The High Court awarded the liquidator of Lance Investments Limited and Lance Homes Limited 80% of his costs against Lee Towers Management Company Limited and his costs against Irish Immigration Fund Limited, after ruling that Lee Towers was primarily an unsecured creditor in the companies’ liquidation.
Ms Justice Baker’s ruling, delivered on 1 February 2019, dealt with costs following her July 2018 judgment on the liquidator’s application for directions and an appeal against an interim Mareva injunction. The July judgment held that the Multi-Unit Development Act 2011 did not displace the Companies Act’s liquidation priority scheme. Most costs arising from Circuit Court orders and remedial works were therefore unsecured liabilities, except for the portion attributable to seeking specific performance of an agreement to transfer common areas and reversions.
The underlying Circuit Court case concerned a Cork City development built by the companies. Lee Towers had sought orders requiring the companies and Irish Immigration Fund to transfer the common areas and reversions, and to complete development works. The Circuit Court ordered remedial works addressing fire safety and defects in areas including the roof, lobbies and other internal common areas. It also awarded costs jointly and severally against the companies and Irish Immigration Fund. Those costs were taxed at €132,423.96. The liquidator had not participated in the taxation or its appeal, and no apportionment between the defendants was made.
In the costs ruling, Justice Baker treated the liquidator as having primarily succeeded in the directions application. She rejected the argument that the legal novelty or wider importance of the issue justified departing from the ordinary rule that costs follow the event. Lee Towers had partly succeeded on the specific-performance issue, so the liquidator received 80% of his costs against it; he received his costs against Irish Immigration Fund.
The court made no order as to costs on the Mareva appeal, which required no additional hearing time, and vacated the injunction and any costs order made by the Circuit Court judge. It deemed the costs of Lee Towers’ application for leave to start the Circuit Court proceedings to be costs and expenses of the liquidation.
For the specific-performance portion of the Circuit Court costs, Justice Baker set an instruction fee of €11,000, counsel’s fee of €4,500, outlay of €1,000, a €250 motion fee for junior counsel not otherwise engaged, and €2,000 for mapping, all subject to VAT. Engineering expert fees were not allowed. The ruling concerned costs and did not revisit the substantive orders for transfer or remedial works.