The High Court has refused an application by solicitors for security for costs in a negligence action brought by Tír na nÓg Projects (Ireland) Limited. The ruling was made at a preliminary stage and does not decide whether the solicitors were negligent.
The company alleges that its solicitors failed to act on instructions to seek an order compelling Kerry County Council to grant planning permission, failed to bring judicial review proceedings against the Council’s refusal, and failed to advise it about the need to challenge that decision. It also alleges that the solicitors advised it to continue with plenary proceedings that were “doomed to fail”. The company seeks alleged lost profits and legal costs.
The underlying dispute concerns a proposed development of 33 houses and a leisure centre at Cappanacush, Kenmare. The company applied for planning permission in 2002. After the Council said the development would materially contravene the county development plan, it formally refused permission in October that year. The company later brought plenary proceedings against the Council, seeking a declaration that permission had been granted by default. Those proceedings remained in existence, but the judgment said no further steps had been taken after November 2009.
The solicitors sought security under section 52 of the Companies Act 2014. They said the company could not meet their costs if they successfully defended the action and relied on a forensic accountant’s estimate of €232,800. They also argued that the negligence claim was statute-barred. The company’s inability to pay was not disputed.
The judge held that the solicitors had established a prima facie limitation defence. The chronology and the parties’ competing arguments meant, however, that the defence could not be treated as established conclusively at this stage.
The company argued that its financial position resulted from the solicitors’ alleged wrongdoing. The judge accepted, with reservation, that it had crossed the preliminary evidential threshold for showing that connection. She noted that the company’s evidence of projected profit was thin, but that the estimated defence costs were substantially lower than the alleged €4 million profit from the development.
The judge also considered correspondence that appeared to contradict the solicitors’ position that the company had never instructed them to seek judicial review before the relevant deadline. She said no final conclusion should be reached on that factual dispute or on negligence, but expressed serious concern about the solicitors’ bona fides on the evidence then available.
The application for security for costs was refused. The court did not determine the underlying negligence claim or the final merits of the limitation defence.