What is the Event that Costs Follow?

Published 31 July 2018

Fastwell Limited -v- OCL Capital plc [2018] IEHC 39

Costs were considered in a recent High Court decision by Mr. Justice O'Connor.

Background

This case arose from a dispute over an Agreement for Lease over two kiosks at Grand Canal Square. Planning Permission was obtained by the Plaintiff but included a significantly enlarged demise, including a basement.

During the trial it emerged that the Plaintiff had failed to make proper discovery and that it was seeking to rely on pre-contractual dealings not pleaded in the Statement of Claim. The Court granted leave for an Amended Statement of Claim to allow the Plaintiff to mend his hand in this respect.

The Amended Statement of Claim included reliefs for an Order rectifying the Agreement for Lease to include the basement area. The trial resumed and was heard over four days in the High Court. The Court asked the Plaintiff on the final day of trial if it would accept the smaller demise which the Defendant asserted was covered by the lease. The Plaintiff agreed and Mr Justice O'Connor made an order in the following terms:

1. A Declaration that an agreement between the two parties exits but that same does not include the basement which is included in the planning permission;
2. An Order allowing the Plaintiff to commence works on the smaller demise;
3. An Order dismissing the Plaintiff's claim for rectification of the Lease to reflect the Plaintiff's claim in relation to the basement;
4. An Order dismissing the Plaintiff's claim for damages for breach of contract.

In relation to costs, the Plaintiff submitted it was entitled to same, following the usual rule that costs follow the event. The event in this case being the question of the validity of the lease. The Plaintiff also suggested that the Defendant could be awarded 1.5 days of costs in respect of the dismissed rectification claim.

The Defendant applied for its costs on the basis that the event in this case was the question of the enlarged demise. The Defendant advised the Court that simply being satisfied with the result did not equate to the event being determined in the Plaintiff's favour.

The Court found that the event in this case was not the event as pleaded by the Plaintiff which related to the enlarged demise. The Court found that the Plaintiff had failed in its claim and costs followed the event and so were awarded to the Defendant. The Court excluded the costs of two days of hearing as an acknowledgment that not all the issues were decided in favour of the Defendant.

This case is a useful reminder that with the general rule of costs following the event, the event should be that which is actually pleaded.