The High Court has proposed ordering Coolbrook Developments Ltd to provide €400,828 in security for costs to each of two defendants in a dispute over the sale of a stake in Burlington Plaza, Dublin 4. The proposed total is €801,656, exclusive of VAT. The court said Coolbrook’s proceedings would be stayed until the security was provided.
Mr Justice David Barniville delivered judgment on applications by Lington Development Ltd and Davy Target Investments plc under section 52 of the Companies Act 2014. He found reason to believe Coolbrook would be unable to pay the defendants’ costs if they successfully defended the case. Coolbrook had accepted, only for the purpose of these applications, that each defendant had a prima facie defence.
The underlying proceedings concern Lington’s February 2017 sale to Davy Target Investments of its 25% interest in Burlington Plaza. Coolbrook, which now owns 75% of the property, alleges the sale breached a 2011 owners’ agreement and seeks to have it declared void or set aside. It also claims damages, alleging breaches of contract and confidence, conspiracy and interference with its contractual rights. Both defendants deny the allegations; the judgment did not decide the merits of those claims.
In assessing Coolbrook’s ability to pay, the judge relied on its 2015 and 2016 accounts, which showed net current assets of €2, and the absence of more recent financial statements or evidence explaining a positive change. The evidence also showed six unsatisfied charges in favour of Dengrove DAC and that Coolbrook’s property interests were fully charged and secured to that lender. The judge considered Dengrove’s letter about possibly releasing part of the rental income conditional and non-binding. He found the offered €250,000 escrow payment insufficient, with its funding source undisclosed.
On the amount of security, the judge rejected a fixed one-third approach under section 52, saying the court had discretion to set a proportionate amount. He ordered the same security for each defendant, despite Davy Target Investments’ higher cost estimate, and excluded VAT. Coolbrook had not said that providing the full amount would prevent it from continuing the case.
The judgment sets out orders the judge proposed making, subject to further discussion with counsel. It specifies no deadline for providing security; the time was to be agreed by the parties or fixed by the court. The proposed stay would remain in place until Coolbrook provided the ordered security.