The High Court has ordered William Loughnane to be liable for the defendants’ costs of proceedings brought by W.L. Construction Limited, after finding he directed and controlled a claim permeated by dishonesty and amounting to an abuse of process.
In a judgment delivered on 19 May 2017, Mr Justice Noonan granted the defendants’ application to join Mr Loughnane as a co-defendant for the purpose of making him liable for those costs. The order does not decide a new claim for damages or specify a sum of costs.
The company’s claim had already been dismissed in October 2016. The judge had found that it was an abuse of process, including because invoices had been fraudulently altered to suggest a liability that did not exist. He also granted the defendants’ application for a non-suit after the company failed to establish, at the end of its case, that any sum was due. The defendants had been awarded their costs; the company’s counterclaim was struck out without an order as to costs.
The defendants argued that the costs arose directly from Mr Loughnane’s litigation misconduct and that there was no prospect of recovering them from the company. It was not disputed that he held 99 per cent of the company’s issued share capital and effectively owned and controlled it. The judge said he was satisfied Mr Loughnane had stood to benefit substantially in a personal capacity from any decree obtained against the defendants.
For Mr Loughnane, counsel argued the claim had appeared legitimate, experts had been engaged, others had contributed to delay, and he had not received reasonable advance notice of a possible costs application. The judge rejected those submissions. He said the expert’s work could not legitimise instructions that were dishonest, and found no other party could be asked to shoulder the blame for the outcome. He also said the defendants could not have known the court’s findings until evidence, particularly Mr Loughnane’s, had been given, so advance notice was not required in these circumstances.
The judge accepted that Mr Loughnane’s cross-examination accounted for only about four or five of the 28 hearing days, but found no basis to limit his exposure. He concluded that the defendants’ application succeeded and ordered that Mr Loughnane be joined as a co-defendant and be liable for their costs.