Campus and Stadium Ireland Ltd v Dublin Waterworld Ltd

• Jurisdiction: Ireland
• Judge: Denham J.
• Judgment Date: 25 October 2007
• Neutral Citation: [2007] IESC 48
• Court: Supreme Court
• Docket Number: [Appeal No: 321 & 327/04]
• Date: 25 October 2007

THE SUPREME COURT

Denham J.

Kearns J.

Finnegan J.

[Appeal No: 321 & 327/04]

Between/

Dublin International Arena Limited

Applicant/Appellant

And

Campus and Stadium Ireland Development Limited, The Minister for Tourism, Sport and Recreation, Ireland, and The Attorney General

Respondents

And

Rohcon Limited, Dublin Waterworld Limited and Waterworld (UK) Limited

Notice Parties

Abstract:

Practice and procedure - Security for costs - Public contracts - Companies Act 1963 - Whether there were special circumstances justifying the refusal of orders for security for costs in judicial review proceedings relating to the award of a public contract.

The appellant appealed against an order of the High Court requiring it to furnish full security for the costs of the first named respondent pursuant to section 390 of the Act of 1963 and for one third of the costs of the second to fourth named respondents pursuant to Order 29 rule 1 of the Rules of the Superior Courts. The second to fourth named respondents cross-appealed from the limitation of the High Court Order. The order for security for costs arose out of judicial review proceedings regarding the award of a public contract pursuant to Council Directive 89/665/EEC as amended by CD 92/13/EEC.

Held by the Supreme Court (Denham, Kearns, Finnegan JJ) in allowing the appeal and dismissing the cross appeal: That there was credible evidence that the appellant would be unable to pay the costs of the proceedings to the respondents if the respondents were successful and therefore the onus shifted to the appellant to prove that there were special circumstances which would justify a refusal of orders for security for costs. The delays by the respondents in applying for security for costs amounted to a special circumstance upon which their applications should be refused.

Reporter: L.O’S.

1 Judgment delivered the 25th day of October. 2007 by Denham J.

• 1. This is an appeal by Dublin International Arena Limited, the applicant/appellant, hereinafter referred to as 'the appellant', from the judgment of the High Court (O Caoimh J.) delivered on the 26th day of May, 2004, which order required the appellant to furnish full security for the costs of Campus and Stadium Ireland Development Limited, the first named Respondent, hereinafter referred to as 'Campus', and for one third of the costs of The Minister for Tourism, Sport and Recreation, Ireland and the Attorney General, being the second to fourth named respondents. The order in respect of Campus was made pursuant to s.390 of the Companies Act, 1963 and the orders in relation to the second to fourth named respondents was made in the exercise of its discretion by the Court pursuant to Order 29, r.1 of the Rules of the Superior Courts.

• 2. The second to fourth named respondents have cross-appealed from the limitation of the order of the High Court, that the appellant furnish security for one third of the second, third and fourth named respondents' costs in the proceedings.

• 3. Rohcon Limited, Dublin Waterworld Limited and Waterworld (UK) Limited are notice parties, and, where appropriate, are referred to as 'Waterworld'.

• 4. This appeal raises issues as to an order for security for costs in proceedings which seek judicial review of the awarding of a public contract.

2 5. Background

3 The background facts to the judicial review proceedings arise out of the awarding of a contract to design, build, finance and, for a period of thirty years, to operate and maintain the National Aquatic Centre at Abbotstown, Co Dublin. Campus was established by the Government to organise the public tender competition for the contract. On the 28th July, 2000, a tender notice was published. The award criteria selected was that of the most economically advantageous tender. Nine requests to participate were reviewed and five were selected to submit outline bids. Three of these were then requested to submit detailed bids. These three were: (a) the appellant, (b) Prospero Limited, and (c) Waterworld. On 19th December, 2000 a decision was taken that Waterworld should be given top ranking. On 7th February, 2002, it appears that a contract was entered into between Campus and Waterworld. The judicial review proceedings, commenced on the 7th May, 2002, seek a review of the award of the public contract pursuant to Council Directive 89/665/EEC, (the Remedies Directive), as amended by Council Directive 92/13/EEC. The judicial review proceedings were brought under Order 84A of the Rules of the Superior Courts.

4 6. Motions

5 The security for costs issue was raised by motion issued on the

6 11th February, 2003, by which the second to fourth named respondents sought security for costs. On the 3rd March, 2003, Campus, also by way of motion, sought security for costs.

7 7. Parties

8 The parties to the proceedings are as follows.

9 7.1 The appellant is a private company limited by shares. It was formed as a vehicle to organise and lead an international consortium to compete for the award of the contract for the aquatic centre and arena.

10 7.2 The first named respondent, Campus, is a public undertaking, the shareholding of which is held 25% by the Taoiseach, 25% by the Minister for Finance, and 50% by the Minister for Arts, Sports and Tourism. It is the contracting party with Waterworld.

11 7.3 The second named respondent, the Minister for Tourism, Sport and Recreation, is the Minister with the responsibility for the awarding of the contract.

12 7.4 The third and fourth named respondents are Ireland and the Attorney General.

13 7.5 When appropriate I shall refer to the second to fourth respondents as 'the State'.

14 7.6 The notice parties are the members of the Waterworld Consortium to whom the contract was awarded.

15 8. Issue

16 The issues on this appeal are: (a) Whether or not it is possible to make an order requiring the provision of security for costs in an application for the review of the award of a public contract pursuant to the Remedies Directive. (b) If it is possible to make an order requiring the provision of security for costs, whether it was appropriate on the facts of this case to order such security.

17 9. The High Court

18 On the issue as to the jurisdiction of the Court to make provision for the security for costs the learned High Court judge held:

19 "It is conceded that the Applicant has an arguable case but as to whether it should be categorised as a strong case in light of the complexity of the case is something that I would be slow to make any determination of at this stage, notwithstanding the submissions made by counsel that I should engage in a minute consideration of the submissions and come to a view as to the strengths of the respective cases advanced on behalf of the various parties to these proceedings.

20 I am not inclined to the view that the EC Directives are such as necessarily preclude an application for security for costs. I recognize that the Directive envisages applications to be brought in a timely fashion. Insofar as there has been delay in this case, I don't think it all falls on one side. It is conceded by counsel for the State that it could have and possibly should have moved in January 2003 in light of the response received in the previous

21 December refusing security for costs, but in the circumstances of the case, I have to bear in mind what took place in the context of the delay complained of and I am not at all satisfied that the Applicant has satisfied this Court that it has incurred costs or any significant costs in the interval or acted to its detriment in any way. Therefore, insofar as it is suggested that there has been, effectively, a situation giving rise to a legitimate expectation on behalf of the Applicant that no security would be sought, I don't find that case to be established. I don't believe that any basis exists for an estoppel in the seeking of the security for costs in the instant case. I also do not believe that principles of equivalence or of effectiveness are such as to preclude such an application.

22 Again, with regard to the European Convention of Human Rights, I am conscious of the fact that in many respects the principles underlying the European Convention are principles which are recognized as part of our constitutional heritage in this country and, in particular, in regard to the judgment of O'Hanlon J. in Salah -v- The General Accident, I believe that the underlying principle addressed there is no different to the principle enshrined in Article 6.1 of the Convention upon which reliance was placed -- namely, the right of access to the Courts. It has been recognized as an unenumerated constitutional right in this jurisdiction.

23 While there may have been some delay in moving to this Court, I think the applicant is in a Catch 22 position because, on the one hand, it is submitted that I should have regard to all the substance of the case in assessing the claim for security for costs and, on the other hand, this necessarily involves giving to the Respondents in the proceedings an opportunity to indicate the nature of their defence to the Court. Even if the more elaborate submission were not to be upheld in the context of demonstrating a real defence, they would have to be afforded an opportunity of doing so: At the same time, I believe that an application could have been made at an earlier date but I am not at all satisfied that even had it been moved some months earlier that it would have changed the essential situation that pertained at the stage when it was sought.

24 With regard to the issue of proportionality, I accept the submissions made on behalf of the Respondents which essentially rely upon the nature of the Applicant being a company, enjoying rights as a company with limited

25 liability and also faced...