Paddy Burke (Builders) Ltd ((in Liquidation) and (in Receivership))

• Jurisdiction: Ireland
• Judge: Mr. Justice Denis McDonald
• Judgment Date: 30 April 2020
• Neutral Citation: [2020] IEHC 199
• Docket Number: [2020 47 C.A.]
• Court: High Court
• Date: 30 April 2020

BETWEEN

PADDY BURKE (BUILDERS) LIMITED (IN LIQUIDATION AND IN RECEIVERSHIP)

PLAINTIFF

AND

TULLYVARAGA MANAGEMENT COMPANY LIMITED

DEFENDANT

AND

BY ORDER DATED 27TH NOVEMBER 2019 STEPHEN TENNANT AND PROMONTORIA (ARROW) LIMITED

DEFENDANTS TO COUNTERCLAIM

[2020] IEHC 199

Denis McDonald J.

[2020 47 C.A.]

THE HIGH COURT

CIRCUIT APPEAL

SOUTH-WESTERN CIRCUIT

COUNTY OF CLARE

Costs – Injunction – Balance of convenience – Parties seeking costs – Whether the defendant was entitled to costs

Facts: The High Court (McDonald J), on 8th April, 2020 ([2020] IEHC 170), upheld the appeal of the defendants to the counterclaim, Mr Tennant (the receiver) and Promontoria (Arrow) Ltd (Promontoria), against an interlocutory injunction granted against them by the Circuit Court, on the application of the defendant/counterclaimant, Tullyvaraga Management Company Ltd (the management company). In particular, McDonald J determined that he should set aside the interlocutory injunction granted by the Circuit Court judge and, its place, he made an order dismissing the application for the injunction. He held that the management company had failed to make out either a strong case to justify the grant of mandatory relief or a serious issue to be tried (by reference to classic Campus Oil principles) to sustain the application for the interlocutory injunction. He also found that the balance of convenience lay against the grant of the injunction. In taking that view on the balance of convenience, he held that damages would adequately compensate the management company in the event that it ultimately succeeded at the trial. He also took into account what he considered to have been an element of delay on the part of the management company in moving for relief. In this judgment, he dealt with the costs of the application for the injunction heard in the Circuit Court in Ennis on 29th January, 2020 and in the High Court on 11th March, 2020.

Held by McDonald J that, in light of the fact that he held against the management company on the balance of convenience, it seemed to him, on the basis of Glaxo Group Ltd v Rowex Ltd [2015]1 I.R. 185, that there were no circumstances in which it would be just that the management company should recover its costs against the receiver and/or Promontoria in respect of the application for the interlocutory injunction either in the High Court or in the Circuit Court, even if it should ultimately transpire, on the basis of more extensive legal argument and oral evidence at the trial, that the management company succeeded in obtaining permanent orders in its favour. On the other hand, it seemed to McDonald J that there would be a real risk of injustice if he were to determine that the receiver and Promontoria should be awarded their costs of the hearing of the interlocutory application either in the High Court or in the Circuit Court, having considered what may potentially arise following discovery of documents by the receiver and Promontoria and the receiver which had yet to take place in the substantive Circuit Court proceedings.

McDonald J held that the just order to make in this case was to direct that the costs of the receiver and Promontoria both of the hearing and application in the Circuit Court and the appeal to the High Court should be costs in the cause such that, if the receiver and Promontoria succeeded in their defence to the counterclaim of the management company at trial, they would be entitled to their costs as against the management company but, on the other hand, if they failed to succeed in their defence, they would not be entitled to their costs of the hearing in the Circuit Court or in the High Court in relation to the application for an interlocutory injunction. He also made a declaration that, irrespective of the outcome of these proceedings, the management company would have no entitlement to the costs of the application for the injunction in the Circuit Court or the costs of this appeal.

Costs in the cause.

JUDGMENT on costs of Mr. Justice Denis McDonald delivered on 30th April, 2020

1 On 8th April, 2020 I delivered judgment in this case ( [2020] IEHC 170) in which I upheld the appeal of the defendants to the counterclaim (“the receiver” and “Promontoria” respectively) against an interlocutory injunction granted against them by the Circuit Court, on the application of the defendant/counterclaimant (“the management company”). In particular, I determined that I should set aside the interlocutory injunction granted by the learned Circuit Court judge and, its place, I made an order dismissing the application for the injunction. This judgment now deals with the costs of the application for the injunction heard in the Circuit Court in Ennis on 29th January, 2020 and in the High Court on 11th March, 2020.

2 I do not propose, in this judgment, to rehearse the underlying facts. They are set out in the judgment delivered by me on 8th April. It is sufficient, for present purposes, to note that, in that judgment, I held that the management company had failed to make out either a strong case to justify the grant of mandatory relief or a serious issue to be tried (by reference to classic Campus Oil principles) to sustain the application for the interlocutory injunction. I also found that the balance of convenience lay against the grant of the injunction. In taking that view on the balance of convenience, I held that damages would adequately compensate the management company in the event that it ultimately succeeds at the trial. I also took into account what I consider to have been an element of delay on the part of the management company in moving for relief.

3 In considering the question of costs, I am obliged to approach the matter in accordance with the provisions of 0. 99 r.2 (3) R.S.C, which replaces the former 0. 99 r.1 (4A). Order 99 r.2 (3) provides as follows:-

“The High Court … upon determining any interlocutory application, shall make an award of costs save where it is not possible justly to adjudicate upon liability for costs on the basis of the interlocutory application.”

4 Order 99 r.2 (3) is in identical terms to the former 0. 99 r.1 (4A). The latter rule has been addressed in a number of authorities including the decision of Laffoy J. in Tekenable Ltd v. Morrissey [2012] IEHC 391 which was expressly approved by the Supreme Court in ACC Bank Plc v. Hanrahan [2014] 1 I.R. 1. In turn, the decision of Laffoy J. in Tekenable was influenced by the earlier decisions of Clarke J. (as he then was) in Allied Irish Banks v. Diamond (High Court, unreported, 7th November, 2011) referred to in Delaney & McGrath on “Civil Procedure in the Superior Courts”, 4th ed., 2018, at para. 24-79 and the previous decision of Laffoy J. herself in O'Dea v. Dublin City Council [2011] IEHC 100.

5 While I have been referred to a number of additional authorities by the parties in their very helpful written submissions on the issue of...