The Supreme Court has reduced the statutory interest awarded to three former courier franchisees, while upholding the High Court’s decision that their costs should not be displaced by the defendant’s lodgement of money in court.
In a judgment delivered on 27 February 2018, the court substituted an interest award of €26,001.26 for the €57,325 awarded by the Court of Appeal. It also reversed the Court of Appeal’s conclusion that interest should count when deciding whether the plaintiffs had recovered more than the lodgement. The court otherwise dismissed the defendant’s appeal.
Cyril Reaney, Ita O’Regan and Travelon Limited had bought courier franchises from Interlink Ireland Ltd, trading as DPD. Their remaining franchise was terminated under a contract clause requiring the company either to find a purchaser or pay an amount reflecting the business’s turnover. After a 12-day High Court trial, the plaintiffs were awarded €356,200, including sums under that clause and for Parcel Line and Pulsar claims. The fraud claim and challenge to a restraint-of-trade clause were dismissed. Neither side appealed the €356,200 award.
DPD had lodged a total of €362,243.23 in 2011, stating that the amount was enough to satisfy all the plaintiffs’ claims. The High Court treated the lodgement as ineffective because it did not allocate sums to individual causes of action. It awarded the plaintiffs 60% of their costs under the approach in Veolia Water UK Plc v Fingal County Council.
The Court of Appeal awarded €57,325 in statutory interest, bringing the total above the lodgement. The Supreme Court agreed that interest could be awarded on the Parcel Line claim, the Pulsar claim and the agreed €95,000 component of the franchise payment. But it set aside interest on the main amount assessed under the contract clause, reasoning that the sum required assessment and had not been agreed in advance.
The court held that statutory interest should not be included when comparing an award with a lodgement under Order 22. It also ruled that a single lodgement expressed to cover all claims was valid. However, because the award was close to the lodgement and the damages assessment involved uncertainty and complexity, the court found special reason not to impose the usual post-lodgement costs consequences. It upheld the High Court’s 60% costs award.