The High Court has ordered Killaree Lighting Services Limited to pay Mayo County Council 60% of the council’s costs after accounting for Killaree’s success on a challenge to the validity of Mayo’s standstill letter and the council’s failure to serve a proper notice.
In a decision delivered on 23 April 2024, Mr Justice Brian O’Moore also awarded Killaree 15% of its own costs of the proceedings. He declined to make a declaration that the standstill letter did not comply with legal requirements, finding that no such declaration had been sought in the original proceedings and that it was not needed to provide Killaree with an effective remedy.
The costs decision followed the main judgment, delivered on 13 February 2024. The judge said Killaree had succeeded on the validity of Mayo’s purported standstill letter but had otherwise failed to challenge the award of a public contract to Electric Skyline Limited. Killaree secured none of the reliefs it sought: the contract was not invalidated and it was not awarded damages.
Mayo argued that it had been completely successful and should recover all its costs. It said any adjustment for the standstill issue should be minimal, citing the way the case was pleaded, evidence it considered related to unpleaded issues, difficulties agreeing an issue paper and the limited time devoted to the issue. The judge considered only the last factor relevant to the costs adjustment.
Mayo estimated that the standstill issue accounted for between 10% and 14% of various parts of the case. The judge said the calculations were opaque and that litigation costs also reflect an issue’s novelty, difficulty and strategic importance. He assessed Killaree’s share of the costs at 15%, which would otherwise have left Mayo entitled to 85% of its costs.
The judge then made a further reduction because of Mayo’s failure to send a proper standstill notice. He said procurement regulations required the court to consider whether to declare the contract ineffective and, if it did not, to impose an alternative penalty. The possible alternatives included terminating or shortening the contract, or a financial penalty capped at 10% of the contract’s value. Mayo’s counsel had accepted that the maximum would exceed €400,000.
As Killaree had not sought relief under the relevant penalty provision, Mayo avoided those consequences. The judge said the costs order should nevertheless reflect the breach. He reduced Mayo’s recoverable costs from 85% to 75%, then set off the two awards to order Killaree to pay Mayo 60% of its costs. The decision concerns costs following the main judgment; it did not set aside the contract or award damages to Killaree.