The Court of Appeal has ordered Anthony Fitzpatrick, liquidator of Eteams (International) Limited, to pay Bank of Ireland’s costs of an unsuccessful appeal personally.
In a supplemental judgment delivered on 4 July 2019, Ms Justice Baker said the application for directions under section 280 of the Companies Act 1963 should have been brought by the liquidator in his personal capacity, rather than in the name of the company in liquidation. For the purpose of deciding costs, she treated him as the unsuccessful appellant.
The appeal itself had already been dismissed in May 2019. It concerned the proper characterisation of a debt sale agreement between the company and the bank. The costs ruling addressed who should bear the appeal costs, not the underlying dispute about that agreement.
The bank argued that the application had been incorrectly constituted because section 280 allows an application by a liquidator, creditor or contributory, but not by the company itself. Justice Baker accepted that argument, relying on Supreme Court and Court of Appeal decisions about who may bring proceedings for a company in liquidation. She said bringing the proceedings in the company’s name did not prevent a personal costs order against the liquidator.
The bank also relied on principles governing costs orders against people who are not parties to litigation. Justice Baker said the liquidator had initiated and controlled the application, including by swearing the affidavit grounding it. But she could not conclude from the available evidence that he would personally benefit financially from the appeal: the company was insolvent, while the extent of its insolvency and whether assets could meet the liquidator’s costs were unclear.
She also rejected the suggestion that the appeal was frivolous or unjustifiable. The principal judgment and the High Court judgment had noted that there was no Irish authority directly on point. Justice Baker said the right of access to courts and the right to appeal should not be constrained by treating an unsuccessful appeal as unmeritorious for the purpose of costs.
The court awarded the appeal costs against Mr Fitzpatrick personally because, in its view, he was the proper applicant under section 280 and was in truth the unsuccessful party. The ruling does not state the amount of those costs.