The High Court has refused an application by Michael Krohne for security for costs in a €109,638.03 dispute over architectural services claimed by Ralf Ditt.
Ditt’s claim is that Krohne owes him the money under an agreement for work and professional services, including services relating to three properties in County Clare. Krohne contests the claim and says he has a full defence. The summary proceedings were remitted for a plenary hearing, and pleadings were delivered before Krohne applied for security for costs.
The motion concerned whether Ditt should have to provide security before the case continued. The judgment records that Ditt, a German national and EU citizen, was resident in Switzerland. It also records that he had no valuable assets apart from a boat in County Clare, valued at between €5,000 and €8,000, and a leasehold interest in a residential property there that appeared to have no capital value. The court was satisfied that Krohne had shown a prima facie defence on the merits, as required by the relevant court rules.
Justice O’Neill said foreign residence could provide the basis for invoking the security-for-costs jurisdiction, but did not entitle a defendant to an order automatically. The court had to consider all the circumstances, with particular attention to whether a costs order could be enforced abroad, and with what difficulty, delay or expense. The judge said a plaintiff’s impecuniosity was not, by itself, a reason to require security.
Ditt’s counsel submitted that the Lugano Convention provided for enforcement of a costs judgment in Switzerland without substantial difficulty, delay or expense. Krohne’s counsel argued that the Convention did not remove the court’s jurisdiction to order security against a plaintiff resident outside the EU.
The judge accepted that a costs judgment could be enforced in Switzerland under the Convention. He concluded that this enforcement route weighed against requiring security, which could impede Ditt’s ability to pursue his claim. Applying a proportionality assessment as part of the court’s discretion, he held that security was not necessary to protect Krohne against an unenforceable costs award and would be excessive in the circumstances.
The court refused the application for security for costs. The judgment decides that motion only; it does not determine whether Ditt is owed the claimed amount or resolve Krohne’s defence.