Court rules Monaghan hotel manager must pay own costs after High Court dismissal challenge
The former manager of a Monaghan hotel will have to pay his own costs for a successful High Court challenge to an attempt to dismiss him for gross misconduct, the Court of Appeal has ruled.
Patrick McFadden was manager of the Glencarn Hotel in Castleblayney and brought injunction proceedings seeking to prevent his dismissal in 2016 following an internal investigation.
The case was ultimately settled on the basis of undertakings in relation to the investigation given to court by his employer, Muckno Hotels Ltd, and a full hearing was not required.
The court later awarded Mr McFadden his legal costs. The court said the undertakings Muckno had given "amounted to a success" to Mr McFadden.
Muckno appealed that costs decision and today the Court of Appeal said the High Court erred in awarding costs to him.
It substituted that decision with a "no order for costs" which means both sides have to pay their own legal bills.
Giving the three-judge Court of Appeal decision, Mr Justice Robert Haughton said in August 2016 Muckno, through its solicitors, made allegations against Mr McFadden concerning drinking on the premises which required explanation or investigation.
Further allegations were also made concerning the payment of musical performers in the hotel and of double booking which also required explanation.
He strongly denied the allegations.
In February 2017, he was suspended on full pay pending an investigation.
On May 3, 2017, he was found to have engaged in actions which amounted to gross misconduct.
He was given seven days to respond as to why he should not be dismissed. In the meantime his salary for that month had not been paid.
His lawyers threatened legal proceedings claiming the investigation was flawed and seeking the restoration of his pay.
Muckno replied it would continue to pay his salary until the disciplinary process is conducted but stood by the investigation and asked him again to respond to why he should not be dismissed. If he didn't reply, he would be dismissed, he was told.
He then sought a High Court injunction preventing dismissal and seeking a disciplinary hearing in accordance with fair procedures.
Muckno opposed the application but gave various undertakings to the court pending resolution of the proceedings, including not to dismiss him and to continue paying his salary.
By June 29, 2017, his post was terminated in accordance with his contract of employment. Muckno no longer sought to rely on the alleged misconduct findings.
Mr McFadden later brought unfair dismissal proceedings which are still pending before the Workplace Relations Commission.
As a result, the issues before the High Court did not go to a full hearing and only the question of who paid the legal costs remained. The court awarded costs to him.
Muckno appealed that decision while Mr McFadden opposed it.
Mr Justice Haughton, on behalf of the CoA, said the injunction application to the court was premature given Mr McFadden's failure to seek undertakings in advance of taking proceedings.
The termination of his employment in June 2017 under the terms of his contract did not render the High Court proceedings moot or dispose of his full claim including in relation to breach of constitutional rights, he said.
This was a case where there was no determination by the trial judge of the injunction and the rule that costs are paid by the loser does not apply. Instead, the court's general discretion in relation to costs applies, he said.
Mr Justice Haughton therefore allowed the appeal and substituted the costs order for "no order as to costs".
