James Patrick Flannery and Another v Mortimer John Walters and Others
| Jurisdiction | Ireland |
| Judge | Mr. Justice Brian J. McGovern |
| Judgment Date | 28 October 2014 |
| Neutral Citation | [2014] IEHC 575 |
| Court | High Court |
| Date | 28 October 2014 |
BETWEEN
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[2014] IEHC 575
THE HIGH COURT
Counterclaim – Security Costs - Rules of the Superior Courts – Foreign Company – Jurisprudence – Judicial Decision-Making – Procedures – Application – Special Circumstances
Facts: In July 2014, a judgement had been delivered ordering the counterclaim plaintiff, Catharsis Technologies Ltd. (‘CTL’) to furnish security costs in respect of a counterclaim. The case at hand concerned the amount of security to be furnished. The original application had been made pursuant to O. 29 of the Rules of the Superior Courts. The order for security had been made on the basis that the Court was satisfied that the defendants to the counterclaim had adduced credible evidence that there was reason to believe that the counterclaim plaintiff, CTL, would be unable to pay the costs of the defendants to the counterclaim if successful in their defence. Whilst, the parties were in agreement that where security for costs is ordered under O. 29 against a foreign individual plaintiff, the usual rule is to order one-third of the costs to be put up by way of security in the absence of special circumstances, they disagreed over whether the ‘one-third rule’ applied in the case of a foreign corporate body against whom security for costs had been ordered. The counterclaim defendants argued that the Court should follow the reasoning of Clarke J. in Harlequin Property (SVG) Ltd. v. O”Halloran [2012] IEHC 13, and Cooke J. in Goode Concrete v. CRH plc. & Ors. [2012] IEHC 198. The counterclaim plaintiff, on the other hand, argued that the Court should follow the decision of Laffoy J. in Ticket Generator Ltd. v. Dublin Airport Authority plc. [2012] IEHC 216, in which she felt bound by the Supreme Court decision in Framus Ltd. v. CRH plc. [2004] 2 I.R. 20, and concluded that in the absence of special circumstances, she must apply the ‘one-third rule’ in ordering security under O. 29 of the Rules of the Superior Courts against a foreign defendant.
Held by Justice McGovern in light of the applicable case-law and the written and oral submissions submitted from both parties that there appeared to be no good reason why the counterclaim plaintiff should be treated any differently than an Irish company would be in similar circumstances, having regard to the fact that the Court previously directed security be furnished on the basis of inability to pay the costs of the defendants to the counterclaim if successful in their defence. In those circumstances, Justice McGovern fixed security in the full amount of such figures as he had calculated on the basis of the competing sums offered by the legal cost accountants for each party. He further stated that the security to be furnished would be security in respect of costs from the date of the first request. On 1st May 2014, the counterclaim defendant first requested security for costs and that was the date from which the costs should be estimated. The Court directed that the security to be furnished in respect of the counterclaim defendants” costs be fixed in the sum of €134,406.00.
HARLEQUIN PROPERTY (SVG) LTD v O'HALLORAN 2013 1 ILRM 124 2012/17/4887 2012 IEHC 13
GOODE CONCRETE v CRH PLC & ORS UNREP COOKE 15.5.2012 2013/21/6348 2012 IEHC 198
TICKET GENERATOR LTD v DUBLIN AIRPORT AUTHORITY PLC & ORS UNREP LAFFOY 24.5.2012 2012/45/13254 2012 IEHC 216
FRAMUS LTD & ORS v CRH PLC & ORS 2004 2 IR 20 2004 2 ILRM 439 2004/18/4116 2004 IESC 25
COMPANIES ACT 1963 S390
FARRELL v BANK OF IRELAND & ORS 2013 2 ILRM 183 2012/14/4124 2012 IESC 42
THALLE v SOARES & ORS 1957 IR 182
FALLON v BORD PLEANALA & BURKE 1992 2 IR 380 1991 ILRM 799
RSC O.31 r12
JUDGMENT of Mr. Justice Brian J. McGovern delivered on the 28th day of October 2014
1. On 22 nd July 2014, I delivered a judgment ordering the counterclaim plaintiff, Catharsis Technologies Ltd. ("CTL") to furnish security costs in respect of the counterclaim._This judgment concerns the amount of security to be furnished.
2. I received both written and oral submissions from the parties as to how I should approach the issue of the correct amount of security to be furnished and the date from which that amount should be calculated. The original application was made pursuant to O. 29 of the Rules of the Superior Courts. I ordered security on the basis that I was satisfied that the defendants to the counterclaim had adduced credible evidence that there is reason to believe that the counterclaim plaintiff, CTL, will be unable to pay the costs of the defendants to the counterclaim if successful in their defence.
3. The parties are in agreement that where security for costs is ordered under O. 29 against a foreign individual plaintiff, the usual rule is to order one-third of the costs to be put up by way of security in the absence of special circumstances. Where the parties disagree in this case is whether the "one-third rule" applies in the case of a foreign corporate body against whom security for costs has been ordered. That is the position in this case. The counterclaim defendants argue that I should follow the reasoning of Clarke J. in Harlequin Property (SVG) Ltd. v. O'Halloran [2012] IEHC 13, and Cooke J. in Goode Concrete v. CRH plc. & Ors. [2012] IEHC 198. The counterclaim plaintiff, on the other hand, argues that I should follow the decision of Laffoy J. in Ticket Generator Ltd. v. Dublin Airport Authority plc. [2012] IEHC 216, in which she felt bound by the Supreme Court decision in Framus Ltd. v. CRH plc. [2004] 2 I.R. 20, and concluded that in the absence of special circumstances, she must apply the "one-third rule" in ordering security under O. 29 of the Rules of the Superior Courts against a foreign defendant. She distinguished the position with s. 390 of the Companies Act.
4. In Harlequin Property (SVG) Ltd. v. O'Halloran, Clarke J. held that where the Court makes an order for security for costs against a non-resident body corporate pursuant to O. 29 of the Rules, the Court should ordinarily treat the non-resident body on a par with an Irish company the subject of s. 390 of the 1963 Act, and should order that full security for costs be provided, and should depart from the one-third rule applicable to foreign personal plaintiffs. At para. 4.15 of his judgment, he stated:
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