Lunch allowable . . . 'side salad, no wine' - calculating 'fair and reasonable' costs

Moorview Developments Ltd and Others v First Active Plc, Ray Jackson and by order Bernard Duffy and six related cases unpublished

High Court

Master of the High Court Edmund Honohan

Judgment

The liability for costs of a losing party cannot be said to be fair if the services availed of by the winning party could have been bought at more modest rates. However, the approved budget should not be unreasonably tight.

Background

The Supreme Court requested the master to calculate what the costs of an appeal might be in advance of it being heard so that security could be provided for the respondents if the appellants failed in their action.

The litigation stemmed from an assertion by Moorview Developments Ltd that a withdrawal of funding by First Active Plc in 2003 was in breach of a loan facility agreed between them in 2002.

The taxing master, who generally assesses costs after legal actions and for whom Mr Honohan was a “substitute”, must award “a fair and reasonable sum”, Mr Honohan said.

Also, under Order 99 of the Rules of the Superior Courts 1986, party and party costs ought not include any expenditure incurred through over-caution on the part of the winning party’s solicitor.

“The losing party’s liability is strictly confined to expenses necessarily incurred,” he said. Items which were “extravagant” should be stripped out.

He examined the likely length of the hearing and whether the second named defendant should attend each day. He also considered the size of the legal team required.

He said the costs suggested by the respondents, which he did not include in his judgment, offered only “a list of the headings” and analysis was “meagre”.

“The figures suggested all appear to me to have something of a back-of-an-envelope quality to them,” he said.

Decision

Mr Honohan said he was free to come up with his own figures “whatever the parties have suggested”.

“The liability of the losing party cannot be said to be fair if the services availed of by the winning party could have been purchased at more modest rates,” he said.

However, the budget should not be unreasonably tight.

“If we were putting a value for a lunch voucher, we would say it should not be just enough for a takeaway coffee and sandwich or fast food, but it should not be enough for a Michelin-starred restaurant,” he said.

“The budget should allow for a reasonable lunch at a reasonable price. Side salad. No wine.”

He said that for the purposes of an appeal to the Supreme Court, the issues to be determined comprise only those errors in fact or in law set out in the notices of appeal.

The first notice ran to 100 grounds with perhaps 16 grounds, which were “substantial, standalone errors” that might be considered fundamental.

The six other appeals had 60 grounds, 12 of which might be substantial. He estimated this would require no more than four days in court.

In total, Mr Honohan set costs of €215,000 plus VAT.

He allowed €84,000 for the principal appeal.

This included the solicitor’s instruction fee of €4,000, plus €2,000 for each day in attendance and €8,000 for “uplift”.

For senior counsel he fixed €5,000 for two days’ preparation, a brief fee of €12,000 and three refreshers of €3,000 each and an uplift of €3,000 each day. And junior counsel was to get a total of €26,000 for a four-day hearing.

For three of the minor appeals he fixed total costs at €18,750 plus VAT and for the remaining three he set costs at €10,750 in total, with no fee for senior counsel as one was “not needed”.