Lett & Company Ltd v Wexford Borough Council

• Jurisdiction: Ireland
• Judge: Ms. Justice Laffoy
• Judgment Date: 16 March 2016
• Neutral Citation: [2016] IESC 13
• Court: Supreme Court
• Docket Number: [Appeal No. 2007/196P],[S.C. No. 196 of 2007]
• Date: 16 March 2016

[2016] IESC 13

THE SUPREME COURT

Laffoy J.

[Appeal No. 2007/196P]

McKechnie J.

Laffoy J.

Dunne J.

BETWEEN

LETT AND COMPANY LIMITED

PLAINTIFF

AND

WEXFORD BOROUGH COUNCIL, THE MINISTER FOR COMMUNICATIONS, MARINE AND NATURAL RESOURCES, IRELAND AND THE ATTORNEY GENERAL

DEFENDANTS

Prima facie entitlement – Compensation – Legitimate expectation – Applicant seeking a declaration that they have a charge on the costs payable by the defendants to the plaintiff – Whether applicant is prima facie entitled to a declaration

Facts: The plaintiff, Lett & Co. Ltd, claimed damages against the defendants arising from a breach of its legitimate expectation that it would receive compensation due to the imposition of an exclusion zone encompassing its mussels beds resulting from the upgrade of sewage facilities in Wexford Harbour. In June, 2007, the High Court declared that Lett was entitled to compensation in the sum of ?1,150,000 against the second defendant, the Minister for Communications, and it was ordered that Lett recover against the second and third defendants (the State defendants) its costs of the action when taxed and ascertained. The State defendants and the Attorney General appealed the decision and in February, 2012, the Supreme Court allowed the appeal as to quantum only and varied the order of the High Court by substituting the sum of ?650,000 by way of compensation. The State defendants paid directly into Lett?s bank account by way of transfer the sum of ?908,950.16, representing the sum of ?650,000 in respect of compensation, together with interest thereon in accordance with the order of the Supreme Court. The position of the applicant, Matheson (the plaintiff's solicitors), was that there remained an outstanding balance due and owing to them in the sum of approximately ?1,128,408 based upon bills for party and party costs drawn up by Lett?s Legal Costs Accountants, who were retained directly by Lett to prepare the party and party bills of costs in respect of both the High Court and the Supreme Court proceedings. In March, 2014, the solicitors applied to the Supreme Court seeking an order pursuant to s. 3 of the Legal Practitioners (Ireland) Act 1876 declaring that the solicitors were entitled to a charge upon the costs awarded to Lett in respect of professional fees, charges, expenses and outlay incurred in representing Lett in the proceedings. Lett argued that, if the Court were to accede to the Solicitors? application and were to declare that the Solicitors have a charge on the costs, such charge would be subject to Lett?s bankers? prior charge, which would render the application moot.

Held by Laffoy J that the solicitors were entitled to a declaration that they have a charge on the costs payable by the State defendants to Lett, when taxed, in respect of the balance of the taxed costs due to Lett which remain undischarged, which on the evidence adduced by the solicitors has a maximum monetary limit of ?1,128.408. Laffoy J was satisfied that the solicitors were prima facie entitled to a declaration under s. 3 of the 1876 Act and that, subject to some refinement for the protection of Lett, the solicitors were entitled to ancillary orders. Laffoy J was not satisfied that Lett had discharged the burden it had assumed of proving that the Mortgage Debenture was taken by Anglo without notice of the Solicitors? right to a charge.

Laffoy J held that the Court should make the following orders: 1) an order pursuant to s. 3 of the 1876 Act declaring that the solicitors are entitled to a charge upon the costs awarded to Lett in the High Court and in the Supreme Court, with a maximum monetary limit of ?1,128,408, and with liberty to either party to apply to the Supreme Court to vary that order when the taxation process has been completed; 2) provided that the solicitors shall be liable to account to Lett for the aggregate of the sum of ?500,000 and the balance of the said costs, taking into account payments in respect of costs already made by Lett to the solicitors (a) an order directing that the sum of ?500,000 held by the solicitors in Lett?s client account be paid out to the solicitors to discharge professional fees, charges, expenses and outlay of the solicitors (including any and all fees due to counsel) which are outstanding when the taxation of the party and party costs is concluded and (b) an order directing the State defendants to pay the balance of the costs awarded to Lett to the solicitors directly within a reasonable period of time following the conclusion of the party and party taxation; 3) an order directing the solicitors to notify Pine Investments of the decision of the Court within one week of the decision being made.

Judgment approved.

Judgment of Ms. Justice Laffoy delivered on the 16th of March, 2016

The parties and the background to the application

1 The applicant on this application is Matheson (the Solicitors), the firm of solicitors which acted for Lett & Company Limited (Lett), the plaintiff in these proceedings in the High Court and the appellant on the appeal to the Supreme Court. The respondent on the application is Lett. No other party sought to participate in, or appeared, on the hearing of the application.

2 In the proceedings by Lett against the defendants, which are reported at [2012] 2 I.R. 198, Lett claimed damages against the defendants arising from a breach of its legitimate expectation that it would receive compensation due to the imposition of an exclusion zone encompassing its mussels beds resulting from the upgrade of sewage facilities in Wexford Harbour. The High Court action was heard in 2006 and 2007. Judgment was delivered in the High Court by Clarke J. on 23rd May, 2007. Lett was successful and was awarded compensation in the sum of ?1,150,000. The order of the High Court was made on 22nd June, 2007 and, in addition to the declaration of the entitlement of Lett to compensation in the sum of ?1,150,000 against the second defendant, it was ordered that Lett recover against the second and third defendants (the State defendants) its costs of the action when taxed and ascertained. Execution on foot of the order was stayed, in the event of an appeal, until the final determination of the appeal.

3 The State defendants and the Attorney General did appeal the decision of the High Court. On the appeal, the Supreme Court allowed the appeal as to quantum only and varied the order of the High Court by substituting the sum of ?650,000 by way of compensation. The judgment, with which the other judges concurred, was delivered in the Supreme Court on 3rd February, 2012 by O'Donnell J. The order of the Supreme Court was made on 17th February, 2012 and in it, it was ordered that the order of the High Court in relation to costs should stand affirmed and that Lett should recover against the State defendants the costs of the appeal when taxed. It was also ordered that the State defendants pay to Lett interest on the sum of ?650,000 from 22nd June, 2007.

4 While this is only of peripheral relevance to the issues the Court has to determine on this application, the State defendants paid directly into Lett's bank account by way of transfer the sum of ?908,950.16, representing the sum of ?650,000 in respect of compensation, together with interest thereon in accordance with the order of the Supreme Court, in May 2012. None of that sum was paid to the Solicitors, although Lett had agreed to pay over ?30,000 portion thereof.

5 The position in relation to the costs which the Solicitors contend is due to them in relation to the proceedings in the High Court and the appeal to the Supreme Court as at 24th March, 2014 has been presented to this Court in tabular form as follows:

Statement of Costs and Outlay (all figures inclusive of VAT)

??

Sums invoiced by the Solicitors

excluding Counsel's fees 1,147,330

Sums invoiced by Counsel 1,029,849 2,177,179

Less payments made by Lett 1,128,721

Balance outstanding on invoices issued 1,048,458

All work in progress as yet not invoiced 79,950

Statement of Costs and Outlay (all figures inclusive of VAT)

1 ,128,408

The position of the Solicitors, accordingly, is that there remains an outstanding balance due and owing to them in the sum of approximately ?1,128,408 (inclusive of VAT) based upon bills for party and party costs drawn up by Lett's Legal Costs Accountants, William J. Brennan & Company, who were retained directly by Lett to prepare the party and party bills of costs in respect of both the High Court and the Supreme Court proceedings. The bills of costs were drawn up and served on the State defendants in February 2013 and the taxation of the party and party costs commenced before the Taxing Master on 9th December, 2013. That process was still ongoing when the appeal was heard and this Court was informed that it was to be resumed before the Taxing Master later that year, on 27th November 2015.

6 In October 2013 the State defendants made a payment on account in the sum of ?500,000 in partial discharge of the costs due and owing by them to Lett on foot of the order of the Supreme Court dated 17th February, 2012. The payment was made by electronic transfer to the Solicitors and was lodged to Lett's client account with the Solicitors. At the insistence of Lett, the full amount remains in the client account.

The application

7 The Solicitors' application was initiated by a notice of motion filed on 27th March, 2014, in which the Solicitors sought a number of reliefs. The first relief sought was an order pursuant to s. 3 of the Legal Practitioners (Ireland) Act 1876 (the Act of 1876) declaring that the Solicitors are entitled to ?a charge upon the costs awarded to [Lett]? pursuant to the order of this Court dated 17th February, 2012 (that is to say, the High Court costs and the Supreme Court costs) in respect of professional fees, charges, expenses and...