High Court: Courts should not ‘knock a few percent off’ of a winning party’s costs for making losing points

About this case:

• Citation:
  [2022] IEHC 631
• Judgment:
  External link
• Court:
  High Court
• Judge:
  Mr Justice Richard Humphreys

Delivering judgment in the case, Mr Justice Richard Humphreys stated that a court had to “look at the bigger picture” when awarding costs to a partially successful party and it would “massively incentivise” applications to “knock a few percent off the winning party’s costs.” Accordingly, the court held that the applicants were entitled to their full costs.

Background

In the substantive hearing of the action, the applicants sought to quash a decision of Meath County Council regarding an indicative road route which ran through the applicants’ lands (see Hickwell Ltd v. Meath County Council (No. 1) [2022] IEHC 418). The court held that there was a lack of reasons provided by the Council as to the need for the road as a whole, as opposed to the route as it went through the lands.

However, following this judgment, the court left over the question of the precise form of order at the request of the Council. The applicants were given liberty to put any other landowners on notice of the issue. Subsequently, several landowners made submissions or wrote letters indicating their opposition to the road. 

As such, the court was required to consider whether the entire indicative road route should be quashed or whether it was just the road route through the applicants’ lands which should be quashed. The Council urged the court to follow its “first instinct” and nullify only the route that went through the applicants’ lands.

Further, the court was required to consider the issue of costs in the case. The hearing lasted for two days and dealt with complex issues. The applicants did not win all of the arguments advanced at trial and were therefore not “wholly successful” within the meaning of section 169 of the Legal Services Regulation Act 2015. In this regard, the Council suggested that the applicants costs award should have a percentage reduction of up to 50 percent.

High Court

On the first issue, Mr Justice Humphreys held that it was important that the other landowners were objecting to the road as a whole, even if they did not make legal submissions. No injustice had been done to them by not being part of the proceedings as they were not objecting to an order of certiorari being made.

Further, the court held that the No. 1 judgment was mistaken insofar as it did not incorporate the point that the “failure to give reasons” argument applied to the road route as a whole. The logical implication of this was that, once the court had upheld the reasons argument, the entire road route had to be quashed.

The court held that the issue of remittal did not arise, but that it was questionable whether remittal could apply to a case which quashed a provision of a development plan. It was noted that such plans were adopted as a whole and there was no particular point in the process to which the draft plan could be remitted. The court stated that “have-a-go attempts by the judiciary to devise ad hoc procedures for variation of development plans (or of any other decision where there is already adequate provision to allow the decisionmaker to amend it) are generally not appropriate.”

Turning to the costs issue, the court was required to exercise its discretion in the award of costs pursuant to section 168 of the LSRA 2015. The court noted that it was not “at large” to deal with costs but that the starting point was that the applicants had won their case.

The court held that a discounting of costs should, in general, only be considered where an applicant fell significantly short of winning the majority of the decided points (see Flannery & Ors. v. An Bord Pleanála [2022] IEHC 327). Analogous points were made in the recent decision of Heather Hill Management Co. CLG v. An Bord Pleanála [2022] IESC 43, which stated that an over-elaborate rule as to costs could lead to a real risk that substantive issues become “satellites to endless, expensive and time-consuming battles.”

The applicants had won on four essential points in the case and the points which they lost only took up one hour of a two-day hearing. Even without the losing points, the matter would have been a two-day case, the court said. As such, this “in no way justifies reducing the fees of a two-day hearing to those of a one-day hearing or reducing them by 50 percent.”

The court commented that it may be “gratifying in the short term to knock a few percent off the winning party’s costs” for making a few losing points, this approach could “massively incentivise” applications for losing parties to avoid paying full costs. As such, there would likely be a great frequency of second-round disputes, the court said.

The correct approach would be to identify the days that were wasted, or a discrete motion/application that was lost, before considering the issue of a discount. To do otherwise was “to invite further consumption of court time.” The court can “either be part of the solution or part of the problem” in discouraging the proliferation of applications, the court said.

In any event, a fraction of a day was not a severable unit for the costs of court and therefore the full costs were awarded to the applicants. Finally, the court noted that costs hearings led to the question of costs in those hearings. In order to avoid a “death spiral” on costs applications, a costs hearing impliedly encompassed the costs of that hearing.

Conclusion

The court awarded the full costs to the applicants and granted an order quashing the entirety of the indicative road route.

Hickwell Limited and Anor. v. Meath County Council (No. 2) [2022] IEHC 631