THE HIGH COURT
			1998 No. 585 Sp 
IN THE MATTER OF FITZWILTON PLC
AND IN THE MATTER OF THE COMPANIES ACT, 1963
AND IN THE MATTER OF SECTION 204 OF THE COMPANIES ACT, 1963
BETWEEN
NEAL DUGGAN
			PLAINTIFF
AND
STONEWORTH INVESTMENT LIMITED
			DEFENDANT
JUDGMENT of Mr. Justice Vivian Lavan dated the 7th day of December, 2001.
	The Plaintiff’s Notice of Motion herein dated the 12th January, 2001 was made returnable for the 2nd April, 2001.  The reliefs sought were:-
1.	An Order pursuant to Order 99 Rule 38(3) of the Rules of the Superior Courts, 1986, that the taxation of items 8, 9, 10, 11, 24, 27, 34, 35 and 39 of the Defendant’s Bill of Costs herein and the amount of each of the said items be reviewed and that the said Bill of Cost be referred back to Taxing Master James Flynn for reconsideration and re-taxation in respect of the said items;
2.	Such further and other relief as to the honourable Court might seem just and;
3.	An Order providing for the costs of this application.
	The essential basis upon which the Plaintiff seeks to challenge the decision of Taxing Master Flynn is that the said Taxing Master declined to make a finding that there was an overlap in the proceedings before the Takeover Panel and the proceedings commenced in the High Court and subsequently heard on appeal before the Supreme Court.
	In his Affidavit sworn on the 18th January, 2001 the Plaintiff avers that:-
(a)	The background to this matter is set forth in (the Plaintiffs) statement of case dated the 30th April, 1999 to the Taxing Master and in the High Court note of Judgment herein on the 30th November, 1998 and in the Defendant’s Affidavit sworn by Barry Michael Cass on the 9th November, 1998 and the 4th March, 1999.
(b)	In the High Court (the Plaintiffs) objected on three grounds to the Defendant’s Notice of the 4th August, 1998 pursuant to Section 204 of the Companies Act, 1963 by which the Defendant sought to acquire (the Plaintiff’s) ordinary shares in Fitzwilton plc compulsorily.  (the Plaintiff) contended that the terms of the Defendants ordinary offer were unfair and unreasonable, secondly that the terms of the ordinary offer were not supported by proper information or independent advice or professional valuation and thirdly, that the Defendant was neither entitled nor bound to acquire (the Plaintiff’s) ordinary shares in Fitzwilton plc on the grounds that the ordinary offer was neither approved nor accepted by not less than three quarters in number of the holders of the ordinary shares therein. 
(c)	Prior to the High Court proceedings the Plaintiff had brought before the Irish Takeover Panel proceedings in which he complained about the fairness of the Defendant’s offer of the 26th May, 1998.  He alleges there was a considerable degree of repetition or overlap between the matters enquired into by the panel and those before the High Court.  The Takeover Panel conducted a far more thorough examination of the issues of 
           (i) 	the fairness or reasonableness of the Defendants offer of 26th May, 1998 to Fitzwilton plc ordinary shareholders; and,
           (ii) 	the adequacy of the information, advice and professional valuations which supported the ordinary offers; than was carried out in the High Court.
(d)	Throughout the enquiry conducted by the Takeover Panel and the case in the High Court, the Defendant engaged and was represented by the same group of persons, namely, Barry Michael Cass who was the Defendants US legal advisor and his principle legal counsel, Counsels Paul Gallagher SC, Brian Murray and Matheson Ormsby & Prentice Solicitors.  All the aforementioned persons were thus fully conversant with the matters which were enquired into by the Takeover Panel in 1998.
	In his submissions before me upon this Motion the Plaintiff indicated that he held 10 shares in Fitzwilton plc.  The value of the Plaintiff’s shares were determined in the sum of £5.  He informed the Court that in his view the value of the shares ought to have been 60p or 65p.  On a substantive case he would have been entitled to an extra 10p per share or at best 15p per share, giving a total entitlement, on the Plaintiffs case of an extra £1 or £1.50.
	In the course of his submissions before me the Plaintiff confirmed that when he decided to maintain the proceedings both before the Takeover Panel and the High Court and Supreme Court on appeal, he was fully aware that should he loose such proceedings he would, in all probability find himself liable in cost to the Defendant.  
	The application before the Takeover Panel involved appearing on three occasions; two days of argument and the last day for decision.  The proceedings came before the High Court on a Motion day.
	The Plaintiffs claim in both sets of proceedings as aforesaid arise by virtue of the fact that in August, 1998 the Defendant notified the Plaintiff that the offer had been combining or had been approved or accepted in respect of not less than four fifths in value of the shares affected and thereby gave notice in pursuance of the provisions of Section 204(1) that it wished to acquire the beneficial ownership of the Plaintiffs shares in the company.  The offer had been accepted by 47% in number of the ordinary shareholders in the company at the time.
	Following the Plaintiffs unsuccessful application before the Takeover Panel, he instituted proceedings before the High Court seeking to set aside the Notice.  He argued, first that it is the individuals who owned and controlled the Defendant had owned 27.6% of the shares of the company, it was necessary to give Section 204 teleological interpretation and that it should be applied in the same way as if the Defendant itself had owned 27.6% of the shares of the company at the time of the offer.  In such circumstances, he argued that the Defendant would not then have acquired that the shareholding prescribed in Section 204(2) as necessary to activate the compulsory acquisition provisions of the Section.  Secondly, the Plaintiff argued that the discussion vested in the Court under Section 204(5) not to order a compulsory acquisition should be exercised because the majority of acceptances of the offer required to activate the compulsory acquisitions provisions had been achieved only by treating the two shareholdings controlling the Defendants as separate and distinct from the company when this was a fiction which did not correspond to the commercial reality of the situation.
	The High Court refused the relief sought and the Plaintiff appealed to the Supreme Court where the said Court dismissed his appeal.  The said Judgment of the Supreme Court Murphy J.; Barrington and Keane J.J. concurring should be referred to for its full effect.  The hearing before the Supreme Court took two days.  Costs of the appeal were also awarded to the Defendant.
	It is to be noted that this review arises from the taxation of the Defendants costs in the High Court only.
	The Defendants having raised their costs, in relation to the High Court costs as aforesaid, the matter came before Taxing Master Flynn on the 30th April, 1999, the 4th November, 1999 and the 3rd October, 2000. On the first appearance before the Taxing Master the Plaintiffs major submission was to the effect that there was an overlap in the case the Defendants had to meet both before the Takeover Panel and the Court proceedings.
	Mr. Collins, Counsel for the Defendant, following his oral submissions furnished the Court with written proceedings to the effect that there were no grounds for this Court interfering with the allowances made by the Taxing Master and accordingly asked this Court to refuse the relief sought by the Plaintiff.

THE ITEMS IN DISPUTE
4.	The items in dispute, together with the allowances complained of by the Plaintiff are set out hereunder, as are the allowances made by the Taxing Master on the initial taxation of the Defendant’s Bill of Costs:
Item No.	Nature of item	Amount claimed	Amount allowed	Amount allowed on initial taxation	
8	Solicitor - schedule item	2.02	2.02	Disallowed	
9	Fee for drafting affidavit (Junior Counsel)	500	300	Disallowed	
10	Solicitor - scheduled item	2.02	2.02	Disallowed	
11	Fee for settling affidavit (Senior Counsel)	250	150	Disallowed	
24	Brief fee (Senior Counsel)	15,000	12,000	9,000	
27	Brief fee (Junior Counsel)	10,000	8,000	6,000	
34	Fee for written submission
(Senior Counsel)	2,500	2,000	Disallowed	
35	Fee for written submission
(Junior Counsel)	2,500	2,000	Disallowed	
39	Solicitors’ Instruction fee	30,000	25,000	16,000	

THE PROCEEDINGS BEFORE THE TAXING MASTER
5.	The Bill of Costs came before the Taxing Master for taxation on the 4th November, 1999 and the Taxing Master delivered a written ruling thereon on the 17th December, 1999.  Both parties were dissatisfied with aspects of this ruling and carried in objections pursuant to Order 99 Rule 38(1).  These objections were heard by the Taxing Master on the 3rd October, 2000 and he delivered a written ruling thereon on the 15th December, 2000.  It is that ruling that is the subject matter of this review.

APPLICABLE LEGAL PRINCIPLES - (I) PARTY AND PARTY COSTS
13.	There is no dispute that the costs awarded to the Defendant herein by the High Court were party and party costs which fell to be taxed as such.

14.	In this regard, Order 99, Rule 10(2) of the Rules of the Superior courts provides that:
	“Subject to the following provisions of this rule, costs to which this rule apply shall be taxed on a party and party basis, and on a taxation on that basis there shall be allowed all such costs as were necessary or proper for the attainment of justice or for enforcing or defending the rights of the party whose costs are being taxed.”

	Order 99, Rule 37(18) further provides that:
	“On every taxation the Taxing Master shall allow all such costs, charges and expenses as shall appear to him to have been necessary or proper for the attainment of justice or for enforcing or defending the rights of any party, but save as against the party who incurred the same, no costs shall be allowed which appear to the Taxing Master to have been incurred or increased through overreaction, negligence or mistake or by payment of special fees to Counsel or special charges or expenses to witnesses or other persons or any other unusual expense.”

15.	The basis of party and party costs is one of indemnity - see per Walsh J. in the Supreme Court in Attorney General (McGarry) -v- Sligo County Council [1991] 1 IR 99 - though not necessarily a full indemnity in every case:  see Tobin and Twomey Services Limited -v- Kerry Foods Limited [1999] 1 ILRM 428.
(II) - THE JURISDICTION OF THIS COURT ON REVIEW
16.	The jurisdiction of the High Court on a review of taxation has been the subject of very many recorded decisions.  The position obtaining prior to the enactment of Section 27 of the Court and Courts Officers Act, 1995 (“the 1995 Act”) was surveyed at length by Laffoy J. in Minister for Finance -v- Goodman (No.2) [1999] 3 IR 333: see in particular at page 345 of the report.  However, given that the taxation at issue in this application was and is governed by the provisions of Section 27, it does not appear necessary or appropriate to consider the pre-1995 Act position in detail.

17.	Section 27(1) and (2) of the 1995 Act confer new powers on the Taxing Master in relation to the taxation of party and party costs.  These provisions significantly alter the powers and functions of the Taxing Master in such taxations: see per Laffoy J. in Minister for Finance -v- Goodman (No.2) at 349-350 of the report, as well as the judgment of this Court (Kearns J.) in Superquinn Limited -v- Bray UDC & Others (Unreported, High Court, 5th May, 2000) at pages 21-22.

18.	Section 27(3) of the 1995 Act is addressed to the powers of the Court on review.  In relevant part, it provides that:
	“The High Court may review a decision of a Taxing Master of the High Court.....made in the exercise of his or her powers under this section, to allow or disallow any costs charges, fees or expenses provided only that the High Court is satisfied that the Taxing Master.....has erred as to the amount of the allowance or disallowance so that the decision of the Taxing Master...is unjust.”

19.	Smyth -v- Tunney [1999] 1 ILRM 211 appears to be the first case in which this provision was considered.  Having set out the text of the section, McCracken J. stated:
	“The principle upon which I must act, therefore, is not simply to decide whether the Taxing Master erred, but also, if I am to alter his decision, I must find that the taxation was unjust.  I cannot approach this issue on the basis of trying to assess what costs I would have awarded had I been the Taxing Master.  It is on this basis that I turn to consider the individual items in dispute.” (at page 213)

20.	This passage was subsequently cited with approval by Kelly J. in Tobin and Twomey Services -v- Kerry Foods Ltd, by Laffoy J. in Minister for Finance -v- Goodman and by McGuinness J. in Bula Ltd (in Receivership) -v- Tara Mines Limited (Unreported, High Court, 7th March, 2000).  It was also cited with evident approval by Geoghegan J. in Bloomer -v- The Incorporated Law Society of Ireland [200] 1 IR 383 in which, after quoting the passage, the Learned Judge continued:
	“In considering whether the Taxing Master erred, I must see whether in arriving at his decision he had regard or excessive regard to some factor which he either should not have had any regard to or to which he should have had much less regard.  I then have to consider whether there was some significant factor to which the Taxing Master ought to have had regard and to which he either had no regard at all or insufficient regard.  Those are examples of error in principle in the consideration of the facts but of course the Court must also consider whether the Taxing Master has fallen into error in either law or jurisdiction.
	If the Court finds that the Taxing Master has erred in the sense described, this Court then has to address the second question which is whether the taxation was unjust.  In relation to any given item in the taxation which is in controversy, the justice or injustice of the decision will be determined by the amount.  If after falling into error, the Taxing Master in fact arrives at the correct figures or at a figure which it might reasonably have been open to him to have arrived at, the Court should not interfere. The decision may not be exactly the same as the decision which the Court would have made but it cannot be described as an unjust decision.”  (at page 387)

21.	These authorities wee considered by Kearns J in Superquinn Limited -v- Bray.  Although the Learned Judge did not find himself with full agreement with the approach of his colleagues, he also emphasised the heavy burden imposed on an Applicant for review by Section 27(3), stating that the wording of the subsection seemed:
	“To represent a significant shift of emphasis and to impose a heavier burden on any Party seeking to challenge a Ruling or the Taxing Master.  This interpretation is acknowledged at p. 25 of the Goodman judgment and can scarcely be a matter of doubt.  It would suggest (when taken in conjunction with S. 27(1) and (2)), that the Court should exercise a considerable degree of judicial restraint in the context of a review, although it must clearly intervene if failure to do so would result in an injustice.”  (at pages 21-22)

	Later, at page 25 of the judgment, the Learned Judge expressed the opinion that in assessing when an error as to amount became “unjust”, the High Court should adopt a standard of review similar to that employed by the Supreme Court in reviewing awards of damages, that is to say it ought not to intervene unless an error of the order of 25% or more was established.

22.	All of these authorities emphasise the narrow ambit of the Court’s functions on a review of taxation.  A review is not an appeal on the merits nor is it open to an Applicant simply to invite the Court to take a different view to the view taken by the Taxing Master as to the amounts to be allowed in respect of disputed items.  As indicated in particular by the judgment of Geoghegan J in Bloomer, some error of approach requires to be established, the effect of which was to render the decision of the Taxing Master “unjust”.

THE OBJECTIONS TO THE ALLOWANCES IN DISPUTE
23.	The essential objection made by the Plaintiff to the allowances in dispute is that they are excessive having regard to the alleged fact that the issues in the Section 204 proceedings were substantially identical to the issues which had previously been considered by the Takeover Panel and that the burden on the Defendant’s legal advisers in preparing for the proceedings was thereby substantially reduced.

24.	This objection was largely accepted by the Taxing Master in his ruling of the 17th December, 1999.  However, following a more detailed review of the matter in the context of the parties’ objections, the Taxing Master took a different view.  It is submitted that the Taxing Master was not merely entitled to take such a view on the material before him but that any other view could not be sustained.

25.	The proceedings before the Takover Panel arose from a complaint made by Mr. Duggan under the Takeover Rules concerning the alleged lack of independence of the independent directors of Fitzwilton plc.  A hearing was conducted into this complaint and by a written ruling was issued by the Panel on the 18th July, 1998.   This ruling (a copy of which is supplied separately) makes it perfectly clear that the complaint made by Mr. Duggan, and the proceedings before the Panel, related only to the single issue of whether the independent directors of Fitzwilton plc had, in fact, such links with the bidding party and/or persons associated with the bidding party, as to compromise their independence or create a conflict of interest.  As appears from the ruling issued by the Panel, Mr. Duggan’s complaint was not accepted by it.

26.	The only other matter considered by the Takeover Panel also arose from a complaint made by Mr. Duggan, this time in relation to the position of Morgan Grenfell, the advisors to the independent directors of Fitzwilton.  This complaint alleged that Morgan Grenfell was not qualified to act as independent advisors. Again, it was dismissed by the Panel, this time without holding a hearing. [The Panel’s ruling is exhibited as exhibit “J” to the affidavit of Barry Cass sworn on the 9th November, 1998 in the 204 proceedings.]

27.	The Takeover Panel did not and of course could not have adjudicated upon any of the issues which subsequently arose in the Section 204 proceedings.  As is clear from the express provisions of Section 204(1), it is the High Court (and, on appeal, the Supreme Court) and the High Court alone that has the power to “to order otherwise” when a dissenting shareholder seeks to resist the acquisition of his or her shareholding.  The functions of the Takeover Panel are set in the Irish Takeover Panel Act, 1997 and the Rules made thereunder and do not include any functions in relation to Section 204.  Moreover, at the time the Plaintiff made his complaints to the Panel, the provisions of Section 204 had not been invoked by Stoneworth.
28.	Furthermore, a consideration of the judgment of the High Court, and the judgment of the Supreme Court on appeal, as well as the pleadings and submissions exchanged by the parties, demonstrates that the issues which arose in the Section 204 proceedings were materially different to the issues which were considered by the Takeover Panel.  The issues raised by the Plaintiff before the High Court were summarised by Mr. Justice Kelly in the following terms:
	“First, he complains of the inability of the Company to invoke Section 204 and also says the case is one which Section 204(2) is applicable.  Secondly, he says that the valuation of the shares is not fair and reasonable and that he was given insufficient information  in relation to the value.  Thirdly, he animadverts on the independence of Morgan Grenfell”.  (at pages 3 of the judgment)

29.	Of these identified issues, only the third had any connection with the issues previously considered by the Takeover Panel, (though, as the Learned Judge observed in his judgment, the Plaintiff had in his affidavit failed to make any reference to the fact that he had made a complaint concerning the position of Morgan Grenfell which had been dismissed as having no substance). This issue was, on any view, ancillary and subsidiary to the other issues raised by the Plaintiff which involved important and complex issues of statutory construction.

30.	In the course of hearing and ruling upon the initial taxation and the subsequent objections, the Taxing Master was fully addressed on the alleged overlap between the Section 204 proceedings and the proceedings before the Takeover Panel.  Ultimately, he was satisfied that, while there was some very limited overlap, it did not bear materially on the proper assessment of the value of the work done by counsel and solicitor in the proceedings and his determination of what was fair and reasonable, having regard to the provisions of Section 27(1) and (2).  The Defendant respectfully submits that there are no grounds for disturbing the Taxing Master’s finding in this regard.

31.	The only other ground of objection which appears to be advance by the Plaintiff is that the allowances made by the Taxing Master were excessive because, it is asserted, the Defendant must have considered the provisions of Section 204 in the context of making its takeover offer for Fitzwilton.  This objection is, it is submitted, wholly misconceived.  No doubt, the Defendant, with its advisers, had cause to consider the possible application of Section 204 in the event that its takeover offer was accepted by the requisite majority of Fitzwilton’s shareholders, as no doubt it considered many other potentially applicable statutory provisions.  However, having to defend the actual proceedings brought by the Plaintiff and to address the actual arguments made by him - many of which were entirely novel - was, it is submitted, another matter entirely.

32.	The Plaintiff saw fit to institute these proceedings notwithstanding that he held only 10 shares in Fitzwilton.  Quite clearly, the Defendant had to defend those proceedings.  Having done so successfully, it is entitled to the costs of defending those proceedings - which are the costs as determined by the Taxing Master - and the argument made by the Plaintiff provides no basis for reducing the level to those costs below the allowances made by the Taxing Master.  In any event, of course, this objection was fully considered by the Taxing Master.

33.	Ultimately, having regard to all the relevant material before him and the submissions of the parties, the Taxing Master concluded that the allowances in dispute (which were, it should be said, less than the amounts claimed in the Bill of Costs) were fair and reasonable.

34.	It is submitted that, having regard to the vital importance of the proceedings to the Defendant, the complexity of the issues raised in the Section 204 proceedings and all the other circumstances of the case, the Taxing Master had ample grounds for so concluding and there are no grounds on which this Honourable Court should interfere with the allowances made by the Taxing Master.

35.	In the circumstances, the Defendant asks the Court to refuse this application for a review of the taxation conducted by the Taxing Master in this case.
	I have carefully considered the submissions made by the Plaintiff and those of the Defendants particularly at paragraphs 25, 26, 27, 28, 29, 30 and 31 aforesaid.
	Having given the matter careful consideration I conclude that there is no overlap of any substantial or serious import as submitted by the Plaintiff.  For the reasons set out aforesaid I am satisfied by both sets of proceedings were correctly assessed by the Taxing Master for what they were namely, two different sets of proceedings.  In the circumstances having regard to the legal propositions governing this Courts power to review the determination of the Taxing Master, I find in favour of the Defendants.  In the circumstances, I refuse the Plaintiff his relief sought.
	For the purposes of completeness I annex hereto the Plaintiffs list of authority and the Defendants list of authority.
	Plaintiffs list of authority.
1.	Smyth -v- Tunney [1999] 1 ILRM 211 (216) (Submissions).
2.	Min Fin -v- Goodman [1999] 3 IR 333 (345) (Review Principle).
3.	Simpsons Motor Sales (1964) 3 AER 833 (838 - C/G) (Top Counsel).
4.	Francis -v- Francis (1955) 3 AER 836 (838 - E/G) [other cases] (Reasons required).
5.	Anheuser Buscu [1987] IR 329 (Ex McCracken).
6.	Eaves -v- Eaves (1955) 3 Aer 849.
7.	Ryan -v- VIP Taxi Coop (Unreported) 20th January, 1989.
8.	Creedon -v- Criminal Institute [1988] IR 51.

	Defendants list of authority.
A.	Statutory Provisions and Rules of the Superior Courts
1.	Section 27 of the Courts and Courts Officers Act, 1995.
2.	Rules of the Superior Court, Order 99.
3.	Section 204 of the Companies Act, 1963.
4.	Irish Takeover Panel Act, 1997.

B.	Caselaw
5.	Attorney General (McGarry) -v- Sligo County Council [1991] 1 IR 99 (extract).
6.	Tobin and Twomey Services -v- Kerry Foods Ltd [1999] 1 ILRM 428.
7.	Minister for Finance -v- Goodman [1999] 3 IR 3336.
8.	Smith -v- Tunney [1999] ILRM 211.
9.	Bloomer -v- Incorporated Law Society [2000] 1 IR 383.
10.	Superquinn Limited -v- Bray UDC (Unreported, Kearns J, 5th May, 2000).
11.	Gallagher (a minor) -v- Stanley (Unreported, Kearns J, 23rd March, 2001).