The Court of Appeal has dismissed Pembroke Equity Partners Limited’s appeal against an order requiring it to pay the costs of a security for costs motion brought by Eileen Corrigan and James Patrick Galligan.
The underlying proceedings began in 2012 as a claim for €409,304.12, said to be due on a €300,000 loan advanced in 2006. The company later claimed €556,068.99. The defendants denied the material claims and pleaded a set-off connected to separate City Pharmacy proceedings. That separate claim against the company remained after claims against accountants were compromised.
The defendants sought security for their costs in November 2019, arguing that the company’s accounts indicated it might be unable to meet an adverse costs award. The company disputed that position and opposed the motion. The parties filed competing expert reports on the company’s finances and on estimated defence costs. The judgment records estimates of €194,441 and €110,638, both inclusive of VAT.
Seven days before the High Court hearing, the company offered to lodge €120,000 as security, without admitting it was obliged to do so. The defendants accepted. On 23 November 2021, the High Court made an order by consent requiring the company to lodge the sum, or provide an approved bond, within seven days. The order stayed the underlying proceedings until security was provided. The judge also awarded the defendants their motion costs, with a stay on payment pending the outcome of their defence in the main proceedings.
The company appealed the costs ruling, seeking to have the costs reserved until trial. It argued that the defendants had accepted substantially less security than their estimate, that the motion had been delayed, and that the company’s offer should count in its favour.
The Court of Appeal held that the High Court judge was entitled to treat the defendants as successful: the company’s late offer had secured the relief sought, and the judge could find that the motion had prompted the offer. The appeal court said the lower sum did not justify reducing costs in the circumstances, as the company had not offered security earlier and the motion had not proceeded to a hearing on the amount.
The court also noted that the parties disputed whether the defendants had delayed culpably in seeking security. Because the motion had been resolved by consent, it did not determine that dispute. It found no error in the costs order and dismissed the appeal. The decision addressed only the costs of the security motion; it did not determine the underlying loan claim or the separate City Pharmacy dispute.