The High Court has directed Pierse Desmond Limited to provide security for costs in its professional negligence case against its former solicitor, Deirdre NicFhionnl aoich, practising as MacGinley Solicitors. The court did not set the amount, saying it would discuss that with counsel. The ruling concerned a preliminary application under section 390 of the Companies Act 1963; it did not decide the negligence claim.
The company alleges that it agreed in February 2007 to buy about 53 acres of registered land in County Kerry from director Patrick Pierse for €2.5 million and paid a €500,000 deposit. It claims that after a 28-day completion notice was served on 29 February 2008, it could not reach its solicitor for advice and the notice expired. The company says the deposit was forfeited and claims consequential losses exceeding €5.3 million.
The solicitor’s defence is that the company was never in a position to complete the purchase and that she had not been put in funds. Justice Hogan noted evidence of a conditional funding offer in March 2008, but said it depended on payment of the deposit and board approval. The judgment records correspondence in which Daniel McAteer said the company could not meet the board approval condition until a meeting with Pierse took place.
For the security application, the judge accepted that the solicitor had a bona fide defence and that the company would be unable to pay an adverse costs order. The company’s 2009 accounts listed €4.625 million as recoverable in the negligence case, but the judge said this was not an asset presently available to meet costs.
The company argued that its inability to pay arose from the alleged negligence. Hogan accepted, for the application only, that an arguable case of negligence could be made. But he found no evidence before him connecting any negligence to the company’s losses or lack of funds. He stressed that this was not a finding on the merits: evidence or documents at a full hearing could establish a causal link.
The judge also rejected the company’s argument that delay barred the application. Although the motion was issued several months after the proceedings began, he found no prejudice and said the delay was not material. The appropriate security amount was left open for discussion with counsel.