The High Court directed that the costs of an interlocutory injunction application and the appeal against it would be determined by the outcome of the substantive counterclaim proceedings.
In a costs judgment delivered on 30 April 2020, Mr Justice Denis McDonald said the receiver and Promontoria (Arrow) Limited could recover their costs of the Circuit Court hearing and High Court appeal if they succeeded in defending the management company’s counterclaim at trial. If they did not succeed, they would not recover those costs.
The judgment followed an 8 April decision allowing the receiver’s and Promontoria’s appeal against an injunction granted by the Circuit Court. The High Court set the injunction aside and dismissed the management company’s application for it. The judge had found that, on the evidence and arguments then before him, the company had not shown a sufficiently strong case or a serious issue to be tried, and that the balance of convenience weighed against an injunction.
The costs judgment did not decide the underlying counterclaim. The judge said further evidence might emerge through discovery or witnesses at trial about whether the original secured lender had assented to management agreements, and whether those agreements had priority over Promontoria’s mortgage. The management company had asserted that the lender assented to the agreements. The judge described that as an assertion by the company’s affidavit deponent, not evidence establishing the point. He also said there was then nothing to demonstrate or suggest that documents supporting the company’s position existed.
The judge concluded that it would risk injustice to award the receiver and Promontoria their costs immediately, given the possibility that evidence at trial could change the picture. He also ruled that the management company would have no entitlement to its costs of the injunction application in the Circuit Court or the appeal, regardless of the eventual outcome of the proceedings.
The order concerned costs only. The underlying claim and counterclaim remained for determination at trial.