The Court of Appeal has set aside a High Court assessment of €27,000 plus VAT in costs against Sharon Keogh and ordered that the first and second defendants’ costs be adjudicated instead. It did not decide whether those costs take priority from the proceeds of a property sale.
The appeal concerned the High Court’s refusal of interlocutory injunctions sought by Mrs Keogh, as well as its costs order. The Court of Appeal agreed that her application and appeal rested on two misconceptions: that a receiver was selling the property, and that Mars Capital Finance Ireland DAC could sell only as mortgagee in possession. The court did not grant an injunction or overturn the refusal of the application.
On costs, the defendants’ counsel told the appeal court he was not standing over the fixed sum ordered by the High Court and proposed adjudication. Mrs Keogh had argued that the amount was extremely high and unfair if taken from sale proceeds. The appeal court allowed her appeal against the measured amount, while leaving her liable for the costs of her High Court motion.
The judgment said the High Court had been given no material to support a proper assessment. The defendants had proposed €35,000 plus VAT based on a solicitor’s estimate, but the calculation itself was not before the judge. The appeal court said the €27,000 plus VAT figure therefore could not stand and referred to the established requirement for an evidential or objectively defensible basis when a court measures costs.
The judgment also addressed the possible priority of those costs against the sale proceeds. The mortgage was defined as charging the property for the loan and certain costs and expenses. Mars Capital argued that the costs of resisting Mrs Keogh’s attempt to prevent or postpone the sale were expenses of realising its security. The appeal court said that position was arguable, but the issue had not been argued in either court and it was not deciding it. It noted that the question could affect Mr Keogh, who was not a party to Mrs Keogh’s proceedings, as well as Bank of Ireland and her unsecured creditors. The court cautioned Mars Capital to be careful in how it proceeded.
The final order was limited: Mrs Keogh’s appeal was allowed against the part of the High Court order measuring the first and second defendants’ costs at €27,000 plus VAT, and adjudication of those costs was substituted. Faherty and Pilkington JJ. agreed with Allen J.