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Cite as: [2002] IEHC 124

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1997 8625P

THE HIGH COURT

BETWEEN

MARY CURRAN

PLAINTIFF

AND

JOHN FINN

DEFENDANT

JUDGEMENT of O'Neill J delivered the 1st day of February 2002

The Plaintiff in her amended Notice of Motion dated the 14th day of June 20CLseeks an order which would inter alia direct the Royal and Sun alliance Insurance Group PLC [hereinafter referred to as the Insurer], to pay the costs that were awarded by order of this Court of the dated the 29th of January 2001 and the order of the Supreme Court of the 20th May 1999.

The background to this matter is set out in my judgement delivered the 2nd day of November 2001 and there is no need to repeat the same here.

This further preliminary hearing was concerned solely with the appropriate procedure to be followed in order to litigate the claim made by the Plaintiff in her Notice of Motion.

For the Plaintiff it was submitted as follows by Dr White:

1. Normally a costs application is brought before the Court by Counsel in the case moving the Court for costs without the necessity for a separate proceeding such as a Notice of Motion. Because of the unusual nature of the application and because the Insurer are not a party to the proceedings a notice of motion was served on them.

2. Should it transpire that evidential matters arise so that the application becomes like a trial, then appropriate steps can be taken including if necessary pleadings. However the affidavits already filed clearly disclose the matters in issue and it would be very unlikely that pleadings would be necessary or desirable.

3. The judge who conducted the trial is in the best position to deal with the costs application.

4. Satellite litigation is to be avoided and an application for costs even of the kind now made herein should not generate a whole new trial. Thus there should not be a requirement for evidence or pleadings. The evidence relevant to the application apart from that put on affidavit for the purpose of this notice of motion, is the evidence in the trial. As the Insurer was the indemnifier of the defendant and had control over the litigation they are fully aware of all the evidence given in the trial in exactly the same way as they were in resisting the application for costs against the defendant at the end of the trial in the normal way.

5. In the Courts of England a summons is taken out for similar applications to the one made herein. However their summons is similar to our notice of motion. In that jurisdiction they do not initiate a separate action by plenary summons to litigate a cost issue of the kind raised in the notice of motion herein.

Dr White referred to the following passages from English cases as follow:

Symphony Group Plc. V Hodgson [CA] [1994] QB 179 at 192

"However, it seems to me that the particular circumstances of this case require this court to accept the invitation of Lord Goff in Alden Shipping Co Ltd v Interbulk Ltd [1986] AC 965 and to lay down some principles for the guidance of judges of first instance when they are asked to make an order for costs against a non party, and in doing so I am well aware of what Lloyd L.J. said in Taylor v Pace Developements Ltd [1991] AC 406, 408: "There is only one immutable rule in relation to costs, and that is that there are no immutable rules". I am also aware of the observations warning against rules for the exercise of a discretion in relation to costs generally by Bowen L.J. in Jones v Curling [1884] 13 Q.B.D. 262, 271 and by Brett M.R.

The Friedberg [1885] 10 P.D. 112, 113.

Nevertheless I am fortified by the fact that Lord Goff considered that such guidance might well become necessary and I believe that the circumstances of this case indicate the present necessity for guidance. In my judgement the following are material considerations to be taken into account, although I do not suggest that there may be others which are relevant. ...................[6] The procedure for the determination of costs is a summary procedure, not necessarily subject to all the rules that would apply in an action. Thus, subject to any relevant statutory exceptions, judicial findings are inadmissible as evidence of the facts upon which they were based in proceeding between one of the parties to the original proceedings and a stranger: see Hollington v F. Hewthorn & Co Ltd [1943] K.B. 587.; Cross on Evidence, 7th edition [1990], pp. 100-101. Yet in the summary procedure for the determination of the liability of a solicitor to pay costs of an action to which he was not a party, the judge's findings of fact may be admissible : see Brendan v Spiro [1938] 1 S.B. 176, 192, cited with approval by this Court in Bahai v Rashidlan [1985] 1 W.L.R 1337, 1343d, 1345h. This departure from basis principles can only be justified if the connection of the non-party was so close that he will not suffer any injustice by allowing this exception to the general."

Bristol and West Plc. Bhadresa [1999] Vol 1 LLOYDS LAW REPORTS 142

"Procedure

Section 51 [albeit in different subsections ] makes provision for applications for costs against non-parties and applications for wasted costs orders against legal representatives. Both such orders are compensatory rather than punitive and are designed to recoup a party's loss incurred in litigation from the person who caused such loss. In the exercise of this jurisdiction, the court must ensure that it does not give rise to a new and costly form of satellite litigation; compare Ridelagh v Horsefield [1994] Ch 205 CA especially at 238G239A and see Turner Page Music v Torres Design Associates. The Times August 3 1998. The guiding [though not immutable ] principles can be stated shortly as follows: [a] an application is appropriate only in plain and straightforward cases where the hearing can be measured in hours and not days; [b] the application should normally be before the trial judge who should be best equipped to [as best informed] to determine the application summarily. [This is not possible in this case] ; [c] elaborate pleadings should be avoided; [d] the formal process of discovery and interrogatories are inappropriate; the ordinary rules of evidence will apply unless a departure from them will occasion no injustice and cross-examination on affidavits should not generally be permitted; see Synphony Group v Hodgson [1994] QB 179 at 193 ["Symphony"J. The court may be persuaded to depart from these principles in an exceptional case where justice requires a more extensive investigation into contested facts and e.g. to order limited discovery or cross-examination if there is an impelling need for them: consider Bailey v IBC Vehicles [1998] 3 All ER 570 at 573 a-c and 575a-b."

Gloucestershire IM v MA Torpey and Partners Ltd

"Turning from the insurance policy to the jurisdiction to make the order sought, it is agreed that I have the jurisdiction under section 51 of the Supreme Court Act of 1981. I will not read that section nor will I read Order 62, but in particular rule 1[iv] and rule 2 [iv] apply. There is, it is agreed jurisdiction to join the insurers as additional parties. That is one of the form of heads of relief asked for by the Plaintiffs in this summons. The insurers contend that it is unnecessary to join them as defendants, and I agree. And I do not make any order joining the insurers as defendants to this action. It seems to me to be an unnecessary step and it was not strongly pressed by the Plaintiffs that I should take that step. It is also agreed that I have jurisdiction to revisit the question of costs after judgement and that despite the fact that I have ordered that costs of the action be paid by the defendants, it is open to me now to make a supplementary order for costs against the insurers.

Authority has been cited for that on behalf of the Plaintiff. The case of Re Scowby, Scowby, v Scowby [1897] 1 Ch 741 and a decision of Brightman J. In Ford-Hunt v Ragbir- Singh [1972] 2 All ER 700. I find it unnecessary to say anything more about those authorities in the light of the concessions made..

Dr White further submitted that seeking an order for costs against the Insurers was not the assertion of a cause of action in itself, that the Plaintiff has set out on affidavit the grounds in detail which entitle the Plaintiff to an order for costs against the insurer.

A long affidavit has been filed by the defendant Mr Finn in which he deposes to the fact generally that he knew nothing of and had no control over the conduct of the action.

He submitted that the Judicature Act 1877 abolished forms of action and thus the necessity to chose the correct form of action or suffer the defeat of the cause. He submitted that it was a policy of the courts to provide the cheapest and most expeditious procedure to resolves disputes and that the Plaintiff in persuing an order for costs against the Insurers has adopted the cheapest and most expeditious procedure, and that the issues between the Plaintiff and the Insurers are clearly and fully set out in the affidavits filed in this motion and nothing is to be gained by dealing with these issues by way of a separate plenary action to be initiated by the Plaintiff against the Insurers.

For the Insurers Mr Counihan submitted that there was no precedent in Irish Law for granting an order for costs against a party who was not a party to the action in question and that if the right to apply for and recover costs against a non party is to be found to be part of the common law in Ireland, then that should only come about in a separate action directed against the Insurer with the benefit of pleadings to precisely define the issue. He submitted that an issue of this uniqueness and importance should not be decided by way of a motion in these existing proceedings to which the Insurers are not a party.

DECISION

It is undoubtedly the case that the order for costs now sought by the Plaintiff against the insurer in this application is without precedent in Irish law. Hence the application raises an issue of law which is unique and of great importance.

The Plaintiffs have chosen to litigate the matter by way of a motion in the existing proceedings. I must decide on this preliminary application whether they were entitled to do this.

While the application raises initially the foregoing issue of law, if the court were to conclude that there was a jurisdiction to grant an order for costs against a non-party, the court would then have to consider whether in the circumstances of the instant case, it would exercise its discretion to award costs against the Insurers. That is a jurisdiction which is well established in the Courts of the United Kingdom for many years.

The authorities which were opened to me from that jurisdiction persuade me that so far as that latter part of the proceeding is concerned, the application should be conducted as a summary proceeding, avoiding if possible the several weighty and time consuming procedures associated with plenary hearings, i.e. Pleadings interrogatories, discovery etc., and that "satellite litigation" should be avoided. Clearly for this part of the application the judge who conducted the trial, as the best informed should deal with the application for costs. Indeed even without the benefit of authority, I would be inclined to favour the same approach, it being eminently sensible.

Thus so far as the merits of the Plaintiffs application for an order for costs is concerned, leaving aside for the moment the issue of law as to jurisdiction, I have come to the view, that the best way for the application to be processed is to observe the principles as to procedure set out above and clearly the best way to do that is to proceed by way of a motion on notice to the insurer.

The residual question then, is whether this issue of law should dictate the use of an entirely new and separate action as submitted by Mr Counihan.

I can see no procedural necessity or indeed advantage in proceeding by way of separate action to litigate this issue. The issue in question is an issue of law. Both it and the evidence relevant to it can be and in fact are set out in the notice of Motion and the affidavits filed. While Mr Counihan sought to persuade me that an issue of such importance should be set out in formal pleadings in a separate action, I cannot see merit in that submission as all that such pleadings would do, would be to substantially repeat what is already clearly set out in the Notice of Motion and the affidavits. In the very unlikely event, and in this regard Mr Counihan did not submit that it was necessary, that other procedures, such as discovery were necessary to resolve the issue in question, the court could direct these procedures in the existing motion.

I have come to the conclusion that there is no procedural disadvantage to the Insurers in litigating the Plaintiff's application for costs against them by way of the motion now before the court. Nor do I think that this motion is an inappropriate way of litigating an important issue of law which arises between these parties.

On the other hand if the legal issue was to be litigated in a separate action, the Plaintiff would have to suffer the added burden of a separate action and if it was decided in that action that there was a jurisdiction to award costs against a non party, there would remain the question as to whether the court would exercise its discretion to award costs against the insurers in this case, an issue which ought properly to be decided in the original action to which it relates. All of this would carry with it a significant exposure to greatly increased costs and a probable lengthy delay in reaching a conclusion of the matter.

For all of these reasons I have come to the conclusion that the procedure adopted by the Plaintiff was an appropriate and correct one and thus I propose to continue with the hearing of this motion.