JUDGMENT of Mr Justice Max Barrett delivered on 5th May, 2017.
1. Following on the court’s judgment in Ryanair Limited v. The Revenue Commissioners & ors IEHC 727, the issue of costs now falls to be adjudicated upon. The State parties maintain that they have won and that costs should follow the event. The respective plaintiffs maintain that whether through an application of the principles identified in Veolia Water UK plc v. Fingal County Council (No. 2) 2 IR 81, 84-86 or by treating this case as a ‘test case’ within the meaning of Cork County Council v. Shackleton & Ors 1 IR 443, 489, either a more nuanced order as to costs or no order as to costs is appropriate.
II. Veolia Water
2. The court refers to the facts as stated at paras. 7-9 of its principal judgment. As identified there, the net issue at hearing came down to one of litigation privilege, an issue on which the State parties clearly won. That being so, it does not appear to the court that this is a case in which the Veolia Water principles come fully into play, the focus of Veolia Water being the apportionment of costs in especially complex litigation. In particular, the court does not accept the contention that this is a case in which (as contemplated by Clarke J., at para. 2.8 of his judgment in Veolia) a substantive or procedural entitlement was obtained which could not have been obtained without hearing by the court. It does not seem to the court that there was ever a moment in which the State was not going to ‘make good’ on its discovery obligations as it (correctly) perceived them to be, nor is there any evidence to suggest that its doing so was hastened by the approaching imminence of the hearing-date. All that said, it does seem to the court, as touched upon by it at para. 31 of its principal judgment, that this is a case in which very considerable allowance falls to be made as regards the apportionment of costs given the remarkable level of ‘to-ing and fro-ing’ between the parties that preceded the hearing of the application, thanks largely to the very protracted practical difficulties that the State appears to have encountered in meeting its acknowledged discovery obligations. As a result, it seems, of the said difficulties, a striking near-two years (22 months) elapsed between agreement being reached between the parties as to the discovery to be made by the State parties and the receipt by the plaintiffs of an affidavit of discovery. The plaintiffs have questioned (though the court cannot supply an answer) whether even this belated making of discovery would have been achieved had it not been for the imminent approach of the hearing-date. Notably, however, even the State’s own counsel indicated at hearing that the circumstances that had arisen might fall to be reflected in a costs order.
3. Separate to the foregoing is the issue whether the within case ought in any event to be treated as a ‘test case’ of a type contemplated in Shackleton. Having observed in Shackleton that a court’s discretion as to the awarding of costs falls and ought to fall to be applied by reference to principle, Clarke J. effectively makes five points of interest concerning the according of costs in ‘test cases’. These are set out below. (References to paragraph numbers are to the numbering in the judgment of Clarke J. of 12th October 2007, commencing at 484).
What is a test case?
(1) Clarke J. does not closely define the meaning of what constitutes a ‘test case’ but appears to contemplate the term as embracing cases in which the following criteria present: (a) there is doubt about the proper interpretation of the common law, the Constitution or statute law involving the private relations between the parties, and (b) the circumstances giving rise to those doubts apply in very many cases, and (c) the case in issue is one of that small number of cases which happen to be first tried and so yield a resultant clarification as to the legal issues arising. (para. 13).
Entirely private parties
(2) Where proceedings involve entirely private parties, it seemed to Clarke J. that there was no proper basis for departing from the ordinary rule in relation to costs. (para. 13)
Where one party a public authority
(3) At the other end of the spectrum, it seemed to Clarke J. that in a case concerning the construction of legislation of widespread and general application it would be open to the court to weigh in the balance in considering costs the fact (if so, and to the extent so) that the litigation was necessitated by the complexity or difficulty of the said legislation (for which the Minister or Ireland would be responsible), (para. 14)
(4) Between these two extremes sat, e.g., that case in which Clarke J. was giving judgment, where a public authority with no responsibility for the applicable (opaque) legislation, but answerable to the ministry that was responsible, was grappling with the meaning of the said legislation in the same manner as everyone else. Here Clarke J. considered the case closer to situation (3) than situation (2). (para.15)
(5) In situation (3) and situation (4), Clarke J. considered that the court retains a discretion to consider whether there should be some departure from the normal rule in respect of costs. (para. 16).
4. Shackleton treats as normative that an entitlement to costs generally arises on the part of the victor in court proceedings. There is no doubt that such an approach to costs serves several beneficial ends. It vindicates the rightfulness of the winner's position, thus promoting a sense of fairness. It performs a compensatory function, making whole the victor for the wrong of having been forced to come to court to secure her rights. It penalises excessive litigation, may encourage meritorious litigation (by parties who consider a particular claim/defence to have a high probability of success) and, by encouraging swiftness and settlements in actions, likely even promotes efficiency in litigation. However, it is an approach to costs that is not without flaw. Most notably, the prospect of having to pay an opponent’s legal expenses may unjustly deter litigants of modest or middling means from coming to court with claims/defences which, though bona fide, are not clear-cut, thus objectionably tilting accessibility to justice in favour of the well-to-do, as well as yielding a potential related distortion in the course of the law’s evolution. It is too an approach that rests on what seems to be the fundamental fallacy that a loser’s conduct in commencing or defending an action in court is necessarily blameworthy, as opposed to being oftentimes simply mistaken. Still, regardless of the merits or de-merits of the notion that an entitlement to costs generally arises and, as a matter of principle, ought to arise on the part of the victor in court proceedings, the court accepts that that represents the essence of our law as to costs at this time. This being so, is it justified to depart in the within proceedings from the general approach to costs on the basis that the within applications fall to be treated as involving a ‘test case’, rendering them applications in which, to borrow from the wording of Clarke J. in Shackleton, at 489, “the court retains a discretion to consider whether there should be some departure from the normal rule in respect of costs”?
5. As mentioned above, what remained of the within applications as they went to hearing was the issue of whether litigation privilege could attach to communications between Ireland and the European Commission in a State aid investigation. There was no authority directly on point, with such authority as arose to be applied being drawn from broadly analogous litigation concerned with public access to documents pursuant to Regulation (EC) No. 1049/2001 of the European Parliament and of the Council of 30 May 2001 regarding public access to European Parliament, Council and Commission documents (O.J. 31.5.2001, L145/43). The court found as it found in its principal judgment and does not propose to repeat those findings here, save to note two points: its judgment can be perceived as developing the applicable law in the emphasis placed by it on Art. 4(3) TEU; and without wishing to second-guess how the law may develop over time, it is conceivable that, subject to appeal (and the novelty of the key point at issue in the applications is such that appeal may follow) the judgment may yet have the potential to impact on other cases where the State has faced litigation on the part of the European Commission and in which it is subject to obligations under Art. 4(3) TEU.
6. All of the foregoing being so, it appears to the court that the within applications properly fall to be treated as involving a ‘test case’. They were, to borrow again from Shackleton (para. 13) (a) concerned with a question of law about which there was a doubt as to its proper interpretation, with (b) the said question giving rise to doubts in very many cases (or at least having real potential to do so), and (c) the applications were among the small number of cases which happened to be first tried and so yielded a resultant clarification as to the legal issues arising.
7. Having regard to the conclusions reached in Part III of its judgment, the court considers that the within applications are ones in which it is appropriate the court should make no order as to costs. The court is buttressed in its sense as to the appropriateness of this course of action by reference to the additional factors referenced at Part II of its judgment.