The High Court has declared that Mahon Sweeney Solicitors LLP is entitled to a charge over a €12,000 costs award made in favour of James Hunter, after refusing a request by Mars Capital to set the award against his larger debt.
The ruling, delivered by Ms Justice Emily Farrell on 29 February 2024, concerns costs awarded after the High Court dismissed an appeal brought by the lender’s predecessor, Mars Capital Ireland D.A.C. On 27 January 2020, Ms Justice Power held there was no Circuit Court decision capable of appeal because the Circuit Court had neither heard nor determined the application before it. The costs of that appeal were awarded to Mr Hunter. The parties later agreed those costs at €12,000.
The solicitors applied under section 3 of the Legal Practitioners (Ireland) Act 1876 for a charge over the award, arguing it was property recovered through their work defending the appeal. The court was satisfied that the statutory conditions for a charge were met, subject to whether the lender should be allowed to set off the award against costs or debt owed by Mr Hunter.
Mars Capital argued that the debts and costs orders were sufficiently connected for a set-off, and that its debt exceeded €12,000. It also argued that Mr Hunter’s 2004 bankruptcy in England and Wales meant the costs award belonged to his bankruptcy estate. The judge noted that no UK law evidence had been provided and that no claim to the award by the bankruptcy trustee had been asserted. She therefore did not decide which country’s law applied.
The judge held that the rules permit, but do not require, set-off, and that the justice of the case had to be assessed. She found the 2020 appeal had been misconceived and unnecessary: the lender should instead have made a fresh application in the Circuit Court after its earlier application was struck out when it failed to appear. The judge also distinguished a later, unsuccessful appeal brought by Mr Hunter, which followed a fresh Circuit Court order and was not brought without jurisdiction.
The court declined to set off the €12,000 award against costs orders or the debt. It declared Mahon Sweeney Solicitors LLP entitled to a charge over the 27 January 2020 costs order. The judge also ordered that Mars Capital Finance Ireland D.A.C. replace Mars Capital Ireland D.A.C. as plaintiff, as the parties had agreed.