High Court of Ireland Decisions

THE HIGH COURT

[2025] IEHC 152

RECORD NO. 2019/142S

BETWEEN

 

AMBASAID LIMITED AND MKN INVESTMENTS

 

LIMITED PLAINTIFFS

AND

 

MBCC FOODS (IRELAND)

 

LIMITED DEFENDANTS

 

RULING (Costs) of Ms. Justice Siobhán Phelan delivered on the 14^th day of March, 2025

 

INTRODUCTION

 

1.      The decision on costs in this case is not a straightforward one given the range of issues advanced, the manner in which both sides were successful on some issues and not others and the extent to which the issues were interwoven.  I am grateful to the parties for their helpful oral submissions on costs.  I refer to my judgment delivered on the 21^st of February, 2025 for the background of these proceedings and a full record of the findings made (see [2025] IEHC 106).

 

2.      It is fair to record at the outset my view that these proceedings were more protracted than they needed to be running to some 7 days at hearing and resulting in unnecessary costs.  Deciding where responsibility for these unnecessary costs should lie is a relatively complex process, particularly where I am satisfied that the approach of both parties contributed to the excessive length of the proceedings, albeit to varying degrees. 

 

3.      Short of a forensic assessment which records time taken but also factors in the extent to which findings on various issues interacted in ways that shaped the outcome of the case and takes due account of the fact that an award was made in favour of the Plaintiff, albeit other than on the primary basis upon which proceedings were advanced, no process of assessment will be perfect.  I am obliged, however, to engage in as fair an exercise as possible.

 

 

APPLICABLE LEGAL PRINCIPLES

 

4.      While the task is not straightforward, I have endeavoured to decide the issue of costs in accordance with principles developed in case law under Order 99 of the Rules and ss. 168 and 169 of the Legal Services Regulation Act, 2015.  I have found the decision of the Court of Appeal in Chubb European Group SE v. Health Insurance Authority [2020] IECA 183, [2022] 2 I.R. 734 particularly helpful.

 

5.      In his judgment for the Court of Appeal, Murray J. found at para. [37] that Chubb, not having been 'entirely successful' in its proceedings had no entitlement under s.169(1) of the 2015 Act to its costs.  He continued:

 

"The Court has, however, the power under s.168(2)(a) to make an order in its favour to the extent that it was 'partially successful' in the proceedings, just as it has the power to make an order on the same basis in favour of HIA., [...] , Depending on the precise construction placed on that phrase, the pre-existing position that a party who won 'the event' but succeeds in respect of only some of the issues addressed in support of the relief it obtains is presumptively entitled to all its costs, may have been changed by the Act."

 

6.      At paragraph 19 of his judgment, Murray J. identified the general principles now applicable to the costs of proceedings in view of the provisions of the 2015 Act.  As made clear by Murray J. in his summary of the applicable general principles, my general discretion in connection with the ordering of costs is preserved (s.168(1)(a) and 0.99, r.2(1)) but in considering the awarding of costs of any action, I should 'have regard to' the provisions of s.169(1).

 

7.      I understand this to mean that I should have regard to factors such as conduct before and during proceedings, whether it was reasonable for a party to raise, pursue or contest one or more issues in the proceedings, the way the parties conducted all or any part of their cases and whether a successful party exaggerated his or her claim.  These factors all appear to be relevant considerations which bear on the question of costs in this case.

 

8.      While I may also have regard to any unreasonable approach to settlement, as settlement negotiations which I urged on the parties were without prejudice and confidential and ultimately not successful for reasons unknown to me, it seems this is not a factor to which I can attribute properly or fairly weight on this cost ruling.

 

9.      Under the new, post-2015 regime, my power to reduce the costs of the party who prevailed on the 'event' by reference to the costs incurred by the other party in addressing issues on which the former failed is not confined to 'complex' Veolia type cases as hitherto.  Even by pre-2015 standards, however, I consider that this case could qualify as complex under the pre-existing costs regime in any event. It is more significant therefore that the prima facie entitlement to costs is now limited to the party who is 'entirely successful' and the term 'event' falls to be construed distributively so that there can be a number of events in a single case.

 

DISCUSSION AND DECISION

 

10.  I am satisfied that notwithstanding that the Plaintiff obtained an award of damages in this case, the Plaintiff cannot be said to have been 'entirely successful in the proceedings', nor indeed was such a contention pressed on behalf of the Landlord. I am therefore satisfied the Plaintiff is not entitled to an award of costs of the proceedings against the Defendant pursuant to s. 169(1) of the 2015 Act because in this case, both parties were successful on discrete elements of the case. 

 

11.  Accordingly, this is a case in which I may properly exercise discretion to make an order that the 'partially successful' party should recover costs relating to the successful element or elements of the proceedings (s.168(2)(d)) and direct an appropriate set-off of costs.  I am also entitled to have regard to the fact that some witness examination was overly protracted and repetitive, and the sides were not equally guilty in this regard.  

 

12.  In my view, the respective conduct or reasonableness of the parties are considerations which bear on the exercise of my discretion because I am satisfied that positions were adopted on both sides in this case that either constituted improper conduct or were unreasonable, adding to the length and complexity of the proceedings. 

 

13.  Notably and by way of example, the conduct of the Landlord in seeking, as I found, to frustrate the exercise of the break clause was neither reasonable nor proper. 

 

14.  On the other side, the approach of the Tenant in contending that rent had been paid up to date through a variety of unsuccessful and I believe contrived arguments, not least that rent was payable monthly in arrears by agreed variation or that Tenant liability for rent post-dated the liability date on the Lease based on an alleged agreement to extend the rent free period by reference to the state of readiness of the Property at the date of handover, both contentions I rejected, were not issues which it was reasonable to raise, pursue or contest in these proceedings.

 

15.  I am satisfied that had both parties adopted a more reasonable approach to these proceedings, the duration of the proceedings could certainly have been shortened and potentially proceedings might have been avoided altogether had conduct pre-litigation been better.

 

16.  I cannot fairly lose sight either of the fact that the Landlord did not succeed on its primary claim in reliance on the break option under the Lease.  The award I made was secondary to the central thrust of the Landlord's claim and related to reinstatement costs to be incurred post determination of the Lease, an issue that could have been pursued without immediate resort to litigation but was not.  I do not wish to overly penalise the Landlord in this regard, however, as it was open to the Tenant to advance an open offer at any time to resolve these proceedings in a manner which would protect them in respect of litigation costs, but this opportunity was not availed of. 

 

17.  Multiple issues were raised during the proceedings including:

 

                                I.            On the issue of whether there had been an agreed variation of rent payable under the Lease, I found that there had been a variation in favour of the Tenant but not precisely in the terms contended on behalf of the Tenant.  Nonetheless, I consider that in terms of associated costs the Landlord lost this issue as little time was spent on the contention that it had been agreed that rent was payable monthly in arrears. 

                             II.            On the question of whether rent due under the Lease ran from the date of the Lease or the date of occupation by agreement and whether these were different, I found against the Tenant's argument in this regard and in favour of the Landlord.  This issue occupied the time of several witnesses.

                          III.            As to whether rent had been due from the 6^th of April, 2009 or a later date, I found against the Landlord in this regard as rent became payable a week later.  Nonetheless, I did not accept the Tenant's position that rent did not become payable until the 21^st of April, 2009.  Although the issue relating to the 6^th of April, 2009 date asserted on behalf of the Landlord was clarified early in the evidence, the claim for rent arrears wrongly advanced at all material times up to the commencement of proceedings, necessitated the engagement of expert witnesses to clarify and therefore contributed significantly to litigation costs.  This could therefore be considered a drawn issue.

                          IV.            On the issue of whether rent was paid up to date as at the break date, I ultimately found that it was not, principally because I did not accept a later agreed occupation date as argued for on behalf of the Tenant.  Accordingly, the Landlord prevailed on this issue.

                            V.            Despite the Landlord prevailing on the issue of rent arrears, I was not satisfied that it was entitled to treat the exercise of the break option as invalid because I accepted the case made on behalf of the Tenant that the Landlord had acted in breach of implied terms in seeking to frustrate the valid exercise of the break option.

                          VI.            While I found that service charges were not calculated in the manner required under the terms of the Lease, a point against the Landlord, this did not entitle the Tenant to a set off in terms of sums due as at the break date as contended by the Tenant.  Nonetheless, the approach to the treatment of service charges was relevant to the finding that the Landlord ought to have provided a reconciliation statement, as had been agreed.  Accordingly, while considerable time was expended on both sides on this issue, I consider the outcome a draw in terms of cost liability.

                       VII.            Similarly in respect of the VAT treatment of service charges by the Landlord and whether this had contributed to an overpayment by the Tenant during the term of the Lease or excused any arrears alleged to be due, I found against the Tenant's argument that sums due as at the break date be reduced by reference to VAT treatment.  The manner of VAT treatment was, however, found to be prejudicial to the Tenant's ability to determine sums due independently and contributed to the finding that the Landlord ought to have provided a reconciliation statement or, alternative, ought not to be permitted to profit from its failure to do so.  Again, I would consider the outcome on this issue a draw in terms of cost liability.

                    VIII.            I found against the Landlord on the case made that the Tenant was obliged to strip out the Property entirely (including Tenant installed staircase, windows and doors) to render vacant possession in the absence of other agreement between the parties but nonetheless found the Tenant liable for reinstatement costs and this was ultimately the basis upon which a decree was granted.  It seems to me that this could therefore also be treated as a drawn issue in terms of cost liability because the Tenant successfully resisted the Landlord's claim that vacant possession had not been accorded in breach of the break option but the Landlord was entitled to an award in respect of costs in returning the property to pre-letting condition.

 

 

 

 

CONCLUSION

 

18.  Based on my above assessment of the manner in which the parties succeeded or drew on distinct elements of the case, I have concluded that the parties were equally successful or equally unsuccessful in these proceedings, howsoever one prefers to characterise it.  The decree ordered was not for the sums claimed and was not awarded based on the primary claim advanced.  Proceedings could have been shortened or avoided altogether by a more reasonable approach on both sides.  I am not able to identify which party was more unreasonable in confidential negotiations.  It is regrettable that the opportunity to make an open offer to settle these proceedings was not taken.  Neither was the option of a Calderbank letter pursued in a manner which might have brought focus to cost liability at an earlier stage.  These avenues were open to both sides. 

 

19.  For these reasons, on what I consider a just and fair application of the principles identified above as elaborated upon in Chubb, I find each party liable to 50% of the costs of the proceedings of the other and direct a set off.  Where costs cannot be agreed on either side and there is contention as to whether money is owed by one side to the other, I direct adjudication of the said costs by the Legal Costs Adjudicator.