The Court of Appeal has directed an independent legal costs accountant to review sale-related costs in a dispute between Allied Irish Banks plc (AIB) and ADM Mersey plc over proceeds from the sale of land owned by Aidan Flynn. The court will decide the amount payable from funds held in court after receiving the accountant’s report.
The costs judgment, delivered by Mr Justice Robert Haughton on 19 February 2021, dealt with costs and final orders following the court’s principal judgment of 29 September 2020. AIB and ADM had not agreed on the remaining issues.
The court confirmed that ADM’s costs of the well-charging proceedings up to the order made by Mr Justice Feeney on 3 December 2012 remain payable by Mr Flynn and rank equally with ADM’s judgment debt, interest and costs. Those costs cannot be paid from the part of the sale proceeds over which AIB has priority.
By contrast, ADM’s costs of sale incurred after the 2012 order—including qualifying costs of accounts and enquiries, securing vacant possession and completing the sale—are to be paid from the funds held for the case before any distribution to secured creditors. The court said these costs benefited all encumbrancers because ADM had carriage of the sale. It also noted that AIB could have sought to take over that responsibility but did not.
The court did not fix the amount of those sale costs. ADM had submitted a figure of €79,956.79, while an earlier estimate in the principal judgment was €57,628.50. The judge noted that some costs included in ADM’s later figure appeared to relate to work before the 2012 order and therefore could not be treated as sale costs payable ahead of the creditors. The parties had not agreed the figures or items claimed.
The accountant is to review the relevant work and report to the court, which will measure the sale costs in gross. ADM’s solicitors must provide their file and supporting materials, and file an affidavit exhibiting the materials relied on. The parties are to try to agree on the accountant; if they cannot, either may apply to the court. The court directed that these preliminary steps be completed within 14 days of electronic delivery of the judgment.
The court also vacated the High Court order awarding ADM its costs of AIB’s application and substituted “no order as to costs”. It made no order for the costs of the appeal or of this costs judgment. The proportion of the net sale proceeds over which AIB and ADM each have priority remains for agreement; if they cannot agree, the court said the issue may have to be decided by the Examiner or the High Court. The judgment does not determine the final distribution.