[2014] IELCA 7

THE HIGH COURT

Record No 2010/842P

BETWEEN

JIM McCARTAN

Plaintiff

and

STEPHEN GRIFFIN

WESTWOOD FIONTAR LIMITED

WESTWOOD TIMBER PRODUCTS LIMITED &

GRIFFIN TIMBER PRODUCTS LIMITED

Defendants

RULING ONOBJECTIONS BROUGHT IN BY THE PLAINTIFF

ORDER

The Bill of Costs herein is taxed pursuant to two Orders of the High Court namely:

  • an Order made on the 22nd day of July 2010 wherein it was ordered that “the costs of this Motion be costs in the Cause”; and
  • an Order made on the 4th day of November 2010 wherein it was ordered that “the Plaintiff do pay to the first and second Defendants the costs of this action when taxed and ascertained said costs to be limited to the costs of one day’s hearing.” The said Order made on the 4th day of November 2010 dismissed a Counterclaim that had been brought by the first and second named defendants against the Plaintiff with “no order as to costs”.

The background to the dispute between the parties; the issues in the High Court proceedings; the description of the proceedings leading to the conclusion of the proceedings following a hearing of the action on 2,3 4 November 2010; and an analysis of the work carried out by the Solicitor for the Costs and by Counsel were set out in my ruling on the Solicitors General Instruction fee and Counsels’ Brief fees that was delivered on 17 July 2013. I address in this ruling the Objections that were brought in by the Plaintiff following the taxation of the Bill of Costs on 17 July 2013.

Objections were presented by the Plaintiff Paying Party to the Taxing Masters’ Office on 1 August 2013 and re-presented the following day, 2 August 2013. The Objections were not in a correct format and an extension of time to lodge Objections was granted to the Plaintiff on 30 September 2013 on the basis that Objections in the correct format specifying each item in respect of which an objection was made and stating the reason for the objection in respect of each item was lodged by 10 October 2013. A document entitled “Summary of Objections in a bill” was lodged by the Plaintiff on 10 October 2013.

176 items were listed in the Summary of Objections but not all the items listed in the Summary of Objections constitute items in respect of which Objections have been properly brought in by the Plaintiff. 65 items listed in the Summary of Objections had been disallowed on taxation. No objection to the disallowance of such items have been brought in by the Defendants in whose favour the Orders for costs were made and accordingly such items have been taxed and are not properly the subject matter of Objections. 3 of the items listed in the Summary of Objections were marked “Accepted” and do not constitute items in respect of which Objections have been brought in by the Plaintiff. Accordingly of the 176 items listed in the Summary of Objections, 108 items constitute Objections properly brought in by the Plaintiff Paying Party. I address each of the 108 items below.

Written submissions in support of his Objections were lodged by the Plaintiff on 15 January 2014 and a written response was lodged by the first named Defendant on 27 January 2014. An oral hearing on the Plaintiff’s Objections was held on 21 March 2014 at which the Plaintiff, Mr McCartan, represented himself and Mr Griffin, the first named Defendant, represented himself and the second named Defendant.

Each of the Objections brought in by the Plaintiff Paying Party arise out of his interpretation of the Order made by the learned trial judge, Charlton J,on 4 November 2010. The Plaintiff submitted that the learned trial judge “intended that my opponents could claim the costs for one day, and that he did not intend them to claim any more. I say that the costs of one day legitimately include the following:

a. The solicitor’s costs for one day, including an allowance for his time, and outlays such as travel; and

b. The barrister’s costs for one day based on a reasonable day’s pay for professional people.”

At the hearing of the Plaintiff’s Objections on 21 March 2014, the Plaintiff submitted that in making an order for one day’s costs, the Judge required him to pay the Defendants’ costs just for the one day and that the Judge did not intend him to pay for the work done by the Solicitor in preparing for the trial. He submitted that in allowing costs for work done by the Solicitor in preparing for the trial of the action, the Taxing Master had misinterpreted the Order made by the Court on 4 November 2010.

In support of his contention concerning the limitation on the costs order, the Plaintiff Paying Party submitted that the trial judge “gave me substantially the relief that I wanted, namely, I was no longer exposed to the large guarantee and I was allowed to keep the payments that I had already received (be they salary, dividends or other remuneration). However, his judgement was not going to allow me to participate further in the companies.”

Mr Griffin, the first named Defendant, refuted the Plaintiff’s contention that the reference in the Order to the costs of one day’s hearing meant that he could not recover from the Plaintiff the costs that he had paid to his Solicitor for dealing with the Plaintiff’s application for an injunction or the work done by his Solicitor in relation to discovery or in preparing for the trial of the action. He submitted that he and his companies had to defend twelve unfounded claims made by the Plaintiff which had made the proceedings complex and stressful. His companies are no longer trading because of the ordeal. He submitted that the Plaintiff had raised blanket objections against the entirety of the Bill of Costs. The Plaintiff had not raised any reasonable objections, despite having been given an opportunity to submit proper objections, and he had not proved that the Taxing Master was unjust in what she had allowed in taxing his Solicitor’s file. He submitted that the Objections brought in by the Plaintiff should be dismissed.

The Order made by Charlton J on 4 November 2010 dismissed the Plaintiff’s claim against the first and second named Defendants and ordered that the Plaintiff pay to the first and second named Defendants “the costs of this action when taxed and ascertained said costs to be limited to the costs of one day’s hearing.” In this taxation the Plaintiff Paying Party put in issue whether the limitation on the costs contained in the Order made on 4 November 2010 means that the first and second named Defendants are only entitled to recover from the Plaintiff a small part of the costs that had been incurred by them in defending the proceedings, namely the costs of the Solicitor and Counsel attending Court on the first day of the hearing of the trial of the action but not any costs for work done in relation to the action prior to the hearing, as contended by the Plaintiff, or whether the first and second named Defendants are entitled to recover from the Plaintiff the costs reasonably and necessarily incurred by them in defending the claim brought against them by the Plaintiff including, inter alia, costs incurred in preparing and/or considering pleadings delivered by the respective parties, in making/considering discovery, in obtaining and complying with Counsel’s Advice on Proofs, in preparing for the hearing of the action and attending Court on the first day of the hearing of the action but excluding the subsequent days of the hearing of the action on 3 & 4 November 2010, as contended by the first and second named Defendants.

In addressing the issue I have had regard to the basis on which costs are awarded in court proceedings and to the ex tempore judgement of the trial judge, Charlton J. I am mindful that the parties now appearing before me are lay litigants and I set out below comments in the hope of assisting their understanding of the basis on which costs are awarded by the Court.

The general rule in relation to the award of costs in court proceedings is that “costs follow the event” but the award of costs is at the discretion of the Judge and a Judge may depart from the general rule if, in his or her discretion, the circumstances of the case dictate that the costs should be dealt with on a different basis. In such an event, the Judge will explain the reasons why he or she has departed from the general rule.

Where both parties in proceedings succeed in part, a Judge may allow the costs of defending an action to one party and the costs of defending a counterclaim to the other leaving it to the taxing master to assess what proportion of the work done and time spent was related to the Plaintiff’s claim and what proportion of work done and time spent was related to the Defendants’ counterclaim. In this case, the learned trial Judge chose not to award costs on that basis.

If so minded, a Judge may impose a limitation on the costs awarded to one party or to another and may do so in a myriad of ways. A Judge may, in the exercise of his or her discretion, inter alia:

(i) limit the costs of an action to a specified number of days at hearing for instance to reflect the fact that time was spent at hearing on an issue or issues on which the party in whose favour the order for costs was made did not succeed; or

(ii) limit the costs awarded by reference to a fraction or a percentage of the costs of the action in which case the limitation would apply across the board to all the items in the Bill of Costs; or

(iii) exclude the costs in relation to certain issues in the proceedings or certain aspects of the proceedings; or

(iv) limit the costs of the hearing of the action to a specified number of days at hearing for instance to reflect the fact that the Judge was not making an order for costs in respect of some aspect of the proceedings.

In this case, the Plaintiff’s claims against the first and second named defendants were dismissed, save in one respect regarding the guarantee given by the Plaintiff to Bank of Scotland. On the basis of the general rule that costs follow the event, the first and second named defendants would ordinarily be entitled to recover the costs that had been reasonably and necessarily incurred in defending the claims brought against them by the Plaintiff on a party party basis. However the first and second named defendants issued a counterclaim against the Plaintiff and that counterclaim was dismissed. On the basis that costs follow the event, the Plaintiff, who succeeded in defending the counterclaim, would ordinarily be entitled to his costs of defending the counterclaim however the learned trial judge refused to make an award of costs in respect of the counterclaim in favour of the Plaintiff. Instead, he dismissed the defendants’ counterclaim with no order as to costs in respect of the counterclaim and he limited the costs of the action awarded to the defendants to the costs of one day’s hearing; had there been no such limitation in the costs awarded to the first and second named Defendants, the Defendants would have been entitled to recover against the Plaintiff the costs of the action on the basis that the action was at hearing over three days. It would appear from the learned trial Judge’s ex tempore judgement that the limitation of the costs of the hearing of the action to one day reflected the fact that the Judge was not awarding the Plaintiff his costs in defending the counterclaim.

The learned trial judge set out in his ex tempore judgement his reasons for imposing a limitation on the costs to which the first and second named defendants were entitled which is of assistance in determining whether or not the costs part of the Order made on 4 November 2010 should be interpreted in the manner suggested by the Plaintiff. On the conclusion of the trial of the action, the Plaintiff requested the learned trial Judge to make no order as to costs but he was advised by the Judge that “I am going to make an order for costs, but it’s going to be limited to one day of costs and there it is”. The Plaintiff then sought costs on the counterclaim to which the learned judge replied “No, what I am doing in awarding one day of cost is this - I am taking into account that you had a partial success. Look Mr McCartan I am not going to engage personally with you, in relation to the main claim in this. The main claim in this case, which is the thing that took up most of the time was completely unjustifiable and if you had a problem in relation to the bank you could have just written, but I don’t accept your evidence in relation to that and I don’t think anybody could given the amount you are supposed to be receiving for a consideration of a mere €200 - it’s just a leap too far so that is the reason I made that order. And I am taking into account the success - your success in the counterclaim I am taking into account as well and I am making a limited order in your favour. But the vast bulk of this hearing was completely unnecessary.”

Having read the pleadings and considered the issues in the proceedings and having read the ex tempore judgement of Charlton J, I would not characterise the judgement as giving the Plaintiff substantially the relief he wanted, as stated by the Plaintiff in his submissions. Secondly, the statement by the Plaintiff that he was allowed to keep the payments that he had received, whether salary, dividends or other remuneration, suggests a finding by the trial judge of an entitlement on his part to the monies in question which is misleading. Thirdly, in dismissing the Plaintiff’s claim, the trial judge went further than is suggested by the Plaintiff’s statement that “his judgement was not going to allow me to participate further in the companies.”

In his ex tempore judgement, the learned trial judge stated that one of the claims that was made by the plaintiff was a valid claim, namely that he had to be released from the guarantee that had been given by him to Bank of Scotland on the collateral of his property in respect of money to be advanced to Westwood Timber Products Limited. He also dismissed the counterclaim that had been brought on behalf of the first and second named Defendants against the Plaintiff because he was not satisfied on the basis of the evidence before him that the agreement between Westwood Timber Products Limited and Griffin Timber Products Limited was supported by consideration, nor was it sealed. In so far as the advance to Mr McCartan by Westwood Timber Products Limited was concerned, he did not believe that the payment of €100,000 to the Plaintiff was a straightforward loan; instead he considered that it was “some kind of a gentleman’s loan or gentleman’s agreement and something that is very difficult for me to understand in the context of dealings between the parties”.

In all other respects, the learned trial judge found against the Plaintiff. He held that there was no probability to the case put forward by Mr McCartan that for the payment of €200 he received a share in a series of interlinked companies, Griffin Timber Products Limited and Westwood Timber Products Limited that were worth close on €1 million and he did not believe that the payment of €100,000 to Mr McCartan was a dividend. In his ex tempore judgement, the learned trial judge held: “As regards the claim, the claim for money in relation to the shareholding is dismissed. The claim in relation to dishonesty against Stephen Griffin is dismissed. The allegations against John Hartnett, an accountant of 34 years standing, to the effect that he acted dishonestly and favoured one director over the other is dismissed definitively. As regards the main claim to the effect that there has been asset stripping in a dishonest way by Mr Griffin, that claim is dismissed.

The Plaintiff has interpreted the Order made by the Court on 4 November 2010 as limiting the costs payable by him to the first and second named Defendants in two different ways:

1. In his Submissions on Objections, the Plaintiff stated in relation to a number of items that “This should be disallowed as it did not relate to the one-day costs allowed.” At the hearing of his Objections, the Plaintiff submitted that the Judge required him to pay the Defendants’ costs just for the one day in attending the hearing of the action and that the Judge did not intend him to pay for any other work done by the Solicitor or Counsel in the proceedings including the work done in preparation for the trial.

2. The Plaintiff also stated in his Summary of Objections in respect of other items in the Bill that “the defendants were only entitled to claim a portion of this. Namely, one third being one day’s costs of a 3 day action”.

The two reasons described above, which between them are advanced by the Plaintiff in support of almost all the Objections brought in by the Plaintiff, are not consistent with one another yet in certain instances, the Plaintiff has advanced the two different reasons in support of his Objections to different items in the Bill of Costs which relate to the same category of work. By way of illustration, items 18 to 28 inclusive in the Bill of Costs relate to work done and costs incurred in relation to an affidavit sworn by the first named Defendant, Stephen Griffin, on 20 April 2010 in reply to an affidavit sworn by the Plaintiff on 12 March 2010. The Plaintiff’s affidavit grounded the Notice of Motion that was issued by the Plaintiff on 18 March 2010 in which the Plaintiff sought injunctive relief against the four named Defendants. Items 18 to 20 inclusive in the Bill of Costs relate to the Solicitor’s Schedule W fee of €2.56 and Senior Counsel’s fee of €200 plus VAT thereon for Senior Counsel settling the affidavit of the first named Defendant. The Summary of Objections lodged by the Plaintiff records his Objection to the allowance of the said items on taxation on the basis that “This should be disallowed as it did not relate to the one-day costs allowed.”An interpretation of the Order on such a basis would preclude the first and second named Defendants from recovering any costs for work carried out by their Solicitor or Counsel prior to the hearing of the action, including work done in relation to the preparation and filing of affidavits.