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Cite as: [2012] IEHC 181
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Judgment Title: Simpson -v- Torpey & Ors Neutral Citation: [2012] IEHC 181 High Court Record Number: 2008 9814P Date of Delivery: 23/03/2012 Court: High Court Composition of Court: Judgment by: Clarke J. Status of Judgment: Approved |
NEUTRAL CITATION [2012] IEHC 181 THE HIGH COURT [2008 No. 9814 P] BETWEEN JOE SIMPSON PLAINTIFF AND
ALAN TORPEY, EDUARDO DOANDES, PAUL DOODY AND GERRY COSGRAVE, TRADING AS R.I. INVESTMENT GROUP DEFENDANTS JUDGMENT of Mr. Justice Clarke delivered the 23rd March, 2012 1. Introduction
8.2 Mr. Simpson is not entitled to a profit share arising out of the Titan deal but is entitled to two-thirds of 5% of the net value of the development projects the subject of these proceedings. The defendants will be directed to produce a valuation of that sum based on professional assistance. Mr. Simpson will be entitled to two-thirds of 5% of that value or such higher value as the court may ultimately determine should Mr. Simpson dispute the defendants' valuation." 1.3 As is clear from the passage from the principal judgment cited above, the defendants were directed to produce a valuation of the net value of the development projects, the subject of the proceedings. That question along with that of the costs of the proceedings generally were the two main issues remaining to be decided. The matter has now come back before the court for the purposes of making a final order. In order to fully understand the issues which I now have to decide, it is relevant to set out a brief history of what occurred since August of last year. 2. Procedural History 2.2 The matter was then further adjourned to allow Mr. Simpson to take his own advice. A different view was expressed as to the relevant net value by experts employed by Mr. Simpson. In those circumstances I indicated that it would be necessary that there be an oral hearing for the purposes of attempting to resolve the dispute as to value. Unfortunately for Mr. Simpson, he proved unable to procure the attendance of any relevant witness and ultimately abandoned any claim under the relevant heading. It does also have to be recorded that it was intimated on behalf of the defendants that they too were experiencing some difficulty in relation to procuring the attendance of a witness on their side although it is not clear whether the possibility of calling such a witness had been fully abandoned prior to an intimation on the part of Mr. Simpson's advisers that he was not pursuing the claim. In any event, there is now no longer any claim in respect of a share in the net value of the development properties concerned. 2.3 Against that background a number of issues were canvassed by the parties when the matter came back before me for the purposes of making final orders. They were as follows:-
B. A claim that it would be appropriate to make an order in favour of Mr. Simpson in respect of part of, what is described in the principal judgment as, "the Titan monies" which, on the evidence, it is said, went into a project which had nothing to do with the defendants or RI Investments and in respect of which it is, therefore, said by Mr. Simpson that he should be entitled to an appropriate share; and C. Costs. 3. Pay in Lieu of Notice 3.2 In those circumstances no issue arises. The facts are simply that I omitted to deal with that issue at the time of making an unapproved judgment available to the parties and immediately corrected the matter as soon as it was brought to my attention. The sum is, as set out in the approved judgment, due by the defendants to Mr. Simpson. 4. The Titan Monies 4.2 In the light of those findings it is necessary to consider the form of the final order. 5. The Final Order 5.2 It follows that Mr. Simpson is entitled to the total of each of the four sums mentioned in para. 8.1 which comes to €137,533. It also seems to me that Mr. Simpson is entitled to interest on those sums under s. 22 of the Courts Act 1981, to run from the 1st November, 2008. Clearly on the basis of the findings in the principal judgment, those sums should have been paid on or before that date and arise in a commercial context. The final issue which arises is in relation to costs. 6. Costs 6.2 It next does need to be noted that Mr. Simpson failed in respect of the Titan issue and that is a factor that needs to be taken into account. However, so far as the profit share is concerned, it is clear that I found that Mr. Simpson was, at the level of principle, entitled to a profit share but, for the reasons already noted in this judgment, it is not now possible to proceed with such a claim because of the difficulty on Mr. Simpson's behalf in presenting evidence as to the value of any such claim to counter the contention of the defendants that that value is, in fact, zero. However, those are not the only facts that need to be taken into account. It does also need to be noted that Mr. Simpson's claim was based on a set of values which came directly from the defendants' own books and records. He can hardly be blamed for that. The defendants had not, prior to the case commencing, put forward any coherent set of figures which suggested that the position was that the net asset value was zero. On any view it was only after such a valuation was provided that the .final decision not to go ahead with the claim under this heading was made by Mr. Simpson. If the defendants had carried out a proper valuation of the projects at the time of Mr. Simpson's departure (which was, after all, the time at which his contractual entitlements needed to assessed) and if they had presented him with such a valuation which showed that there was no net value available, then Mr. Simpson's pursuit of a claim under that heading might legitimately be subject to some criticism unless he was able to bring home a claim based on the court being persuaded that the defendants' valuation was incorrect. However, at the time these proceedings were commenced, and during which they were maintained until recently, Mr. Simpson was entitled to the benefit of a contract which gave him such a share, in particular where no document had been produced setting out a valuation which showed that that entitlement was worthless. His pursuit of the claim under that heading needs, again, to be seen against the background of the fact that it was the defendants failure to carry out a valuation by reference to which his entitlements could be calculated that led to the problem in the first place. 6.3 It is against that background that the question of costs needs to be assessed. It is unnecessary to restate the principles which have now evolved for dealing with costs in complex cases deriving from Veolia Water UK plc v. Fingal County Council (No. 2) [2007] 2 IR 81 and other cases which followed on from it. (See generally Mennolly Homes Ltd v. Appeal Commissioners & Anor [2010] IEHC 56; Mc Aleenan v. AIG [Europe] Ltd [2010] IEHC 128; and John Ronan and Sons & Ors v. Clean Build Ltd & Ors [2011] IEHC 499). The first question is to determine whether the plaintiff had to come to court to get something which he could not have achieved had he not come to court. The answer to that question can only be yes in the context of this case. I have found Mr. Simpson to be entitled to a sum of €137,533 as against the defendants on a joint and several basis in circumstances where, if he had not come to court, he would not have the benefit of such a finding. The starting point has to be, therefore, that the defendants denied Mr. Simpson an entitlement to something which the court has found him to be entitled to and the prima facie position has to be, therefore, that he is entitled to any costs reasonably expended in achieving that end. 6.4 The second leg of the question, which the court must ask itself in accordance with the Veolia principles, is whether, notwithstanding that a party has succeeded, that party may have materially added to the costs of the case by raising other unmeritorious issues. The court is not, of course, required to attempt to count up how many points either side won. Rather, the question is to determine whether it can be said with any degree of confidence that an otherwise successful party added materially to the costs by raising unmeritorious points. 6.5 For the reasons which I have sought to analyse earlier, it seems to me that the claims made under the ordinary employer/employee aspects of the case were, to a very large extent, resolved in favour of Mr. Simpson, and insofar as they were not, the problems can be attributed to the failure of the defendants to address the bonus question in the first place. It seems to me that like considerations apply to the issues concerning the profit share, at least up the point when the principal judgment was delivered. Insofar as that claim is now abandoned and that it might, therefore, be said that Mr. Simpson has failed in respect of it, I have already analysed the case which Mr. Simpson put forward which was based on the defendants own documents and in circumstances where the defendants, at the time of the trial, had not put forward a coherent contrary view as to the net value of the assets. I am not satisfied that it is appropriate, in those circumstances, to treat any costs associated with the valuation issue, up to and including the trial, as being costs which derive from an issue on which Mr. Simpson failed. It would be quite different if, prior to the commencement of proceedings, or at some stage in advance of trial, a proper valuation had been put forward which suggested that the net value was zero. If, in the teeth of such a valuation, Mr. Simpson had continued with his claim and abandoned it in the circumstances which have now arisen then the position would be significantly different. 6.6 It is also necessary to have regard to the fact that a significant portion of the time at the trial was taken up with the question, on which Mr. Simpson succeeded, as to who the contracting party was. I have, therefore, concluded that the only issue which was raised by Mr. Simpson and which might, on one view, have lengthened the case and thus added to the costs, and on which he failed, was the Titan issue. In all the circumstances it seems to me to be appropriate to reduce the costs to which Mr. Simpson might be entitled by one day to reflect, in substance, that a half a day's costs ought to be awarded to the defendants to reflect the fact that the case took longer and was thus more expensive by reason of Mr. Simpson raising, and failing on, the Titan issue. As the substantive hearing lasted for four days it seems to me that Mr. Simpson is entitled to the full costs of this action based, for the purposes of taxation, on a claim of the scale which succeeded, and on the basis of a three day action. However, it is clear that Mr. Simpson cannot be entitled to any costs since the principal judgment was delivered. On the basis set out in the principal judgment, the defendants were required to bear the cost of the initial valuation report themselves. Any costs on the defendants' part, which have arisen in relation to the valuation issue, since judgment was delivered (excluding the cost of the report in question), can reasonably be set off against any costs of Mr. Simpson in having the proceedings finalised through the present judgment. 6.7 In relation to the contention that the claim was a lot larger than the amount ultimately awarded, it does also have to be noted that there are a number of devices which a defendant, faced with a claim which that defendant believes to be excessive, can use to affect the costs of the relevant action. Money can be lodged in court under O. 22 of the Rules of the Superior Courts. A so called Calderbank letter can be written. Admissions can be made in the defence. By any or all of these devices a defendant can effectively set a bar which the plaintiff has to reach to justify going ahead with the case. The defendants in this case took none of those options. Their position was that they owed Mr. Simpson nothing. Mr. Simpson had to run the case to get something. The fact that he did not get as much as he sought needs to be seen against the background of the fact that he still had to run the case to get what I have found to be his entitlements and against the position of the defendants that he was entitled to nothing. In those circumstances it is only appropriate to reduce his costs in circumstances where it can be said that he raised unmeritorious issues which had the effect of making the proceedings more expensive. In reducing his costs from four days to three I have dealt, to the extent that I consider to be appropriate, with that issue. There is no further reason for reducing Mr. Simpson's costs based on the scale of the award. 6.8 Finally, it is necessary to deal briefly with the costs of some interlocutory orders which were reserved to the trial judge. It does not seem to me to be necessary to deal with any orders in respect of which the court made no order or any orders where the costs were directed to be costs in the cause. Mr. Simpson is entitled to his costs generally and that includes any costs which were made costs in the cause. On that basis there seems to be only three orders in respect of which costs were reserved, being an order of the 9th March, 2009, when Lavan J. struck out a motion for judgment in default of appearance with costs reserved, an order of Kearns P. on the 2nd December, 2009, in which costs were reserved on an application for case management and an order of the 26th January, 2010, when O'Neill J. reserved costs while dismissing an application made by the defendants to have Mr. Simpson's claim dismissed as being frivolous and vexatious. Given that his claim has succeeded in part, it is clear that that application was totally unmeritorious. It seems to me that Mr. Simpson is entitled to the costs of each of those matters as forming part of the natural run of the case. 6.9 In summary, therefore, Mr. Simpson is entitled to an award of €137,533 with Courts Act interest from the 1st November, 2008, together with the costs of the proceedings to be taxed on the basis of an award of the scale actually made and on the basis of a three day action (but excluding any costs arising after the delivery of the principal judgment). Mr. Simpson is also entitled to the three items of reserved costs to which reference has already been made.
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