Mavior v Zerko Ltd

CourtSupreme Court
JudgeMr. Justice Clarke
Judgment Date13 March 2013
Neutral Citation[2013] IESC 15
Docket Number[S.C. No. 584 of 2012]
Date13 March 2013
Mavior v Zerko Ltd


Zerko Limited

[2013] IESC 15

Denham C.J.

Clarke J.

MacMenamin J.

[Appeal No: 584/2012]



Security for costs

Appeal to Supreme Court - Appeal of refusal of application for security for costs - Jurisdiction to award security for costs of appeal - Corporate litigant - Procedural history - Jurisdiction to order security - Inherent jurisdiction - Jurisdiction pursuant to rules - Status of unlimited resident company - Rationale for security - Whether appropriate to invoke inherent jurisdiction - Nominal plaintiff - Whether plaintiff nominal plaintiff - Farrell v Bank of Ireland [2012] IESC 42, (Unrep, SC, 10/7/2012); Mavior v Zerko Limited [2012] IEHC 471, (Unrep, Finlay Geoghegan J, 22/11/2012); Goode Concrete v CRH plc [2012] IEHC 116, (Unrep, Cooke J, 21/3/2012); ABM Construction v Habbingley Limited [2012] IEHC 61, (Unrep, Laffoy J, 15/2/2012); Salthill Properties Limited v Royal Bank of Scotland [2010] IEHC 31, [2011] 2 IR 441; Barry v Buckley [1981] IR 306; G McG v DW (No 2) [2000] 4 IR 1; Harlequin Property (SVG) Limited v O'Halloran [2012] IEHC 13, [2013] 1 ILRM 124; Cowell v Taylor (1885) 31 Ch D 34; Sykes v Sykes Law Rep 4 CP 465; Cooke v Whellock (1890) 24 QBD 658; Rhodes v Dawson (1886) 16 QBD 548 and Kennealy v Keane [1901] 2 IR 640 considered - Companies Act 1963 (No 33), s 390 - Rules of the Superior Courts 1986 (SI 15/1986), O 29 - Appeal dismissed; order of trial judge affirmed (584/2012 - SC - 13/3/2013) [2013] IESC 15

Mavior v Zerko Limited

The plaintiff was an unlimited company registered in Ireland. The defendant was a limited company that was used by Ulster Bank Ireland Ltd to hold the legal and beneficial interest of two hotels. In October 2011, the hotels were flooded and it was agreed that the defendant"s management company would seek repairs. The plaintiff was contracted by this management company to carry out the repairs. It was the plaintiff"s contention that the repairs were completed and three payments were made by the defendant in respect of same but that there was still an outstanding balance of €1 million owed. The defendant disputed the contracts it held with MJBCH Ltd and the plaintiff whilst also alleging that the work performed was to a substandard level nullifying the debt claimed.

The defendant brought a motion seeking an order for the plaintiff to provide security of costs under Order 29 of the Rules of the Superior Court on the basis that there was a bona fide defence and that if the defendant was successful, it was unlikely the plaintiff would be able to pay the defendant"s costs which were estimated to be €500,000 to €600,000 plus VAT due to the precarious financial position the company was in. The application was rejected on the basis that the court did not have jurisdiction to make such an order simply because of their financial position as they were resident to the jurisdiction. The only exception to this rule was if the plaintiff could be described as a nominal defendant. The defendant appealed the decision to the Supreme Court

Held by Clarke J (with Denham C.J. and MacMenamin J. concurring) that the High Court judge"s view of the jurisdiction of the court was the correct interpretation, in that the court could not make an order for security of costs simply because of the plaintiff"s financial position. The plaintiff was an unlimited company registered in Ireland, meaning it should be regarded as a natural Irish person. It was not appropriate to invoke the inherent jurisdiction of the court to make such an order and expansion of the circumstances where security of costs could be supported should be done through case law.

It was also held that there was indeed an exception to this rule, and that was if the plaintiff could be described as a nominal defendant even if they were resident in the jurisdiction. However, the plaintiff could only be regarded as this if it was shown that a third party had a beneficial interest in the cause of action instead of having an independent entitlement. Whilst in this case, it was alleged that a Ms. Gayle Killilea was a creditor of the plaintiff, this was deemed to be insufficient as it appeared she was an individual who would stand to recover funds from the plaintiff if they were ultimately successful due to her relationship with them, but could not be described as the beneficial owner of the cause of action. The plaintiff was held not to be a nominal defendant.

Appeal refused.

FARRELL v BANK OF IRELAND UNREP SUPREME 10.7.2012 2012/14/4124 2012 IESC 42

MAVIOR v ZERKO LTD UNREP FINLAY GEOGHEGAN 22.11.2012 2012/24/7021 2012 IEHC 471


RSC O.29





MCG (G) v W (D)(NO.2) 2000 4 IR 1

RSC O.29 r3

RSC O.29 r4


COWELL v TAYLOR 1885 31 CH D 34


COOKE v WHELLOCK 1890 24 QBD 658


KENNEDY v KEANE 1901 2 IR 640

1. Introduction

1.1 The question of plaintiffs or appellants being required to give security for the costs of proceedings or appeals has always raised difficult questions. However, such issues come into significantly greater focus in difficult financial times. Against such a backdrop parties are understandably concerned about being exposed to expensive litigation only to find that, notwithstanding succeeding in the proceedings concerned, their opponent is unable to meet the award of costs which would normally follow. On the other side plaintiffs and appellants are understandably concerned that their ordinary right to bring and pursue proceedings or to appeal unfavourable decisions could be significantly impaired by being required to put up significant sums of money as the price for proceeding.


1.2 This Court has recently, in Farrell v. Bank of Ireland [2012] IESC 42, had to consider the jurisdiction to award security for costs of an appeal. The judgment in that case also provides some analysis of the overall principles by reference to which security can be ordered. However, as pointed out in Farrell, at least in some respects different considerations apply as and between security for the costs of a claim as yet unresolved, on the one hand, and an appeal against an adverse finding, on the other hand. Likewise, there are differences between security awarded against limited liability companies, on the one hand, and natural persons, on the other.


1.3 Indeed, it is the position of a corporate litigant (although not a limited company) that lies at the heart of this appeal. The plaintiff/respondent ("Mavior") is an Irish registered unlimited company. It brings these proceedings claiming sums of money said to be due from the defendant/appellant ("Zerko") either on foot of a contract, or on a quantum meruit basis, arising out of building works relating to significant repairs required to be carried out to a storm-damaged hotel premises in Dublin. The claims are strongly resisted by Zerko. Indeed, Zerko goes so far as to state that it has no contractual or legal relationship with Mavior such as would allow Mavior to maintain any claim against it. In those circumstances Zerko sought security for the costs of these proceedings against Mavior. The matter came before the High Court (Finlay Geoghegan J.) and was the subject of a judgment on the 22 nd November, 2012 ( Mavior v. Zerko Limited [2012] IEHC 471). In giving that judgment Finlay Geoghegan J. refused Zerko's application for security for costs. Zerko has appealed that refusal to this Court. It is appropriate to start by briefly outlining the relevant background facts.

2. Background Facts

2.1 In circumstances which are not material to the narrow issue which this Court now has to address, Zerko, which appears to be a special purpose vehicle established by Ulster Bank Ireland Limited for the purposes of holding ownership interests of a banking syndicate in the Ballsbridge Inns and Tower Hotels in Dublin, entered into an agreement with MJBCH Limited for the purposes of running and managing those hotels. MJBCH Limited is a company controlled by a Mr. Sean Dunne. There is a connection between MJBCH Limited and Mavior for it appears to be accepted that the entire beneficial interest in Mavior is ultimately owned by a Ms. Gayle Killilea. Ms. Killilea is married to Mr. Sean Dunne.


2.2 As a result of storm damage it is said that an agreement was entered into between Zerko and MJBCH Limited to the effect that the latter would organise that repair and reinstatement works to be carried out. It is further claimed that MJBCH entered into an agreement with Mavior to carry out some of the works concerned. It is argued that MJBCH had authority, as agent of Zerko, to enter into an agreement with Mavior and that Zerko is, therefore, liable to Mavior for payment under that contract. Alternatively, as pointed out, Mavior claims monies said to be due to it by Zerko on a quantum meruit basis for the value of such building works said to have been carried out at Zerko's request and with Zerko's knowledge.


2.3 Zerko disputes the terms of the alleged agreement between it and MJBCH Limited and also the existence of any contract between it and Mavior. While Zerko does not dispute that Mavior carried out works on the hotels from which it now benefits, Zerko argues that some of the works were sub-standard. Zerko also says that the arrangements between the...

To continue reading

Request your trial
29 cases
  • F.D.
    • Ireland
    • Supreme Court
    • 12 November 2015
    ...those passages from the judgment of Murray J. in GMcG v. DW have been considered in this Court in the judgment of Clarke J. in Mavior v. Zerko Limited [2013] 3 I.R. 268 (the Mavior case), where the issue was whether a defendant in High Court proceedings was entitled to security for costs a......
  • N.K. v S.K.
    • Ireland
    • Court of Appeal (Ireland)
    • 17 January 2017
    ...examined by the Supreme Court in both G.McG v. DW (No.2)(Joinder of Attorney General) [2000] 4 I.R. 1 and Mavior v. Zerko Ltd. [2013] IESC 15, [2013] 3 I.R. 268. In G.McG. Murray J. stated ( [2000] 4 I.R. 1, 26):- 'The concept of inherent jurisdiction necessarily depends on a distinctio......
  • F. v G
    • Ireland
    • High Court
    • 7 March 2014
    ...3 PROTECTION OF CHILDREN (HAGUE CONVENTION) ACT 2000 S12 MCG (G) v W (D) 2000 4 IR 1 2000 2 ILRM 451 1999/17/5236 MAVIOR v ZERKO LTD 2013 2 ILRM 167 2013 IESC 15 FAMILY LAW ACT 1995 S29(1)(D) FAMILY LAW ACT 1995 S29(1)(E) CONSTITUTION ART 41.3.2 FAMILY LAW ACT 1995 S29 M (C) v DELEGACION ......
  • Havbell DAC v Flynn
    • Ireland
    • Court of Appeal (Ireland)
    • 10 November 2020
    ...been shown to be demonstrated to have been substantively incorrect by the subsequent decision of the Supreme Court in Mavior v Zerko Ltd [2013] IESC 15, [2013] 3 IR 268: para 15 Addressing these other grounds, with particular reference to the Mavior v Zerko ground, Clarke J observed that th......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT