The Supreme Court has granted leave to appeal to Jons Civil Engineering Limited and P.J. Edwards & Company Limited in a long-running dispute over a development site in Drogheda. The determination was delivered on 4 October 2016. The court also gave the appeal priority.
The respondents are Paulson Investments Limited and Albert Enterprises Limited, related property development companies. In November 2005 they began proceedings claiming damages for breach of contract, negligence and breach of duty over difficulties in developing a site at Dyer Street, Drogheda. They claim €2 million in wasted professional fees and about €22 million for the difference in value between the development as built and as intended. Jons Civil Engineering was to build the basement of a proposed nine-storey scheme, and P.J. Edwards & Company is a specialist piling contractor. Both have delivered a full defence.
In 2011 the two defendants learned that some of the companies' loans had moved to the National Asset Management Agency. They applied for an order requiring the companies to provide security for the costs of defending the case. In the High Court, Birmingham J. delivered judgment on 2 November 2012 and ordered the security, finding that the companies could not pay the costs of both applicants if they lost, and that each applicant had a prima facie defence.
The companies appealed. On 8 June 2016 the Court of Appeal (Finlay Geoghegan, Peart and Hogan JJ.) allowed the appeal by majority and vacated the order, with Hogan J. giving a minority judgment. The majority relied on a €500,000 lodgement made with the companies' solicitors, which it called a very significant additional matter, together with the advanced stage of the proceedings.
The applicants argued that the ruling departed from the rule that security should be a reasonable estimate of the costs to be met. The respondents opposed leave, saying the issue was routine and had been overtaken by the Companies Act 2014.
The Supreme Court was satisfied that the applicants had raised a matter of general public importance. Leave is granted on one question: whether lodging a sum of money with solicitors, said to be in respect of costs, is a special circumstance sufficient to discharge a plaintiff company's obligation to provide security for costs under section 390 of the Companies Act 1963.