The High Court has refused to continue a restraint preventing Banco BPI SA from paying out under an on-demand performance bond, after rejecting a request to maintain it pending appeal. The court also ordered Construgomes & Carlos Gomes SA to pay the costs of its failed injunction application to Dragados Ireland Limited and BAM Civil Engineering Limited, with execution of the costs order stayed for three months.
The ruling, delivered by Ms Justice Nuala Butler on 1 March 2021, addresses costs and a stay following an earlier judgment in the same proceedings. That earlier decision refused the plaintiff’s application for an interlocutory injunction restraining payment under the bond. The present judgment did not decide the underlying contractual and fraud claims.
The plaintiff argued that costs should wait until trial, because the fraud issue could be revisited after discovery and cross-examination. The defendants sought their costs at this stage. Justice Butler held that the rules generally required costs of an interlocutory application to be decided when it was determined, unless a just decision was not possible. She considered it fair and possible to decide the issue then: the injunction application required the plaintiff to meet a high “seriously arguable” threshold for fraud, and it had not done so. The judge said payment under the bond made a trial less likely, which could leave the defendants unable to recover costs if the issue were reserved.
The court ordered costs, including reserved costs, in favour of the first and second defendants against the plaintiff. It stayed execution for three months to allow the plaintiff time to decide whether to appeal or pursue the underlying proceedings, and to take steps to bring the matter before the Court of Appeal. Any further stay would have to be sought there.
The plaintiff also sought a stay pending appeal that would keep the bank from paying under the bond. Justice Butler held that the interim order of 8 October 2020 had ended when the injunction motion was determined. Continuing the restraint would require a new order, effectively granting pending appeal the relief already refused. She declined to make one, finding that the plaintiff’s arguments about liability being in issue on appeal and the defendants suffering no specific prejudice were insufficient to justify continued interference with the bond.
The judge also noted concerns about the affidavit supporting the initial ex parte application. It had not addressed the defendants’ claim for liquidated damages, which the plaintiff later accepted had not been covered by an adjudicator’s decision. The court did not determine the truth of the competing claims about defects or fraud in this judgment.