Lett & Co v Wexford Borough Council: no constitutional impediment to Supreme Court hearing application in first instance

imagesHere, the Court held that there is no constitutional impediment to it exercising its statutory jurisdiction under s 3 of the Legal Practitioners (Ireland) Act 1876 to hear Matheson’s (Lett’s solicitors) application in first instance for a charge upon costs awarded to Lett in a 2012 order by the Court, even though the Supreme Court is a court of final appeal. But the Court held that it has no jurisdiction to hear Matheson’s application for a declaration that it held a common law lien over the costs award.

Background

In 2007, the High Court made an order for €1,500,000 in damages plus costs in favour of Lett against the second and third defendants, the Minister for Communications, Marine & Natural Resources and Ireland. The Defendants appealed that decision to the Supreme Court. In 2012, the Court made an order affirming the High Court order and awarding Lett costs for the appeal. Matheson was Lett’s solicitor throughout and claims that Lett owes it over €1 million in fees and has not made any payment of fees since 2007. During taxation of costs, the State lodged €500,000 to Lett’s client account with Matheson. Matheson guaranteed the State that, should costs be taxed lower, it would return the balance. Matheson agreed with Lett that it would not offset any of that sum against invoiced fees until taxation was complete. Lett, however, wanted to use €270,000 of that fund to repay loans to IBRC taken out to cover litigation costs and to pay trade creditors. Matheson made an application to the Supreme Courtunder s 3 of the 1876 Act for a charge upon any costs payments made by the State and a declaration that it held a common law lien over any costs award.

Issue

Can the Supreme Court hear the application or should it be transferred to the High Court?

Law

S 3 of the 1876 Act states:

In every case in which an attorney or solicitor shall be employed to prosecute or defend any suit, matter, or proceeding in any court of justice, it shall be lawful for the court or judge before whom any such suit, matter, or proceeding has been heard or shall be depending to declare such attorney or solicitor entitled to a charge upon the property recovered or preserved, …

There were two issues: firstly whether the Supreme Court should hear the application for a charge against the High Court costs award–whether that award was property recovered or preserved through the Supreme Court order; and secondly, whether the Supreme Court, as a court of final appeal, could hear the application in first instance. Lett argued that the costs awarded in the High Court are not property recovered in the Supreme Court and that the was a constitutional issue around the Supreme Court hearing the application in the first instance as it would deny them a right of appeal.

Dunne J wrote the majority decision allowing the application under s 3 of the 1876 Act to proceed but not allowing the application for the declaration of the common law lien to proceed. Laffoy J concurred. Dunne J cited Lismore Buildings Ltd v Bank of Ireland Finance Ltd (No 2) [2000] 2 IR 316, which concerned an application before the Supreme Court for a charge against costs awardeed by the Court. She held that the High Court order for costs were property recovered or preserved by the Supreme Court order, the 1876 Act provided jurisdiction to the Court to hear Matheson’s application and thereof no constitutional impediment to the Court exercising its statutory jurisdiction to hear an application in first instance. She pointed to other circumstances where the Court hears applications for which there is no provision for appeal: an application to admit additional evidence under the Rules of the Superior Courts. However, Dunne J held that the Court has no jurisdiction to hear Matheson’s application for a declaration that it holds a common law lien over the costs awarded.

In a dissenting opinion (here), McKechnie J distinguished Lismore from this case, as in that case the Court was only concerned with costs awarded by the Supreme Court. He stated that Article 34.3.1 gives the High Court full and original jurisdiction to determine all matters; s 3 states “it will be lawful” for the court seised to make the order–it does not give the court which made the costs order exclusive jurisdiction; the substantive case concluded in 2012; the Supreme Court’s function is fundamentally appellate; therefore he would say that the Supreme Court should decline jurisdiction.

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