The Court of Appeal has allowed an appeal against an order making William Loughnane personally liable for costs arising from a construction company’s unsuccessful claim, ruling that he had not been put on notice of the claim before the original litigation ended.
The appeal concerned costs from proceedings brought by WL Construction Limited against Charles Chawke and Edward Bohan. The company sought money under a building contract for work at a public house known as the Lord Lucan at Finnstown Shopping Centre, Lucan.
The High Court dismissed the company’s claim as an abuse of process. In findings that were not appealed, the trial judge said the claim had been tainted by Mr Loughnane’s dishonest and untrue evidence, including lies under oath. The judgment also records that he tendered fraudulent invoices. The High Court ordered the company to pay the proceedings’ costs on 26 October 2016; the company was unable to meet them.
The defendants later applied to join Mr Loughnane as a co-defendant so they could seek to recover those costs from him. The High Court granted that application in a judgment delivered on 19 May 2017. Mr Loughnane appealed.
Giving the Court of Appeal’s judgment, Mr Justice Gerard Hogan said the appeal could be decided on procedural fairness. Mr Loughnane had not been a party to the original proceedings and, the court said, had no notice before they concluded in October 2016 that the defendants might seek costs from him personally. That left him without an opportunity to consider steps that might reduce his potential exposure, such as using his control of the company to halt or discontinue the proceedings.
The court said that, if the jurisdiction to award costs against a non-party recognised in an earlier High Court decision was accepted, it had to be exercised exceptionally and with procedural safeguards. A non-party should receive notice during the litigation that costs might be claimed against them.
Mr Justice Hogan questioned whether the earlier decision, Moorview Developments Ltd. v. First Active plc, was correct, but did not decide that issue. He said the question would have to await a case in which it was fully argued. The court allowed Mr Loughnane’s appeal because the required notice had not been given. The judgment does not determine the broader validity of non-party costs jurisdiction.