The recent case of Hunter v Nurendale Ltd T/A Panda Waste [2013] IEHC 430, involved the first application for a protective costs order before the Irish Courts, seeking a declaration that section 3 of the Environmental (Miscellaneous Provisions) Act 2011 (the 2011 Act) applied. 

Section 3 of the 2011 Act applies the "special costs rule" (i.e. that each party must bear their own costs, subject to certain exceptions, instead of the usual rule that the "winner" gets their legal costs). The rule applies to certain categories of civil proceedings aimed at enforcement of environmental and planning law. It was introduced to give effect to Article 9(4) of the Aarhus Convention which bans prohibitive costs. 

The facts

The respondent operates a commercial waste facility, located approximately seventy metres away from the applicant's home. The applicant alleged that the facility was not being carried on in accordance with the planning permission granted or with the waste licence.  She sought an order restraining the respondents from carrying out unauthorised development pursuant to section 160 of the Planning and Development Act, 2000, and an order requiring the respondents to restore the lands to their original condition.

The respondent alleged that the applicant had been appointed sole applicant in these proceedings because she had no assets, and therefore asked the Court to direct that the applicant's husband be joined as a notice party to the proceedings in order to fix him with responsibility for any costs order made in favour of the respondent.

In response, the applicant sought an order pursuant to section 7 of the 2011 Act, declaring that section 3 of the 2011 Act applied (i.e. the "special costs rule").

The decision

The Court agreed to join the applicant's husband to the proceedings, as a notice party, for the purpose of fixing him with liability for costs in the event that the applications fail.  The Court also held that the applicant was entitled to a protective costs order under section 3 of the 2011 Act, ensuring that each party should bear its own costs of the action. 

  1. The application to join the husband as a notice party

The case of Mooreview Developments Ltd v First Active PLC [2011] IEHC 117 was cited by Hedigan J. as authority for the jurisdiction of the court to make a non-party costs order.  In that case, Clarke J. held that the key factors to be taken into account by a court when deciding its jurisdiction to make a non-party liable for costs are: (i) the extent to which it might have been reasonable to think that the party, who was primarily liable for the costs for which the non-party was to be made liable, could meet any costs if it failed in the proceedings; (ii) the degree of possible benefit of the proceedings to the non-party concerned; and (iii) any factors touching on whether the proceedings were pursued reasonably and in a reasonable fashion.

Hedigan J. held that in the circumstances it was appropriate to make an order joining the applicant's husband as a notice party for the purposes of fixing him with an order for costs in the event that the applications fail.  All the complaints concerning the waste facility had come from the applicant's husband, and it appeared the applicant had been put forward in that capacity in order to protect her husband, who was the registered owner of their property, from liability for costs.

  1.  The application for a protective costs order

Hedigan J. referred to the case of David Edwards & Anor v Environment Agency & Ors (C-260/11), 11 April 2013, where the CJEU held that the costs in environmental cases should not be prohibitively expensive and this means that persons should not be prevented from pursuing a claim for review by reason of the financial burden that might arise as a result.

In Edwards, the CJEU set out the criteria for making a protective costs order.  It ruled that when deciding on costs, a national court "cannot act solely on the basis of that claimant's financial situation, but must also carry out an objective analysis of the amount of the costs.  It may also take into account the situation of the parties concerned, whether the claimant has a reasonable prospect of success, the importance of what is at stake for the claimant and for the protection of the environment, the complexity of the relevant law and procedure, the potentially frivolous nature of the claim at its various stages, and the existence of a national legal aid scheme or a costs protection regime."

Applying these criteria to the circumstances of the case, Hedigan J. concluded that the applicant was entitled to a protective costs order pursuant to section 3 of the 2011 Act.

The correct procedure for seeking a protective costs order

Hedigan J. set out the procedure that should be followed in bringing an application for a protective costs order in any future case.

  1. The proceedings should be brought by motion on notice, supported by an affidavit of the applicant, which should set out:   
  1. What broadly the expenses involved in such an application would be;
  2. A broad statement of the claimant's financial situation;
  3. The reasons why the applicant believes that there is a reasonable prospect of success;
  4. What is at stake for the applicant and for the protection of the environment;
  5. Any possible claim of frivolous proceedings that could arise; and
  6. The existence of any possible legal aid scheme or any contingency arrangement in relation to costs that the applicant may have made with his/her solicitors.
  1. The respondent, in any replying affidavit should set out its view on:
  1. The potential costs involved in the case;
  2. The situation of the parties concerned in the application;
  3. Whether the applicant has a reasonable prospect of success, and why it does not, if that is to be claimed;
  4. The importance of the issues at stake for the protection of the environment;
  5. The full reasoning as to why the claim in question is a frivolous one if that is to be claimed; and
  6. Where necessary, deal with the question of legal aid or any contingency arrangement.
  1. Furthermore, prior to the application, both parties should agree a schedule of relevant information (or so-called Scott Schedule), setting out the essence of each claim and the response that is made thereto.

Comment

Post-Aarhus ratification, there has been an increase in awareness of the ban on prohibitive costs in certain categories of civil proceedings aimed at enforcement of planning and environmental law. 

The recent Irish cases of NO2GM Ltd v Environmental Protection Agency [2012] IEHC 369; O’Connor v Environmental Protection Agency [2012] IEHC 370, and In the matter of an application by Dymphna Maher [2012] IEHC 445 have shown that the courts will not permit litigants to bring ex parte applications for protective costs orders.  In those cases, the High Court held it had no jurisdiction to make such an order without notice to the other parties who would be affected by the order.

Hedigan J's judgment provides much-needed guidance on the requirements of the court when dealing with applications for protective costs orders.  Such applications should be brought by motion on notice, supported by an affidavit of the applicant, containing the details outlined above.

The decision also clarifies the scope of the "special costs rule" in section 3 of the 2011 Act. It shows that the rule also applies where court proceedings are brought to ensure compliance with planning or environmental law in a situation where no planning permission, consent, or licence has been obtained (i.e. in cases of unauthorised development or unlicensed activity).