The Court of Appeal has dismissed Greenville Primary Care Limited’s appeal against an order requiring it to provide €285,666 as security for the costs of its ongoing action against Infrastructure Investment Fund ICAV. The court affirmed the High Court order and its award of the defendant’s costs of the security motion. It provisionally indicated that the defendant was entitled to its appeal costs, giving the plaintiff ten days from electronic delivery of the judgment to notify the court and defendant if it wished to argue for a different costs order.
The appeal concerned security for costs under section 52 of the Companies Act 2014. The Court of Appeal said the question was whether credible evidence gave reason to believe that the plaintiff would be unable to pay the defendant’s costs if the defendant succeeded. The court stressed that this did not require proof that inability to pay was probable, and that evidence did not become incredible simply because the plaintiff disputed it.
The underlying action arises from agreements concerning a primary care centre planned on land in Listowel, County Kerry. Greenville claims, among other things, that the defendant breached obligations relating to construction cost savings and easements benefiting land it retained. The defendant denies breach and disputes that the easements cover future development, including a proposed nursing home. Those claims were not decided in this appeal. The court found that the defendant had an arguable defence to the easement claim, including on whether the easements extended to future development and the capacity of the storm drain.
The defendant estimated its costs of defending the action at €285,666. The court noted that this estimate did not include the appeal or some other costs, and had not been challenged as an underestimate. It considered financial evidence indicating that, even using the plaintiff’s earlier €900,000 valuation of its retained property, funds available to unsecured creditors would fall short of liabilities. The court also noted increased debenture and directors’ loan balances in draft 2021 accounts.
The plaintiff relied in part on the prospective value of an option to take a lease of space intended for a pharmacy. The court noted that no lease was in place and that the commercial value depended on uncertain matters, including planning conditions on parking and whether more doctors would practise at the centre. It concluded that the evidence about the prospective lease did not alter the financial picture enough to displace the reason to believe that the plaintiff might be unable to pay.
The judgment was delivered on 8 December 2022 by Mr Justice Allen, with Whelan and Collins JJ. agreeing. The appeal was dismissed; the merits of the underlying contract dispute remain for later determination.