsel's brief fee to appear on the appeal, which they immediately paid over, the solicitors have not received any payment whatsoever. They therefore say that based on the party and party bill, there remains due in respect of their costs, expenses and outlay to include counsel's fees, a sum of €1,128,408.00 (inclusive of VAT).

5 By reason of the debt laden position of the company and in view of the insistence by Pine Investment, that the proceeds of taxation are expressly covered by the terms of the mortgage deed and thus must be remitted to it, the solicitors are justifiably concerned about not being able to recover any further sums, in respect of their said costs, fees and outlay. Hence, they make the following application.

The Application:

6 By Notice of Motion dated 26th March, 2014, the solicitors seek the following reliefs:-

‘1. An Order pursuant to section 3 of the Legal Practitioners (Ireland) Act 1876 declaring that the Solicitors of the Plaintiff are entitled to a charge upon the costs awarded to the Plaintiff pursuant to an Order of this Honourable Court dated 17th February 2012 in respect of the professional fees, charges, expenses and outlay incurred in representing the plaintiff in the above entitled proceedings.

2. Further or in the alternative a declaration that the Solicitors for the Plaintiff hold a lien over the costs awarded to the Plaintiff pursuant to an Order of this Honourable Court dated 17th February 2012 in respect of the professional fees, charges, expenses and outlay incurred in representing the Plaintiff in the above entitled proceedings.

3. An Order directing that the funds already received from the Second and Third Defendants in relation to the Plaintiff's costs are held in the Plaintiff's client account by the Solicitors for the Plaintiff are to be paid out to discharge the professional fees, charges, expenses and outlay of the Solicitors for the Plaintiff, including any and all fees due to counsel.

4. An Order directing the Second and Third Defendants to pay the balance of the costs awarded to the Plaintiff by this Honourable Court pursuant to an order dated 17th February 2012 to the Solicitors for the Plaintiff within a reasonable period of time following the conclusion of the party and party taxation.

5. Further or other relief.

6. Costs.’

7 The application is grounded upon two affidavits of Mr. Stuart Margetson, solicitor, a consultant in the firm, and the various responding and replying affidavits of Mr. Richard Lett, a director of the plaintiff company, and of Mr. Geoffrey Johnston, a director of Pine Investment whose affidavit was filed in support of that company. A number of contested issues emerge from these affidavits both on the factual and on the legal side. It will be necessary at a later point in this judgment to further refer to such matters.

The Issue:

8 At the opening of this appeal a question arose as to whether this Court has jurisdiction to entertain an application made under s. 3 of the Legal Practitioners (Ireland) Act 1876 (‘the 1876 Act’), and if so, whether it was appropriate that the same should be determined by it. By agreement between the parties it was decided that this matter should first be examined, in the nature of a preliminary issue, with the remaining points being stood down until that matter had been resolved. Submissions, both oral and written followed. This therefore, is my judgment on the net point as to this Court's jurisdiction on a s. 3 application, and even if found to exist on the criteria necessary for its appropriate exercise.

Remedies for Solicitors' Costs:

9 Disregarding other...