Supreme Court of Ireland Decisions

 


THE SUPREME COURT

No. 324/03

McGuinness J.

Fennelly J.

McCracken J.

BETWEEN

JACKIE CRONIN (NEE O'CONNOR)

PLAINTIFF/RESPONDENT

AND

ASTRA BUSINESS SYSTEMS LIMITED

DEFENDANT/APPELLANT

Judgment Delivered the 14th day of May 2004 by McGuinness J. [Nem Diss]

The plaintiff was injured in a road traffic accident on the 14^th March 1997. She commenced proceedings in the High Court by plenary summons issued on the 31^st August 1999 seeking damages for her injuries. On 10^th October 2000 the defendant (who is the appellant before this court) made a lodgment of IR£21,010 with its defence. By a Notice of Acceptance dated 27^th November 2000 the plaintiff accepted the lodgment. The amount of the lodgment accepted by the plaintiff fell within the jurisdiction of the Circuit Court.

Under the provisions of Order 22 Rule 4 (3) of the Rules of the Superior Courts 1986 the plaintiff was entitled to tax her costs up to the date of the lodgment. The issue then arose as to whether the plaintiff was entitled to costs on the High Court scale or on the Circuit Court scale. In his ruling dated 22^nd March 2002 the Taxing Master found that the plaintiff was entitled to have her costs taxed on the High Court scale notwithstanding the amount of the lodgment figure. Objections thereto were then filed by the defendant. On 30^th July 2002 the Taxing Master, having considered the written submissions and oral arguments of the parties, affirmed the amounts ruled at the taxation and allowed High Court costs. The Taxing Master certified the plaintiff's costs in the sum of IR£6,455.09 (€8,196.27).

In the light of the Taxing Master's decision the defendant issued a motion to review the taxation of the plaintiff's costs pursuant to Order 99, Rule 38(3) of the Rules of the Superior Courts. The motion was heard before Butler J. on 8^th May 2003. Butler J. delivered his reserved judgment on 20^th June 2003 affirming the Taxing Master's rulings and decision. The defendant then appealed to this court.

The defendant was late in filing its appeal to this court and applied for leave to extend the time for appeal. This application came on for hearing before the court on 10^th October 2003. A consent order was made extending the time for appeal. It was a condition of that consent order that the defendant would agree to pay to the plaintiff the costs incurred by her in the review of the Taxing Master's decision to date and also the costs of the appeal to this court irrespective of its outcome. To some extent, therefore, this appeal is a moot. However the defendant/appellant submits that the issue which arises (namely whether the High Court or Circuit Court costs should be allowed) is of some importance in the realm of practice and procedure. In the event the appeal was fully argued before this court.

Statutory Provisions and Rules of the Superior Courts

A number of provisions made both by statute and by the Rules of the Superior Courts are relevant to the issue arising in this appeal and it seems convenient to set these out at this point. In regard to taxation of costs in general Order 99 Rule 37(18) provides:

"On every taxation the Taxing Master shall allow all such costs, charges and expenses as shall appear to him to have been necessary or proper for the attainment of justice or for enforcing or defending the rights of any party, but, save as against the party who incurred the same, no costs shall be allowed which appear to the Taxing Master to have been incurred or increased through over-caution, negligence or mistake, or by payment of special fees to counsel or special charges or expenses to witnesses or other persons or by other unusual expenses."

Order 99 Rule 38(3) provides for the review of the decisions of the Taxing Master by the High Court. Where relevant it provides as follows:-

"Any party who is dissatisfied with the decision of the Taxing Master as to any items which have been objected to as aforesaid or with the amount thereof, may within twenty one days from the date of the determination of the hearing of the objections or such other time as the court or the Taxing Master may allow, apply to the court for an order to review the taxation as to the same items and the court may thereupon make such order as may seem just…"

The role of the court in reviewing taxation is governed by section 27(3) of the Courts and Courts Officers Act 1995 which provides as follows:-

"The High Court may review a decision of a Taxing Master of the High Court and the Circuit Court may review a decision of a County Registrar exercising the powers of a Taxing Master of the High Court made in the exercise of his or her powers under this section, to allow or disallow any costs, charges, fees or expenses provided only that the High Court is satisfied that the Taxing Master, or the Circuit Court is satisfied that the County Registrar, has erred as to amount of the allowance or disallowance so that the decision of the Taxing Master or the County Registrar is unjust."

The level of costs which may be recoverable by a plaintiff after a trial in certain circumstances is limited in accordance with the amount of damages awarded. Section 17(1) of the Courts Act 1981 (as amended by section 14 of the Courts Act 1991) provides:

"Where an order is made by a court in favour of the plaintiff or applicant in any proceedings...and the court is not the lowest court having jurisdiction to make an order granting the relief the subject of the order, the plaintiff shall not be entitled to recover more costs than he would have been entitled to recover if the proceedings had been commenced and determined in the said lowest court."

The Decision of the High Court

The defendant's application for a review of taxation of costs came on for hearing before Butler J., who delivered a reserved judgment on 20^th June 2003. In his judgment Butler J. laid stress on the fact that section 17(1) dealt solely with the situation where an Order was made by a court in favour of a plaintiff. No relevant statutory provision dealt with the situation where the plaintiff accepted a sum lodged in court.

At page 4 of his judgment the learned judge concluded:

"In the absence of precise statutory provisions I can see no basis for determining that it was the intention of the Oireachtas that a plaintiff, who institutes proceedings in the High Court and accepts a sum lodged that is within the jurisdiction of the Circuit Court should not be entitled to have her costs taxed on a High Court basis. In the absence of any contrary evidence it is fair to assume that the plaintiff, through her solicitors and counsel, did find it necessary and proper to proceed in the High Court. There are very many instances, in addition to the present case, where this could occur. For example, a plaintiff could be injured in an accident, receive a bad prognosis for medical advisors and that prognosis could ultimately change. Such a plaintiff must have every right to accept a lodgment without the penalty of having to pay the difference in costs between High and Circuit Court levels to his or her solicitor. I am satisfied that the learned Taxing Master was correct in his rulings and I affirm his findings."

Submissions of Counsel

Senior Counsel for the defendant, Mr McDonald, accepted that section 17(1) provided expressly for the situation where an order had been made by a court and did not specifically deal with the situation where a lodgment had been accepted. Nevertheless, he submitted that the terms of section 17(1) and of section 17 as a whole gave a clear indication of the intention of the Oireachtas that costs should be limited in accordance with the amount recovered by the plaintiff whether by order or by lodgment. The central plank of the defendant's argument was that the value of the case was to be measured at the point when the lodgment was accepted; the value of the case was the value of the lodgment. The value of the plaintiff's case was, therefore, well below the maximum jurisdiction of the Circuit Court and her costs should be taxed accordingly. These were the costs which were "necessary or proper for the attainment of justice" (Order 99 Rule 10(1)). In determining the value of a case the test should be an objective one.

In making these submissions Mr McDonnell relied on the case of Solomon v Mulliner [1901] 1 QB 76. In that case the plaintiff brought an action against two defendants in relation to the wrongful detention of his motor car. One of the defendants made a lodgment of forty shillings into court. The plaintiff accepted that lodgment in satisfaction of its claim against that defendant. The plaintiff then sought to tax his costs and it was contended that the action could have been commenced in a county court. In his judgment A.L. Smith, Master of the Rolls (at page 83) said:

"At what time is it to be ascertained whether the action is, as regards amount, properly within the jurisdiction of the county court? Not, in my opinion, at the time when the plaintiff is stating what amount he thinks fit to claim on the writ or statement of claim, but at the time when the amount recoverable is adjudicated on by the proper tribunal or otherwise ascertained by the result. It cannot depend on the amount which the plaintiff chooses to claim. If that is so, then, in as much as by the plaintiff's own admission, so far as the action against Mulliner is concerned, the sum of forty shillings was sufficient to satisfy his claim, the action as against him is one which could properly have been commenced in the county court both as to kind and amount."

Counsel drew attention to the wording of the plaintiff's Notice of Acceptance. He submitted that having accepted the lodgment expressly in satisfaction of her claim the plaintiff must also accept that, for the purposes of taxation under the same rule, the value of her claim must be regarded as equivalent to the amount of the lodgment rather than any value which the plaintiff subjectively (or her legal advisors subjectively) sought to put upon the case prior to acceptance of the lodgment.

Senior Counsel for the plaintiff, Mr Geraghty, submitted that this particular appeal, though in form an appeal by the defendant as appellant, was in substance in reality an appeal brought on behalf of the insurance industry as a whole, who had their own agenda in relation thereto.

He submitted that the appellant had not satisfied the requirements of section 27(3) of the Courts and Courts Officers Act 1995 in that it had not been shown that the Taxing Master had erred as to the amount of any allowance so as to render his decision unjust. The existence of injustice would have to be determined by the amount of the allowance. There was no evidence in the present case as to the proper allowance, if different from the amount actually allowed, and no injustice had been shown. Counsel referred to the interpretation of section 27(3) by the High Court in the case of Smyth v Tunney (No. 2) [1999] 1 ILRM 211. In his judgment in that case (at page 213) McCracken J. stated:

"The principle upon which I must act, therefore, is not simply to decide whether the Taxing Master erred, but also, if I am to alter his decision, I must find that his taxation was unjust. I cannot approach this issue on the basis of trying to assess what costs I would have awarded had I been the Taxing Master."

This interpretation was followed by Geoghegan J. in Bloomer v Incorporated Law Society of Ireland (No. 2) [2000] I.R. 383.

As far as section 17(1) was concerned, Mr Geraghty submitted that the Oireachtas in limiting the party and party costs recoverable by a plaintiff in defined circumstances confined the operation of such limitation to cases where the amount of the award, and therefore the value of the plaintiff's claim, had been determined by a judge. He referred to the huge disparity which, in the great majority of cases, existed between an individual plaintiff and the defendant's insurance company and to the pressures which could operate upon a plaintiff to accept a lodgment which might not represent the full value of his or her case. This had, he said, occurred in the present case where the plaintiff, for personal reasons, was in urgent need of a sum of money.

Counsel argued that the plaintiff's advisers, in advising the institution of proceedings in the High Court, considered that the plaintiff would reasonably recover damages at the High Court level if she succeeded in establishing liability on the part of the defendant and in defeating any plea of contributory negligence on her part. The plaintiff's legal advisers had estimated within reasonable parameters the probable level of damages should the plaintiff succeed and accordingly they were neither unreasonable nor irresponsible in bringing proceedings in the High Court.

Counsel also pointed out that there had been an interval of time of over twelve months between the issuing of proceedings and the acceptance of the lodgment in the case. During that time it had been open to the defendant to bring an application to remit the proceedings to a lower court if the defendant believed that a lower court was the appropriate jurisdiction.

Conclusions

This is an appeal from a review of taxation of costs. The issue as to whether the plaintiff should be awarded costs at the High Court level or at the Circuit Court level was considered by the Taxing Master in a lengthy and careful judgment in which he dealt with the objections which had been put forward by the defendant. The central issue was again considered by the learned High Court judge in his judgment.

The review of taxation by the High Court is governed by section 27(3) of the Courts and Courts Officers Act 1995. As was pointed out by McCracken J. in Smyth v Tunney (No. 2) [1999] 1 ILRM 211 in the passage quoted above such a review entails a consideration not alone whether the Taxing Master has erred but also whether such an error has led to injustice.

The defendant has argued this case on a point of principle – that the value of the case must, for the purposes of taxation, be the value of the lodgment which the plaintiff has accepted. This, he says is an objective test. Any estimate of possible damages made by the plaintiff or her legal advisers at the inception of the proceedings is purely subjective. Such a subjective test cannot be relied upon in deciding the appropriate level of costs.

It appears to me doubtful that such a stark distinction can be made between a subjective and an objective test in the circumstances either of the commencement of proceedings or of the acceptance of a lodgment. In launching proceedings a plaintiff and his or her advisers must take objective facts into account, including for instance the history of the accident. At that point they may anticipate a possible claim of contributory negligence, but they cannot be certain of this until a defence is filed. As was pointed out by the learned High Court judge the medical prognosis may also be uncertain. Subjective considerations are involved here. The words in section 27(3) of the 1995 Act "so that the decision of the Taxing Master or County Registrar is unjust" also imply that the test must to some degree be subjective.

Subjective considerations also arise in the decision to accept a lodgment. The question of the level of costs following an acceptance of a lodgment was considered by Glyn-Jones J. in the case of Hopkins v Rees and Kirby Ltd [1959] 2 All E.R. 352. The facts of the case are summarised in the head note. In that action the plaintiff claimed against his employers, the defendant company, damages for negligence causing personal injury. There was a claim of contributory negligence. The plaintiff was a steel erector who was employed in painting the inside of the defendant's factory and fell a distance of some twenty feet to the ground. Proceedings were issued but the defendants paid a sum of £250 into court which was accepted by the plaintiff in satisfaction of his claim. What fell for decision by Glyn-Jones J. was whether the plaintiff could recover costs at the High Court level when he had accepted a lodgment which fell within the county court jurisdiction.

In his judgment Glyn-Jones J. began by saying that he did not know whether the plaintiff accepted the sum paid into court because he thought that it would adequately compensate him for the injury that he had suffered, or because he thought that there was some chance of the plea of contributory negligence on his part succeeding. At page 353 of the report the learned judge went on to consider the position of the plaintiff at the commencement of the proceedings. He considered the medical report on the plaintiff's injury and concluded:

"Looking at the materials available to the plaintiff and his solicitors at the time when the writ was issued, was there ground on which the plaintiff might reasonably contemplate that the damages recoverable would exceed £400? Counsel for the defendants submit that in answering that question regard should be had to all the matters that were in dispute in the action, including medical evidence and the circumstances in which the accident happened. I think that this is wrong. The only question for me is this - putting myself, as far as I can, in the position of the plaintiff at the time when he issued the writ, am I satisfied that it was then obvious that this was a county court action, or was it an action which, when tried by one judge rather than another, might have resulted in an award exceeding £400 excluding any reduction on the ground of contributory negligence?...Looking at that, and no more, I am unable to say that it was quite clear, or should have been quite clear, to the plaintiff as a reasonable man that no judge would award more than £400 for that injury. For that reason, I think that High Court costs are recoverable in this case, and I make the order that the plaintiff is entitled to have his costs taxed on the High Court scale."

As in the Hopkins case, this court cannot know what particular considerations induced the plaintiff to accept the lodgment in the present case. It seems likely that in this, and in most cases, both subjective and objective considerations would have come into play. The situation where, after due consideration, a plaintiff decides to accept a lodgment is crucially different from the situation where, after hearing all the evidence on both sides, a court decides the level of damages to be awarded. Section 17(1), as has been accepted, specifically governs only the situation where the amount of damages is ordered by the court. Its terms should not, in my view, be extended to cover the acceptance by the plaintiff of a lodgment. I am unable to accept that in all circumstances and in every case the value of a case can be measured by the amount of an accepted lodgment. I consider that the learned trial judge was correct in his conclusion that he could see no basis for determining that it was the intention of the Oireachtas that a plaintiff who institutes proceedings in the High Court and accepts a sum lodged that is within the jurisdiction of the Circuit Court should not be entitled to have her costs taxed on a High Court basis.

In the present case there seems to be little or no evidence other than the amount of the accepted lodgment which would show an error in principle by the Taxing Master. The onus is on the defendant to show both that the Taxing Master erred in principle and that his decision was unjust. In my opinion the defendant has failed to discharge that onus. I would dismiss the appeal.