Seamus Smyth v O'Shea Fishing Company Ltd and Another

JurisdictionIreland
JudgeMr. Justice Binchy
Judgment Date09 June 2015
Neutral Citation[2015] IEHC 360
CourtHigh Court
Date09 June 2015

[2015] IEHC 360

THE HIGH COURT

[No. 1528 P/2012]
Smyth v O'Shea Fishing Company Ltd & Fintra Investments Ltd
No Redaction Needed
Approved Judgment

BETWEEN

SEAMUS SMYTH
PLAINTIFF

AND

O'SHEA FISHING COMPANY LIMITED AND FINTRA INVESTMENTS LIMTED
DEFENDANTS

Damages & Restitution – Practice & Procedures – Security for costs – O. 29 r. 1 of the Rules of the Superior Courts – Delay

Facts: The defendants applied for an order for security for costs on the ground that the plaintiff resided outside the jurisdiction of the Courts regarding the proceedings instituted by the plaintiff against the defendants for damages alleging wrongful termination of a contract for employment.

Mr. Justice Binchy refused to grant an order for security for costs to the defendants. The Court observed that for an application to succeed under o.29 r.1, certain principles must be followed such as: establishment of prima facie defence, financial constraints of the plaintiff regardless of prima facie defence having been established and the fact that the plaintiff's inability to give security emanated from the wrongful conduct of the defendant. The Court held that there was considerable delay on behalf of the defendants to claim security for costs despite being aware of the fact that the plaintiff was a resident of Australia and any order compelling the plaintiff to make security for costs would impede the progress of the proceedings initiated by the plaintiff.

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JUDGMENT of Mr. Justice Binchy delivered on the 9th day of June, 2015.

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1. This is an application for a security of costs brought by way of motion dated 28 th June 2013. The matter came on for hearing on the 17 th of April, 2015. The defendants make this application pursuant to Order 29, rule 1 of the Rules of the Superior Courts on the grounds that the plaintiff resides outside the jurisdiction.

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2. In order to be eligible to bring such an application it is well established that a defendant must have at least a prima facie defence to the proceedings. At the outset of the application, counsel for the plaintiff acknowledged that this is a low threshold and conceded, for the purposes of this application, that the defendants have a prima facie defence.

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3. Order 29 Rule 1 of the Rules of the Superior Courts provides:-

"When a party shall require security for costs from another party, he shall be at liberty to apply by notice to the party for such security; and in case the latter shall not, within forty-eight hours after service thereof, undertake by notice to comply therewith, the party requiring the security shall be at liberty to apply to the Court for an order that the said party do furnish such security."

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4. Following a review of the authorities, Finlay P. (as he then was) in Collins v. Doyle [1982] I.L.R.M 495 set out the following principles of law applicable to such applications, which remain the key principles applicable, as follows:-

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2 "(1) Prima facie, a defendant establishing a prima facie defence to a claim made by a plaintiff residing outside the jurisdiction has got a right to an order for security for costs.

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(2) This is not an absolute right and the court must exercise a discretion based on the facts of each individual case.

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(3) Poverty on the part of the plaintiff making it impossible for him to comply with an order for security for costs is not even when prima facie established, of itself automatically a reason for refusing the order.

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(4) Amongst the matters to which a court may have regard in exercising a discretion against ordering security is if a prima facie case has been made by the plaintiff to the effect that his inability to give security flows from the wrong committed by the defendant."

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5. In subsequent cases, emphasis has been placed on the principle that there is no absolute right to security for costs, that the order is a discretionary one and that the court must exercise its discretion based on the facts of each particular case ( Deirdre Malone v. Brown Thomas amp; Co Limited and Federal Security Services Ltd., Supreme Court [1995] 1 I.L.R.M 369). The constitutional right of access to the courts has also been stressed. See, for example, the decision of the Court of Appeal (delivered by Mahon J.) in the case of CMC Medical Operations Limited (In Liquidation) t/a Cork Medical Centre v. The Voluntary Health Insurance Board [2015] IECA 68 where he said:-

"A court should be slow to take any step which has the effect of curtailing litigation or unduly restricting the constitutional right of access to the courts. The requirement that a party effectively defending an application for security for costs should be expected to delve unduly deeply into complex matters which constitute the subject matter of the litigation itself may produce this result."

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6. Notwithstanding these reservations, the principles outlined in Collins v. Doyle remain the guiding principles to be applied in such applications. However, even where a defendant establishes, prima facie, an entitlement to an order for security for costs, there are a number of exceptions any one of which may operate to deny the defendant the relief:-

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1) Where the defendant is the cause of the plaintiff's impoverishment. As Finlay P. said in Collins v. Doyle;-

"Such a principle does not seem to me to justify giving to a defendant an adventitious protection against the claim of a plaintiff whom he may have impoverished, by reason of the place of residence of the plaintiff which is on the individual facts irrelevant to the reality of recovering costs."

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2) Where the defendant has delayed in making the application for security and as a consequence of which the plaintiff has incurred costs in progressing the proceedings. This exception was again acknowledged recently in the case of Interfund Global Services Limited v. Pascarn Service Limited [2014] IEHC 164 where Barr J. cited the decision of the Supreme Court in SEE v. Public Lighting Services [1987] I.L.R.M 255:-

"It has long been held that delay in seeking security for costs will disentitle a party to the reliefs sought. In SEE v. Public Lighting Services [1987] I.L.R.M 255 , McCarthy J., giving the unanimous judgment of the Supreme Court, held that a delay of seven months between the serving of a notice of appeal and the bringing of the motion was excessive, having regard to the fact that during that period the plaintiff/appellant had undertaken the expense of preparing a transcript of the evidence from the notes of counsel."

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7. Turning to the facts of this case, the plaintiff's claim is for inter alia, damages and declaratory relief arising from the alleged wrongful termination of a contract of employment between the plaintiff and the defendants on or about the 14 th July 2008. The plaintiff is a fisherman and claims to have been employed initially by the first named defendant in or about the year 2000. Following the transfer of the business of the first named defendant to the second named defendant in October 2002, (of which the plaintiff claims he had no knowledge), the plaintiff claims that either he remained an employee of the first named defendant or that alternatively his employment was transferred to the second named defendant upon the same terms. The precise legal relationship between the plaintiff and the defendants is central to the dispute between the parties in these proceeding. The defendants maintain that by reason of a number of decisions of the High Court including the decision of Costello P. in DPP v. McLoughlin [1986] I.L.R.M 493 and Carroll J. in Griffin and Deasy v. Minister for Social, Community and Family Affairs [2002] 2 I.C.L.M.D, the crew of a fishing vessel who are remunerated by way of a share in the proceeds of the catch are not, as a matter of law, regarded as employees but rather are regarded as partners in a joint venture.

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8. In 2006, the first defendant lost its...

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    ...with the orders of the court. The situation bears no resemblance to the situation which arose in Smyth v O'Shea Fishing Company Limited [2015] IEHC 360, in which Binchy J refused security for costs, in which the court stated:- “18… The consequence of the defendants not bringing forward this......

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