The Supreme Court struck out an appeal by six Superwood companies after they failed to provide €1,592,102.56 in security for costs. The court said the history of the proceedings showed there was no reasonable prospect the companies would raise the required sum.
The ruling, delivered by Chief Justice Keane on 15 March 2004, also dismissed the companies’ applications to have their existing security treated as adequate, amend their appeal notice or obtain more time to file a new one. The court did not decide the appeal on its merits.
The dispute arose from a fire at premises in Bray, County Wicklow. The companies claimed that insurers had wrongfully repudiated a consequential-loss claim originally put at more than IR£2 million. The insurers had alleged that the claim was fraudulently exaggerated and that the companies had failed to provide information required by the policies.
After an initial High Court judgment dismissed the claim, the Supreme Court allowed an appeal in 1995, ruling that the trial judge had erred in law on fraud and the insurers’ reliance on a policy condition. The case returned to the High Court for assessment of losses. Following a 281-day retrial, the High Court in April 2001 awarded sums to two of the companies, but reduced the damages and interest to nil after accounting for a settlement with a fourth defendant. It also dismissed claims in negligence and breach of contract.
The companies appealed that outcome. In April 2002, the Supreme Court ordered them to provide security for the insurers’ appeal costs, with the amount to be set by the High Court Master. The amount was fixed at €1,592,102.56, and the companies’ challenges to that figure were dismissed. Their later requests for more time and permission to replace their 336-ground appeal notice were also rejected.
The insurers then asked the Supreme Court to dismiss or strike out the appeal. The companies argued that the security requirement came from section 390 of the Companies Act 1963, which allowed proceedings to be stayed until security was provided but did not expressly authorize striking out an appeal. They also relied on the constitutional right of appeal and argued that parts of their appeal concerned fair procedures at trial.
The court rejected those submissions. It held that it had inherent jurisdiction to strike out proceedings for failure to comply with a security order, and said the fair-procedures argument should have been raised when security was first considered. It found no evidence of a realistic plan to raise the money and concluded that striking out the appeal was the only remaining course.