New Appeal: Re s 78 of the Courts of Justice Act 1936–court’s discretion to order one losing defendant to pay the legal costs of other defendants

In this determination, White v Bar Council of Ireland, the Minister for Justice & Equality & Ors, the Supreme Court granted former High Court Judge Barry White leave to appeal against the Court of Appeal’s interpretation of s 78 of the Courts of Justice Act 1936.

 

Background

Former High Court Judge Barry White wanted to return to practice law after retiring from the bench. His difficulties were, firstly, that the Rule 5.21 of the Bar Council’s Code of Conduct prohibits members who are retired judges from returning to practice in front of courts of equal or lesser jurisdiction that the one on which they sat; and secondly, the Minister held the opinion that a barrister could not practice unless regulated by the Bar Council and refused to place White’s name on the panel of counsel eligible for payment under the Criminal Legal Aid scheme.

White issued judicial review proceedings naming both the Bar Council and the Minister as defendants. He was seeking an order of certiorari quashing the Bar Council’s decision affirming that he would be subject to Rule 5.21 and an order of certiorari quashing the Minister’s decision not to add him to the panel eligible for payment under the Criminal Legal Aid scheme.

In the High Court, Barrett J held that the Minister had acted ultra vires, arbitrarily, unreasonable and in breach of White’s constitutional right to earn a livelihood. But Barrett J refused to grant any relief against the Bar Council, holding that White could practice without being under its regulation.

White applied under s 78 of of the Courts of Justice Act 1936 for an order directing the Minister to pay the costs incurred by the Bar Council, for which White was liable. The 1936 Act states:

78.—Where, in a civil proceeding in any court, there are two or more defendants and the plaintiff succeeds against one or more of the defendants and fails against the others or other of the defendants, it shall be lawful for the Court, if having regard to all the circumstances it thinks proper so to do, to order that the defendant or defendants against whom the plaintiff has succeeded shall (in addition to the plaintiff’s own costs) pay to the plaintiff by way of recoupment the costs which the plaintiff is liable to pay and pays to the defendant or defendants against whom he has failed.

The High Court granted White that costs order against the Minister. The Minister appealed that decision to the Court of Appeal.

 

Court of Appeal

Interpreting s 78, Peart J stated:

  1. In my view s. 78 exists in order to provide the court with a statutory jurisdiction to make an ‘order over’ where there are two defendants who may have a liability either jointly or severally in respect of the same wrong, and where the plaintiff is entitled on the known facts not to be certain which of those defendants may ultimately be found to be liable. It may only be at trial that a conclusion on liability as between two potential defendants can be determined. It would be a manifest injustice to a plaintiff in such circumstances to have to decide (in racing parlance) to put his money on one horse or the other. The section enables him to back both horses (to pursue the betting analogy still further) without the certainty that where liability is found only against defendant A, the plaintiff will have to pay the costs of B against whom he/she has been unsuccessful. It is nevertheless at the judge’s discretion whether or not to make the order over under s. 78 at the conclusion of the trial. But an absolute sine qua non has always been, and it makes complete sense of course, that both named defendants have a potential liability to the plaintiff in the same cause of action arising on the same facts.

Applying that interpretation to the facts of this case, the CoA allowed the Minister’s appeal, stating:

  1. … As I have said, the claim against each respondent are completely different, and where the relief sought against the Bar Council could never have been granted against the Minister, and vice versa. I consider, very respectfully, that the trial judge’s conclusion that he had jurisdiction under s. 78 to make the ‘order over’ in these proceedings is erroneous.

White applied to the Supreme Court for leave for a further appeal.

 

Supreme Court

White argued that the CoA’s decision overturned the Supreme Court’s decision in O’Keeffe v Russell [1994] 1 ILRM 137.

The determination summarises the decision in O’Keeffe as:

  1. In O’Keeffe the plaintiff succeeded in her claim against a bank but failed in her action against her former solicitors in negligence. The application for an order over arose from the fact that if a particular document was construed in one way, it favoured the bank while a different interpretation favoured the solicitors. Finlay CJ said that in those circumstances there was inevitably “a genuine alternative claim and alternative potential liability between these two defendants”. It was therefore a case in which an order over should have been made.

Granting White leave to appeal, the Supreme Court stated:

  1. Although matters of costs are often dealt with quite speedily, and are often influenced by the facts of individual cases, s.78 of the Courts of Justice Act 1936 is in theory applicable in any case against two or more defendants or respondents where a plaintiff/claimant succeeds against only some of them. Accordingly the Court considers that the application raises a point of law of some general importance. It will accordingly grant leave to appeal on the question of the correct interpretation of the section, and its applicability in the circumstances of this case.
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