The High Court has refused a request by Sorohan Builders Limited and Joseph Sorohan for security for costs from Ronbow Management Company Limited, which is suing over the title to common areas at the Elton Court residential complex in Sandycove, County Dublin.
In a judgment delivered on 10 February 2011, Mr Justice Herbert found that the company was unlikely to be able to pay the defendants’ estimated legal costs of €145,000, excluding VAT. But he concluded that requiring security would be oppressive and unjustly restrictive of the company’s access to the court.
The application was made under Order 29 of the Rules of the Superior Courts and, alternatively, section 390 of the Companies Act 1963. The plaintiff is a company limited by guarantee, established to manage communal facilities for 37 townhouses and car-parking spaces at Elton Court. Sorohan Builders developed the complex and sold the leasehold interests; Joseph Sorohan sold the freehold interests.
The underlying action alleges, among other things, breach of contract, negligence, misrepresentation and breach of title warranty against the two defendants and Beauchamps Solicitors. The plaintiff also alleges that the solicitors acted in a conflict of interest. Those claims remain allegations: no defence had yet been delivered when this application was heard.
The court considered an earlier order by Ms Justice Laffoy requiring the plaintiff to provide security for costs to Beauchamps Solicitors. An appeal against that order had been taken to the Supreme Court. Mr Justice Herbert noted that the plaintiff’s only identified asset was the complex’s common areas, with service charges as its only income, and that no evidence showed the common areas had marketable value.
The judge accepted that the two applicants had shown a prima facie defence to the claims against them. He also considered that the plaintiff had not established prejudice from the timing of their application. However, he found that the applicants shared an effective common defence with Beauchamps, which had so far borne the burden of defending the claim. On the evidence, he did not consider it necessary or proper for the two applicants to incur the estimated €145,000 to obtain justice or defend their rights.
The court declined to make the requested security-for-costs order. It did not decide the underlying title or liability claims, and the judgment does not determine the separate security order concerning Beauchamps Solicitors.