Dublin International Arena Ltd v Campus and Stadium Ireland Ltd
| Jurisdiction | Ireland |
| Judge | MR. JUSTICE Ó CAOIMH |
| Judgment Date | 26 May 2004 |
| Neutral Citation | 2004 WJSC-HC 3040 |
| Court | High Court |
| Docket Number | HC 274\04 |
| Date | 26 May 2004 |
2004 WJSC-HC 3040
THE HIGH COURT
AND
AND
Citations:
RSC O.29 r1
COMPANIES ACT 1963 S390
LANCEFORT LTD V BORD PLEANALA 1998 2 IR 511
JACK O'TOOLE LTD V MACEOIN KELLY ASSOCIATES 1986 IR 277
EEC DIR 93/37
RSC O.84(E)
RSC O.84(E) r4
UNIVERSALI-BAU V ENSORGUNGSBETRIEBE SIMMERING C-470.99 ECJ
DEKRA EIREANN TEORANTA V MIN FOR ENVIRONMENT & SGS (IRL) LTD 2003 2 IR 270 2003 2 ILRM 210
VILLAGE RESIDENTS ASSOCIATION LTD V BORD PLEANALA 2001 1 IR 441
KEARY DEVELOPMENTS LTD V TARMAC GROUP LTD 1995 2 BCLC 400
EUROPEAN CONVENTION ON HUMAN RIGHTS & FUNDAMENTAL FREEDOMS ART 6.1
EUROPEAN CONVENTION ON HUMAN RIGHTS ACT 2003
EEC DIR 93/37 ART 18
RSC O.84(A)
BROADNET IRELAND LTD V OFFICE OF THE DIRECTOR OF TELECOMMUNICATIONS REGULATION 2001 3 IR 281 2000 2 ILRM 241
BEAUROSS LTD V KENNEDY UNREP MORRIS 18.10.1995 1995/15/3854
SEE CO LTD V PUBLIC LIGHTING SERVICES 1987 ILRM 255
SIAC CONSTRUCTION LTD V MAYO CO COUNCIL 2002 3 IR 148 2002 2 ILRM 401
S (MINORS), IN RE 2002 2 WLR 720
COMHLUCHT PAIPEAR ROIMHAIREACHTA TEO V UDARAS NA GAELTACHTA 1990 1 IR 320 1990 ILRM 266
TREATY OF ROME ART 234
SALIH V GENERAL ACCIDENT ASSURANCE 1987 IR 628
European law - Company law - Security for costs - Public procurement contracts - Practice and procedure Litigation - Delay - Principle of equivalence - Whether applicant should furnish security for costs - Whether in public interest to grant application - Rules of the Superior Courts, 1986 (SI 15) - Companies Act, 1963 - Public Works Directive.
One of the notice parties, Waterworid had been awarded the contract to design, build and maintain the National Aquatic Centre at Abbottstown. The applicant had also submitted a tender for the contract, had been unsuccessful and brought judicial review proceedings seeking to challenge the award of the contract. The respondents brought the present motions seeking security for costs from the applicant. The applicant contended that granting the order sought would stifle the applicant’s claim. Furthermore the respondents by their conduct and delay were estopped from bringing the present application. It was also contended that security for costs was inapplicable in a case involving a review of a public contract under the European Remedies Directive and would compromise the effectiveness of the Remedies Directive. Attention was also drawn to the fact that an investigation into the tendering process had been ordered by the Government and a comprehensive report published by the Attorney General. The respondents took issue with the submissions of the applicant and also claimed that the applicant had failed to comply with the three month time limit as set out in Order 84 A of the Superior Court rules in instituting the proceedings.
Held by Ó Caoimh J in directing security for costs to be given. Cases involving EC Directives did not necessarily preclude an application for security for costs. No case had been established that the applicant had a legitimate expectation that the respondents would not seek security for costs. The principles of equivalence or effectiveness did not preclude the making of the present application. With regard to issue of proportionality, the applicant was a company and therefore enjoyed both the rights as a company of limited liability and also disadvantages that might apply. In the circumstances the orders sought for security for costs as against the applicant would be granted.
APPROVED JUDGMENT DELIVERED BY MR. JUSTICE Ó CAOIMH ON WEDNESDAY, 26TH MAY 2004
I hereby certify the following to be a true and accurate transcript of my shorthand notes of the evidence in the above-named action.
APPEARANCES
For THE APPLICANT
MR. SREENAN SC
MS. O'BRIEN BL
Instructed by:
ARTHUR COX SOLICITORS
For THE 1ST RESPONDENT
MR. COLLINS SC
MR. GARDINER SC
Instructed by:
McCANN FITZGERALD
For THE 2ND, 3RD & 4TH RESPONDENTS
MS. COLLINS SC
MS. BARRINGTON BL
Instructed by:
CHIEF STATE SOLICITORS
COPYRIGHT: Transcripts are the work of Gwen Malone Stenography Services and they must not be photocopied or reproduced in any manner or supplied or loaned by an appellant to a respondent or to any other party without written permission of Gwen Malone Stenography Services
MR. JUSTICE Ó CAOIMH DELIVERED HIS JUDGMENT ON WEDNESDAY, 26TH MAY 2004, AS FOLLOWS
| MR. JUSTICE Ó CAOIMH: | This matter comes before this Court pursuant to two |
Notices of Motion issued on behalf of the first Respondent, which I will refer to as Campus, and the second to fourth Respondents, which I will refer to as the State.
In the case of the State, the Notice of Motion issued on 11th February 2003 and on its face it seeks an order pursuant to Order 29 Rule 1 of the Rules of the Superior Courts requiring the Applicant to furnish security for the costs of defending the proceedings. The application in question is grounded upon an affidavit of Anthony Joyce, Solicitor, of the Chief State Solicitors Office of the same date, and in it reference is made to a letter of 22nd November 2002 in which security for costs was sought. Section 390 of the Companies Act, 1963was expressly referred to. It isn't referred to as such in the grounding affidavit, but in the letter of 22nd November, Mr. Joyce stated "inter alia."
"If such security is not forthcoming within seven days of the date of this letter, my clients will have no alternative but to bring an application under Section 390 of the Companies Act seeking an order requiring such sufficient security to be given for those costs."
On 10th March 2003, Campus caused a Notice of Motion to issue in which security for costs was sought pursuant to Section 390 of the Companies Act, 1963as amended and this, again, related to a previous request. The application was grounded upon an affidavit of Mr. Quigley and it would seem that a request was initially made on 16th December 2002 for security for costs, and a reply was forthcoming on 20th December 2002. In each case, the reply was, in effect, in the negative, refusing to provide security for costs and making the case that it would be unfair to do so in all of the circumstances.
While the Applicant seeks to draw a distinction between the two motions, on behalf of the State reference is made to the dictum of Morris J. in Lancefort Limited -v- An Bord Pleanála [1988] 2IR 511 at 514 where he said that he did not accept that an application under Section 390 was improperly brought when it was brought under Order 29 Rule 1 or that the Court had no power to make an order under the Rule.
It is not in issue that the Applicant does not have funds to meet an order for costs if same were to be made against it in the substantive proceedings: section 390 of the Companies Act provides:
"Where a limited company is a 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 defence require sufficient security to be given for those costs and may stay all proceedings until the security is given."
It is agreed that the power in question is discretionary and the issue is whether it would be just or unjust to make the orders sought. However, the Respondents refer to the dictum of Finlay CJ in O'Toole Limited -V- MacEoin Kelly & Associates [1986] IR 277 where he addressed the issue and stated "inter: alia" as follows at page 283 of the report:
"It is clear that there is no presumption either in favour of the making of an order for security for costs or against, although I am satisfied that where it is established or conceded, as arises in this case, that a limited liability company who is a plaintiff will be unable to meet the costs of a successful defendant unless the plaintiff company seeks to avoid an order for security for costs, then it must as a matter of onus of proof establish to the satisfaction of the judge the special circumstances which would justify the refusal of the order."
Accordingly, it is submitted that the onus is on the Applicant to show the special circumstances justifying the refusal of the order for the provision of the security. No case is made that the insolvency or the situation of the Applicant company, which is, effectively, one of insolvency is attributable to the wrongdoing of the Respondents or either of them. On the basis of the established authorities, it appears prima facie that this Court should award security for costs unless it can be shown that the Respondents have no real defence or, in other words, the Applicant's claim is overwhelming. It is indicated that I should address this matter on the basis of the Respondents having to show a defence to the claim against them.
The State's defence is on a number of bases and it is in the first place that it is not the contracting party and, therefore, does not fall within the terms of the European Community Directive, what is known as the Public Works Directive, Directive 93/37 EEC, as it was not the awarding authority. It is furthermore part of the defence that the Applicant has been guilty of delay in the commencement of these proceedings. In this regard, reliance is placed upon the provisions of Order 84(e) of the Rules of the Superior Court and, in particular, Rule 4 thereof: which provides as follows:
"An application for the review of a decision to award or the award of a public contract shall be...
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