Ulster Bank, Ltd v Hassell

• Jurisdiction: Ireland
• Judgment Date: 26 April 1940
• Date: 26 April 1940
• Court: High Court

Ulster Bank v. Hassell.

ULSTER BANK LIMITED

Plaintiffs

and

THOMAS JOSEPH HASSELL (Trading as THOMAS J. HASSELL & SON)

Defendant.

Practice - Costs - Mortgagee's action brought in the High Court - Action which might have been commenced in the Circuit Court - Or. XXVIII, r. 2, of the Rules of the High Court and Supreme Court, 1926, only allowing Circuit Court costs - Whether r. 2 of Or. XXVIII repealed by the Courts of Justice Act, 1936 - Whether the Act retrospective as to costs - Order obtained by mortgagee in High Court prior to the passing of the Act - Subsequent subsidiary orders obtained subsequent to the passing of the Act - Whether costs taxable on higher or lower scale - Rules of the Supreme Court (Ir.), 1905 -Or. LXV, r. 1 - Courts of Justice Act, 1924 (No. 10 of 1924), s. 48 -Rules of the Circuit Court, Or. XL, r. 28 - Courts of Justice Act, 1936 (No. 48 of 1936), s. 3; s. 12, sub-ss. 1, 2, 3; s. 18, sub-s. 2; ss. 21, 45, 60, 67, 68, 78.

Motion to review taxation.

The plaintiffs applied to the High Court for an order that the taxation of their costs in this suit be reviewed, and that the objection made by them to the taxation of those costs on the Circuit Court scale be sustained, and that the Taxing Master be directed to tax the said costs on the High Court scale.

The facts are summarised in the headnote and are sufficiently set out in the Taxing Master's report which was as follows:—

"I beg to report that, pursuant to the order of the Hon. Mr. Justice Meredith, made on the 27th day of April, 1936, and to the orders herein, dated, respectively, the 6th July, 1936, the 29th April, 1938, and the 6th March, 1939, I have taxed the costs of the plaintiffs in this suit. I beg to refer to the said bill of costs.

The plaintiffs are mortgagees, and when, on the 7th April, 1936, they commenced the proceedings they claimed that there was due to them on foot of an indenture of mortgage, dated 13th day of March, 1930, the sum of £307. Certain premises, which were originally comprised in the said mortgage, had been released from all claims in respect thereof, and the balance of the premises, which at the date of the commencement of the proceedings were subject to the said mortgage, consisted of No. 24 James Street in the City of Dublin. At the time of the commencement of the proceedings the Poor Law Valuation of No. 24 James Street, comprised in the said mortgage, was £60. In the course of the proceedings at Chambers the premises were put up for sale by public auction, the sale being expressed to be subject to the right of the Corporation of Dublin to exercise the power to purchase a portion of the said premises comprising 13 square perches, 8 square yards, which power had been acquired by the said Corporation under the James Street Area Compulsory Purchase Order, 1936. Subject to the right of the Corporation as aforesaid, the reserve price was fixed at £400. This sum was not obtained and the auction proved abortive. Subsequent to such abortive sale the Dublin Corporation, in exercise of the said power, acquired a portion of the premises at the rere of the house known as No. 24 James Street for £375, and have paid this sum into Court by way of purchase money. The plaintiffs have taken the necessary steps to have a Receiver appointed, and I am informed that this Receiver is now in receipt of the rents and profits of the premises known as No. 24 James Street, other than that portion thereof acquired by the Dublin Corporation as aforesaid. Such unsold premises therefore remain in the hands of the Receiver, and in regard to same it was stated to me that the plaintiffs, in order to comply with the requirements of the Dublin Corporation, were obliged to expend the sum of £120 in renewing the roof.

In order to bring about an allocation of the funds now in Court to the credit of the suit the plaintiffs issued a summons for the taxation of their costs. I taxed their bill of costs on the Circuit Court scale for the reason that, on the facts disclosed to me, the suit is one that could have been properly commenced in the Circuit Court. By notice dated the 27th February, 1940, the plaintiffs objected to my taxation on the Circuit Court scale and required me to review my taxation and to tax their bill of costs on the High Court scale. On the 1st March, 1940, I reviewed my taxation and, after hearing the solicitors for the parties, I disallowed the objection of the plaintiffs. I was then requested to make up this report.

It is agreed by the parties that the only matter for determination by the Court is the correct principle to be applied by me on taxation—that is to say, whether I should tax on the High Court scale or on the Circuit Court scale.

The question is regarded as being of great importance to Banks and Corporations for the financing of house purchase, and it was stated to me that a review by the Court of my taxation in this case is asked for in order to obtain judicial clarification of an anomalous condition of affairs now arising out of conflicting decisions, principles and enactments.

By way of addition to this report I beg to refer the Court to a copy of a Memorandum prepared by me in 1937 on the practice of the Taxing Office in regard to the costs of mortgagees.

The proceedings in this suit were commenced prior to the passing of the Courts of Justice Act, 1936.

Dated the 15th day of March, 1940. H. B. O'Hanlon."

The Memorandum above referred to was as follows:—

"The Practice of the Taxing Office in regard to the costs of mortgagees.

The general principle is that the costs of mortgagees are, in effect, taxed on a solicitor and client basis.

'A mortgagee is entitled to all costs reasonably incurred in relation to the mortgage debt': National Provincial Bank of England v. Games(1). 'The Court, in settling the account between a mortgagor and mortgagee, will give to the latter all that his contract, or the legal or equitable consequences of it, entitle him to receive, and all the costs properly incurred in ascertaining or defending such rights, whether at law or in equity': Dryden v. Frost(2).

Mortgagee's costs may be ascertained under two heads:— (a) costs, charges and expenses properly incurred in relation to the debt and security and not being costs of litigation or incurred in any proceeding in Court; and (b) costs of litigation.

In regard to (a), the practice is well settled. Regard is had to the general principle, and 'on a taxation of mortgagee's costs, payable by the mortgagor, the practice of the Taxing Office is to tax as between the solicitor and the party or estate liable to pay and not as between the solicitor and his own client': In re Longbotham & Sons(3). The taxation is not a full solicitor and client taxation but is a taxation of solicitor and client costs payable by a third party, and the Taxing Master will, in the exercise of his discretion, tax off items which he considers are not properly chargeable against the mortgagor although the mortgagee might be liable for them to his own solicitor.

In regard to (b), the costs are taxed pursuant to a judgment or order of the Court which declares the mortgagee entitled (usually 'with his demand') to his 'costs' when taxed and ascertained. In a suit or proceeding 'properly commenced' in the High Court the Taxing Master in taxing

costs pursuant to an action of the Court follows the general principle, as qualified by In re Longbotham & Sons(1),and, since the practice of the High Court in Chambers in such matters is well settled, the Taxing Master finds no difficulty save as to matters of detail or as to the quantumof the charges made in the bill. When, however, it is alleged against the costs as charged that the suit or proceeding was not 'properly commenced' in the High Court, or the Taxing Master discovers from enquiry or observation that the suit or proceeding might have been 'properly commenced' in the Circuit Court, then, the Taxing Master often experiences difficulty in determining the correct principle to apply to the taxation.

The jurisdiction of the Circuit Court in a mortgage suit is stated in s. 48 (v) of the Courts of Justice Act, 1924:— 'The Circuit Court shall have and exercise jurisdiction in equity cases . . . where the value of the personalty does not exceed one thousand pounds and the Poor Law Valuation of the land does not exceed sixty pounds. 'Equity cases are defined in the County Courts (Ir.) Order, 1890, as 'any proceedings taken under one or more of the provisions of s. 33 of the County Officers and Courts (Ir.) Act, 1877.'

Under s. 33, sub-s. 3, of the County Officers and Courts (Ir.) Act, 1877, the several Civil Bill Courts in Ireland had (under the old County Courts system) all the powers of the Chancery Division of the High Court in all suits for foreclosure, sale or redemption of, or for enforcing, any mortgage, charge or lien upon lands where the mortgage, charge or lien did not exceed in amount £500 and the annual value of the lands to which the suit related did not exceed £30. Sect. 51 of the Courts of Justice Act, 1924, transfers to the Circuit Court 'all jurisdiction . . . which, at the commencement of this Act, was vested in or...