High Court judgment on Ashdrum Lodge Ltd v Barbouti (No. 2)

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  Ashdrum Lodge Ltd [Trading as Kiernan Homes] v Barbouti [No. 2] (Approved) [2026] IEHC 162 (13 March 2026)

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THE HIGH COURT

[2026] IEHC 162

Record No.: 2018/6876P

Between/

ASHDRUM LODGE LIMITED T/A KIERNAN HOMES

Plaintiff

---

-and-

---

AYSAR BARBOUTI

Defendant

---

-and by order-

---

?DAVID GILLIGAN and GILLIGAN ARCHITECTS LIMITED

---

Third parties

---

---

JUDGMENT (No. 2) of Ms. Justice Siobh?n Stack,

delivered the 13 th day of March, 2026.

Introduction

1. This judgment concerns the applications made by the Defendant and Third Parties arising out of a 28-day trial in which I have already delivered the principal judgment ([2025] IEHC 522).

2. The length of the judgment was necessitated by the sheer number of issues addressed in the evidence. However, notwithstanding the variety of issues raised by the Defendant, she was unsuccessful on virtually all issues which were contested at trial. (There are limited exceptions to the Defendant's lack of success, such as, for example, the Third Parties' reliance on the first limb of s. 17 (2) of the Civil Liability Act, 1961.) While the Defendant has obtained an award in the sum of ?57,510.57, being 50% of the damages payable in respect of defective haunching to garden walls, together with the full cost of underpinning the foundations to the Warehouse, the only issue determined by the Court relating to those particular defects was the degree to which the Third Parties were liable, pursuant to s. 17(2) of the Civil Liability Act, 1961, to compensate the Defendant for those defects, the Defendant herself having become identified with the Contractor by reason of her Settlement with it on Day 4.

3. The Third Parties have set out in their written submissions a table of the references to the capping of the walls. This very helpful table, when read in light of the principal judgment, actually makes it plain that this issue took up virtually no time whatsoever in the case. There are, for example, references to the alleged incidents where issues with the mortar were raised with Mr. Gilligan while the Works were ongoing. I have found that those incidents, which were described by the Defendant herself in her evidence, did not occur. These references therefore militate against an award of costs in favour of the Defendant.

4. While the defects with the haunching were mentioned in passing, I found when it came to apportioning liability as between the Third Party and the Defendant that I had very little evidence to go on to assist me in that task. Furthermore, the Defendant actually declined to offer any expert opinion on the issues which had arisen and as to the respective fault of the Third Party and the Contractor, preferring to leave me at large on that question. The result, therefore, was that on the sole issue which I had to decide relating to the defective haunching the Defendant's expert declined to offer any assistance to the court. The only expert opinion I had on that issue was that contained in the reports of Mr. O'Connell, the architect for the Third Parties. Doing the best I could with the minimal references made by Mr. O'Connell to this issue, I essentially adopted his opinion that liability should be apportioned 50/50.

5. Notwithstanding, therefore, that virtually the entire of the trial was taken up with issues on which the Defendant was unsuccessful, she has applied for 50% of her costs. While it is conceded that the Defendant is entitled to a limited costs order in her favour, the basis of her application for 50% of the costs of a lengthy and complex trial is, with respect, entirely unclear. Indeed, on review of the written and oral submissions relating to costs, the focus of her submissions was to seek to rebut the Third Parties' submissions on how time was spent at trial, how costs should be allocated, and so on, rather than actually propounding any basis on which I could grant the Defendant 50% of her costs.

6. The Third Parties break down the issues as comprising 24 separate issues, which they identify from the principal judgment, with the Defendant only being successful on two of them. In addition, they identify the percentage of the claim recovered as being just under 4%, demonstrating the relative insignificance of the value of the successful aspect of the claim.

7. The Third Parties make two related applications in respect of costs. First, they acknowledge the partial success of the Defendant but say that it is limited and that the Defendant should get costs on the Circuit Court scale up to and including Day 1 of the trial as the award which she obtained is well within the jurisdiction of the Circuit Court.

8. The Third Parties also relied on a Calderbank offer which was sent five days prior to the start of the trial and it is accepted that the costs relating to the proceedings up to and including Day 1 were substantially incurred by that stage. This offer was in the sum of ?170,250 plus costs, together with a waiver of the Third Parties' fees (which are substantial), and it? remained open until the end of Day 2 of the trial. It was not accepted.

9. While the Calderbank offer included an offer to pay High Court costs as the amount offered was well in excess of the jurisdiction of the Circuit Court, it is submitted that the Defendant should now be confined **** to **** costs **** on the Circuit Court scale as the award ultimately made was well within the jurisdiction of the Circuit Court.

10. Indeed, the Third Parties rely on s. 17(1) of the Courts Act, 1981, as inserted by s. 14 of the Courts Act, 1991, for the proposition that this court is obliged to confine any award of costs to Ms. Barbouti to costs on the Circuit Court scale. In the alternative, they say that, even if s. 17 (1) does not apply, the court should exercise its discretion to restrict Ms. Barbouti to Circuit Court costs as she failed on the vast bulk of her claim, both as to issues and quantum.

11. In addition, the Third Parties ask the Court to grant the Third Parties their costs from Day 2 onwards and to exercise its discretion to make a "differential costs order" pursuant to s. 17 (5) of the 1981 Act in respect of the costs up to and including Day 1. This would require the Defendant to pay to the Third Parties the difference between the High Court costs actually incurred by the Third Parties up to Day 1 and the Circuit Court costs which they ought to have incurred.

12. So far as the costs from Day 2 onwards are concerned, the Third Parties submit that they should be awarded High Court costs against the Defendant for that portion of the trial.

Relevant statutory provisions

13. The principal law on costs is now contained in ss. 168 and 169 of the Legal Services Regulation Act, 2015. Section 168 provides (in material part):-

"(1) Subject to the provisions of this Part, a court may, on application by a party to civil proceedings, at any stage in, and from time to time during, those proceedings?

(a) order that a party to the proceedings pay the costs of or incidental to the proceedings of one or more other parties to the proceedings, or

(b) where proceedings before the court concern the estate of a deceased individual, or the property of a trust, order that the costs of or incidental to the proceedings of one or more parties to the proceedings be paid out of the property of the estate or trust.

(2) Without prejudice to subsection (1), the order may include an order that a party shall pay?

(a) a portion of another party's costs,

(b) costs from or until a specified date, including a date before the proceedings were commenced,

(c) costs relating to one or more particular steps in the proceedings,

(d) where a party is partially successful in the proceedings, costs relating to the successful element or elements of the proceedings, and

(e) interest on costs from or until a specified date, including a date before the judgment." [Emphasis added.]

14. Section 169 provides:-

"(1) A party who is entirely successful in civil proceedings is entitled to an award of costs against a party who is not successful in those proceedings, unless the court orders otherwise, having regard to the particular nature and circumstances of the case, and the conduct of the proceedings by the parties, including?

(a) conduct before and during the proceedings,

(b) whether it was reasonable for a party to raise, pursue or contest one or more issues in the proceedings,

(c) the manner in which the parties conducted all or any part of their cases,

(d) whether a successful party exaggerated his or her claim,

(e) whether a party made a payment into court and the date of that payment,

(f) whether a party made an offer to settle the matter the subject of the proceedings, and if so, the date, terms and circumstances of that offer , and

(g) where the parties were invited by the court to settle the claim (whether by mediation or otherwise) and the court considers that one or more than one of the parties was or were unreasonable in refusing to engage in the settlement discussions or in mediation.

(2) Where the court orders that a party who is entirely successful in civil proceedings is not entitled to an award of costs against a party who is not successful in those proceedings, it shall give reasons for that order.

(3) Where a party succeeds against one or more than one of the parties to civil proceedings but not against all of them, the court may order, to the extent that the court considers that it is proper to do so in all the circumstances, that?

(a) the successful party pay any or all of the costs of the party against whom he or she has not succeeded, or

(b) the party or more than one of the parties against whom the successful party has succeeded pay not only the costs of the successful party but also any or all of the costs that the successful party is liable to pay under paragraph (a).

(4) Unless the court before which civil proceedings were commenced orders otherwise, or the parties to those proceedings agree otherwise, a party who discontinues or abandons the proceedings after they are commenced (including discontinuance or abandonment of an appeal) is liable to pay the reasonable costs of every other party who has incurred costs in the defence of the civil proceedings concerned until the discontinuance or abandonment." [Emphasis added.]

15. Section 17 of the Courts Act, 1981, as substituted by s. 14 of the Courts Act, 1991, provides, in material part:

"(1) Where an order is made by a court in favour of the plaintiff or applicant in any proceedings ... and the court is not the lowest court having jurisdiction to make an order granting the relief the subject of the order, the plaintiff shall not be entitled to recover more costs than he would have been entitled to recover if the proceedings had been commenced and determined in the said lowest court.

...

(5) (a) Where an order is made by a court in favour of the plaintiff or applicant in any proceedings (not being an appeal) and the court is not the lowest court having jurisdiction to make an order granting the relief the subject of the order, the judge concerned may, if in all the circumstances he thinks it appropriate to do so, make an order for the payment to the defendant or respondent in the proceedings by the plaintiff or applicant of an amount not exceeding whichever of the following the judge considers appropriate:

(i) the amount, measured by the judge, of the additional costs as between party and party incurred in the proceedings by the defendant or respondent by reason of the fact that the proceedings were not commenced and determined in the said lowest court, or

(ii) an amount equal to the difference between?

(I) the amount of the costs as between party and party incurred in the proceedings by the defendant or respondent as taxed by a Taxing Master of the High Court or, if the proceedings were heard and determined in the Circuit Court, the appropriate county registrar, and

(II) the amount of the costs as between party and party incurred in the proceedings by the defendant or respondent as taxed by a Taxing Master of the High Court or, if the proceedings were heard and determined in the Circuit Court, the appropriate county registrar on a scale that he considers would have been appropriate if the proceedings had been heard and determined in the said lowest court."

16. As is evident from the wording, s. 17 (1) is mandatory, whereas s. 17 (5) (a) (ii) confers a discretion on the court to make a "differential costs order" where an order is made in favour of a plaintiff (which the Defendant is regarded as being, so far as the third party action is concerned) in any proceedings and the court is not the lowest court having jurisdiction to make an order granting the relief the subject of the order.

Whether section 17 applies

**

17. The Defendant says that s. 17 does not apply to third party actions, as is plain from its use of the terms "plaintiff" and "defendant". The Third Parties rely on the terms of Order 16 of the Rules of the Superior Courts, and in particular, Order 16, rule 8, for the proposition that, so far as a third party is concerned, the defendant in the principal action is regarded as the plaintiff and the third party is regarded as the defendant. But I agree with the Defendant's submissions that this rule cannot be seen as altering the plain meaning of s. 17 of the 1981 Act.

18. Indeed, the policy of s. 17 as a whole, as identified by Hardiman J. in O'Connor v. Bus ?tha Cliath, [2003] IESC 66, ? [2003] ** 4 I.R. 459, at p. 505, is "to provide a strong incentive to the institution of proceedings, generally, in the lowest court having jurisdiction to make the award appropriate to them." It is true that the Defendant commenced the third party proceedings by serving a Third Party Notice (and by getting leave of this court for that purpose). But the principal proceedings were instituted by the plaintiff, whose claim well exceeded the jurisdiction of the Circuit Court (which was at the relevant time - and remains - ?75,000, so far as this type of claim is concerned). Furthermore, the Defendant's claim well exceeded that amount also. Indeed, even had her claim not exceeded the Circuit Court jurisdiction, because it overlapped so significantly with the facts underlying the plaintiff's claim, it would be entirely impractical to have required her to have issued separate proceedings in the Circuit Court. The policy of s. 17 (1) is to reduce costs, not to compel unnecessary duplication in litigation.

19. The policy of the sub-section as described by Hardiman J. is not based on a review once the outcome of the proceedings is known, but to influence the choice of jurisdiction at the time proceedings are instituted. It therefore seeks to incentivise those claiming liquidated damages to make that claim in the lowest court having jurisdiction to deal with it. In addition, it provides an incentive for those claiming general damages to issue in a lower court where it is (or should be) clear even prior to issue of proceedings that the likely award will fall within the jurisdiction of a lower court.

20. At the time proceedings were issued and indeed at the time the Third Party Notice was served, the proceedings had to be issued in this Court as otherwise neither the plaintiff nor Ms. Barbouti could advance the claim they wanted to make. They were each claiming sums well in excess of ?1m. As a result they could not have issued? in the Circuit Court. In my view, s. 17 (1) is directed to decision-making at the time of issue of the proceedings and is not applicable here.

21. In contrast, s. 17 (5), which the Third Parties also rely on, applies at the conclusion of the proceedings, when the award has been made. It permits the court to consider, after the outcome of the case is known, whether it was reasonable to issue proceedings in the higher court. It is notable that, unlike subs. (1), subs. (5) is discretionary. This less rigorous approach no doubt has its origin in the understanding that what is obvious at the end of a trial may not have been obvious before it starts, let alone when proceedings are issued. That is the nature of litigation.

22. In O'Connor, Hardiman J. also addressed the policy of subs. (5), as follows (at p. 508):

"... the mischief of litigation which is more elaborate and more expensive than it should be is precisely the mischief at which section 17 (5) is aimed. Unless the court, by the exercise of its discretion, imposes a price on those who thoughtlessly, or in pursuit of tactical advantage, embark on litigation which is elaborate and expensive when it could have been simpler and cheaper, the intention of the legislature will in my view be frustrated. Litigation which is unduly elaborate and expensive imposes a cost on others: most directly on the defendant but on wider groups and on society as a whole in the form of a social cost. The legislative intent in section 17 (5) is, in an appropriate case, to impose the cost of overblown litigation, or part of it at least, on those who make it so."

23. In my view, given that the outcome of the trial is that a very large claim has resulted in a modest award which could have been obtained in the Circuit Court, s. 17 (5) would normally be applicable here. However, the matter is complicated by the fact that these are third party proceedings in which the principal action was issued and went to trial in the High Court. This placed a practical constraint on the Defendant as to the jurisdiction in which proceedings against the Third Parties should issue. It would seem that, by use of the word "plaintiff", s. 17 (5) is not applicable in the case of third party proceedings.

24. In those circumstances, it seems preferable to consider the question of costs as a matter governed by s. 168 rather than section 17(5).

**

Exercise of discretion pursuant to s. 168 (2)(d)

25. The only basis on which the Defendant could justifiably seek any costs is that she was "partially successful" within the meaning of s. 168, ** in that she obtained an award of damages. It is settled law that a trial judge does not need to engage in an exhaustive or mathematical exercise in seeking to identify the extent to which the Defendant was "partially successful". Having said that, it is telling that, the Third Parties having conducted such an exercise for the purposes of the costs applications, they estimate that the Defendant was awarded approximately 4% of the amount claimed, and succeeded in only two of 24 separate issues identified in the judgment.

26. Not only that, but, before the trial started, the Third Parties conceded liability in relation to the two issues to which the award relates. Indeed, the Third Parties made a Calderbank offer prior to the trial starting for what has transpired to be substantially greater in at least two respects. First, the sum of ?170,250 was offered. That is approximately three times the award subsequently obtained. Secondly, as that sum was within the High Court jurisdiction, High Court costs to the date of the offer were also offered. (The Calderbank offer also offered that the Third Parties would waive their professional fees, which are substantial and have never been paid. If there is a live claim for these fees, that was potentially a third very significant aspect of the Calderbank offer.) Regrettably for both sides, the Defendant rejected this offer.

27. However, the Defendant says I should not give any significant weight to a Calderbank letter which issued just days before a trial starting 31 January, when the date for hearing had been fixed the previous May. I will deal with that issue first, before turning to the exercise of the discretion. **

Relevance of Calderbank offer

28. The Defendant relies on various authorities (Murnaghan v. Markland Holdings Ltd, ** [2004] IEHC 406 , [2004] 4 I.R. 537, Gravity Construction Limited v. Total Highway Maintenance Limited [2021] IEHC 19) as authority for the proposition that I should not have regard to the Calderbank offer in exercising my discretion as to costs, as it was made too late.

29. There are two principal reasons why I do not accept that submission.

30. First, the Third Parties are not, in my view, to be criticised for the fact that the Calderbank offer was made well after the date for hearing was set and shortly before the trial, as there was a significant lack of clarity prior to trial as to the Defendant's case against the Third Parties. I have already, in section 3 of the principal judgment, set out the portions of the pleadings relevant to the defects in the mortar. I think it must be stressed that, regardless of any Rules of Court or powers of case management, it will always be the case in plenary proceedings, and in particular in complex proceedings of the kind under consideration here, that it simply will not be possible for litigants, or their advisers - and I include both legal practitioners and expert witnesses in that term - to identify each and every issue that may ultimately fall for consideration, let alone to set out neatly all of the points they will wish to rely on, whether in pleadings or in expert reports. Litigation is a pressurised and dynamic process and appropriate leeway must be given to everyone involved. Indeed, if that leeway is not given, the modern trend of over-pleading and of being over-inclusive as to points raised and material relied upon will get even worse. I do not think it is fair to anyone to require absolute precision - or anything close to it - in the preparation of cases which very frequently take their own course once they begin and as the evidence begins to clarify the underlying, contested facts.

31. Having said all of that, the nature of the Defendant's case against the Third Parties was always obscure, in my view. I will refer to just a few examples from the principal judgment rather than labour the point.

32. First, the position of the Defendant as regards the appointment of a quantity surveyor was confused to the point of contradiction. The Defendant included the failure to appoint a quantity surveyor as a particular of negligence, while simultaneously insisting in her evidence on the correctness of her position in refusing in pre-litigation correspondence to agree to the appointment of a quantity surveyor to investigate what she said was overcharging.? The failure to agree to the appointment of a quantity surveyor was, in my view, a very significant factor leading to the claim by the builder and consequently to this third party action. Conversely, it is my view that, had a quantity surveyor been appointed once the Defendant became concerned about costs, these expensive and protracted proceedings would most likely have been unnecessary, at least insofar as the claim against the Third Parties for "over-certification" was concerned. Added to this is the claim for Mr. Wearon's quantity surveying fees, the legal basis for which was, with respect, very unclear. Significant leeway was afforded in the judgment to the consideration of a claim for the reimbursement of fees, the basis for which, respectfully, was never properly identified. And of course, this all leaves aside the fact that the Third Parties were dismissed as architect when they attempted to appoint a quantity surveyor to resolve the Defendant's dispute with the contractor.

33. Secondly, without question the most significant issue between the parties was whether the Third Parties were liable to the Defendant for the admitted defects in the mortar, which it was agreed resulted from inadequate or inappropriate mixing. Apart from the fact that the agreement as to the cause of the defect in the mortar was only reached a matter of two or three months prior to trial, when the Sandberg Report issued, it is significant that neither the pleadings nor the expert reports served by the Defendant prior to the trial make clear either the legal or factual basis for the claim against the Third Parties which ultimately turned on whether the defect in the mortar in the new and reconstructed walls ought to have been apparent on periodic visual inspection.

34. So far as the expert reports are concerned, one of the two experts dealing with the principal issue of defects in the mortar and whether, as a consequence, the walls should be demolished and reconstructed conceded, in his evidence, that his report was not prepared with a view to examining the issues in the case but was rather a report into the steps required to improve the condition of the walls and to bring them to an acceptable standard. More worryingly, the principal expert witness for the Defendant on the issue of the defects in the mortar did not, at any point in his reports, one of which issued months after the case was set down for hearing, identify the failure to identify the defective mortar on periodic visual inspection as a breach of duty by the Third Parties. This point, so far as his evidence is concerned, first emerged on Day 10 when he gave a vivid account of examining the walls near the piers in Wall 1 in March, 2018.

35. The alleged lateness of the Calderbank offer must therefore be considered against the backdrop of a claim that was somewhat unclear but, more importantly, that had escalated significantly only two months earlier with the introduction of a very significant claim for defects in the garden walls by way of service of updated particulars.

36. The second reason why I do not accept the argument that the Calderbank offer was made too late to be given any weight in the exercise of the Court's discretion on costs, is that, in my view, the authorities relied upon are distinguishable.

37. In Gravity Construction Limited v. Total Highway Maintenance Limited [2021] IEHC 19, it seems that the respondent sought to resist costs after the date of the offer which was headed "without prejudice as to costs" even though it was not made until three weeks before the hearing date, which had been obtained almost six months earlier.

38. In addition, it seems that the offer was relied upon to resist costs of the opening day, and it would appear that it was sought to confine them to the date of receipt of the offer or thereabouts. That is not occurring here as it is expressly conceded that the Defendant should get costs on the Circuit Court scale up to and including Day 1, thereby acknowledging the reality which appears not to have been acknowledged in Gravity that the bulk of the costs are incurred in advance of Day 1 of any trial. In addition, the timing of the offer was perhaps acknowledged by offering costs up to and including Day 2, as this afforded the Defendant a full week to consider the offer.

39. By contrast, in Gravity only a "reasonable contribution" to costs was offered, the extent of the contribution not being identified in the offer. Murnaghan is also distinguishable on this point as there was no offer in relation to costs, even though the offer was made on Day 1 of the trial.

40. A second point of distinction is that the circumstances in which that offer in Gravity was made are completely different to the circumstances here. Gravity concerned a statutory scheme designed to achieve interim payment for construction companies while disputes as to payment are adjudicated upon. The respondent had resisted payment until just a few weeks before the hearing and had then conceded the award on the day of the hearing. In those circumstances, the offer seemed to be no more than an attempt to avoid the costs of litigation which had been delayed for tactical reasons.

41. This case is quite different. Here, the Third Parties were faced with a claim relating to alleged "over-certification" and issues relating to the administration of the contract (cost control and so forth) which had morphed into a very significant claim for compensation in relation to defects in the garden walls only on the service of Consolidated Further and Better Particulars of Negligence and Breach of Contract, followed by Updated Particulars Loss and Damage some six months after the date for trial had been obtained, and just over two months before the trial started. Furthermore, in Gravity, the respondent conceded the substance of the claim in that case - which was much less complex than that made here. In this case, the Third Parties successfully contested the balance of the claim, which was considerable and indeed dwarfed the issues which were conceded. The remainder of the claim was vastly more valuable than the claim relating to the defects in respect of which concessions were made and required a 28-day hearing.

42. Similarly, Murnaghan is quite a different case on its facts. In that case, the offer was received at 11 a.m. on the hearing date itself, and remained open only until 2 p.m. In other words, at the exact time the case was due to start, the offer was made, and it was only kept open over lunch. The plaintiff did not even have a chance to consider it after court or overnight. (As it happened, the court had other business and did not start the hearing until 2 p.m., but the time available to consider it was still unreasonably short and it came unreasonably late.)

43. Finally, the plaintiff in Murnaghan obtained an award of approximately 80% of the offer (leaving aside the question of costs). Here, the Defendant (who is the plaintiff in this context) not only obtained approximately one third of the sum offered (and that is leaving aside the considerable sum owing in respect of the Third Parties' fees), but she also insisted on pursuing a lengthy and difficult trial in which she has, in effect, been almost completely unsuccessful. Indeed, at the express invitation of the Third Parties' legal team, the court has agreed that some key factual evidence given by the Defendant herself and one of her witnesses, cannot be accepted. Furthermore, and again in response to express submissions on the point, the court has accepted that the Defendant acted wholly unreasonably in dismissing first the contractor and thereafter the Third Parties before final inspections could be conducted and any appropriate assessment of the Final Account could be made.

44. In the events which have occurred, the Third Parties have not been found liable to the Defendant for anything other than a claim which they correctly conceded prior to trial. That concession had the result that the experts did not need to address the defects in the haunching or the reasons why it occurred (resulting, it would seem, in the absence of any real evidence to guide the court in attempting subsequently to apportion liability for the defects, although that, I think, is probably one of the inevitable imperfections in a trial of this kind rather than any real criticism). Neither were they required to address issues relating to the foundations of the Warehouse.

45. The Defendant also contends that I should not give weight to the Calderbank offer in exercising my discretion in costs as it did not specify the proportion of liability which the Third Parties were assuming as concurrent wrongdoers with the plaintiff. I do not entirely understand this objection. The Defendant settled with the plaintiff without requiring any such warranty, leaving the issue to be litigated as against the Third Parties. It was a matter for the Defendant to consider, on receipt of the offer, whether the sum in question would likely satisfy any liability on the part of the Third Parties if the matter went to trial. The amount offered would be "consideration" within the meaning of s. 17 (2) in due course and it was for the Defendant to consider whether that would have exposed her to risk of paying the Third Parties costs if (as has occurred) she ultimately did not succeed in demonstrating any greater liability on the part of the Third Parties at trial. In short, the Defendant could have accepted that offer and proceeded to trial against the plaintiff, just as she in fact accepted the plaintiff's offer on Day 4 and proceeded to trial against the Third Parties.

46. There was also reference in the letter refusing the offer to the possibility that the plaintiff would not be able to meet the award and that the Third Parties would thereby become liable for the entire claim under the 1% rule. However, I cannot see the relevance of this as the plaintiff was not insolvent.

47. In those circumstances, the making of the Calderbank offer is highly material to the exercise of the Court's discretion under s. 168 as it is relevant to the question of the extent to which the Defendant can be said to have been "partially successful". From the date of refusal of the Calderbank offer, the Defendant was, essentially, wholly unsuccessful.

Exercise of discretion pursuant to s. 168

**

48.?Section 168 (2)(a), (b), (c) and (d) are all material in this case as the Defendant was wholly unsuccessful from the date of refusal of the Calderbank offer and was only partially successful prior to that date. It is appropriate to limit the award of costs in favour of the Defendant in a manner which recognises both that she succeeded only on issues which were conceded prior to trial, and that she failed, having received those concessions, to abandon the remainder of her claim in which she was entirely unsuccessful.

49. Given the amount of the award which the Defendant has obtained, it is appropriate, in exercise of the discretion recognised in s. 168 of the 2015 Act, to limit the costs in a manner analogous to s. 17 (1), had it been applicable. It is therefore my view that the proposal of the Third Parties that the Defendant would be awarded costs only on the Circuit Court scale up to and including Day 1 of the trial meets the justice of the case.

50. Nevertheless, to mark the fact that the Defendant was unsuccessful on the issues which were actually litigated and necessitated a lengthy and protracted trial, the Third Parties should have their costs from Day 2 onwards, subject of course to adjudication in the event that they cannot be agreed.

51. In addition, it is appropriate to make an order analogous to the kind envisaged in s. 17 (5) of the 1981 Act, albeit in this case as an aspect of the discretion pursuant to s. 168 of the 2015 Act. Even prior to the trial, the issue of the haunching of the historic walls was far from being the most significant issue in the case. On the contrary, it seems from the expert reports which have been exchanged that it was one of a very long list of issues with which the legal practitioners and experts were engaged. As regards the defect in the foundations of the Warehouse, this was an issue from the outset but I understand that the original claim was for demolition and reconstruction of the Warehouse, before it was ultimately conceded that underpinning would adequately deal with the issues. As is apparent from the amount eventually agreed as representing the cost of remedying these issues, they formed a very small part of the overall claim.

52. By contrast, the Third Parties were faced with a very significant claim of well over ?1m and it seems inevitable that dealing with that issue would have attracted the greatest level of time and attention. That claim has been unsuccessful. So far as the "over-certification" claim is concerned, I have found that this would not have needed to be litigated had the Defendant cooperated with the Contractor in the procedures relating to the Final Account and had she permitted the Third Parties to appoint a quantity surveyor under the implied terms of the contract so as to resolve these issues. Indeed, even if certain clauses of the standard form RIAI Blue Form Contract had not been implied into the dealings between the parties, this would in any event have been both the reasonable and obvious manner in which to resolve disputes as to payments under a construction contract. Indeed, the sacking of the contractor before it had finished the Works meant that the series of inspections relating to the ongoing Works, the potential issue of a Certificate of Practical Completion, and the issue of the Final Certificate, never took place. Had those inspections taken place, and given that the Contractor anticipated a 12 month defects liability period, it is probable that the defects in the mortar would have come to light within the defects liability period and that the Third Parties would have required the contractor to remedy them.

Conclusion

53. In my view, the Third Parties have been entirely successful in defending the issues which were brought to trial. Prima facie, they have been successful on virtually every issue overall and have been successful on every issue brought to trial. Liability on a very small portion of the claim was conceded prior to trial, and this means that the Defendant should get a discount from what would otherwise be a costs order against her.

54. In the circumstances, while I do not agree that it is governed by s. 17? of the Courts Act, 1981, the Order sought by the Third Parties represents a fair overall outcome, as it recognises the almost overwhelming success of the Third Parties, but affords an appropriate discount to the Defendant for the defects on which liability was conceded.

55. In exercise of my discretion under s. 168 of the Legal Services Regulation Act, 2015, I will therefore order:

(i) That the Defendant be awarded her costs on the Circuit Court scale (with a certificate for Senior Counsel) up to and including Day 1 of the trial;

(ii) That the Third Parties be awarded their costs from Day 2 onwards;

(iii) That the Third Parties should be granted a "differential costs order" analogous to an order pursuant to s. 17 (5)(a) (ii) in respect of the additional costs incurred by them up to and including Day 1 of the trial, being the difference between the High Court costs incurred by them and the Circuit Court costs (again including a certificate for Senior Counsel) which they ought to have incurred.

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URL: https://www.bailii.org/ie/cases/IEHC/2026/2026IEHC162.html