The High Court made no order as to costs after dismissing Pepper Finance Corporation (Ireland) DAC’s appeal against confirmation of a personal insolvency arrangement for Mark Fay.
In a judgment delivered on 8 May 2020, Mr Justice Denis McDonald said the court would also make an order substituting Pepper as the objecting creditor in place of Cooperatieve Rabobank U.A., reflecting an uncontested agreement between the parties. The court affirmed the Circuit Court’s order confirming the arrangement. The substantive appeal had been decided on 6 April 2020.
The practitioner, Judy Mooney, formally sought costs after initially missing the timeframe for submissions. Her submissions said that under the Legal Aid Board’s Abhaile scheme she was obliged to seek costs when a creditor’s objection was overruled, while acknowledging that no costs order might be more appropriate in this case. Pepper urged the court to make no order as to costs.
The judge said Pepper had raised legitimate concerns about the quality of the evidence supporting the arrangement, including apparent inconsistencies in the debtor’s affidavits. He said the evidence before the court when the appeal hearing began on 16 October 2019 was plainly defective and could not then have supported affirming the Circuit Court’s order.
The judge criticised the practitioner’s legal team for not alerting the court to the defects at the outset, despite having been notified of them by Pepper’s solicitors before the hearing. He said the defects should have been disclosed and the hearing put back while they were investigated and explained. Pepper’s intervention, he said, led to the identification of a substantial number of cases with similarly serious defects, raising an issue of systematic importance.
Although Pepper lost the appeal on its substantive arguments, the judge said its concerns and submissions had assisted the court. He therefore declined to award costs to the practitioner. He did not decide whether section 169 of the Legal Services Regulation Act 2015 applies to costs in a hearing under the Personal Insolvency Act. He said the interaction between that provision and section 115A(14) of the 2012 Act should be considered another day after full argument. He added that even if section 169 applied, the practitioner’s legal team’s conduct would justify refusing costs.