The Court of Appeal has refused an apartment owner’s application for security for costs against an insolvent developer appealing discovery orders in a wider dispute over defects in an apartment development in Ratoath, County Meath.
The application concerned an appeal by Saltan Properties Limited against High Court orders that largely refused discovery it sought from Fiona O’Donnell and required it to provide discovery to her. The Court of Appeal did not decide the appeal itself. It considered only whether Saltan should have to provide security for the costs of that appeal.
O’Donnell owns an apartment at Riverwalk Court. The development was built around 2003/2004, with Saltan as developer and other defendants involved as contractors and professional advisers. Structural and other defects were reported. Insurance covered part of the remedial costs and damage, while other losses were not covered. Twenty-six sets of proceedings, one for each apartment, were issued in 2012 on a subrogated basis. Three, including O’Donnell’s action, are being pursued as master claims under case-management arrangements.
The High Court heard discovery motions in November 2019 and delivered its reserved decision on 18 December. Saltan appealed those orders. The Court of Appeal judgment records that Saltan was insolvent and unable to meet an adverse costs order on appeal. Its unaudited abridged accounts filed in September 2019 showed net liabilities of €32,375,318.
Under Order 86, Rule 9 of the Rules of the Superior Courts, the court may order security in special circumstances. The judge accepted that O’Donnell had a prima facie defence to the appeal, but held that insolvency and that threshold alone did not establish the required special circumstances. The claimed delay, the company’s role as developer, its long-running defence of the case and the fact it was being funded in the litigation did not show a risk of added and unnecessary injustice. The judgment said there was no evidence that Saltan had acted improperly or abusively.
The court also held that section 52 of the Companies Act 2014 did not apply. That provision concerns security sought against a company acting as plaintiff; Saltan was a defendant appealing an order. The judge said Order 86, Rule 9 provided a separate route to seek security in such appeals, subject to its test.
The application was refused under both provisions. The judgment did not determine the underlying defects claims or the merits of Saltan’s discovery appeal.