Revenue Commissioners v Anthony J. Fitzpatrick

JurisdictionIreland
CourtCourt of Appeal (Ireland)
JudgeMs. Justice Finlay Geoghegan
Judgment Date07 April 2017
Neutral Citation[2017] IECA 115
Docket NumberNeutral Citation Number: [2017] IECA 115 Appeal No. 2016 218 2015 443 2015 394
Date07 April 2017

[2017] IECA 115

THE COURT OF APPEAL

Finlay Geoghegan J.

Finlay Geoghegan J.

Irvine J.

Hogan J.

Neutral Citation Number: [2017] IECA 115

Appeal No. 2016 218

2015 443

2015 394

IN THE MATTER OF

BALLYRIDER LIMITED (IN VOLUNTARYLIQUIDATION) AND

IN THE MATTER OF THE COMPANIES ACTS 1963 – 2012

BETWEEN/
THE REVENUE COMMISSIONERS
APPLICANT/RESPONDENT
AND
ANTHONY J. FITZPATRICK
RESPONDENT/APPELLANT

Costs – Liquidation – Direction – Respondent seeking orders declaring that certain costs, charges, and expenses were not properly incurred – Whether there ought to have been a reduction or total set off of the costs

Facts: The respondent, the Revenue Commissioners, commenced High Court proceedings by an originating notice of motion dated 19th August, 2014, seeking orders pursuant to s. 280 of the Companies Act 1963 directing the appellant, Mr Fitzpatrick, to refrain from bringing certain proceedings in the name and on behalf of Ballyrider Ltd (the Company), and also declaring that certain costs, charges, and expenses were not properly incurred and could not be paid out of the assets of the Company in priority to other claims. It also sought, in the alternative, an order pursuant to s. 277 of the 1963 Act removing Mr Fitzpatrick as liquidator of the Company. The trial judge, in delivering judgment on costs on 27th October 2015, concluded that the Revenue Commissioners had been successful in their application and that in accordance with the general rule under O. 99 of the Rules of the Superior Courts, costs should follow the event. She further held that the order should be made against Mr Fitzpatrick personally, and that neither his costs nor those of the Revenue Commissioners were costs properly incurred in the liquidation. Mr Fitzpatrick appealed to the Court of Appeal against the High Court judgment, submitting that, as a matter of principle, the application was not one in which a court should, pursuant to O. 99, r. 1 make an order against Mr Fitzpatrick, as a liquidator, personally. Second, he submitted that the trial judge had failed to take account in her costs determination of what she had stated at para. 85 of her substantive judgment. Third, in part as an alternative submission, even on the determinations of the High Court it was submitted that the primary reliefs sought were directions pursuant to s. 280 of the 1963 Act which were founded on a claim of negligence, and there was no determination that Mr Fitzpatrick had been negligent. In those circumstances he submitted that the trial judge ought to have determined, in accordance with the principles set out in Veolia Water (UK) & Ors v Fingal Co. (No. 2) [2007] 2 IR 81 (and any subsequent judgments), that each party had been successful on certain issues and therefore that there ought to have been a reduction or total set off of the costs. On the costs of the appeal, his submission was that there should be no order as to costs as whilst the Revenue Commissioners had succeeded on the appeal in relation to the removal of Mr Fitzpatrick as liquidator, the latter had succeeded on the appeal against the consequential orders. The Revenue Commissioners submitted that the trial judge correctly determined that this was an application to which the normal rule that costs follow the event should apply, the comment at para. 85 of her judgment did not warrant any diminution, and that following the decision of the Court there should only be a very small deduction from the overall costs. Similarly, in relation to the appeal, it was submitted that the principal issue was the removal of Mr Fitzpatrick, and that there should be separate orders on the different appeals or only a small deduction from a full order for costs in favour of the Revenue Commissioners.

Held by Finlay Geoghegan J that the appropriate exercise of the discretion of the Court to do justice between the parties was to make an award in favour of the Revenue Commissioners against Mr. Fitzpatrick personally for 50% of the costs of the High Court application.

Finlay Geoghegan J held that, in exercise of the Court’s discretion in accordance with O.99 the appropriate and just order between the parties was to make an order in favour of the Revenue Commissioners for 50% of the costs of the first two appeals up to the date of the first judgment (26th July 2016) with a direction that they were to be treated as one appeal and to make no order on the costs appeal or any additional matter on the other appeals after the date of the first judgment.

Appeal allowed.

JUDGMENT delivered by Ms. Justice Finlay Geoghegan on the 7th day of April 2017
1

This judgment is supplemental to a judgment delivered by this Court (Irvine J.: Finlay Geoghegan J. and Hogan J. concurring) on 26th July, 2016; [2016] IECA 228. That judgment concerned the substantive issues in dispute in relation to orders made by the High Court on 25th July, 2015 and 30th July, 2015, removing the appellant (‘Mr. Fitzpatrick’) as liquidator of Ballyrider Limited (‘the Company’), appointing Mr. Maloney as liquidator in his place, and directing Mr. Fitzpatrick to hand over to Mr. Maloney books, records, and sums retained in the liquidation, along with other sums in respect of monies already paid out of the liquidation by Mr. Fitzpatrick, or retained on account of his fees.

2

In the first judgment, this Court dismissed the appeal against the removal of Mr. Fitzpatrick as liquidator pursuant to s. 227 of the Companies Act 1963 and the consequential appointment of Mr. Maloney, but allowed the appeal against the consequential orders to pay over monies no longer retained in the liquidation.

3

There were in fact three separate appeals brought by Mr. Fitzpatrick to this Court. This arose by reason of orders made by the High Court on different dates. The costs order of the High Court, for the reasons set out in a judgment delivered by Murphy J. on 27th October, 2015, was not formally made until 29th April, 2016. The appeal on costs was left over until after the delivery of judgment in the two substantive appeals.

4

The parties were permitted to put in further submissions and there was a further short oral hearing on 24th March, 2017 in relation to both the appeal on costs and also the costs of the appeals themselves.

5

The order made in the High Court on costs was:

(i) That neither the costs of the Revenue Commissioners nor Mr. Fitzpatrick are costs properly incurred in the liquidation.

(ii) That Mr. Fitzpatrick personally pay to the Revenue Commissioners the costs of the proceedings when taxed or ascertained.

(iii) A stay on the order for costs pending the outcome of the appeal.

6

The High Court proceedings were commenced by an originating notice of motion dated 19th August, 2014 seeking orders pursuant to s. 280 of the Companies Act 1963 (‘the 1963 Act’) directing Mr. Fitzpatrick to refrain from bringing certain proceedings in the name and on behalf of the Company, and also declaring that certain costs, charges, and expenses were not properly incurred and could not be paid out of the assets of the Company in priority to other claims. It also sought, in the alternative, an order pursuant to s. 277 of the 1963 Act removing Mr. Fitzpatrick as liquidator of the Company.

7

The Company is in voluntary liquidation. The Revenue Commissioners are a preferential creditor and have a nominee as a member of the Committee of Inspection. The application was brought against Mr. Fitzpatrick in his capacity as liquidator of the Company in voluntary liquidation.

8

The trial judge, in delivering judgment on costs on 27th October 2015, concluded that the Revenue Commissioners had been successful in their application and that in accordance with the general rule under O. 99 of the Rules of the Superior Courts, costs should follow the event. She further held that the order should be made against Mr. Fitzpatrick personally, and that neither his costs nor those of the Revenue Commissioners were costs properly incurred in the liquidation. Her reason for this conclusion was that in the application Mr. Fitzpatrick was solely protecting his own interests; it was his conduct in the liquidation...

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5 cases
  • Re Lance Homes Ltd & The Companies Act; Lee Towers Management Company Ltd v Lance Investments Ltd ((in Liquidation)) No. 2
    • Ireland
    • High Court
    • 1 February 2019
    ...determined in the judgment of the Court of Appeal in In re Ballyrider (in Voluntary Liquidation): Revenue Commissioners v. Fitzpatrick [2017] IECA 115. That judgment was given supplemental to a judgment in the substantive issue in dispute in relation to orders removing Mr. Fitzpatrick as l......
  • O'Reilly v Neville
    • Ireland
    • High Court
    • 18 January 2018
    ...of the proceedings in favour of the defendants. She made similar orders in the case of Revenue Commissioners v. Anthony J. Fitzpatrick [2017] IECA 115. 11 The letter of offer made on behalf of the defendants of April, 2012 was indeed a commendable offer. It is correct however to say that it......
  • Fitzpatrick v The Revenue Commissioners
    • Ireland
    • Court of Appeal (Ireland)
    • 30 April 2020
    ...the liquidator, and this together with the costs of the substantive appeal were dealt with in a supplemental decision reported at [2017] IECA 115. At hearing Mr. Fitzpatrick “wisely” (per Finlay Geoghegan J.) did not seek to be indemnified out of the company assets in respect of the costs o......
  • Anthony Fitzpatrick v Aiden Murphy (as Official Liquidator)
    • Ireland
    • High Court
    • 5 May 2021
    ...or the public. Indeed, I note that broadly the same point was made by Finlay Geoghegan J for the Court of Appeal in Re Ballyrider Ltd [2017] IECA 115, ( Unreported, Court of Appeal, 7 April 2017) (at paras. 25 The fifth Ballyrider principle does not apply because Mr Fitzpatrick was not acti......
  • Request a trial to view additional results

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