Corcoran v Alexandru

JurisdictionIreland
JudgeMs. Justice Creedon
Judgment Date26 January 2018
Neutral Citation[2018] IEHC 48
Date26 January 2018
CourtHigh Court
Docket Number[2015 138 CA] [2015 137 CA]

[2018] IEHC 48

THE HIGH COURT

Creedon J.

[2015 138 CA]

[2015 137 CA]

BETWEEN
JOHN GERARD CORCORAN
AND
MARTIN CORCORAN
APPELLANTS/DEFENDANTS
AND
NEAGU ALEXANDRU
FIRST NAMED RESPONDENT
AND
AVIVA INSURANCE LIMITED
SECOND NAMED RESPONDENT/PLAINTIFF

Practice & Procedure – O. 29 of the Rules of the Superior Courts 1986 – Security for costs – Costs – Regulation No.44/2001

Facts: The second named respondent/plaintiff sought an order from the Court pursuant to the provisions of o. 29 of the Rules of the Superior Courts, directing that the appellants should provide security for the costs of the second named respondent/plaintiff in relation to the appellants' appeal of a decision of the President of the Circuit Court. The second named respondent/plaintiff relied on the case of Angela Farrell v. Governor and Company of Bank of Ireland & Ors. [2013] 2 ILRM 183, where it was held that the Court must be cognisant of when it's considering whether to grant an order for security for costs. The appellants/defendants relied on the case of Salthill Properties Limited and Brian Cunningham v. Royal Bank of Scotland plc, First Active PLC and Bernard Duffy [2011] 2 IR 441. The appellants/defendants contended that both the appellants lived in the European Union at present, and therefore, the Court must refuse the respondent's application for an order for the security for costs.

Ms. Justice Creedon denied the relief sought by the second named respondent/plaintiff. The Court held that in order to grant the security for costs, two conditions should be satisfied namely, the plaintiff must be ordinarily resident outside the State but within the EU member states, and that the defendant must have a prima facie defence to the plaintiff's claim. The Court found that both the appellants were residents of the United Kingdom wherein the Irish Court's orders were recognizable. The Court, however, held that given the exit of the United Kingdom from the EU, it was not clear how the orders of the Court would be enforced, and thus, it would not grant the desired relief.

JUDGMENT of Ms. Justice Creedon delivered on the 26th day of January, 2018
BACKGROUND
1

On the 4th of December, 2017, the second named respondent sought an order from this court, pursuant to the provisions of Order 29 of the Rules of the Superior Courts, directing that the appellants provide security for the second named respondent's costs in relation to the appellants' appeal of a decision of the President of the Circuit Court, Judge Groarke, dated 7th of July, 2015.

2

The case arose from a road traffic accident, which was alleged to have occurred on 24th of June, 2012. The President held that the accident was fraudulently staged by the appellants and dismissed their claim.

3

Both appellants currently reside in the United Kingdom.

LAW
4

Order 29 of the Rules of the Superior Courts 1986 was opened to the court by both parties. The pertinent section reads as follows:

‘When a party shall require security for costs from another party, he shall be at liberty to apply by notice to the party for such security; and in case the latter shall not, within forty-eight hours after service thereof, undertake by notice to comply therewith, the party requiring the security shall be at liberty to apply to the Court for an order that the said party do furnish such security.’

5

Counsel for the second named respondent opened the case of Angela Farrell v. Governor and Company of Bank of Ireland & Ors. [2013] 2 ILRM 183, and specifically, Clarke J's judgment therein.

6

The case sets out the general principle that the court must be cognisant of when considering whether to grant an order for security for costs. At p. 192, Clarke J, quoting from Delany and McGrath: Civil Procedure in the Superior Courts, noted that:

‘The authors suggest that the concept of ordering a party to provide security for the costs of an action effectively involves balancing the right of a defendant to recover costs if he successfully defends a claim against the right of a plaintiff, rooted in the Constitution, to have access to the courts.’

7

At p. 197, Clarke J also stated:

‘So far as individual plaintiffs are concerned the jurisprudence suggests that the High Court will not order security against an individual plaintiff unless that plaintiff is out of the jurisdiction (which in this context now includes, in practice, the European Union in respect of EU nationals).’

8

Clarke J went on to discuss the underlying rationale for such a principle:

‘A plaintiff, through impecunious, must be entitled to bring and pursue a case. The awarding of security for costs against plaintiffs from outside the relevant area is based on the difficulty of recovering costs where the plaintiff is not readily amenable to the process of the Irish courts or other courts which, under the provisions of Regulation 44/2001, give a high level of recognition to orders (including cost orders) of the Irish courts.’

9

At p. 197, Clarke J noted that the nature of the case necessarily impacts on an application for an order of security for costs:

‘There are important differences of principle between the position that pertains before a court of first instance and that which arises in respect of an appeal.’

Among these differences, Clarke J noted at p. 198 that by the appeal stage:

‘The court has available to it a detailed account of the process which was engaged in by all parties before the court of first instance. Furthermore it is much easier for an appellate court to at least form some view on the likely chances of success or failure of an appeal. The facts have been found by the trial judge. Any argument that findings of fact which were important to the decision could not be sustained on appeal can only be directed to the limited basis on which this court can review findings of fact.’

It was stated that an application for security for costs may be influenced by these considerations.

10

Counsel for the appellants opened the case of Salthill Properties Limited and Brian Cunningham v. Royal Bank of Scotland plc, First Active PLC and Bernard Duffy [2011] 2 IR 441, where Clarke J, in refusing an order for security for costs against the second plaintiff, stated at p. 450 that the rationale underlying Order 29 of the Rules of the Superior Courts 1986 is:

‘To protect defendants from spurious claims which may be brought against them by plaintiffs who reside outside the jurisdiction and who may be able to evade any subsequent order as to costs made against them.’

11

At p. 451, a two pronged test was established to guide the court when making such an order:

‘In order for security to be ordered against an individual plaintiff, two conditions must be satisfied:

a) the plaintiff must be ordinarily resident outside of the jurisdiction; and

b) the defendant must have a prima facie defence on the merits of the plaintiff's claim.’

However, it was suggested that even where both prongs of the test are satisfied, the court retains a significant discretion to decline to grant an order, if special circumstances exist which require said refusal.

12

Citing Pitt v. Bolger [1996] 1 IR 108 and European Fashion Products Ltd & ors v. Eenkhoorn & ors [2001] IEHC...

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