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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Potteridge Trading Ltd. v. First Active plc [2008] IEHC 42 (21 February 2008)
URL: http://www.bailii.org/ie/cases/IEHC/2008/2008_IEHC_42.html
Cite as: [2008] IEHC 42
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- Procedural History
- Raising further particulars.
- Preparing and serving the amended defences.
- Responding to any further particulars that may be raised by the plaintiffs arising out of the re-amended defences.
- Responding to the plaintiff's further discovery requests in respect of the re-amended claim.
- Preparing a further discovery request on behalf of the Bank.
- Preparing and making further discovery in respect of the re-amended claim".
- "The preparation of books for trial including a book of pleadings and a book of defendant authorities.
- The preparation of written legal submissions.
- Substantial work in attempting to prepare an agreed statement of facts in advance of trial.
- Liaising with potential witnesses in advance of trial".
Neutral Citation No: [2008] IEHC 42
THE HIGH COURT
[2004 No. 18785 P]
BETWEEN
PORTERRIDGE TRADING LIMITED
PLAINTIFFS
AND
FIRST ACTIVE PLC
DEFENDANT
AND
[2006 No. 1645 P]
BETWEEN
PORTERRIDGE TRADING LIMITED
PLAINTIFFS
AND
BERNARD DUFFY
DEFENDANT
AND
[2003 No. 9018 P]
BETWEEN
MOOREVIEW DEVELOPMENTS LIMITED,
SALTHILL PROPERTIES LIMITED,
VALEBROOK DEVELOPMENTS LIMITED,
SPRINGSIDE PROPERTIES LIMITED, DRAKE S.C. LIMITED,
MALLDRO S.C. LIMITED,
THE POPPINTREE MALL LIMITED, AND
VAN BLONDON PROPERTIES LIMITED
PLAINTIFFS
AND
FIRST ACTIVE PLC AND RAY JACKSON
DEFENDANT
RULING of Mr. Justice Clarke delivered on the 21st day of February, 2008
1. Introduction
1.1 This ruling is supplemental to a judgment delivered by me in these connected cases on the 7th of September last. The terminology used in this ruling follows that adopted in that judgment ("the judgment").
1.2 As appears from the judgment, and for the reasons which I set out in it, I came to the view that, on balance, the plaintiffs in what I described as both the Mooreview proceedings and the Porterridge proceedings should be permitted to amend their respective claims in those proceedings, in the manner for which they have sought leave. Further details of the amendments permitted can be found in the judgment.
1.3 At para. 4.15 of the judgment I indicated that I would hear Counsel further on the precise order as to costs which I should make. However, I noted that "any additional costs whether of pleadings, discovery or otherwise which can be said to flow from the amendments, should be allowed to the appropriate defendants". I further indicated that in advance of the then proposed further case management meeting referred to in the judgment, a letter should be written by each of the relevant defendants specifying the precise order as to costs to which would be sought. In that context it is appropriate to turn to the subsequent procedural history of the matter.
2.1 As is clear from the judgment amendments were sought and obtained in two separate sets of proceedings. In the Mooreview proceedings, solicitors for First Active wrote, on the 4th of October, to the plaintiff's solicitors indicating that they would seek the costs of the motion to amend together with what were described as:-
"All additional consequential costs that have been and continue to be incurred by the Bank arising from the re-amendment of the plaintiff's statement of claim to include inter alia:
2.2 In relation to the Porterridge proceedings Solicitors on behalf of First Active also sent a letter of the 4th October seeking the costs of the motion to amend, consequential costs which were specified in terms identical to those used in the letter in the Mooreview proceedings to which I have already referred, but, in addition, sought what were described as "thrown away costs" which were said to have been incurred in preparation for an anticipated hearing of that case which had been scheduled to take place in May or June of last year and which was, it was said, postponed at a very late stage by reason of the amendment application. The relevant costs were specified as including inter alia:-
2.3 By a separate letter of the 4th October, 2007, Solicitors on behalf of Mr. Jackson sought the costs of the application to amend as against him and also sought consequential costs of the amendments which, while not expressed in identical terms to the manner in which the similar request on behalf of First Active was maintained, were, in substance, specified to the same effect.
2.4 For reasons which it is unnecessary to set out here, it was not possible to conduct the case management meeting contemplated for October until the end of November and the issues arising out of the correspondence to which I have referred came to be argued by the parties on the 30th November, together with very many other issues which required to be addressed in the course of a two day case management meeting. As many of the other matters then in dispute had the potential to affect the timescale within which the proceedings as a whole were likely to become ready for trial, I gave priority to giving judgment on those issues. This ruling is directed towards the cost issues which I have identified which do not, of course, affect the ongoing proceedings in any material way. I now turn to the issues which arise.
3. The Issues
3.1 As is clear from the correspondence to which I have referred and from the argument conducted on foot of that correspondence, there are, in substance, three groups of issues which need to be considered. There are:-
(i) The costs of the motions to amend which include applications on behalf of both First Active and Mr. Jackson for their costs of the motions to amend (in both cases so far as First Active is concerned and in the Moorview proceedings so far as Mr. Jackson is concerned). There is also a similar application on behalf of the respective plaintiffs for their costs of the motions to amend which was moved by Counsel on their behalf at the hearing before me;
(ii) The consequential costs of the amendments sought by both First Active and Mr. Jackson in their respective Solicitors' letters of the 4th October, 2007;
(iii) The costs thrown away sought by First Active in the Porterridge proceedings.
I propose to deal with each in turn.
4. The costs of the applications to amend.
4.1 It was necessary, in this context, to distinguish between the issues which arose as and between First Active and the respective plaintiffs on the one hand and Mr. Jackson and the respective plaintiffs on the other hand. As pointed out in the judgment it had appeared to Counsel for Mr. Jackson (not at all unreasonably) on the basis of a draft of the proposed amendments which had been supplied in advance of the hearing of the application to amend, that the amendments had no direct bearing on the substantive case to be made as against Mr. Jackson. It was, of course, the case that some of the amendments sought would have had an effect on Mr. Jackson's position as Receiver if the contentions sought to be pleaded were to be made out, for the allegations were such that, if substantiated, could affect the validity of the appointment of Mr. Jackson as receiver. However save in that sense Mr. Jackson was not affected by the amendments and would not, in reality, have been likely to have had anything significant to say at the trial of the action in respect of those issues, even if the amendments were permitted.
4.2 However, as is also clear from the judgment, on the morning of the hearing it became clear that Mr. Jackson's Solicitors had been supplied with an incorrect version of the proposed amendments. It was clear that some of the proposed alterations which had not been notified to Mr. Jackson's Solicitors did, in fact, affect Mr. Jackson directly and, in those circumstances, Counsel on behalf of Mr. Jackson, quite properly, reserved his position which, in practice, meant that Mr. Jackson had the opportunity to consider the judgment which I delivered in relation to the amendments insofar as they related to First Active, before the matter came before the Court again. On that occasion it was indicated on behalf of Mr. Jackson that no objection was taken to the amendments sought in respect of the claim as against him. In those circumstances the application to amend was not opposed on behalf of Mr. Jackson.
4.3 The situation was, of course, different in the case of First Active whom, as is clear from the judgment, opposed the amendments sought on a variety of grounds which I addressed in the judgment.
4.4 That distinction is of some importance in the light of the arguments and authorities which were referred to in the course of the hearing before me.
4.5 Counsel for First Active referred to a number of authorities which established that, in the past, it has almost invariably followed that the costs of an application to amend were awarded against the party seeking the amendment. Counsel referred to the relevant passages from Delany & McGrath on Civil Procedure at para. 5.150 and to the authorities, such as Bell v. Peterson [1996] ILRM 290 and Wolfe v. Wolfe [2001] I.R. 313, referred to in the relevant passage. I have no doubt but that the authors have correctly stated the position. The reason is obvious. An application to amend is necessitated because the pleadings were wrong in the first place. Unless there were unusual circumstances which justified the party seeking to amend in being able to say that the reason why the amendment was required stemmed from some failing on the part of the other side, it is difficult to envisage circumstances where the costs of an ordinary application to amend would not be awarded against the party seeking the amendment.
4.6 However for the reasons which I set out in Veoila Water v. Fingal Council [2006] IEHC 240, it seems to me that where particular interlocutory applications become substantive matters in their own right, it is appropriate for the Court to give consideration to whether such matters should properly be treated as a separate "event" in themselves so that the costs of that application should follow the event. As noted in Veoila, the reasoning for such an approach is, at least in significant part, resultant from the need to impress upon parties that decisions taken to bring or contest significant procedural applications, which become major issues in their own right, should be tempered by the knowledge that unreasonable applications or unreasonable opposition to reasonable applications can, of themselves, have a consequence in costs. However, as also pointed out in Veoila, many applications will take place in the ordinary way in a motion list and it will make little difference to the costs of bringing or defending such applications as to whether they are strenuously contested or allowed to go through without significant opposition. The somewhat nuanced approach which I advocated in Veoila was, in express terms, stated not to be applicable to such routine matters but rather only to be applicable to cases where what might otherwise be treated as a relatively routine interlocutory application became a significant hearing in itself by virtue of the positions adopted by the parties. In those circumstances it does not seem to me to be unreasonable to have regard to the positions adopted by the parties which led to such a significant hearing as part of the overall consideration in relation to how costs should be determined.
4.7 It seems to me, therefore, that the traditional approach in respect of awarding costs of a motion to amend continues to apply to any routine application to amend, even where it may be opposed to a greater or lesser extent but not in such a manner as leads to a separate and significant hearing with its own attendant additional costs. However, where there is such a significant separate hearing then it seems to me that the Court needs to take a wider range of factors into account in determining a just order as to costs. Where, for example, a party makes unreasonable objection to an amendment which necessitates a significant hearing and where the party concerned fails in their opposition, it would, in my view, be unjust that the fact of unreasonable opposition was not to be taken into account. However, the Court would also have to have regard to the fact that an application for an amendment would have been necessitated in any event and in those circumstances it might be appropriate to award the costs of bringing the motion to the party against whom it was brought, but to award the costs of the significant hearing against such party (or in an appropriate case to make no order as to costs) to reflect the fact that the significant hearing was necessitated by such party adopting an unreasonable position.
4.8 Having set out what, in my view, are the relevant principles it is necessary to apply them to the facts of this case. It is true to say that First Active opposed the amendments and, in one sense, lost "the event", in that the amendments were allowed. However, that fact also needs to be seen against the backdrop of a number of additional factors.
4.9 Firstly, the proceedings had already been amended on one previous occasion with the application which is the subject of the judgment being an application for re-amendment. Secondly, no real excuse for a significant number of the amendments not having been included in the original proceedings was put up on behalf of the plaintiffs. Given that the proceedings were going to be amended in any event (to allow for the inclusion of the fraud claim to which I refer in some detail in the judgment) I came to the view that no additional prejudice would be caused by allowing those further amendments. Furthermore First Active persuaded me that there was a significant risk of prejudice in the event that the proceedings were significantly delayed with a serious allegation of fraud hanging over First Active in its capacity as a licensed financial institution. It was in those circumstances that I came to the view that an amendment should only be allowed on strict terms which would ensure that there would not be a significant delay in the case coming on for trial.
4.10 Against the background of those factors it does not seem to me that it would be appropriate to characterise First Active's opposition as having been unreasonable even though it did not ultimately persuade me to disallow the amendment sought. It is also fair to note that the amendments were allowed on terms although equally it must be said that First Active did not offer, either prior to or at the hearing, that the amendments might be allowed provided such terms were imposed.
4.11 In addition it seems to me that I must pay significant regard to the fact that two separate applications to amend (in respect of the two different proceedings) were brought by the plaintiffs at two separate points in time. As is clear from the judgment, what occurred was that an amendment was originally sought in the Porterridge proceedings. In the course of hearing that application it seemed to me (and I raised the issue with Counsel for Porterridge) that what was being asserted logically involved an alteration in the case sought to be made in the Mooreview proceedings. It was agreed that that was the case and it was intimated that an application to amend Mooreview would subsequently be brought. In the circumstances I ultimately determined that I would need to hear the application to amend in the Mooreview proceedings before coming to an overall decision as to whether the amendments as a whole should be allowed. It is clear, therefore, that there were two separate hearings for no good reason. No real explanation was given as to why all of the amendments could not have been sought at the same time. If that had happended and while there might have been some marginal additional costs attributable to the fact that there were two separate applications, the costs of the significant contested hearing would have been confined to one rather than two separate events. On that basis alone it is necessary to conclude that First Active were unnecessarily put to the costs of two rather than one hearing.
4.12 In all those circumstances I am not persuaded that this is a case where it is appropriate to depart from the ordinary practice of directing that the costs of a motion to amend be ordered to be paid by the party seeking the amendment. It might have been otherwise had the respective plaintiffs brought one application to amend at the same time and had it been possible to conclude that First Active's opposition to the amendments was, in some material way, unreasonable to the extent that it generated a significant and separate hearing which First Active lost and which was unnecessary.
4.13 In those circumstances it seems to me appropriate to allow the costs of both of the applications to amend in favour of First Active and against the respective plaintiffs.
4.14 It is, of course, the case that none of the considerations which I have just analysed even apply in the case of Mr. Jackson. He ultimately consented to the amendments. There was, therefore, no significant separate hearing and there is not even, therefore, a basis for considering whether there should be a departure from the ordinary order in respect of costs. It follows that Mr. Jackson is also entitled to the costs of the motion to amend.
5. The consequential costs
5.1 As is clear from the respective letters of the 4th October, 2007 to which I have referred both First Active and Mr. Jackson seek certain costs which result from the fact that the proceedings have now been amended. It is clear from the passage from the judgment to which I have already referred that I had already determined that, in principle, any additional costs which were necessitated by the fact of the amendments and the consequential need to engage in additional particulars and discovery (both as to requests and responses) should be awarded to the respective defendants together with costs associated with any necessary changes to their respective Defences.
5.2 It seems to me that the items set out in the respective letters of the 4th October accurately summarise the headings under which such additional costs will arise and it seems to me that I should direct that both First Active and Mr. Jackson are entitled to the costs as specified in the relevant paragraphs of those letters to which I have already referred.
6. Costs thrown away
6.1 The final issue concerns the extent to which it may be appropriate to make an award of costs in favour of First Active arising out of the fact that the Porterridge proceedings were close to the original date scheduled for trial when the application for an amendment was first mooted. The relevant sequence of events needs to be noted. The case had been listed for hearing. There were some difficulties about the precise starting date having regard to what was said to be outstanding interlocutory issues. It was also intimated that Counsel on behalf of Porterridge might have a difficulty with a revised starting date which was proposed.
6.2 Without determining the relevant interlocutory issues, I indicated that I did not consider that the availability of Counsel was an appropriate reason for the case not to go on but went on to say that if it should transpire that there were legitimate complaints on behalf of Porterridge to the effect that there had been procedural default on the part of First Active it might be more than reasonable to accommodate Counsel in those circumstances but not where the only reason for the case not going ahead was the unavailability of Counsel. In that context I made arrangements to hear the outstanding interlocutory matters.
6.3 Instead of the matter being pursued in that way it was, at the last minute, intimated that Porterridge wished to amend its claim. The intended trial date was then vacated but the date allocated was used for the purposed of hearing the first motion to amend which was, of course, in the Porterridge proceedings which would otherwise have commenced on that day.
6.4 In those circumstances it is said on behalf of First Active that the costs thrown away by virtue being at such a high state of readiness for an anticipated trial, ought be awarded against Porterridge by reason of the late nature of the application to amend. Against that it is said on behalf of Porterridge that the issues which will go to trial will still remain for decision and that there may be, in fact, a saving on the part of First Active because those issues will now be tried as part of a single hearing rather than separated out. This latter point needs to be seen against the background of the fact that, at an early stage in the Porterridge proceedings, Counsel on behalf of Porterridge pressed for the Porterridge proceedings to be tried separately on the basis that they were likely to be ready for hearing at an earlier stage than the remainder of the proceedings between these parties generally and ought not, therefore, it was said, be unnecessarily delayed until such time as the remainder of the proceedings had become ready for hearing. The current position, (which is to the effect that the Porterridge proceedings now have to be tried with the rest of the proceedings) stems, therefore, partly from a change of mind on the part of Porterridge but also from the very fact that, as a result of the amendments, there are now (even though there were not originally) significant overlapping issues between the various proceedings. The issues for which First Active had readied itself for trial (that is to say the original issues which arose in the Porterridge proceedings and which were not excluded by virtue of a previous ruling which I gave in those proceedings, to the effect that some of the issues raised could no longer be pursued because they were caught by the rule in Henderson & Henderson) were separate and distinct and had little or no overlap with any of the issues which arose in any of the other proceedings against either First Active or Mr. Jackson.
6.5 I am not, therefore, satisfied that there will be any significant saving on the part of First Active in having those issues tried as part of one significant and continuous, if sequenced, hearing. Those issues are likely to form a separate part of that hearing (in whatever manner that hearing may ultimately be conducted) with their own evidence and legal argument. The fact that the issues in the Porterridge proceedings as they now are (after the amendment) have a significant overlap does not take away from the fact that there was no significant overlap prior to the amendment and that the proceedings which had been readied for trial will not, in my view, benefit to any significant extent by being tried at the same time as the remainder of the issues between these parties in the multifarious litigation.
6.6 In those circumstances it seems to me that the costs under the thrown away category specified in the letter of the 4th October from Solicitors on behalf of First Active are costs which have, indeed, been thrown away by the very belated application for an adjournment at a time when those issues were ready for trial. I see nothing in the detail of the items specified in that letter which could reasonably lead to the view that the items so specified do not naturally fall within the category of costs thrown away. I will, therefore, further direct that the costs of that category specified in the manner which I have already cited from the relevant letter of the 4th October, should, in the Porterridge proceedings, be awarded in favour of First Active and against Porterridge.
7. Conclusions
7.1 For the reasons which I have, therefore, set out I am satisfied that each of the categories of costs sought on behalf of First Active in respectively the Mooreview and Porterridge proceedings and the Receiver should be awarded to those parties against the relevant plaintiffs.
Approved: Clarke J.