The High Court has refused an application to make a company director personally liable for another party’s legal costs after the company’s claim over land in Liscannor, Co Clare, failed.
Mr Justice Rory Mulcahy ruled on 8 November 2024 that the first defendant had not established that John Flanagan, a director of Atlantis Developments Limited, was the “real party” to the litigation. The court also found that the application came too late for an order to be just.
Atlantis had sought damages over its 2005 purchase of land from Patrick Considine. The dispute concerned whether Considine owned all the land included in the sale, including a portion later registered to Liscannor Development Company Limited. In the underlying judgment, the court rejected Atlantis’s claim, finding that Considine owned all the land at the time of sale.
Considine had already been awarded his costs against Atlantis. In December 2023, the court gave him permission to seek an order joining Flanagan so that he could pursue costs against him personally. Flanagan was joined as a notice party for that application, but did not attend its hearing.
Considine argued that Flanagan had driven the litigation, had a personal financial interest in its outcome and should have known Atlantis could not meet a costs order. The judge accepted that Flanagan was the driving force behind the proceedings and that it would not have been reasonable for him to expect Atlantis to meet an adverse costs order. But the claimed direct financial interest was not established. The evidence showed Flanagan held an equal share in Atlantis with another director; the court found no basis to conclude that Flanagan would have directly benefited if the company had won.
The judge also considered the conduct of the claim. He said there was some basis for criticism over the failure to establish the true position about the disputed land’s ownership, but it would be harsh to call Atlantis’s conduct unreasonable. Its reliance on the registration of the land was not unreasonable in the circumstances, and the fact that the claim failed did not mean it had been unreasonable to bring or continue it. A speculative planning-permission claim was unsupported by evidence, but was not pursued at the hearing.
A key factor was that Considine did not indicate he would seek costs against Flanagan until replying written submissions, after the evidence had concluded and the legal costs had already been incurred. The judge said the lack of notice weighed strongly against an order, particularly given that Considine knew of Atlantis’s precarious finances and had previously failed to obtain security for costs. That security application had been refused, in part because it was made too late.
The court refused the application for a costs order against Flanagan. As Flanagan had not participated in the application, it made no order as to its costs.