Supreme Court has jurisdiction to hear application by firm of solicitors for a charge on litigation costs awarded to client company

Dunne J ( for majority) : Costs of legal proceedings – solicitors for a company seeking an order pursuant to s. 3 of the Legal Practitioners (Ireland) Act 1876 declaring that they are entitled to a charge upon the costs awarded to the company by the Supreme Court – seeking a declaration that they held a common law lien over the costs awarded to the company - jurisdiction of the Supreme Court to deal with this application – background - costs arise from two orders, one being an order of the High Court and the other of the Supreme Court - company involved in mussel farming in Wexford - decision was taken to upgrade sewage facilities for Wexford town and its environs together with the construction of a waste treatment plant – company issued the proceedings seeking damages for a breach of its legitimate expectation that it would receive compensation by reason of the imposition of an exclusion zone of five hundred metres radius around an outfall pipe for the proposed waste treatment plant which encompassed the company’s mussel beds – awarded €650,000 by way of compensation by the Supreme Court - order for costs - a balance of approximately €1,128,408 (inclusive of VAT) remains due and owing to the solicitors – company has been invoiced in respect of professional fees, but not in the full amount due and owing - due in part to discussions with the company, as a result of which it became apparent that the company was in severe financial difficulties – solicitors concerned that if they continued to issue invoices for the outstanding balance, they would become liable for substantial sums in respect of VAT – company paid substantial sums in respect of professional fees at various stages during the currency of the proceedings - have not paid any sum due by way of professional fees since 2007, with the exception of a sum paid on account to senior counsel in respect of the Supreme Court appeal – company received the sum of €908,950.16 directly into its bank account from the State - €650,000 being the amount of the award determined by the Supreme Court, together with interest in the sum of €258,950.16 - €650,000 was paid over to IBRC (to whom the company is indebted) - €56,000 was paid into pension funds of the company’s directors - €170,000 was retained to discharge potential stamp duty liability in respect of the taxation of costs - offered to pay a sum of €30,000 to the solicitors, but this did not in fact occur – solicitors are concerned that any further sum paid to the company by the State in respect of costs will be paid to IBRC - during the taxation of costs, a sum of €500,000 was paid on account to the solicitors and was lodged by them in the company’s client account with the solicitors - stipulated by the State that if the costs taxed at less than €500,000, any balance would be refunded to the State and this was agreed to in writing - dispute has arisen between the plaintiff and its solicitors as to how that sum should be dealt with – solicitors complied with the request from the company to retain the same sum and not to apply it towards any outstanding invoices - appears that the company wanted to use some €270,000 of that figure to pay IBRC and trade creditors – solicitor initiated this application seeking an order pursuant to s. 3 of the 1876 Act and ancillary relief – investment company purchased company’s loans – investment company relies on a provision in a mortgage debenture pursuant to which the investment company are entitled to enforce its security in respect of the costs - contended by investment company that the monies over which the solicitors seek an order pursuant to s. 3 of the 1876 Act represents money payable to the company which is the property of investment company under the mortgage debenture – company director agreed that the costs are receivables and should be remitted to investment company – manner in which the cost of litigation was funded – length of proceedings - undertaking to pay the balance of any award or settlement following the deduction of all proper charges due to the solicitor - never contemplated that the bank might be entitled to receive payment of any costs recovered when such costs were still outstanding - application before this court concerns only the sum of €500,000 already paid on account in respect of costs and such further sum (if any) found to be due by way of costs on the completion of the party and party taxation – investment company chose not to be represented at the hearing - no appearance on behalf of the State defendants - judgment is only concerned with the jurisdiction of this Court to consider an application pursuant to s.3 of the 1876 Act - jurisdiction contained in s. 3 of the 1876 Act - the order for costs made in favour of the company against the State defendants in this case comes within the meaning of property recovered and preserved as provided for in s. 3 of the 1876 Act - an appellate court when reversing a costs order is “recovering or preserving” property within the meaning of the section - the statutory power conferred by s. 3 of the 1876 Act empowers the court which made the order by which property was recovered or preserved to charge that property - property recovered or preserved by virtue of an order of the Supreme Court, it is to that court the application pursuant to s. 3 of the 1876 Act should be made - difficult to see how it could be said that the High Court could have jurisdiction to make an order over an award of costs made in the Supreme Court – no right of appeal does not create a constitutional impediment to the hearing of such applications – akin to an application to admit further evidence – court not of the view that the solicitors are entitled to enforce its common law lien before this court - no statutory provision conferring jurisdiction on this court to grant such relief.

McKechnie J (dissenting): Costs of legal proceedings – solicitors represented a company in complex and lengthy commercial proceedings, both at trial and appeal level – Supreme Court awarded the company damages of €650,000.00 against the Minister – company awarded costs – company in financial difficulty - legal cost accountant drew up a bill of costs on a party and party basis which was submitted to the Minister - referred to taxation - presently before the Taxing Master, with the process of taxation not yet concluded – company agreed to pay, in part discharge and on account, the sum of €500,000 - money remains in the client’s account – it has not been distributed by way of disbursement because of the company’s insistence in controlling its destination and the recipients thereof - prior to October 2007, the company made periodic payments in respect of fees totalling almost €1,098,471.55 - apart from obtaining an agreed sum in respect of counsel’s brief fee to appear on the appeal, which they immediately paid over, the solicitors have not received any payment whatsoever - based on the party and party bill, there remains due in respect of their costs, expenses and outlay to include counsel’s fees, a sum of €1,128,408.00 (inclusive of VAT). - proceeds of taxation are expressly covered by the terms of the mortgage deed - solicitors concerned about not being able to recover any further sums, in respect of their said costs, fees and outlay – solicitors argued that they are entitled to a charge upon the costs awarded to the company pursuant to an Order of the Supreme Court – they sought a declaration that they hold a lien over the costs awarded to the Plaintiff pursuant to an Order of the Supreme Court – sought an Order directing the Minister to pay the balance of the costs awarded to the company by the Supreme Court to them within a reasonable period of time following the conclusion of the party and party taxation - whether the Supreme Court has jurisdiction to hear this type of application - a solicitor may seek to recover or otherwise secure his costs by exercising or enforcing a lien in certain circumstances over his client’s assets or property, or he or she may resort to an application under s. 3 of the Legal Practitioners (Ireland) Act 1876 or both - a solicitor has available to him in aid of costs recovery what has been described as a general lien or a particular lien - a retaining lien - a right to retain property already in his possession until he is paid costs due to him in his professional capacity - right to ask the court to direct that personal property recovered under a judgment obtained by his exertions, should stand as security for his costs of such recovery - not technically a lien, as the requirement of possession or control is absent - right to apply - by statute he has a right to apply to the court for a charging order on property “recovered or preserved” through his instrumentality, in respect of his assessed cost arising out of the suit, matter or proceeding which has been prosecuted or defended by him - this relief must in the first instance be prayed for in the High Court – relevant statutory provisions - the court by which the property is recovered or preserved can make the order under the section - where the property is not recovered or preserved by the trial court, but rather is so by an order of an appellate court: in such a situation both have concurrent jurisdiction - nature of the power to make the order is discretionary - once the statutory conditions have been satisfied a solicitor is prima facie entitled to the order once he shows that otherwise he may not be able to recover his costs - if a solicitor is otherwise entitled to a common law lien for his costs, the section may be regarded simply as being a more convenient way for enforcing that right - the power under the section is not exercisable until the property is either recovered or preserved - beyond doubt but that “property” in the context of the section, includes costs payable by one party to another, even where such costs, at the date of the application, have not been taxed - Supreme Court has jurisdiction to make the order as sought - respective jurisdiction both the Supreme Court and the High Court in the context of s. 3 of the 1876 Act - purpose of the section - role is to offer protection to solicitors in seeking remuneration for work undertaken on behalf of a client in their professional capacity - enactment was a clear recognition that the pre-existing common law remedies in this area needed strengthening - simple and straightforward means of securing and enforcing payment - a statutory charge - s. 3 of the 1876 Act undoubtedly is a “charging” section over recovered or preserved property against which payment can be enforced for outstanding fees - thrust is to preserve an asset, and to impress upon it an equity in favour of a solicitor for his appropriate costs - Jurisdiction of the High Court - no submission has been made questioning the section’s consistency with the Constitution - Supreme Court has jurisdiction insofar as its cost order gives rise to the recovery of a fund available for charging - the High Court has concurrent jurisdiction with regard to such fund as evidently it would have in respect of any fund recovered by its own orders - when and in what circumstances it is appropriate to make an application which in principle is available to be made to either court - Jurisdiction of the Supreme Court - the Supreme Court will exceptionally receive fresh or represented evidence – jurisdiction of the Supreme Court is fundamentally appellate - the application in the first instance should be made to the High Court unless there are strong compelling circumstances to the contrary.