Diarem Ltd v Cliffs of Moher Ltd

• Jurisdiction: Ireland
• Judge: Mr. Justice Noonan
• Judgment Date: 27 March 2017
• Neutral Citation: [2017] IEHC 191
• Docket Number: [2016 No. 259 MCA]
• Court: High Court
• Date: 27 March 2017

IN THE MATTER OF THE PLANNING AND DEVELOPMENT ACTS 2000 (AS AMENDED) AND IN THE MATTER OF AN APPLICATION PURSUANT TO SECTION 160 OF THE PLANNING AND DEVELOPMENT ACT 2000

BETWEEN

DIAMREM LIMITED

APPLICANT

AND

CLIFFS OF MOHER CENTRE LIMITED

AND

CLARE COUNTY COUNCIL

RESPONDENTS

[2017] IEHC 191

[2016 No. 259 MCA]

THE HIGH COURT

Planning and Development – s. 160 of the Planning and Development Acts 2000 – s. 52 of the Companies Act 2014 – Commercial Interests – Security for Costs – Law of Limitation

Facts: Following the applicant's request for an order compelling the respondents to comply with the terms of a planning permission for the development of a visitor centre, the respondents now sought security for the costs. The respondents stated that the planning permission contained no stipulation requiring the removal of the temporary car park; the permission contained no conditions. The respondents argued that the applicant's claim would be statute barred. The respondents further contended that the closure of the car park would violate public interest. The applicant suggested that special circumstances influence the Court to exercise its discretion against granting security for the costs.

Mr. Justice Noonan held that the application seeking security for the costs would be refused. The Court observed that the outlined facts of the case constituted special circumstances and warranted the Court to exercise its discretion. The Court further anticipated that the continued retention of the car park would potentially have a significant adverse impact on the applicant's ability to operate the park and ride system and as a result would frustrate the commercial interests of the applicant.

JUDGMENT of Mr. Justice Noonan delivered on the 27th day of March, 2017

1 The substantive proceedings herein consist of an application pursuant to s. 160 of the Planning and Development Act 2000 (as amended) (‘the PDA’) whereby the applicant seeks an order compelling the respondents to comply with the terms of a planning permission for the development of a visitor centre at the Cliffs of Moher, Co. Clare. The application now before the court is one for security for the respondents' costs and is made pursuant to s. 52 of the Companies Act 2014.

Background Facts

2 The first respondent was established by the second respondent (‘the Council’) for the purposes of developing a new visitor centre at the Cliffs of Moher. The first respondent applied for and obtained planning permission for this development in 2002, under reference 01/333. The permission granted, ultimately by An Bord Pleanála, was subject to a number of conditions which included a standard condition that the development would be carried out in accordance with the plans and particulars lodged with the application and conditions 3 and 7 which provided as follows:-

‘3. Details of the proposed Mobility Management Strategy shall be submitted to the planning authority for written agreement prior to the commencement of development.

Reason: In the interest of traffic, safety and visitor management…

7. Detailed proposals, including full particulars of the temporary car park to be provided during the period of construction and the storage of excavated materials from the site, shall be submitted to and agreed with the planning authority prior to the commencement of the development.

Reason: In the interest of orderly development.’

3 The s. 160 application is grounded on an affidavit of John D. Flanagan, a director and, in effect, the proprietor of the applicant. He avers that the report by the An Bord Pleanála inspector considers that a park and ride system should be put in place to service the visitor centre rather than a car park on site. Against this background, the Mobility Management Strategy requirement was included in the permission. Mr. Flanagan says that the second respondent in its response to condition 3 indicated that it proposed to omit the permanent car park for which permission had been granted beside the visitor centre and instead retain the temporary car park pending full assessment of a park and ride scheme to be implemented when the centre was completed and operational. Mr. Flanagan says, therefore, that the Council agreed that the temporary car park was only to be retained until the implementation of the park and ride system.

4 In 2009, another company associated with Mr. Flanagan obtained two planning permissions for separate park and ride systems to be located respectively in Liscannor and Doolin to serve the Cliffs of Moher Visitor Centre. Applications to extend these permissions were made successfully in 2014 and 2015. He avers that the continued retention of the temporary car park is incompatible with the viability of a park and ride system for obvious reasons and this was recognised by the An Bord Pleanála inspector in his original report. It would appear that the visitor centre has been operational since in or around 2007 and the temporary car park is still retained in situ by the Council after some eleven years. The applicant company was incorporated in May 2014, for the purposes of operating the park and ride system and subsequently entered into an agreement in 2015 with the Council for that purpose. The applicant complains that its business has essentially been undermined and frustrated by the refusal of the Council to close the temporary car park, thereby rendering the business non-viable.

5 Although the essential thrust of the s. 160 application herein is based on the applicant's commercial interests, in his affidavit Mr. Flanagan also refers to the fact that there was a clear undertaking by the Council to discontinue the temporary car park so as to, inter alia, ensure that the ecologically sensitive site would be protected. He further avers that the discontinuation of the car park is necessary to enable the visitor centre to operate in an environmentally appropriate manner.

6 Following the institution of the within proceedings, the respondents' solicitors wrote to the applicant's solicitors on the 9th of September, 2016, seeking security for costs having regard to the fact that the applicant was only incorporated in 2014 and appeared to have no significant assets. Reference was also made to an associated company in receivership and the fact that Mr. Flanagan had a judgment in excess of €10m registered against him. In a response of the 27th of September, 2016, the applicant's solicitors declined to furnish security for costs and went on to say:

‘Given the nature of the proceedings herein, our client is entitled to a protective costs order under the Aarhus Convention in respect of their proceedings and in particular following the decision of the Court of Appeal in McCoy v. Shillelagh Quarries & Ors.’

7 The respondents' solicitors replied on the 13th of October, 2016, indicating that they disputed the applicant's entitlement to a protective costs order and awaited receipt of its notice of motion and grounding affidavit in that regard. Before any such application was brought by the applicant, the within application for security for costs was initiated by way of notice of motion on the 17th of November, 2016.

Section 52

8 Section 52 of the Companies Act 2014 provides:

‘Where a company is plaintiff in any action or other legal proceeding, any judge having jurisdiction in the matter, may, if it appears by credible testimony that there is reason to believe that the company will be unable to pay the costs of the defendant if successful in his or her defence, require security to be given for those costs and may stay all proceedings until the security is given.’

9 The fundamental principles to be applied in such applications were usefully summarised by Clarke J. in Connaughton Road Construction Ltd v. Laing O'Rourke (Ireland) Ltd [2009] IEHC 7 where he said (at para. 2.1):

‘(1) In order to succeed in obtaining security for costs an initial onus rests upon the moving party to establish:

(a) That he had a prima facie defence to the plaintiff's claim, and

(b) That the plaintiff would not be able to pay the moving party's costs if the moving party be successful.

(2) In the event that the above two facts are established, then security ought to be required unless it could be shown that there were specific circumstances in the case with ought to cause the court to exercise its discretion not the make the order sought.

In this regard the onus rests upon the party resisting the order. The most common examples of such special circumstances include cases where a plaintiff's liability to discharge the defendant's costs of successfully defending the action concerned flow from the wrong allegedly committed by the moving party or where there has been delay by the moving party in seeking the order sought.’

The Arguments

10 The respondents submit that all the criteria identified in Connaughton Road are met in this case. They raise a number of matters by way of defence. First, they say that the planning permission contains no stipulation requiring removal of the temporary car park. They submit that the applicant's claim proceeds on the basis that the planning permission required that the principle means of access to the visitors centre should be by way of park and ride facility, when the permission in fact contains no such condition.

11 Secondly the respondents submit that the applicant's claim is statute barred. A seven year time limit applies to s. 160 enforcement proceedings. In the case of a development without planning permission, the seven year runs from the date of commencement of the development. In the case of a development which has...