The Supreme Court has allowed an appeal by the West Donegal Land League Limited over an order requiring it to provide security for the legal costs of one defendant in a dispute over land in County Donegal.
In a judgment delivered on 15 May 2006, Denham J. said the High Court application should be reheard in a list for longer motions, so the parties could address all issues, including whether special circumstances justified refusing security. The Court made no decision on whether oral evidence should be heard at that rehearing.
The appeal concerned a High Court order under section 390 of the Companies Act 1963. That order required the League to provide security for Joseph Hamilton Boyd’s costs and said proceedings against him would be stayed if it failed to do so. The High Court had accepted evidence that the League might be unable to meet his costs and that he had a prima facie defence.
The League argued that it had not had a fair opportunity in the High Court to present its case on special circumstances. Denham J. accepted that the motion had been heard briefly and that the lack of time raised concerns about access to court. She concluded that the matter should be returned to the High Court for a full rehearing.
The judgment also set out an alternative conclusion in case the application was not remitted. On that basis, Denham J. found that special circumstances existed and that security should not be ordered. She referred to the League’s account that local graziers had previously used the land in common and formed the company partly because of Boyd’s alleged conduct; the parties’ dispute over whether he had acted as trustee; and earlier statements in which he had claimed a tax benefit on the basis that he was acting as trustee. The Court said those matters were relevant to the security application, without deciding the truth of the allegations or the merits of the ownership dispute.
The judgment stated that the League had funds, though they were not substantial, and was not insolvent. It also said the appeal did not establish that the company was being used to leave a successful defendant without assets. Denham J. stressed that the decision concerned security for costs alone and expressed no view on who beneficially owned the land.
The Court allowed the appeal. The judgment gives no final determination of the security application after rehearing, and does not decide the underlying land claims.