Minister for Finance v Goodman (& Others)

• Jurisdiction: Ireland
• Judgment Date: 08 October 1999
• Date: 08 October 1999
• Docket Number: 1998 No. 60, 61,62 & 63 MCA
• Court: High Court

THE HIGH COURT

1998 No. 60, 61,62 & 63 MCA

BETWEEN

THE MINISTER FOR FINANCE

APPLICANT

AND

LAURENCE GOODMAN, GOODMAN INTERNATIONAL AND SUBSIDIARY COMPANIES

RESPONDENTS

Abstract:

Costs - Taxation of costs - Review - Scope of High Court’s jurisdiction in review of order of taxation - Errors of principle and errors of quantification - Tribunal - Relevance of comparators - Necessary and proper expenditure - Factors to be taken into account in valuing work - Hourly/daily rates - Whether additional award is appropriate to reflect complexity and skill - Constituent elements of Counsels’ fees - Whether Counsels’ fees appropriate considering experience of careful and prudent solicitor - Claims for expert witnesses and analysts - Distinction between outsourcing of work and necessary expertise - Rules of the Superior Courts, 1986 (SI 15) Order 99, rule 38(3).

The High Court in reviewing a decision of the Taxing Master pursuant to O 99 r 38(3) is entitled to alter his allowances where he has erred, whether that error be one of principle or whether, having proceeded on a correct principle, his quantification of allowances is erroneous. In respect of the Solicitors’ costs, it would be arbitrary to reduce by way of a flat percentage, unsupported by evidence, the Taxing Master’s determination of instruction fees, in order to disallow costs unnecessarily incurred. The ‘uplifts’ allowed by the Taxing Master in respect of skill, knowledge and complexity component of the work, and the volume of work and the effort involved were not justified since these elements had already been taken into account in determining the instruction fee. The test to be applied in respect of Counsels’ fees (which represents the law prior to the Courts and Court Officers Act 1995), is whether no solicitor acting reasonably carefully and reasonably prudently based on his experience in the course of his practice would have determined such fees. Disbursements by a solicitor in respect of legal expertise cannot be allowed since to allow this would be to negative the numerical limitation on lawyer representation contained in the Orders of the Tribunal. So held by the High Court in adjusting the allowances of the Taxing Master in part.

1 Judgment of Ms. Justice Laffoy delivered on the 8th day of October, 1999.

2 THE APPLICATIONS

3 This judgment is concerned with four applications by the Applicant pursuant to Order 99, Rule 3 8(3) of the Rules of the Superior Courts, 1986 (the Rules) to review the taxation of certain items allowed by the Taxing Master on the taxation of the following costs, namely:

• (1) The costs of Laurence Goodman (Mr. Goodman) in respect of export credit insurance issues (Record No. 1998 No. 60 MCA);

• (2) The costs of Mr. Goodman in respect of general issues, i.e., matters other than export credit insurance issues (Record No. 1998 No. 61 MCA);

• (3) The costs of Goodman International and Subsidiary Companies (the Companies) in respect of export credit insurance issues (Record No. 1998 No. 62 MCA); and

• (4) The costs of the Companies in respect of general issues, i.e., matters other than export credit insurance (Record No. 1998 No. 63 MCA).

  All of the foregoing costs were taxed by the Taxing Master pursuant to two Orders dated 29th July, 1994 made by the Tribunal of Inquiry, which has come to be known colloquially as the Beef Tribunal, which was established by Order of the Minister for Agriculture and Food made on 31st May, 1991 pursuant to the resolution of Dail Eireann passed on 24th May, 1991 and a resolution of Seanad Eireann passed on 29th May, 1991.

  THE ORDERS OF THE TRIBUNAL

  Section 6(1) of the Tribunals of Inquiry (Evidence) (Amendment) Act, 1979 (the Act of 1979) provides as follows:

  “Where a tribunal...is of opinion that, having regard to the findings of the tribunal and all other relevant matters, there are sufficient reasons rendering it equitable to do so, the tribunal...may by order direct that the whole or part of the costs of any person appearing before the tribunal by counsel or solicitor, as

  taxed by a Taxing Master of the High Court, shall be paid to the person by any other person named in the order.”

  By an Order dated 29th July, 1994, having recited, inter aliathat on 21st June, 1991 the Companies had been granted authorisation under Section 2(b) of the Tribunals of Inquiry (Evidence) Act, 1921 (the Act of 1921) by the Tribunal to be represented before it by counsel instructed by solicitor, and the effect of Section 6 of the Act of 1979, the Tribunal ordered as follows:

  “IT IS HEREBY ORDERED that a Taxing Master of the High Court do tax in the manner hereinafter appearing the applicants’ costs of appearing before the said Tribunal by three counsel instructed by solicitor.

  In relation to the taxation of the applicants’ costs the tribunal DOTH ORDER as follows:

  • (a) That the statutory provisions and the Rules of the Superior Courts relating to the taxation of costs in an action in the High Court (including the provisions relating to review and appeal) shall, in so far as practicable, apply.

  • (b) That the costs of employing a solicitor and three counsel be taxed on a party and party basis.

  • (c) That the costs do include such witnesses’ expenses as related to those witnesses who actually gave oral evidence before the tribunal on the proposal of the applicants;

  • (d) That the amount of witnesses’ expenses be (a) such fee for the preparation of any statement prepared by the witness which was received by the Tribunal as part of the witnesses’ testimony as the Taxing Master (or on review or appeal, the Court) considers reasonable: (b) such fee (not already paid) for attending before the Tribunal on such days as the witness gave oral evidence as the Taxing Master (or, on review or appeal, the Court) considers reasonable and (b) the travelling and subsistence expenses (not already paid) reasonably incurred for the purpose of giving oral evidence before the Tribunal.

  • (e) That the Minister for Finance be at liberty to attend and be heard on the said taxation and any review or appeal in relation to it.

  • (f) That the Minister for Finance do pay the applicants’ costs when taxed and ascertained.”

    An Order in similar terms, but subject to one variation, was made in favour of Mr. Goodman who had also been granted representation before the Tribunal on 21st June, 1991. The variation was that the Order in favour of Mr. Goodman provided that his costs of employing a solicitor and two counsel should be taxed on a party and party basis.

    During the course of the Tribunal objection had been taken on behalf of the State to the firm of solicitors retained by the Companies and Mr. Goodman, A & L Goodbody, acting for the Companies and Mr. Goodman in connection with allegations which the Tribunal was investigating in relation to export credit insurance. Following that objection, another firm of solicitors, Rory O’Donnell & Co. was retained in connection with export

    credit issues and that firm instructed the same team of barristers as had been instructed by A & L Goodbody in connection with general issues. A consequence of the splitting of representation was that separate bills of costs were presented and there were separate taxations in relation to representation in connection with export credit general issues and the other issues which arose before the Tribunal.

    PROCEEDINGS BEFORE THE TAXING MASTER

    The taxation of the two bills of costs presented by the Companies and Mr. Goodman in connection with general issues commenced before the Taxing Master on 24th October, 1995. It was interrupted by an Application for judicial review in this Court entitled

    “The Minister for Finance, Applicant v. Taxing Master James Flynn, Respondent and Goodman International and Laurence Goodman, Notice Parties (Record No. 292 JR. of 1995)” (the Judicial Review proceedings) in which judgment was delivered by Carroll J. on 9th February, 1996. The taxation was resumed on 8th May, 1996 and continued until 13th June, 1996. The Taxing Master ruled on the taxation in a comprehensive Report running to 206 pages on 30th July, 1996.

    The taxation of the two bills of costs in connection with export credit issues commenced before the Taxing Master on 17th June, 1996 and he gave his ruling on 30th July, 1996 in a Report of that date.

    Objections to allowances made by the Taxing Master on both taxations were carried in by the Minister for Finance (the Minister) pursuant to Order 99, Rule 3 8(1) of the Rules. The objections were supported by written submissions, to which the Companies and Mr. Goodman responded in written replies. The hearing of the objections commenced before the Taxing Master on 30th January, 1997 and concluded on 4th February, 1997. The Taxing

    Master ruled on the objections on 18th April, 1997 in two Reports of that date in which he disallowed all of the objections and affirmed his allowances.

    On the taxation, the Companies and Mr. Goodman were represented by two legal cost accountants, Arnold Lowe and Paul Behan, instructed by solicitors, and the Minister was represented by a legal cost accountant, Peter Fitzpatrick, instructed by a solicitor. No viva voceevidence was adduced on the taxation. However, the Taxing Master had before him the bills of costs and the documentation and other data generated by the legal teams and other advisers in connection with the representation of the Companies and Mr. Goodman before the Tribunal. Some viva voceevidence was adduced on the hearing of the objections and, in so far as it is necessary, I will refer to it later.

    THIS REVIEW

    This review has been sought under Order 99, Rule 3 8(3) of the Rules which provides as follows:

    “Any party who is dissatisfied with the decision of the Taxing Master as to any items which have been objected to as aforesaid or with the amount thereof, may...apply...