Jackie Cronin (plaintiff) v Astra Business Systems Ltd (defendant).
Practice and procedure - Taxation of costs - Appeal of review by the High Court of taxation of costs - Whether the Taxing Master erred in principle - Lodgment in satisfaction of a claim - Whether the value of the case can be measured by the sum of the accepted lodgment - Whether the test to be applied in measuring the value of a case is a subjective or objective test - Whether a plaintiff in High Court proceedings is entitled to High Court costs in circumstances where that plaintiff accepts a lodgment, the sum of which falls within the jurisdiction of the Circuit Court - Courts and Courts Officers Act, 1995 s. 27(3); Courts Act, 1981 s.17(1) (as amended by section 14 of the Courts Act, 1991) - Order 22 Rule 4(3), Order 99 Rule 37(8) and Order 99 Rule 38(3) of the Rules of the Superior Courts, 1986
The Supreme Court (Mrs Justice McGuinness, Mr. Justice Fennelly and Mr. Justice McCracken); judgment delivered May 14 th 2004.
In a review by the High Court of taxation of costs, the onus is on the appellant to show that the Taxing Master not only erred in priciple but also that the decision was unjust. Section 17(1) of the Courts Act, 1981, as amended, provides for a limitation on the allowance of costs and governs circumstances where the amount of damages is decided and awarded by a judge, it does not extend to cover circumstances where a lodgment is accepted in satisfaction of a claim. In decideing the value of a case both subjective and objective considerations are relevant. The value of a case cannot in all circumstances and in every case, be measured by the amount of an accepted lodgment.
The Supreme Court so held in dismissing the defendant's appeal of the High Court review of the taxation of costs.
Patrick Geraghty SC and Gillian Reid BL for the applicant; Dennis McDonald SC and Karl Finnegan BL for the respondent.
Mrs Justice McGuinness outlined the background of the case before the Court. The plaintiff was injured in a road traffic accident and she commenced proceedings in the High Court by plenary summons. The defendant made a lodgment of IR£21,000 with its defence and, by a Notice of Acceptance, the plaintiff accepted that lodgment. As provided by Order 22 Rule 4(3) of the Rules of the Superior Courts, 1986, the plaintiff was entitled to tax her costs up to the date of the lodgment. As the sum of the lodgment fell within the jurisdiction of the Circuit Court, the issue then arose as to whether the plaintiff was entitled to costs on the High Court scale or the Circuit Court scale.
Notwithstanding the fact that the sum of the lodgment was within the jurisdiction of the Circuit Court, the Taxing Master ruled that the plaintiff was entitled to have her costs taxed on the High Court scale. Objections were filed, by the defendant, to this ruling and on having considered written submissions and oral arguments of the parties, the Taxing Master affirmed the amounts ruled at the taxation and allowed High Court costs in the amount of IR£6,455.09.
Consequently the defendant issued a motion to review the taxation of the plaintiff's costs, pursuant to Order 99 Rule 38(3) of the Rules of the Superior Courts, 1986. The motion was heard before Mr. Justice Butler of the High Court. In his reserved judgment Mr. Justice Butler affirmed the Taxing Master's rulings and decision and concluded: "In the absence of precise statutory provisions I can see no basis for determining that it was the intention of the Oireachtas that a plaintiff, who institutes proceedings in the High Court and accepts a sum lodged that is within the jurisdiction of the Circuit Court should not be entitled to have her costs taxed on a High Court basis." As a result, the defendant appealed from this review of taxation of costs to the Supreme Court.
Counsel for the defendant accepted that section 17(1) of the Courts Act, 1981, as amended, provided expressly for the situation where an order had been made by a court and did not specifically deal with the situation where a lodgment had been accepted. However, Mr. McDonald SC argued that the terms of section 17(1) and section 17 as a whole clearly indicated an intention of the Oireactas that costs should be limited in accordance with the amount recovered by the plaintiff whether by order or by lodgment. It was also submitted by counsel for the defendant that the value of the case was to be measured at the point when the lodgment was accepted and that the value of the case was, in fact, the value of the lodgment. It followed, it was submitted, that the value of the plaintiff's case was therefore the amount of the lodgment and was thus below the maximum jurisdiction of the Circuit Court and her costs should be taxed accordingly.
Counsel for the defendant referred to the wording of the plaintiff's Notice of Acceptance and relied upon the case of Solomon v Mulliner 1 QB 76, in submitting that having accepted the lodgment expressly in satisfaction of her claim, the plaintiff must also accept that, for the purpose of taxation, the value of her claim must be regarded as equivalent to the amount of the lodgment rather than any value which the plaintiff, or her legal advisors, subjectively sought to place on the case prior to acceptance of the lodgment. Thus, counsel for the defendant submitted that the value of the case must be measured objectively rather than subjectively.
Mrs. Justice McGuinness then considered the submissions made by Mr. Geraghty SC, on behalf of the plaintiff, whereby, firstly it was stated that while in form this appeal was an appeal taken by the defendant as appellant, in reality this appeal was brought on behalf of the insurance industry as a whole, who had their own agenda. Counsel for the plaintiff then referred to section 27(3) of the Courts and Courts Officers Act, 1995 and submitted that the appellant had not satisfied the requirements of section 27(3), in that it had not been shown that the Taxing Master had erred as to the amount of any allowance so as to render his decision unjust. It was further submitted that the existence of injustice would have to be determined by the amount of the allowance. In this instance, it was submitted, there was no evidence as to a proper allowance and as to whether that allowance is different to the amount actually allowed for costs, thus, there was no evidence of an injustice.
With regard to section 17(1) of the Courts Act 1981, as amended, counsel for the plaintiff submitted that the Oireactas intended to confine this section, regarding limiting costs recoverable by a plaintiff, to cases where the amount of the award, and, thus, the value of the plaintiff's claim has been determined by a judge. Counsel also referred to the fact that some plaintiffs, as in this case, will accept a lodgment which might not represent the full value of the case, for personal reasons. Counsel further submitted that the plaintiff's advisors initially considered that the plaintiff would reasonably recover damages at the High Court level if the plaintiff succeeded in establishing liability on the part of the defendant and in defeating any plea of contributory negligence on her part and accordingly they were neither unreasonable nor irresponsible in issuing proceedings in the High Court. Finally Mrs. Justice McGuinness noted Counsel for the plaintiff's submission that there was over twelve months between the issuing of proceedings and the acceptance of the lodgement, during which time the defendant could have brought an application to remit the proceedings to a lower court if the defendant believed that a lower court was the appropriate jurisdiction.
After considering the submissions made on behalf of the defendant and the plaintiff, Mrs. Justice McGuinness considered the issue of review of taxation. Mrs. Justice McGuinness stated that the issue, as to whether the plaintiff should be awarded costs on the High Court or CircuitCourt scale, was considered by the Taxing Master in a lengthy and careful judgment and was again considered by Mr. Justice Butler of the High Court in the review of the taxation. Section 27(3) of the Courts and Courts Officers Act, 1995, governs the review of taxation by the High Court.
Mrs. Justice McGuinness followed the opinion of Mr. Justice McCracken in the case of Smyth v Tunney (N0. 2) 1 I.L.R.M. 211, that such a review involves not only the issue of whether the Taxing Master erred but also the issue of whether such an error has led to an injustice.
Mrs. Justice McGuinness referred to the fact that counsel for the defendant had argued this case on a point of principle, namely that the value of the case must, for taxation purposes, be the value of the lodgment which was accepted.
This, counsel submitted, is an objective test and an initial estimate on likely damages is a subjective test which should not be relied upon in deciding the appropriate level of costs. It appeared doubtful to Mrs. Justice McGuinness that in the circumstances of the commencement of proceedings or the acceptance of a lodgment, that such a stark distinction could be made between an objective and a subjective test. Mrs. Justice McGuinness stated that both subjective and objective considerations are involved.
Thus, in commencing proceedings, the plaintiff must take objective facts into account, including the factual history of the accident. In addition, subjective considerations then come into play, for instance in relation to an uncertain medical prognosis and to any anticipated possible claim for contributory negligence, a point that cannot be clarified until a defence is filed. Mrs. Justice McGuinness also referred to the fact that the words in section 27(3) of the Courts and Courts Officers Act, 1995, "so that the decision of the Taxing Master or County Registrar is unjus t," imply that the test must be subjective to some degree. Subjective considerations also arise in the decision to accept a lodgment.
Mrs. Justice McGuinness stated that, as in the Hopkins case, the court cannot know what particular considerations induced the plaintiff to accept the lodgment in the present case. It seemed to Mrs. Justice McGuinness that in this, and in most cases, both subjective and objective considerations would have come into play. Ms. Justice McGuinness was of the opinion that a situation where, after due consideration, a plaintiff decides to accept a lodgment is crucially different from a situation where, after hearing all the evidence on both sides, a court decides the level of damages to be awarded. It was accepted that section 17(1) of the Courts Act, 1981, as amended, specifically governs only the situation where the amount of damages is ordered by the court. In the opinion of Mrs. Justice McGuinness, the terms of section 17(1) should not be extended to cover the acceptance by the plaintiff of a lodgment. Mrs. Justice McGuinnes could not accept that in all circumstances and in every case, the value of a case can be measured by the amount of an accepted lodgment. Mrs. Justice McGuinness considered that the trial judge, Mr. Justice Butler, was correct in his conclusion that he could see no basis for determining that it was the intention of the Oireachtas that a plaintiff who institutes proceedings in the High Court and accepts a sum lodged, that is witin the jurisdiction of the Circuit Court, should not be entitled to have her costs taxed on a High Court basis.
Mrs. Justice McGuinness held that there was little or no evidence, other than the amount of the accepted lodgment, which would show an error in principle by the Taxing Master. It was further held by Ms. Justice McGuinness that the onus is on the defendant to show both that the Taxing Master erred in principle and that his decision was unjust, the defendant in this case, had failed to discharge that onus. For the foregoing reasons, Mrs. Justice McGuinness accordingly dismissed the appeal.
Mr Justice Fennelly and Mr. Justice McCracken concurred.
Solicitors: Orpen Franks (Dublin) for the plaintiff; Terence Liston & Company (Dublin) for the defendant.
Louise Harris, Barrister