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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Meagher -v- Dublin City Council & Anor [2014] IEHC 280 (28 May 2014)
URL: http://www.bailii.org/ie/cases/IEHC/2014/H280.html
Cite as: [2014] IEHC 280
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Judgment Title: Meagher -v- Dublin City Council & Anor Neutral Citation: [2014] IEHC 280 High Court Record Number: 2005 336 S Date of Delivery: 28/05/2014 Court: High Court Composition of Court: Judgment by: Hogan J. Status of Judgment: Approved |
Neutral Citation: [2014] IEHC 280 THE HIGH COURT [2005 No. 336 S] BETWEEN JOHN MEAGHER PLAINTIFF AND
DUBLIN CITY COUNCIL AND HEALTH SERVICE EXECUTIVE (No.2) DEFENDANTS JUDGMENT of Mr. Justice Hogan delivered on 28th May, 2014 1. On 1st November 2013 I delivered my first judgment in these proceedings: see Meagher v. Dublin City Council [2013] IEHC 474. The plaintiff sought to recover certain unpaid invoices in respect of the provision of accommodation and other services which he had provided to asylum seekers in the period between 1997-2002 at the request of both Dublin City Council and the Health Service Executive (“HSE”). While I dismissed the claim against the Council, I ultimately ruled that the plaintiff was entitled to recover the sum of €106,640 from the HSE. I also ruled that the plaintiff was entitled to recover four days’ costs as against the HSE. 2. The issue which now arises is whether I should make a charging order pursuant to s. 3 of the Legal Practitioners (Ireland) Act 1876 (“the 1876 Act”) in respect of both that costs order and the further sum of €106,640 in favour of the plaintiff’s solicitors. This issue arises in the following way. 3. These proceedings began in 2005 and proceeded in a very leisurely fashion. Indeed, the proceedings were not even served until April, 2008 and even then only after the making of an order extending time for the service of the proceedings. Further delays ensued, with the result that the matter was only set down for trial in August, 2012. The proceedings themselves came on for hearing before me in March, 2013 and, following two short adjournments, ultimately concluded on 9th July, 2013, following a ten day hearing. I then reserved judgment and delivered that judgment on 1st November, 2013. 4. For reasons which will become apparent later in this judgment, it has not proved necessary to consider whether one possible effect of a delay of that kind might be to disentitle the plaintiff’s solicitors to the benefit of a charging order under s. 3 of the 1876 Act to which they might otherwise have been entitled. 5. In the meantime, however, Danske Bank had issued proceedings in January, 2013 against Mr. Meagher. On 23rd February, 2013, Danske Bank obtained judgment by default against Mr. Meagher for the sum of €6.98m. Mr. Meagher appealed that decision to the Supreme Court, but on 1st April, 2014, that Court dismissed the appeal: see Danske Bank A/S v. Meagher [2014] IESC 38. 6. Danske then applied to this Court (Kelly J.) to have a receiver appointed. Such an order was duly made and Kelly J. directed that all sums that may be due to John Meagher from the defendants in these present proceedings - including any judgment which he might obtain - should be amenable to a garnishee order. Application for a charging order under s. 3 of the 1876 Act 8. Section 3 of the 1876 Act provides:-
The effect of s. 3 of the 1876 Act 11. In Mount Kennett the plaintiffs had sued the defendants for damages in respect of the non-completion of a property transaction. In this Court the plaintiffs were awarded damages (plus interest), together with costs by order of Smyth J. made at an earlier stage in the proceedings. In his later judgment on the s. 3 charging order issue, Clarke J. considered that the overall liability of the defendants to the plaintiffs was in the order of €3.25m., inclusive of costs. 12. Receivers were, however, subsequently appointed to the plaintiff companies and the defendants in turn had appealed this award to the Supreme Court. A decision was taken by the receivers to settle the appeal and their entitlement to do so was not questioned. The settlement of €1.5m. was, however, a costs inclusive figure and, as Clarke J. pointed, the receivers could scarcely be faulted for exercising their judgment in arriving at the settlement which they did:
14. It was against that background that the plaintiffs’ solicitors application under s. 3 of the 1876 Act fell to be considered. Clarke J. considered that the equity of the case required the making of the order under s. 3, but, critically, not for all of the costs which had been incurred:
16. It seems to me that this is the approach which should largely govern the present application. The most important difference between the two cases is that in the present case the plaintiff actually obtained an order for costs in addition to the damages award. Moreover, Danske accept that the costs which are recoverable by the plaintiff’s solicitors pursuant to that costs order fall outside the scope of the sums which the receivers might seek to recover in satisfaction of that debt. 17. A further consideration is that the costs order which I made was itself intended to be a proportionate one. After all, the plaintiff failed entirely in the case against the Dublin City Council and the ultimate award against the HSE was a considerably lower percentage of the sum which was originally claimed. Indeed, it might be said that as against that background the award of four days’ costs was itself a generous one. 18. The plaintiff relied heavily on the decision of North J. in Charlton v. Charlton (1884) 49 Law Times 267, 270 where in the context of the similar charging provisions contained in s. 28 of the (English) Solicitors Act 1860 the judge invoked the principle of salvage in interpreting these charging order provisions:
20. The underlying policy of the 1876 Act must also be considered. It is true that, as North J. pointed out in Charlton, it reflects to some degree the principles of the law of salvage. This is why it would have been unfair not to have made some form of charging order in Mount Kennett, as thanks to the efforts of the plaintiff company’s legal team, funds were recovered for the benefit of the company, and, ultimately, its creditors. In a case such as Mount Kennett where no separate provision was made for costs in the settlement, why should the creditors of the company in effect receive everything, while those who toiled to effect that salvage (namely, the legal team) should receive nothing at all? This is especially so when without those efforts the creditors themselves would have recovered nothing at all. One can thus readily appreciate that in a case such as Mount Kennett, considerations of fairness and equity would thus justify the making of a charging order. 21. The analogy drawn from the law of admiralty cannot, however, be stretched too far. It should be recalled that admiralty law is not a complete corpus juris in its own right, reflecting as it does the particular characteristics of the law and customs of the sea. The law of salvage reflects the peculiar need to give salvors - who often courageously put life and limb at risk as they seek to rescue the stricken vessel - a special priority over other creditors. 22. While there is also a public interest in ensuring that the legal rights of distressed companies and financially pressed individuals are also safeguarded by seeing to it that lawyers who act for them might have some priority entitlement to payment out of the funds thus recovered through their efforts, there the comparison with the law of salvage surely ends. Specifically, it cannot be said that either the law of the 1876 Act or its underlying policy requires or mandates that the courts should as an invariable rule accord such legal teams a form of super-priority status over other creditors. If that were thought to be necessary or desirable, then express provision would have been made for this purpose, perhaps along the lines of the priority given to an examiner’s costs in examinership by s. 29(2) and s. 29(3) of the Companies (Amendment) Act 1990. 23. Viewed thus, the underlying principle of s. 3 of the 1876 Act is that expressed by Clarke J. in Mount Kennett is that, generally speaking at least, the legal teams should recover only a fair proportion of the funds recovered in a case of this kind. As illustrated by the comments of North J. in Charlton, the charging order should be in respect of taxed costs only. But where, as in the present case, the plaintiff’s legal team have obtained a separate order for costs and that order is itself designed to reflect proportionately a fair balance between the interests of plaintiff and defendant in line with the approach of Clarke J. in Veolia Water UK plc v. Fingal County Council [2006] IEHC 240, [2007] 2 IR 81 it would not be appropriate to go further and to make a charging order in respect of the funds recovered itself. Conclusions |