Ticket Generator Ltd v Dublin Airport Authority & Others (No 2)

• Jurisdiction: Ireland
• Judge: Miss Justice Laffoy
• Judgment Date: 24 May 2012
• Neutral Citation: [2012] IEHC 216
• Court: High Court
• Date: 24 May 2012

Ticket Generator Ltd v Dublin Airport Authority PLC & Ors

BETWEEN

TICKET GENERATOR LIMITED

PLAINTIFF

AND

DUBLIN AIRPORT AUTHORITY PLC, RYANAIR LIMITED AND RYANAIR HOLDINGS PLC

DEFENDANTS

[2012] IEHC 216

[No. 8979P/2011]

THE HIGH COURT

PRACTICE AND PROCEDURE

Security for costs

Order for security for costs - Whether amount of security should be one third of estimated costs - Quantification of amount of security - One third rule - Corporate plaintiff incorporated outside State - Special circumstances - Thalle v Soares [1957] IR 182; Fallon v An Bord Pleanála [1992] 2 IR 380; Harlequin Property (SVG) Ltd v O'Halloran [2012] IEHC 13, [2013] 1 ILRM 124; Lismore Homes Ltd v Bank of Ireland Finance Ltd (No 3) [2001] 3 IR 536; Goode Concrete v CRH plc (Unrep, the Cooke J, 15/5/2012) and Framus Ltd v CRH Plc [2004] 2 IR 21 considered - Rules of the Superior Courts 1986 (SI 15/1986), O 29 and O 31, r 12 - Companies Act 1963 (No 33), s 390 - One third costs ordered (2011/8979P - Laffoy J - 24/5/2012) [2012] IEHC 216

Ticket Generator Limited v Dublin Airport Authority plc

Facts: As part of on-going litigation concerning the sale of rail tickers at Dublin Airport, an order for security of costs had been made in an earlier hearing ([2012] IEHC 215). The Court had invited submissions as to whether the security should be fixed at one third of the estimated costs, applying Thalle v Soares [1957] IR 182.

Held by Laffoy J, that the Court had been unaware at the earlier hearing of a recent case in which a similar point had been raised, namely Harlequin Property (SVG) Ltd v O'Halloran [2012] IEHC 13. In this case, costs had been raised to their full level of security.

Having considered the parties” submissions, the Court declined to adopt the approach set out in the Harlequin case. The Court was bound to follow Thalle v Soares and the subsequent case of Framus Ltd v CRH Plc [2004] 2 IR 2 and fix the costs at one third. Thalle v Soares [1957] IR 182 and Framus Ltd v CRH Plc [2004] 2 IR 2 followed.

RSC O.29

THALLE v SOARES 1957 IR 182

HARLEQUIN PROPERTY (SVG) LTD v O'HALLORAN 19.1.2012 2012 IEHC 13

COMPANIES ACT 1963 S390

FALLON v BOARD PLEANALA 1992 2 IR 380

LISMORE HOMES LTD v BANK OF IRELAND FINANCE LTD & ORS 2001 3 IR 536

GOODE CONCRETE v CRH PLC & ORS UNREP COOKE 15.5.2012 2012 IEHC 198

FRAMUS LTD v CRH PLC 2004 2 IR 20

RSC O.31 r12

RSC O.31 r2

RSC O.58 r1

1 Judgment of Miss Justice Laffoy delivered on 24th day of May, 2012.

2 1. The issue addressed in this judgment is the issue which is identified at para. 7.2(c) of the judgment on the application by the second defendant (Ryanair) for security for costs against the plaintiff, which I delivered on 11 ^th May, 2012. Having indicated that there would be an order pursuant to Order 29 of the Rules of the Superior Courts 1986 (the Rules) that the plaintiff do furnish security for costs to Ryanair, I raised the question whether, given that the order for security was being made under Order 29, the amount of the security ordered should be one-third of the estimated costs, in accordance with the decision of the Supreme Court in Thalle v. Soares [1957] I.R. 182. The Court has had the benefit of very helpful written submissions and oral submissions from each side on the issue.

3 2. When I raised that issue, I was unaware that a similar point had been addressed in the recent past in the High Court by Clarke J. in his judgment in Harlequin Property (SVG) Ltd. v. O'Halloran [2012] IEHC 13. In those proceedings, Clarke J. had previously made an order under Order 29 of the Rules that the plaintiff, a company incorporated in the Caribbean region should provide security for costs. In the judgment relevant to the issue now being considered, 19 ^th January, 2012, he considered a number of issues in relation to the quantification of the amount of security, including the question whether, given that the order for security for costs was made under Order 29 rather than under s. 390 of the Companies Act 1963 (the Act of 1963), it was appropriate to follow the common practice in orders made under Order 29 to direct security at one-third of the total amount of the costs estimated as being likely to arise. In addressing the so called "one third rule", Clarke J. referred to various authorities: the decision of the Supreme Court in Thalle v. Soares and the decision of the Supreme Court in Fallon v. An Bord Pleanála [1992] 2 I.R. 380, both of which he analysed in depth, noting that the High Court is bound by the jurisprudence of the Supreme Court in those cases, which established that the one-third practice should not be lightly departed from, but also noting that that jurisprudence evolved in cases involving personal, rather than corporate, plaintiffs ( cf. para 4.12); and the decision of the Supreme Court in Lismore Homes Ltd. v. Bank of Ireland Finance Ltd. (No. 3) [2001] 3 I.R. 536. In the latter case, the Supreme Court held that the meaning of the wording of s. 390 of the Act of 1963 was clear. If a court ordered security for costs to be given under that provision, then the security to be given was sufficient security for the costs of the defendant, on the basis that the word "sufficient" in its plain meaning signified adequate or enough and was directly related in s. 390 to the defendant's costs.

4 3. Very recently, in Goode Concrete v. CRH Plc & Ors. (Unreported, the High Court, 15 ^th May, 2012), Cooke J. followed the approach of Clarke J. in the Harlequin case. But for the submissions made on behalf of the plaintiff, I would have no difficulty in adopting a similar approach in this case, because the underlying rationale of the Harlequin decision is compelling.

5 4. The kernel of the decision of Clarke J. in the Harlequin case is to be found at the end of para. 4.15 and the beginning of para. 4.16 of his judgment where he stated:

"Where, however, as here, the court has already been satisfied that the tests for the making of an order for security under s. 390 of the 1963 Act were met, save only for the fact that the corporate entity concerned was not Irish, then it seems to me that there is a compelling logic in applying the same regime for the calculation of the amount of security required as would apply arising out of a successful application for security under s. 390 of the 1963 Act.

For that reason alone, I am satisfied that it is appropriate to approach the fixing of security on the facts of this case on the basis of full security rather than by the application of the one-third practice."

6 The basis on which this Court decided in these proceedings that the plaintiff should provide security for costs was, as set out at para. 5.6 of the judgment of 11 ^th May, 2012, that, on the evidence, one had to conclude that, as a matter of probability, the plaintiff would not be able to pay Ryanair's costs of defending the proceedings, if Ryanair is successful.

7 5. However, counsel for the plaintiff submitted that it is not open to the Court on this application not to apply the one-third rule, because the Court is bound...