Moorview Developments Ltd v First Active Plc & others

• Jurisdiction: Ireland
• Judge: Macken, J.
• Judgment Date: 23 February 2012
• Neutral Citation: [2012] IESC 22
• Court: Supreme Court
• Docket Number: [No. 250/2010] and ors
• Date: 23 February 2012

Moorview Developments Ltd & Ors v First Active Plc & Ors

Between:

MOORVIEW DEVELOPMENTS LIMITED, SALTHILL PROPERTIES LIMITED, VALEBROOK DEVELOPMENTS LIMITED, SPRINGSIDE PROPERTIES LIMITED, DRAKE S.C. LIMITED, MALLDRO S.C. LIMITED, THE POPPINTREE MALL LIMITED AND BLONDON PROPERTIES LIMITED

APPELLANTS/PLAINTIFFS

AND

FIRST ACTIVE PLC AND RAY JACKSON AND BY ORDER BERNARD DUFFY

RESPONDENTS/DEFENDANTS

[2012] IESC 22

[No. 250/2010] and ors

THE SUPREME COURT

Abstract:

Practice and procedure - Supreme Court - Security for costs - Impecuniosity - Opposition -Discretion - Clear arguable grounds - Insolvent - Whether order for security for costs appropriate

Facts: The judgment concerned two applications made for orders for security for costs pursuant to Order 58 Rules of the Superior Courts and s. 390 Companies Act 1963, as amended. The first respondents legal costs amounted to a very significant sum in the region of millions of euros incurred over a period of 7 years. High Court costs had been awarded in favour of all defendants/ respondents. The application was opposed on the basis inter alia that the impecuniosity asserted was caused by the respondents and that the appeals would be stifled by such an application.

Held by the Supreme Court (Macken, Finnegan, McKechnie JJ. concurring), that no arguable grounds had been established. It was common case that the plaintiffs were impecunious. No circumstances arose in the case to allow the Court to exercise its discretion and refuse security for costs. Orders for security for costs would be granted in respect of both applications on the basis that the appellants were insolvent and/ or impecunious, there were no disclosed clear arguable grounds of appeal and the appeal was likely to be of significant length.

Reporter: E.F.

RSC O.58 r17

PORTERRIDGE TRADING LTD v FIRST ACTIVE PLC UNREP CLARKE 4.10.2006 2006/48/10310 2006 IEHC 285

COMPANIES ACT 1963 S316

HENDERSON v HENDERSON 1843 3 HARE 100 67 ER 313 1843-60 AER 378

KANWELL DEVELOPMENTS LTD v SALTHILL PROPERTIES LTD (IN RECEIVERSHIP) UNREP CLARKE 11.1.2008 2008/31/6885 2008 IEHC 3

CUNNINGHAM v SPRINGSIDE PROPERTIES LTD (IN RECEIVERSHIP) & ORS UNREP CLARKE 31.7.2009 2009/10/2381 2009 IEHC 454

RSC O.58

COMPANIES ACT 1963 S390

HAY v O'GRADY 1992 1 IR 210 1992 ILRM 689 1992/2/502

NORTHERN BANK FINANCE CORP LTD v CHARLTON & SHEEHY 1979 IR 149

LISMORE HOMES LTD (IN RECEIVERSHIP) & ANOR v BANK OF IRELAND FINANCE LTD & ORS 1992 2 IR 57 1992 ILRM 798 1992/3/687

MIDLAND BANK LTD v CROSSLEY-COOKE 1969 IR 56

BULA LTD (IN RECEIVERSHIP) & ORS v TARA MINES LTD & ORS UNREP SUPREME 26.3.1998 2000/19/7479

WEST DONEGAL LAND LEAGUE LTD v UDARAS NA GAELTACHTA & ORS 2007 1 ILRM 1 2006/57/12198 2006 IESC 29

INTER FINANCE GROUP LTD v KPMG PEAT MARWICK T/A KPMG MANAGAMENT CONSULTING UNREP MORRIS 29.6.1998 2000/11/4104

COURTS OF JUSTICE ACT 1924 S29

1 Judgment of Macken, J. delivered on the 23rd day of February, 2012

2 Judgment delivered by Macken J. [nem diss]

3 This judgment concerns two applications made pursuant to Notices of Motion brought on behalf of the first and second respondents/defendants, for orders pursuant to Order 58, Rule 17 of the Rules of the Superior Courts, and to the inherent jurisdiction of this Court directing the plaintiffs/appellants to furnish security for the costs of those respondents in respect of the within appeals. Ancillary relief is sought, including the fixing of the amount of security before the Master of the High Court, and requesting that the time be stipulated by this Court within which to provide for such security, together with, in the usual way, an order for a stay on the further prosecution of the appeals pending security for costs being provided.

4 The application on behalf of First Active Plc. is grounded on the affidavit of Connor McDonnell, solicitor of Arthur Cox, solicitors, which gives the basis for the application being made, and to which reference will be made further in the course of this judgment. For the purposes of this introductory part of the judgment, it is sufficient to indicate the following, namely, that there were several cases heard together, or in sequence, before the High Court (Clarke, J.) in respect of which counterclaims were filed on behalf of the first respondent/defendant. The High Court delivered judgment in favour of that respondent on its counterclaims (by judgment of the 9 ^th July, 2010) in the following sums:

Moorview Developments Limited	€60,050,800
Salthill Properties Limited	€60,050,800
Valebrook Developments Limited	€61,060,576
Springside Properties Limited	€59,553,486

5 The evidence establishes that the above cases, including the appellant's claims and the respondents' defences and/or counterclaims, were very time consuming and brief details are as follows:

6 (a) There were 90 days (full or part day hearings) in court prior to the commencement of the main trial on the 28 ^th April, 2008.

7 (b) There was extensive discovery by the respondents requiring a review of over 70,000 documents.

8 (c) A substantial number of lengthy and detailed witness statements had to be prepared in relation both to factual witnesses and expert witnesses testifying on behalf of the respondents.

9 (d) Over 100 days of hearings took place from the commencement of the main trial on the 28 ^th April, 2008 until completion of all the actions.

10 (e) Numerous amendment applications were made in relation to the nature of the claims being put forward on behalf of the plaintiffs/appellants, which claims were all found by the learned High Court judge to be without merit.

11 In relation to the foregoing, it is said that the first respondent's legal costs in respect of the proceedings before the High Court, amounted to a very significant sum, in the region of millions of Euro incurred over a period of about 7 years. Costs were awarded in favour of all defendants/respondents.

12 Subsequent to the main judgment delivered on the 6 ^th March, 2009, which is the subject matter also of the main appeal in these proceedings, solicitors acting on behalf of the first defendant/respondent by letters in early 2010 and in early 2011, sought security for costs from the solicitors then acting on behalf of, inter alia the present appellants, and all the other corporate appellants, as well as a Mr. Brian Cunningham, a personal appellant in a related matter, and the driving force behind the Cunningham Group. Security for costs was declined by those solicitors. It is said on behalf of that respondent that it is apparent from the letter of the 27 ^th January, 2011, from the solicitors then acting on behalf of the corporate appellants, that they were in each case insolvent. There has been no suggestion otherwise to this Court. Insofar as Mr. Cunningham is concerned. In the judgment of the High Court (Clarke, J.) dated the 16 ^th March, 2011, that court drew the inference that he was the promoter of the entire litigation, and in respect of which, it is said, his financial means are not clear. This inference was drawn by the learned High Court judge in his judgment on an application made on behalf of these defendants/respondents to declare Mr. Cunningham personally liable for the costs already awarded against the corporate plaintiffs in favour of these defendants/respondents. An order was made to that effect.

13 The appellants resist the applications on the basis that: (i) they have a good and valid appeal; (ii) the appeal is genuine and not a spurious attempt to avoid paying the taxed costs; and (iii) when the Notice of Appeal is considered in detail, while it seeks to set aside the entire of the judgments of the High Court, those grounds of appeal include grounds why, in law, the judgment was incorrect. I point out at this stage that the Notice of Appeal extends to 24 page and raises over 100 separate grounds, covering areas including: (a) the non-suit application; (b) permission to amend; (c) use of the discovered documents; (d) the Witness statements; (e) uncontroversial facts; (f) the fraud and contract claims; (g) the claim for rectification; (h) the nature of a demand facility; (i) the fraud claim; (j) the case against the second respondent; (k) the claim in respect of Malahide Road; (1) the sale of Baily Point; (m) certain dependent claims which it is not necessary to enumerate in this judgment, and certain further so-called independent claims which are also not enumerated. In respect of all of these, it is said that the learned High Court judge misdirected himself to such an extent that the judgment(s) are fatally flawed. Finally, the application is resisted on the basis that a sum of money of this nature, that is to say, by way of security for costs, is, by implication, bound to affect the appellants adversely in their financial affairs, and will also impact on their ability to prosecute the appeal properly.

14 In the grounding affidavit of Mr. McDonnell, no figure is presented to the Court as to the likely costs, as the fixing of costs is sought to be executed before the Master in the Notice of Motion.

15 A Notice of Motion for security for costs has also been filed on behalf of the second respondent/defendant, between Moorview Developments Limited and other companies, and is advanced on behalf of Mr. Jackson on the same or on similar grounds to those already mentioned in relation to the first of the Notice of Motions filed.

16 The written submissions filed cover the appeals of Moorview Developments & Others v. First Active Plc, Ray Jackson, and by order, Bernard Duffy (Appeal No. 250/2010), and what are called related appeals, which are all of those appeals set out above. For completeness sake, the third named respondent/defendant is a person who purchased...