The Revenue Commissioners v Burns

CourtHigh Court
JudgeMr. Justice David Keane
Judgment Date01 April 2021
Neutral Citation[2021] IEHC 251
Docket Number[2019 No.88COS]

[2021] IEHC 251



David Keane

[2019 No.88COS]




RULING of Mr. Justice David Keane delivered on the 1st April 2021

On 19 February 2021, I gave judgment refusing the application of the Revenue Commissioners (‘Revenue’) for various directions and declarations as of right, pursuant to s. 438 of the Companies Act 2014 (‘the 2014 Act’), against Aengus Burns and Paul McCann (together, ‘the receivers’), as receivers and managers of the property of Begassa Limited (‘the company’).


This ruling should be read in conjunction with that judgment, which can be found under the neutral citation [2021] IEHC 110.


In accordance with the joint statement made by the Chief Justice and the Presidents of each court jurisdiction on 24 March 2020 on the delivery of judgments during the Covid-19 pandemic, I invited the parties to seek agreement on any outstanding issues, including the costs of the application, failing which they were to file concise written submissions, which would then be ruled upon remotely unless a further oral hearing was required in the interests of justice.


Both Revenue and the receivers filed helpful and concise written submissions within the period allowed.

The costs of the application

i. applicable rules and principles


Order 99, rule 2(1) of the Rules of the Superior Courts (‘RSC’), as inserted by the Rules of the Superior Courts (Costs) 2019 (S.I. No. 584 of 2019), confirms that, subject to the provisions of statute, the costs of and incidental to every proceeding in the Superior Courts shall be at the discretion of the court concerned.


Order 99, rule 3(1) of the RSC provides in material part:

‘The High Court, in considering the awarding of the costs of any action or step in any proceedings … in respect of a claim or counterclaim, shall have regard to the matters set out in section 169(1) of the [Legal Services Regulation Act 2015], where applicable.’


Section 168 of the Legal Services Regulation Act 2015 (‘the 2015 Act’) states in material part:

‘(1) Subject to the provisions of this Part, a court may, on application by a party to civil proceedings, at any stage in, and from time to time during, those proceedings –

(a) order that a party to the proceedings pay the costs of or incidental to the proceedings of one or more other parties to the proceedings …

(2) Without prejudice to subsection (1), the order may include an order that a party shall pay –

(a) a portion of another party's costs,

(b) costs from or until a specified date, including a date before the proceedings were commenced,

(c) costs relating to one or more particular steps in the proceedings,

(d) where a party is partially successful in the proceedings, costs relating to the successful elements of the proceedings, and

(e) interest on costs form or until a specified date, including a date before judgment.’


Section 169(1) of the 2015 Act states:

‘A party who is entirely successful in civil proceedings is entitled to an award of costs against a party who is not successful in those proceedings, 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, including—

(a) conduct before and during the proceedings,

(b) whether it was reasonable for a party to raise, pursue or contest one or more issues in the proceedings,

(c) the manner in which the parties conducted all or any part of their cases,

(d) whether a successful party exaggerated his or her claim,

(e) whether a party made a payment into court and the date of that payment,

(f) whether a party made an offer to settle the matter the subject of the proceedings, and if so, the date, terms and circumstances of that offer, and

(g) where the parties were invited by the court to settle the claim (whether by mediation or otherwise) and the court considers that one or more than one of the parties was or were unreasonable in refusing to engage in the settlement discussions or in mediation.’


In Chubb European Group SE v Health Insurance Authority [2020] IECA 183, (Unreported, Court of Appeal, 8 July 2020) (‘Chubb’) (at para. 19), Murray J distilled from those provisions the following principles on the costs of concluded proceedings:

‘(a) The general discretion of the Court in connection with the ordering of costs is preserved (s.168(1)(a) and 0. 99, r.2(1)).

(b) In considering the awarding of costs of any action, the Court should ‘ have regard to’ the provisions of s.169(1) (0. 99, r.3(1)).

(c) In a case where the party seeking costs has been ‘ entirely successful in those proceedings’, the party so succeeding ‘is entitled’ to an award of costs against the unsuccessful party unless the court orders otherwise (s.169(1)).

(d) In determining whether to ‘ order otherwise’ the court should have regard to the ‘ nature and circumstances of the case’ and ‘ the conduct of the proceedings by the parties’ (s.169(1)).

(e) Further, the matters to which the court shall have regard in deciding whether to so order otherwise include the conduct of the parties before and during the proceedings, and whether it was reasonable for a party to raise, pursue or contest one or more issues (s. 169(1)(a) and (b)).

(f) The Court, in the exercise of its discretion may also make an order that where a party is ‘ partially successful’ in the proceedings, it should recover costs relating to the successful element or elements of the proceedings (s.168(2)(d)).

(g) Even where a party has not been ‘ entirely successful’ the court should still have regard to the matters referred to in s.169(1)(a)-(g) when deciding whether to award costs (0. 99, r.3(1)).

(h) In the exercise of its discretion, the Court may order the payment of a portion of a party's costs, or costs from or until a specified date (s.168(2)(a)).’

ii. submissions on costs


The receivers submit that they have been entirely successful in these proceedings, so that they are entitled to an award of costs against Revenue, as there is nothing in the particular nature and circumstances of the case, or in the conduct of the parties, that would warrant the exercise of the court's discretion to order otherwise.


Revenue submits that the receivers have not been successful on one issue – namely, the applicability of s. 617(4) of the 2014 Act to a receivership as opposed to a winding-up – and that, in consequence, it is entitled to either an order for a portion of its costs of the application or an order that each party should bear its own costs.


In advancing that submission, Revenue relies on the observation of Murray J in Chubb (at para. 20), that there are two potential difference between the former costs regime and that which now applies under the Act of 2015: first, that the discretion to depart from the principle that costs should follow the event where the successful party has not prevailed on all issues is no longer limited to complex cases; and second, that, in a case with more than one ‘event’, prevailing in the event and being entirely successful in the action may well not mean the same thing.


In developing its argument, Revenue suggests, in short, that the receivers may have won the event but were not entirely successful in the application because they failed to persuade the court that the repayment of the receivership loan attracted the statutory priority accorded to the reimbursement of funds used to discharge any costs, charges or expenses in a winding up under Part 11 of the 2014 Act.


Revenue relies on a number of decisions on costs in cases in which the losing party prevailed on an issue or issues and where, in consequence, the court concerned determined the percentage of the overall costs attributable to that part of the trial, before netting those costs off against the remaining percentage of the costs of the proceedings due to the winning party.


So, Revenue cites McAleenan v AIG (Europe) Ltd [2010] IEHC 279, (Unreported, High Court (Finlay Geoghegan J), 16 July 2010), a case in which a solicitor challenged an insurer's decision to avoid the professional indemnity policy for the solicitor's practice in which she worked, which decision had been taken on the grounds, among others: (1) that the plaintiff was a partner in the practice; (2) that the policy was a joint, and not a composite, one; (3) that the policy was vitiated by the alleged fraudulent non-disclosure of the principal in the practice; (4) that the insurer was entitled to rely on additional grounds of avoidance set out in a particular letter; (5) that the plaintiff misrepresented to the insurer that she was a partner in the practice; and (6) that the misrepresentation was a material one and was recklessly made entitling the insurer to avoid the policy.


The plaintiff succeeded in her challenge to the first three grounds invoked to support the avoidance of the policy but failed on the others with the result that she lost the action. However, Finlay Geoghegan J concluded (at para. 9) that the insurer had decided to pursue its defence of the first three ground to a determination, which ‘added significantly to the evidence adduced; to the extent of the legal submissions; and to the length of time of the hearing of the case’. The hearing took nine days; six days of evidence and three days of submissions.


Finlay Geoghegan J concluded that, rather than attempt to separately assess the costs of each issue, it would be preferable instead to estimate the percentage of the costs attributable to the issues on which the plaintiff had succeeded and to offset that amount against the...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT