Scotchstone Capital Fund Ltd and Another v Ireland and Another

• Jurisdiction: Ireland
• Judge: Donnelly J.,Faherty J.,Ní Raifeartaigh J.
• Judgment Date: 14 November 2023
• Neutral Citation: [2023] IECA 280
• Court: Court of Appeal (Ireland)
• Docket Number: Record No: 2020 149

Scotchstone Capital Fund Ltd

and

Piotr Skoczylas

Applicant/Appellants

and

Ireland and The Attorney General

Respondents/Respondents

[2023] IECA 280

Donnelly J.

Faherty J.

Ní Raifeartaigh J.

Record No: 2020 149

COURT OF APPEAL

Costs – Frivolous and vexatious proceedings – Legal Services Regulation Act 2015 s. 169 – Parties seeking costs – Whether costs should follow the event

Facts: The Court of Appeal, on 31 January 2022, dismissed the appeal of the appellants, Scotchstone Capital Fund Ltd and Mr Skoczylas, against the judgment and order of the High Court striking out the proceedings as being frivolous and/or vexatious and/or bound to fail. The appellants filed written submissions seeking their own costs, and, in the alternative, if such order is not granted, an order that each side would bear its own costs. The appellants also sought, if required, a stay on any order for costs against them pending the outcome of other proceedings in which the appellants sought to challenge the constitutionality of the Credit Institutions (Stabilisation) Act 2010 to wit Dowling & Ors v Minister for Finance & Ors (Rec. No. 2013/2708P). The second appellant sought further orders in a motion dated 16 March 2022 as follows: (a) to vary/set aside/rescind the judgment of the Court of 31 January 2022; (b) to correct what he contended were “material and decisive errors” in the said judgment; (c) alternatively, an order to stay the proceedings and to stay any order striking out the case pending the outcome of Dowling. By judgment dated 5 December 2022, the Court refused all the reliefs claimed in the motion. As the issue of costs regarding the substantive appeal remained outstanding, the Court directed that the costs of the 16 March 2022 motion and the costs of the substantive appeal be heard together in a costs hearing that will be fixed as soon as possible. The Court dealt with the issue of the substantive costs of the appeal, the costs of the motion of 16 March 2022 and the issue of a stay, if required, on any order of costs made against the appellants. The hearing of the application for costs was heard on 26 July 2023.

Held by the Court that there was no reason to order otherwise than granting the entirely successful respondents, Ireland and the Attorney General, the costs of the substantive appeal. The Court held that the costs of the 16 March 2022 motion follow the event; the respondents as the entirely successful parties were entitled to their costs of the motion. Where there had been a reserved judgment, an intervening motion and a protracted delay before the oral hearing on costs subsequent to the delivery of written submissions, the Court considered that it was incumbent on the respondents to place before it some material upon which it could be satisfied that this was a suitable case upon which to engage in the process of measuring costs. The Court refused to measure costs and, instead, made an order for the payment of the respondents’ costs, against the appellants, such costs to be adjudicated upon in default of agreement.

The Court held that the balance of justice did not require it to take the unusual step of staying the order for costs pending the outcome of separate proceedings. The Court considered that the balance of justice required a stay to be granted on the costs orders for a period of 21 days from the date of the judgment to enable an application to be made to the Supreme Court should the appellants wish to do so; that stay would then continue until the determination of proceedings before the Supreme Court or until such time as the Supreme Court otherwise determines. The Court directed that its judgment of 22 January 2022 be amended as follows: (1) para 42 be amended by the deletion of “We also note that the High Court order does not record that there was any application for a stay on the order: it does record a stay on the costs until the determination of the appeal”; and (2) para 45 be amended by the deletion of “No such application appears to have been made to the High Court, and no such application was made to this Court prior to the hearing of the appeal”.

Costs application refused.

JUDGMENT of the Court delivered on the 14 ^th day of November, 2023

1 . This Court gave judgment on 31 January 2022 dismissing the appeal of the plaintiffs/appellants against the judgment and order of the High Court striking out the proceedings as being frivolous and/or vexatious and/or bound to fail. At the end of the judgment, delivered electronically, the Court indicated that, given that the appellants have been entirely unsuccessful in their appeal, it would appear to follow that the respondents are entitled to the costs of this appeal, to be adjudicated in default of agreement but the appellants were given time to contend for a different order by way of written submissions.

2 . The appellants filed written submissions seeking their own costs, and, in the alternative, if such order is not granted, an order that each side would bear its own costs. The appellants also sought, if required, a stay on any order for costs against them pending the outcome of other proceedings in which the appellants seek to challenge the constitutionality of the Credit Institutions (Stabilisation) Act 2010 (“the 2010 Act”) to wit Dowling & Ors v Minister for Finance & Ors (Rec. No. 2013/2708P).

3 . Prior to the Court being in a position to deal with the costs and stay issue, the second appellant sought further orders in a motion dated 16 March 2022 as follows:

• a) “to vary/set aside/rescind the judgment of this Court of 31 ^st January, 2022 (“the Greendale relief”)

• b) to correct what he contends are “material and decisive errors” in the said judgment (“the Nash relief”)

• c) alternatively, an order to stay these proceedings and to stay any order striking out this case pending the outcome of other proceedings in which the appellants seek to challenge the constitutionality of the Credit Institutions (Stabilisation) Act 2010. ( Dowling & Ors v Minister for Finance & Ors (Rec. No. 2013/2708P))”

For ease of reference and despite the difference in reliefs sought, this motion will be referred to as the “ Greendale Motion”.

4 . By judgment dated 5 December 2022, this Court refused all the reliefs claimed in the motion. As the issue of costs regarding the substantive appeal remained outstanding, we directed that the costs of the 16 March 2022 motion and the costs of the substantive appeal be heard together in a costs hearing that will be fixed as soon as possible.

5 . This judgment deals with the issue of the substantive costs of the appeal, the costs of the motion of 16 March 2022 and the issue of a stay, if required, on any order of costs made against the appellants. The hearing of the application for costs was heard on 26 July 2023.

6 . The passage of time between the judgment of the 5 December 2022 and the hearing of the motion is due to the fact that in the meantime the second appellant sought to issue a further Greendale motion and also to seek a correction of an error in the proceedings. This Court dealt with this application by way of a ruling dated 30 January 2023 in which we rejected the application and said that if there was an application it could be dealt with by way of the process indicated in Order 28 rule 11. Without issuing a motion, the second appellant sought such an amendment at the costs hearing although he notified the State and the Court of his intention to do so by email shortly before the hearing.

7 . A further delay to the hearing of the within issues was caused by a change of solicitors for the first appellant in advance of the hearing of the Greendale Motion and an almost immediate motion to come off record by the new solicitor. That motion was opposed by the second appellant, as director of the first appellant, and a judgment was delivered on 25 May 2023 permitting the new solicitor to come off record. The contested hearing for costs of that motion was heard on 26 July 2023 and is the subject of a separate ruling by this Court also given today.

8 . At all times in this litigation the second appellant has represented himself. Up to October 2022, during the period when the first appellant was legally represented, the solicitor on record had adopted the submissions made by the second appellant. That situation appears to have applied to other litigation to which both appellants were party.

The Costs of the Substantive Appeal

9 . The indicative view given by the Court in its judgment of 31 January 2022 that the respondents appear entitled to their costs reflects the position as set out in s. 169(1) of the Legal Services Regulation Act, 2015, that a party who is entirely successful in civil proceedings is entitled to an award of costs against the unsuccessful party unless the court orders otherwise, having regard to the particular nature and circumstances of the case and the conduct of the proceedings by the parties. The respondents in written and oral submissions urged upon the Court that the general principle covered the situation here and there was no reason to deviate from it. The respondents also urged the Court to measure costs if they were awarded same.

10 . In written submissions by the second appellant (adopted by the first appellant) and in oral submissions by the second appellant (which this Court will view as covering the situation of the first appellant), it was strongly urged upon the Court that the nature and circumstances (indeed the special or unusual circumstances as per Veolia Water UK Plc & ors v Fingal County Council [2006] IEHC 240 and reflected in s. 169) of this case were such that they ought to be granted their costs or, alternatively that no order be made.

11 . The second appellant submitted that the Court was required to have regard to settlement approaches made by the appellants. He referred to three open...