The High Court has ordered five respondents to pay Neal Cyr’s costs of opposing their unsuccessful application for security for costs. The costs are to be assessed if the parties cannot agree, and payment is stayed until the underlying proceedings are determined.
In a judgment delivered on 26 August 2024, Mr Justice Mark Sanfey said the respondents should bear the costs because the motion had been decided decisively in Cyr’s favour. He declined to reduce the award by separating out points on which the respondents had succeeded. He also refused Cyr’s request for costs on a legal practitioner and client basis, ordering costs on a party and party basis instead.
The costs decision followed an earlier judgment, delivered on 22 March 2023 and reported as [2023] IEHC 149, which refused the respondents’ application for security for costs. The respondents had argued that the costs of that motion should be “costs in the cause”, meaning they would be dealt with as part of the outcome of the main proceedings. They said it was reasonable to bring the motion and noted that they had succeeded on two elements, while the earlier decision turned on special circumstances.
The judge said a security-for-costs application is a discrete matter that would not be revisited at trial. A defendant must satisfy all three elements for such an application to succeed, including showing there are no special circumstances against ordering security. Because the outcome on that third element is often uncertain, he said a defendant whose application fails should ordinarily be liable for the plaintiff’s costs, absent unusual circumstances.
The judge also noted his earlier view that Cyr’s return to the United States, which enabled the respondents to meet the residence element of their application, appeared to have been prompted or procured at least in part by inaccurate statements about the law in a letter from the respondents’ solicitor and at a meeting. This was a reference to the earlier judgment, not a new finding in the costs decision.
The respondents had relied on two other High Court cases involving refused applications for interlocutory injunctions. Justice Sanfey said those cases differed because the issue of whether there was a serious issue to be tried could look different at trial. Here, his conclusion that security would cause the greater injustice by preventing Cyr from having his grievances determined at a full trial would not be affected by the trial’s outcome.
The underlying action concerns an application under section 212 of the Companies Act 2014 relating to PASRM Limited. The judge said the parties should try to agree a timetable to bring the matter to trial. If they cannot, either side has liberty to apply. The costs judgment did not determine the underlying action.