Costs: Whelan v AIB, and Re Buzreel

463169447Whelan v AIB

Here, O’Donnell J, in a written judgment on costs, stated:

“Costs orders should, where it is possible to do so, distinguish between discrete issues and events in a case, so as to encourage parties to make realistic assessments and concessions where appropriate, and correspondingly to discourage parties from using claims which are likely to succeed on one or more narrow issues as a platform to ventilate other and more ambitious claims without any risk to costs” [7].

The High Court granted AIB judgment against the Plaintiffs (Philip Lynch, his wife and his four children) for €26 million. The court dismissed the Plaintiffs’ claim against AIB that the loan was non-recourse and their claim for negligence against MOP Solicitors and L K Shields Solicitors. The High Court held that there was no fault by AIB or MOP and that, although LSK had given incorrect advice, it would be unjust to hold it liable for the Plaintiffs’ loss. The Plaintiffs appealed to the Supreme Court. The Court (post) held that LSK was negligent, but as the Plaintiffs did not rely on that negligent advice, LSK was not liable for the Plaintiff’s loss.

As the Plaintiffs had succeeded on a point of law (negligence) which LSK was “particularly obdurate in denying”, but were unsucessful overall, the Court granted LKS an order for 75% of its costs.

In Re Buzreel

The judgment in this case is explained here. In the costs hearing, Demirca argued that the Court should vacate the High Court Order that it pay Midland Web’s costs for those proceedings, and that the Court order that Midland Web pay its costs for the Supreme Court proceedings. Demirca gave three reasons: it had proposed another round of bids, which the Court ultimately ordered; Midland Web did not comply with the original tender process; and Midland Web did not comply with the Van Hool Order. “Loose ends kept appearing and the trial judge allowed those to win the day”.

The Liquidator argued that Midland Web should pay his costs. Despite the fact that the proceedings led to a higher bid, which led to a higher return to Buzreel’s creditors–even allowing for legal costs–he argued that Midland Web, as the losing party, should pay rather than the creditors.

Midland Web argued that there were special circumstances in the case that warranted a departure from the costs follow the event rule: a higher sum was recovered for the creditors; there were “infirmities on both sides” in the bidding; if Demirca made its winning bid in the beginning there would not have been proceedings; and despite losing in the final bids, it could have won.

The Court held that, as the result worked to the benefit of Buzreel’s creditors, and as matters unfortunately became complicated and necessitated the proceedings, the High Court costs order against Demirca be vacated and each party would pay their own costs.

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