The High Court struck out a claim by six Superwood companies against Ireland and the Attorney General, finding that the statement of claim disclosed no reasonable cause of action. The court also dismissed the companies’ application for judgment in default of defence.
Mr Justice Murphy’s judgment, delivered on 5 July 2005, concerned the State’s application under Order 19, rule 28 of the Rules of the Superior Courts. The State had also sought dismissal under the court’s inherent jurisdiction. The judge made the order on the pleadings, concluding that even if the pleaded facts were proved, the action could not succeed against the State.
The companies challenged section 390 of the Companies Act 1963, which had been used to require security for costs in their appeal against insurers over an insurance claim arising from a fire at their premises in October 1987. They sought declarations that the provision was unconstitutional and incompatible with the European Convention on Human Rights, as well as damages.
In the insurance litigation, the Supreme Court had upheld an order requiring security for costs. The amount was assessed at €1,592,102.56. The companies argued that their inability to provide the security followed from the insurers’ alleged wrongful refusal to pay under the insurance contract, and that the security requirement prevented their appeal from being heard. Those were the companies’ submissions, not findings made in this case.
The High Court held that the Supreme Court had already considered the relevant issues around security for costs, including the companies’ financial position and the cause of their impecuniosity. It found no basis for the companies to raise the same constitutional challenge against different defendants. The judge also noted that the Human Rights Commission had not been given notice as required by section 6 of the European Convention on Human Rights Act 2003, so the court could not make the declaration of incompatibility sought.
The judge further concluded that the pleaded Convention claim was unclear and lacked cogency. In considering the companies’ access-to-court argument, he referred to the European Court of Human Rights decision in Tolstoy v United Kingdom, which held that a security-for-costs order did not impair the essence of the right of access to court.
The ruling addressed the claim against the State. It did not determine the merits of the companies’ underlying insurance dispute. The High Court dismissed the companies’ default-of-defence motion as a consequence of striking out their action.