The Supreme Court allowed ACC Bank plc’s appeals against costs orders made after its applications for summary judgment against Margaret Hanrahan and Michelle Sheeran were sent to plenary hearing. The Court replaced the orders requiring ACC to pay the costs of both motions with orders that those costs be costs in the cause.
The appeals concerned costs only. The High Court had found that the defendants had established an arguable defence, meeting the threshold for the proceedings to continue to a full hearing. That decision was not appealed, and the Supreme Court did not revisit it.
The High Court had ordered ACC to pay the costs of the two summary judgment motions, applying the view that costs should follow the event. The Supreme Court said an unsuccessful summary judgment application does not, by itself, justify ordering the plaintiff to pay the defendants’ costs when the case is sent to plenary hearing.
The Court said costs of such motions will usually be reserved or made costs in the cause, particularly where disputed facts supporting a defence may be examined at trial. It said a court may order a plaintiff to bear some or all of the motion costs if satisfied the plaintiff acted manifestly unreasonably by refusing to agree to a plenary hearing after the responding affidavits had been filed.
The Supreme Court found an error in principle in the High Court’s approach. After reviewing the affidavit evidence and the High Court ruling, it found no legitimate basis to conclude that ACC had acted manifestly unreasonably. Its failure to obtain summary judgment did not, on its own, justify the costs order.
The Court therefore allowed the appeals and substituted costs-in-the-cause orders for both motions. The underlying proceedings were not decided by the Supreme Court and remain for plenary hearing.