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URL: http://www.bailii.org/ie/cases/IESC/2005/S30.html
Cite as: [2005] 4 IR 461, [2005] IESC 30

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Judgment Title: M.N. -v- S.M.

Neutral Citation: [2005]IESC 30

Supreme Court Record Number: 157/2004

High Court Record Number: 2002 No. 9533P

Date of Delivery: 05/05/2005

Court: Supreme Court

Composition of Court: Denham J., Geoghegan J., McCracken J.

Judgment by: Geoghegan J.

Status of Judgment: Approved


Judgments by	Result	Concurring
Geoghegan J.	Other (see notes)	Denham J., McCracken J.

Notes on Memo: Judgment on costs only

- 7 -

THE SUPREME COURT

Record No. 157/2004

Denham J.
Geoghegan J.
McCracken J.

BETWEEN/

M.N.

Plaintiff/Respondent

and

S. M.

Defendant/Appellant

JUDGMENT of Mr. Justice Geoghegan delivered the 5th day of May 2005

This judgment relates to the issue of costs in an appeal brought by the defendant/appellant against an award of €600,000.00 damages for sexual assault obtained by the plaintiff/respondent in the High Court in a trial by judge and jury. On the hearing of the appeal which related to the assessment of damages only this court reduced the award to a figure of €350,000. The defendant, having obtained this substantial reduction, has applied for his costs of the appeal against the plaintiff. Counsel for the plaintiff in response has not actually sought the costs of the appeal on behalf of the plaintiff but has submitted to this court that there should be no order for costs on the appeal. There is never any easy answer in justice as to who should pay the costs of an appeal when there is a reduction in damages in an appeal confined to assessment of damages and as this was a reasonably substantial case, the court considered it appropriate to reserve judgment so as to consider whether any worthwhile guidelines could be formulated.

There are no simple answers. If a plaintiff is awarded damages in the High Court which are too high and are, therefore, reduced by the Supreme Court this will not usually arise from any fault on the part of the plaintiff. It is a considerable hardship to the plaintiff if in addition to suffering a reduction in his award he then has to pay two sets of costs to the opposing lawyers and his own lawyers out of the legitimate award.

On the other hand, if the plaintiff were to be awarded his costs of the appeal despite the fact that he had suffered a reduction in damages, that may legitimately be viewed as an injustice to a defendant. The reduction in damages which the defendant by his well-founded appeal has achieved is eaten away by his having to pay two sets of costs on the appeal.

In the intermediate situation where the Supreme Court decides to make no order as to costs on the appeal there is, on one view, a hardship to both sides. On the one hand the plaintiff has to suffer a reduction in his ultimate legitimate award in order to pay his own lawyers even though he was in no way to blame for the High Court awarding him an excessive sum. On the other hand, the defendant notwithstanding that he was found to have brought a legitimate appeal and has successfully obtained a reduction in the High Court award finds himself having to pay his own lawyers thereby greatly reducing the benefit which he has achieved by the appeal.

What is the judgment of Solomon in this situation? The answer is there is none. Although I am about to suggest procedures which in my view may ease the problems which arise in these types of cases there is still no perfect solution. Nor would it be appropriate to lay down absolute norms as to how costs are to be dealt with in all cases of this kind. Every appeal has its own special aspects. In most instances of course the normal rule of “costs following the event” will apply. But in cases where that may be perceived to cause a hardship, the court must exercise its discretion and the manner in which it exercises that discretion will differ from case to case.

As to the correct application of principle in relation to costs in appeals from assessments only there is not much assistance to be gained from English case law. Under current English Rules of Court there are many factors which may be taken into account in relation to costs. Questions of reasonableness in not submitting to mediation and questions of the significance to be attached to success in one discrete issue which may have the effect of winning the appeal but failure in a number of others may all now in many instances be taken into account.

It has been suggested before that following a trial at first instance and in the context of an appeal either party should be entitled to write a letter to the other which would be“without prejudice” save as to a costs issue. Thus a defendant who considered that the plaintiff’s award was too high and would likely be reduced on appeal may write a letter to the plaintiff claiming that the award of say a €100,000 was too high but that he would be prepared to pay €75,000 and that if that sum was not accepted the letter would be used in the Supreme Court for the purposes of a costs application in the event of the damages being reduced to €75,000 or less. By the same token, it would be open to a plaintiff in such a case to write to the defendant offering to accept €75,000 and warning the defendant that if a reduction of damages was achieved by the defendant but the resulting sum was still €75,000 or more the plaintiff would use the letter with a view to obtaining his costs of the appeal notwithstanding the reduction. This practice which has proved useful in other jurisdictions should be availed of in this jurisdiction.

An argument can be made that there is never any real hardship to a defendant if he has to pay either two sets or one set of costs on an appeal notwithstanding obtaining a reduction in damages because there was nothing to prevent him making a lodgment of that amount with his defence in the first instance. In modern times, I am inclined to think that that may be too purist a view. Cases have a way of changing their colour as time goes on after the stage of delivery of the defence. There is nothing to prevent a defendant who either has not made a lodgment or has made an inadequate lodgment making an open offer, as I have suggested, on a “without prejudice” basis except as to costs for the purposes of an appeal and, indeed a defendant who has made a lodgment would be entitled to make an offer higher than the lodgment by open letter in that manner. If this procedure was adopted more often, the injustices which can arise in relation to costs of an appeal would be greatly reduced.

There may be some cases where a plaintiff may be entitled to his costs of the appeal notwithstanding that there is a reduction in his damages given the various remedies open to a defendant such as the making of a lodgment or the making of an open offer as I have suggested. In this particular case, however, the defendant has obtained a very substantial reduction in the plaintiff’s award and his financial position is such that there would have been no reality in making offers that might have been acceptable to the plaintiff notwithstanding that they involved a reduction in the damages awarded in the High Court. In the circumstances of this case the solution put forward by counsel for the plaintiff would seem, in all the circumstances, to be the fairest. Accordingly, I would be of the view that there should be no order as to costs on the appeal.

I would like to add one rider. Although the novel procedures which I have suggested might usefully be adopted in relation to appeals from the Circuit Court to the High Court in Dublin or to the High Court on Circuit, I do not think that the two situations are similar. A circuit appeal is a full rehearing and that can make a very big difference to the factors which the judge might take into account in exercising his or her discretion. For my own part and especially in smaller cases, I have from time to time awarded costs of an appeal to a plaintiff in a circuit appeal notwithstanding that his damages have been reduced. Given the rights of the defendant to have lodged and to make offers of the kind which I have indicated, there may be little or no injustice in doing that whilst the opposite could cause an undue hardship to a plaintiff. This judgment should not be used to fetter the discretion of a judge hearing a circuit appeal. Different principles apply.

N. v. M.