Lough Neagh Explorations Ltd v Morrice

• Jurisdiction: Ireland
• Judge: CHIEF JUSTICE
• Judgment Date: 17 May 1999
• Neutral Citation: [1999] IESC 40
• Court: Supreme Court
• Docket Number: [1997 No. 4828 P.; S.C. Nos. 194 and 204 of 1998]
• Date: 17 May 1999

LOUGH NEAGH EXPLORATION LTD. (ULSTER NATURAL RESOURCES LTD.) v. MORRICE & ORS

BETWEEN:

LOUGH NEAGH EXPLORATION LIMITED FORMERLY KNOWN AS ULSTER NATURAL RESOURCES LIMITED

PLAINTIFF/APPELLANT

AND

SUSAN MORRICE, S MORRICE & ASSOCIATES LIMITED, PRIORITY OIL AND GAS LIMITED AND THE MINISTER FOR TRANSPORT, ENERGY AND COMMUNICATIONS

DEFENDANT/RESPONDENTS

[1999] IESC 40

HAMILTON C J

MURPHY J

BARRON J

194/98 & 204/98

THE SUPREME COURT

Synopsis

Practice and Procedure

Security for costs; striking out; inherent jurisdiction of the Court; discretion; failure to provide security within time provided; proceedings struck out in High Court on this ground; adjournment granted by Supreme Court to raise security; failure to provide required security; whether order of High Court should be set aside and time for lodging security extended; whether more appropriate for proceedings to be stayed unless and until security furnished; whether party in whose favour the order made prejudiced by the stayed proceedings.

Held: Appeal dismissed.

Lough Neagh Exploration Limited v. Morrice - Supreme Court: Hamilton C.J., Murphy J., Barron J. - 17/05/1999 - [1999] 4 IR 527

When a time limit has been set for the provision of security for costs there is a jurisdiction to strike out the proceedings for a failure to comply with that time limit. While that jurisdiction should be exercised sparingly it was clear that the order striking out in this case represented a proper exercise of judicial discretion. The Supreme Court so held in dismissing the appeal.

Citations:

RSC O.27 r1

GIDDINGS V GIDDINGS 1847 10 BEAV 29

LA GRANGE V MCANDREW 1879 4 QBD 210

DUFFUS V SCULLIN 20 LRI 8

SPEED UP HOLDINGS LTD V GOUGH & CO (HANDLY) LTD 1986 FSR 330

MURPHY V J DONOHOE LTD 1996 1 IR 123

MERCANTILE CREDIT CO OF IRELAND V HEELAN 1998 1 IR 81

1 JUDGMENT OF THE CHIEF JUSTICE DELIVERED THE 17TH DAY OF MAY 1999

2 By the Judgment and Order of Ms Justice Laffoy given and made on the 27th August 1997, reported at [1998] 1 ILRM 205, it was ordered that the Appellant (LNE) should furnish security for the costs of the first, second and thirdly named Defendants/Respondents and in default of furnishing such security that further proceedings therein be stayed.

3 By Orders of the Master of the High Court made on the 23rd day of January 1998 the amount to be lodged to the credit of the action as security for the costs of the first, second and thirdly named Defendants was determined at a total sum of £128,000.00. It was common case that the Master directed - although the orders do not so specify - that the amounts to be provided by way of security should be lodged within six weeks from the date of his Order.

4 By Notices of Motions, one dated the 10th day of March 1998, and the other the 24th day of March 1998 the first, second and thirdly named Defendants/Respondents applied to the Master of the High Court pursuant to Order 27, Rule 1, of the Rules of the Superior Courts and the inherent jurisdiction of the Court for an order striking out the Plaintiffs claim for want of prosecution or for failure to comply with the order providing for security for costs.

5 The matter subsequently came before Mr Justice O'Sullivan on the 10th of June 1998. By his judgment and the order made pursuant thereto, reported at [1999] 1 ILRM 62, it was ordered that the proceedings be struck out and that LNE should pay the first, second and thirdly named Defendants/Respondents the costs of these proceedings. It is from that judgment and order that LNE appeals to this Court.

6 LNE is a company incorporated in Northern Ireland. The issued share capital of that company was held as to 10.28% by James F Kenny and the remaining 89.72% was registered in the name of Ulster Natural Resources Limited (UNR). The share capital of (UNR) was in turn held as to 50% by the said James F Kenny and the remaining 50% by the first named Respondent/Defendant, Ms Susan Morrice. The actual share holdings, as opposed to the percentages in which they were held, were not stated in any of the affidavits sworn in these proceedings. Mr Kenny is the managing director of LNE. He has sworn four affidavits in connection with the present application. It was his contention that LNE had "made vigorous efforts" to comply with the orders for security for costs and he explained the mechanism by which it was proposed to raise the necessary funds for that purpose. It appeared that LNE had authorised a rights issue of 200,000 ordinary shares at 55p each. Mr Kenny had endeavoured to procure a share issue by UNR to enable it to take up its rights in LNE. It was common case that no extraordinary general meeting of UNR has been held for that purpose. Ms Morrice had declined to attend any such meeting. It was argued by the Appellants that her...