I.E.G.P. Management Company Ltd by Guarantee v Cosgrave and Others
| Jurisdiction | Ireland |
| Judge | Ms. Justice Costello |
| Judgment Date | 25 May 2023 |
| Neutral Citation | [2023] IECA 128 |
| Court | Court of Appeal (Ireland) |
| Docket Number | Court of Appeal Record Number: 2022/201, 2022/200 |
[2023] IECA 128
Costello J.
Donnelly J.
Pilkington J.
Court of Appeal Record Number: 2022/201, 2022/200
High Court Record Number: 2018/7009P
THE COURT OF APPEAL
CIVIL
JUDGMENT of Ms. Justice Costello delivered on the 25th day of May 2023
. On 21 June 2022 the High Court ordered the plaintiff to provide security for the costs of the eighth and ninth named defendants (hereinafter referred to as “the Architect” in this judgment) pursuant to s.52 of the Companies Act 2014. The plaintiff was ordered to pay into court the sum of €265,250 to be available to meet an order for the legal costs of the Architect, which amount was intended to provide security for the Architect at least in respect of any contested application for discovery, the making and analysing of discovery and any mediation that may occur. The plaintiff was further ordered to pay into court before any other preliminary or interlocutory application or before service of a Notice of Trial, security for the costs of the Architect in the amount of €265,250 to be available to meet an order for the legal costs of the Architect. On 7 July 2022 the first sum was duly paid into court. The High Court made a similar order in respect of the sixth named defendant and a like sum of €265,250 was paid into court in respect of its costs. The plaintiff was ordered to pay the costs of the motion for security for costs of both the Architect and the sixth named defendant.
. On 21 June 2022 the High Court refused the plaintiff's application under O.56A of the Rules of the Superior Courts, and s.16(1) of the Mediation Act 2017, to invite the Architect to consider mediation and awarded the architect the costs of the motion. The plaintiff has appealed in respect of both orders. The plaintiff has compromised its case against the sixth named defendant who is no longer a participant in the proceedings.
. The plaintiff (whom I shall continue to refer to as the plaintiff) is an owners' management company for the purposes of the Multi-Unit Developments Act 2011. It manages a development known as the Ivy Exchange, Parnell Street, Dublin 1 (“the development”). The Ivy Exchange is a substantial commercial and residential development comprising 198 apartments and 11 commercial units. The buildings were built pursuant to three grants of planning permissions dated between February 2004 and January 2005. Construction was substantially complete by late 2006.
. The plaintiff has sued ten defendants in relation to the design and construction of the common areas of the development. The first three defendants are businessmen and property developers (or their estates) and they are/were principals of the fourth and fifth named defendants. The fourth named defendant was the developer, and the fifth named defendant was the main contractor in the construction of the development.
. The sixth named defendant is a firm of consultant civil and structural engineers who were engaged by the developer for the purposes of the construction project. The plaintiff has compromised these proceedings with the sixth named defendant. The seventh named defendant is a consultant mechanical and electrical engineer who was also engaged by the developer for the purposes of the construction project. The plaintiff has been unable to locate the seventh named defendant and the proceedings have not been served upon him.
. The eighth defendant is a firm of architects of which the ninth defendant is a director, (together “the Architect”). The eighth defendant was engaged by the developer to provide architectural services in respect of the project as found by the High Court “principally between 2002 and 2004”. The ninth defendant provided a Certificate of Compliance with the building regulations in respect of Unit No. 171 of the development in July 2006.
. The tenth defendant is a firm of consultant fire engineers. The High Court found that it “apparently” incorporates or included the firm of McBains Cooper and both were engaged for the purposes of the project. The tenth defendant made applications to Dublin City Council for Fire Safety Certificates at various stages of the development.
. The underlying dispute in the case concerns liability for alleged fire safety defects in the construction of the Ivy Exchange development. The plaintiff is the owners' management company for the development and was incorporated for and in compliance with the terms of the Multi-Unit Developments Act 2011. It is a company limited by guarantee, as is required by s.1 of the Act. The common areas of the development were transferred by the first, second and third named defendants to the plaintiff on 13 January 2012.
. The Plenary Summons in these proceedings issued on 31 July 2018, approximately 12 years after practical completion of the development. It is not clear from the papers when the Plenary Summons was served on the defendants. The Statement of Claim was filed on the 2 December 2019. Three months later, on 2 March 2020, before the Architect had an opportunity to raise particulars in respect of the case it was asked to meet, the plaintiff issued a motion returnable for 23 March 2020 for an Order of the Court inviting the first to sixth named defendant and the Architect to consider mediation as a means of attempting to resolve the dispute, the subject matter of the proceedings.
. The Architect served a Notice for Particulars on 4 March 2020 and sought copies of the documents referred to by the plaintiff in its Statement of Claim, including the terms of the contract under which the Architect was employed, pursuant to O.31, r.15 of the Rules of the Superior Courts. This was replied to on 20 March 2020. The Architect maintains that the plaintiff has not properly particularised the claim against it. The Statement of Claim sets out the appointment and/or engagement of each of the professional defendants in virtually identical terms, save that the role or title of each defendant is inserted and the pleas modified to reflect their role. It is pleaded that, notwithstanding the issuance of certificates confirming compliance, the works were carried out in a defective manner and the defects are then set out. Generic particulars of negligence, breach of duty and misrepresentation are pleaded separately against each defendant, or group of defendants, but the pleas are to a very large extent repetitious. The Statement of Claim does not purport to link any of the defects pleaded to any specific defendant or to any particular default on the part of any specific defendant. As things stand, all of the defects are alleged to be the responsibility of all of the defendants who, in turn, are all alleged to have been negligent in almost exactly the same manner.
. On 24 June 2020, the solicitors for the Architect issued a motion seeking an order pursuant to s.52 of the Companies Act, 2014 directing the plaintiff to provide security for their costs in the proceedings; an order measuring the security to be given by the plaintiff and the form of the security; and an order staying the proceedings until such time as appropriate security for costs is provided by the plaintiff. On 1 February 2021 the sixth named defendant issued a similar motion. The two motions seeking security for costs, together with the motion seeking an order inviting the Architect to consider mediation, were heard and tried together before the High Court over four days.
. The trial judge (Butler J.) outlined the facts of the case and the legal principles applicable to security for costs under s.52 of the Companies Act 2014. This provides as follows:-
“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 the proceedings until the security is given”
. The section requires the moving party to establish that (a) they have a prima facie defence to the plaintiff's claim and (b) the plaintiff will not be able to pay the moving party's costs if the moving party be successful (see Usk and District Residents Association Limited v. Environmental Protection Agency [2006] IESC 1). In the event that these two facts are established, security ought to be required unless the plaintiff can show that there are special circumstances which would cause the Court to exercise its discretion not to make the order. Butler J. noted that a moving party is required to demonstrate that:-
“If there is a legal defence that it is potentially sustainable on a practical view of the law or, if the defence is one of fact, that if what the defendant alleges in answer to the plaintiff is proven in court that would defeat the plaintiff's claim.” ( Oltech (Systems) Ltd. v. Olivetti U.K. Ltd. [2012] 3 IR 396, 402)
. She then considered the second requirement by reference to IBB Internet Services Ltd. v. Motorola Ltd. [2013] IESC 53, Jirehouse v. Beller [2009] 1 WLR 751, Greenclean Waste Management v. Leahy [2015] 1 IR 106 and Coolbrook Developments Limited...
To continue reading
Request your trial