The High Court has ordered Eugene McCool personally to pay the defendant’s costs of his unsuccessful second application to replace McCool Controls and Engineering Limited as plaintiff. The costs are to be measured on a party and party basis, with adjudication by the Office of the Legal Costs Adjudicator if the parties cannot agree.
In a supplemental judgment delivered on 11 November 2019, Mr Justice Garrett Simons said the second substitution application had been dismissed in an earlier judgment because the issue was res judicata and an issue estoppel applied, in the absence of a material change in circumstances. The earlier judgment, delivered on 25 October 2018, had not needed to decide other issues raised in the litigation.
The costs hearing concerned only the second substitution application. The defendant’s counsel argued that Mr McCool should pay its costs because he had brought the application personally and had lost. Counsel also sought costs on a solicitor and client basis, which permits recovery of costs except where they are unreasonable in amount or were unreasonably incurred.
Mr McCool argued that any abuse of process was not deliberate, saying he was a lay litigant unfamiliar with legal procedure. He also alleged that the defendant had abused the process in its conduct of the litigation, and submitted that costs should be “costs in the cause”—payable by whichever existing party ultimately succeeded at trial.
Simons J applied the ordinary rule that costs follow the event. He said Mr McCool had failed entirely in the application and had given no cogent reason to depart from that rule. Making the costs “costs in the cause” would defer the decision and could absolve Mr McCool personally, despite his having made the application himself, the judge said. It could also transfer his personal exposure to the corporate plaintiff.
The judge described bringing a second application in almost identical terms while an appeal concerning the first refusal was pending as capable of being characterised as an abuse of process. However, he declined to order solicitor and client costs. The earlier refusal of a similar application, made on 10 April 2018, had resulted in a separate solicitor and client costs order. Simons J said the present hearing had a narrower scope and did not address all the matters considered on that occasion. He concluded that this second application, though “certainly wrongheaded”, did not involve the level of unreasonableness or moral culpability required for the exceptional costs basis.
The order is confined to the costs of and incidental to the second substitution application, against Mr McCool personally rather than the corporate plaintiff. A stay in the usual terms will apply if there is an appeal to the Court of Appeal or an application for leave to appeal to the Supreme Court.