Introduction

A recent case heard before the Supreme Court was the fourth in a series of judgments relating to the cost of litigation in environmental litigation. The decision was the Supreme Court’s final conclusion on a substantive appeal in light of a Court of Justice of the European Union (CJEU) reference.

Klohn v An Bord Pleanála

Mr Klohn had lost underlying environmental proceedings, being a judicial review of a grant of planning permission to construct a “fallen animal unit”. Costs had been awarded against him in that matter. The Taxing Master fixed the costs at a sum of €86,000. Mr Klohn applied to the High Court to have these costs quashed, but was refused. It was appealed to the Supreme Court, with the agreement of counsel for the An Bord Pleanála (the Board). Certain points were referred to the CJEU. The appeal was allowed and the sum of €1,250 was substituted for the original assessment of the Taxing Master of €86,000. Mr Klohn was awarded the full costs of the appeal. Chief Justice Clarke delivered the judgment.

The CJEU decision on the first reference determined that the costs must be assessed on a “not prohibitively expensive” (NPE) basis. It was accepted by both parties that the original sum of €86,000 would not meet this definition. The Court held that, rather than sending the matter back to the Taxing Master, which would result in further costs and delays, it was appropriate for the Court to address the quantum of costs itself. It was held that the Court has the authority to make this type of order and substitute its own view.

The four issues considered

1. What regard should the Court have to the costs paid by Mr Klohn to his own lawyers?

The parties agreed that in light of Edwards & Pallikaropoulos v.Environment Agency & Ors., the Court should have regard to those costs. It was also accepted that it may be appropriate, in certain cases, to assess the costs that should be awarded at zero. If the costs were to be assessed at zero in this manner it would be as a result of taking into account, the costs already incurred by the party in paying for their own representation. The judgment confirmed “that the fact that he has paid those costs must be taken into account in reaching an assessment as to whether any particular amount of costs which might now be directed to be paid by him breaches the NPE principle.

2. Should an order be made providing for the payment of some of Mr Klohn’s own costs?

The Court examined whether the issue was res judicata, meaning a matter decided by the court, a question which had been left open to it by the CJEU, and held that “any question of there being an obligation on the Board to pay costs to Mr. Klohn is defeated by the principle of res judicata.” The matter had been dealt with when the High Court decided to award costs against Mr Klohn and in favour of the Board, and no appeal was taken on this point.

3. Could the Court award damages to Mr Klohn for breach of his rights under European Union law?

The Court confirmed that it does not automatically follow that a finding of invalidity in respect of any measure necessarily carries with it an entitlement to damages. The Court also held that no claim for damages had been put before a trial court at any point in the proceedings. It was held that the Court should not consider the question of damages.

4. Issues concerning the costs of the appeal itself:

• Mr Klohn had been represented by a lawyer from another jurisdiction on appeal without being accompanied by a lawyer ordinarily qualified to practice in Ireland. This was held to be permitted, but the Board raised the issue that they did not actively participate on that issue and that it would be inappropriate to award those costs against them. It was held that the Board did raise the issue themselves, which led to that matter being considered and referred to the CJEU, and so costs should therefore not be excluded from the costs to be awarded to Mr Klohn.

• The Board also suggested that the Court should not award Mr. Klohn his full costs of the appeal having regard to the principles set out in Veolia WaterUK Plc & Ors. v. Fingal County Council and subsequent cases, as it was suggested that Mr Klohn did not succeed on all points. It was held that subsequent decisions has made clear that the Court should only deprive an otherwise successful party of full costs where it is clear they have raised unmeritorious issues which had the effect of materially increasing costs. The issues raised on behalf of Mr Klohn had not had such an effect.

Quantification of costs

The Board suggested that Mr Klohn must have considered the costs paid to his own lawyers as reasonably payable and therefore NPE, as he did pay them, and that the Court could take this into consideration in the Court’s own quantification of what was NPE. The Court rejected this suggestion on the basis that those costs arose from a contractual arrangement entered into by the party and the lawyers.

The Court stated that the overall assessment of the level of costs which may be NPE involves both an objective and a subjective element. They illustrated this by giving the example, “A very wealthy party might well be able to afford a very large sum in costs but that does not necessarily mean that the sum concerned might be considered NPE if it could act as a significant deterrent to that party bringing proceedings. Thus, there may be an objective limit on the amount of costs which can properly be awarded in proceedings to which the NPE regime applies. However, it is also clear that the subjective position of the particular applicant must also be taken into account.”

Mr Klohn had sworn an affidavit saying he was “a man of ordinary means”. The Court considered that a sum in excess of €30,000 towards his own costs would have been a considerable sum, and so the costs could only be assessed at a very modest sum, that being €1,250. The Court noted that the €86,000 represented sums actually expended by the Board, and the Board would therefore be at a loss of all of those monies, but that the consequence was mandated by European law.

Conclusion

This judgment further illustrates the extensive costs protections available to applicants when taking judicial review proceedings to which the NPE rule applies. While this might result in the Planning Board or a developer as a notice party being unable to obtain incurred costs if they are successful in such proceedings. This, as the Court found, is the consequence of the EU law mandated position.

For more information, contact a member of our Planning and Environmental team.

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