High Court: Cork City Council ‘exploited and endorsed’ unlawful legal costs system in Circuit Court for years



Killian Flood BL
Killian Flood BL

The High Court has imposed a costs order for judicial review proceedings against Cork City Council, the notice party, on the basis that it “actively invoked, exploited and endorsed an unlawful system of taxation of costs” drawn up by the Cork County Registrar.

The applicant had challenged the practice of the County Registrar to apply a scale of costs for “standard” cases, which involved a flat fee plus 12.5 percent of the value of the case.

The judicial review was unopposed by both the County Registrar and Cork City Council. However, the applicant argued that the Council should pay for the costs of the uncontested proceedings, despite being a notice party. The court agreed, stating that the Council benefited from the unlawful fee scale for years and actively contributed to its implementation.

Background

The applicant, Richard O’Donovan, brought personal injury proceedings against Cork City Council in May 2015 arising from a fall from his bicycle due to a pothole in the road. A full defence was submitted by the Council and the case proceeded with motions for particulars and discovery being brought. Shortly before trial in April 2017, the case settled for €9,500 plus taxed costs.

The applicant’s solicitor subsequently provided a bill of costs to the Council for all work done from the accident in 2012 to settlement in 2017. The applicant’s solicitor raised a total legal bill of €37,000 for the case.

In response, the solicitors for the Council provided a cheque for €10,201 as a “tender in respect of your costs herein.” In further legal correspondence, the Council’s solicitor stated that the tender was in line with the Cork County Registrar’s guideline scale in the Circuit Court and that “the City Council adheres strictly to that scale in all cases.”

It transpired that, in November 2006, the County Registrar issued a “litigation circular” on the amounts likely to be allowed on taxation of costs in standard cases. The amount allowed in the circular was based on the value of the overall award rather than work done. An indicative sum of €2,500 plus 12.5 percent of the value of the award was provided for fully contested cases. A 20 percent deduction applied to cases settled before hearing. The circular’s figures were updated in January 2015 but the same formula was used.

The applicant rejected the tender offer from the Council’s solicitor and the matter proceeded to taxation before the County Registrar. The matter was heard in the County Registrar’s chambers, as was her practice, and no DAR recording was made. However, the costs accountant reported that she did not look at any of the papers in the case. The Council’s solicitor argued that it was a standard case and the scale should apply. The County Registrar did this, awarding only €9,700 in costs. As this was lower than the tender, the Council’s solicitors sought reimbursement of the excess of the tender.

Judicial review proceedings were initiated by the applicant against the office of the Cork County Registrar, with Cork City Council named as a notice party. The applicant sought orders quashing the costs decision and declarations that the practice of the County Registrar was unlawful.

After some intervention from the Attorney General, it was accepted that the County Registrar was immune from suit due to the status of her office. As such, she did not take any part in the proceedings. The Council also wrote to the applicant stating that it would not be taking part in the proceedings and could therefore not be liable for any costs.

High Court

In light of these developments, the applicant was unopposed in his application for orders of certiorari and a remittal of the proceedings. Further, he contended that the declaratory reliefs also had to be granted in the case to prevent the County Registrar from continuing her unlawful practice. As such, the only issue was whether the City Council was liable to pay the costs of the judicial review proceedings. The Council opposed this costs application.

Giving judgment in the case, Mr Justice Deirdre Murphy began by outlining the decision in McIlwraith v Fawsitt and Gilroy Automation Limited [1990] 1I.R. 343, in which it was held that a notice party (such as the Council) could be liable for an applicant’s costs if it was responsible for leading a judge into error. If the party was not responsible for the error, then it was proper for there to be no order as to costs.

The court also referred to Miley v The Employment Appeals Tribunal [2018] 1 IR 787, which determined that in a limited set of circumstances, a party could be left without its costs, including where no respondent party stood over a decision in a judicial review case.

Applying the law to the facts, the court accepted that the County Registrar’s fee scale was entirely ultra vires her powers. In fact, there was no basis whatsoever for her to have implemented the costs scale. As such, the court was satisfied to grant the orders of certiorari and the declaratory reliefs that the County Registrar’s practice was unlawful.

On the issue of costs, the court held that it would make a costs order against Cork City Council for the applicant’s judicial review proceedings. The court was highly critical of the Council in the case. As a public body, represented by a leading legal firm, it “invoked a taxation process which it knew or ought to have known was unlawful.” This continued for years, with the unlawfulness of the scale being conceded “the moment it was challenged in the High Court,” the court said. Further, the court held that the Council “actively invoked, exploited and endorsed an unlawful system of taxation of costs” and the solicitors acted “arrogantly” by drawing up the tendered costs.

The Council also supported the Registrar’s approach to taxation at the hearing in the present case, the court said. The court noted that the Registrar would have been encouraged in her actions due to the endorsement of lawfulness from the Council and the reputable firm of solicitors.

Further, the court rejected the Council’s argument that the applicant should have brought an appeal rather than judicial review proceedings, stating that the Council chose not to oppose the proceedings and could therefore not make substantive arguments.

Conclusion

The court determined that the Council had to pay the applicant’s costs of the judicial review proceedings, excluding the costs of the applicant’s correspondence with the Attorney General.

Further, the court determined that the applicant was entitled to the costs of the costs hearing, which was by far the costliest event in the proceedings.

© Irish Legal News Ltd 2021



Other judgments by Ms Justice Deirdre Murphy

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