Judge to lead full hearing of legal dispute over liability for €380,000 legal fees – The Irish Times

A dispute over whether a couple are liable for around €380,000 in legal fees in relation to litigation over a mortgage is to be brought before a full hearing in the High Court.

Nothing in the “limited” papers presented to the court indicates that Stephen and Marina Hatton were given advance notice that legal fees “would be so high,” Justice Garrett Simons noted.

The only figure mentioned in the first pledge, issued in 2015, was a sum of 10,000 euros requested by attorney Cormac Lohan as an upfront payment, the judge said.

While it may be that the fee estimate could not have been more accurate at this early stage in the Danske Bank litigation, it is “not apparent” from the “restricted” papers that the defendants ever received an updated fee estimate, he said.

Mr Lohan, who practices as Lohan & Co Solicitors, initiated proceedings against the Co Wexford-based couple in July 2018, alleging around €381,277 was due and owed in connection with litigation relating to a mortgage in favor of Danske Bank .

He sought summary judgment but agreed to a plenary hearing last March, Judge Simons noted in his most recent ruling, setting out the terms of that remanding.

The solicitor’s case is based on a March 8, 2017 cost invoice sent to the couple and a company, Edenfarms Ltd.

The lawyer’s fee was 170,000 euros plus VAT, and the level of detail in the cost accounting was “sparse”, “particularly in view of the very high sums involved”, according to the judge. Fee notes for Junior and Senior Counsel amounting to €136,100 plus VAT were attached to the cost calculation.

The legal fees were not assessed by the Legal Services Regulatory Authority (LSRA), which took over the High Court Taxing Master’s cost-decision functions in 2019, he noted.

The couple allegedly filed a complaint about Mr. Lohan with the bar association in September 2018, a few months after Mr. Lohan started that case, he said. Her complaint raised several issues, some of which related to cost accounting.

In December 2018, the Society informed them that they could not pursue their complaint until the attorney’s case was resolved, but that they could raise the matter with the Society thereafter.

On March 13 last year, the court heard that Mr. Lohan now accepted that his lawsuit should go to the plenary hearing and also agreed to refer the cost accounting for a decision by the LSRA.

The defendants’ lawyers raised no substantive objections to a plenary hearing, but pointed out the delay in the proceedings so far. Aside from any question of the decision, the Hattons maintained their defense that there was an ancillary agreement under which the costs were to be borne by another company, Moralltach Ltd, the solicitor said.

Mr Judge Simons ruled the case should be heard in plenary over, among other things, a “substantial dispute of substance” over whether there was any type of ancillary agreement between the parties whereby Moralltach Ltd would make a loan to cover the entire Debts owed by the defendants to Danske Bank and would also pay all legal costs.

The judge found Mr. Lohan “strongly” denied such an agreement and said the issue could not be resolved on the basis of sworn evidence alone.

A second reason for a plenary hearing concerns whether the summary subpoena, as it stands, meets the summary hearing requirements set out by the Supreme Court, he said. A third reason was whether the cost accounting was sufficiently detailed to enable Mr Lohan to rely on certain provisions of the Solicitors Acts.

The trial judge will decide those questions, the judge said, adding that he himself made no finding other than that the threshold of a reasonable or credible defense had been reached.

A prerequisite for the referral back to the plenary session is that the accused can waive the legal costs for the main hearing if they wish. This is to ensure they are not hampered by the lack of detail on the cost statement “nor by the (apparent) lack of an accurate fee estimate,” the judge said.

The defendants do not have to seek a court decision and may instead want to defend the case for other reasons, including the fact that they did not have legal costs due to the alleged agreement with Moralltach GmbH, he said.