The High Court has ordered six Superwood companies to provide security for the costs of three insurer defendants in a review of a Taxing Master’s decision on the companies’ costs. The court remitted the matter to the Master of the High Court to fix the amount and stayed the review until that security is furnished.
The application was made by the first three defendants under section 390 of the Companies Act 1963. Mr Justice Quirke held that a review under Order 99, rule 38 of the Rules of the Superior Courts is a separate legal proceeding, so the court could require security for its costs.
The review application concerns costs awarded to the plaintiffs after they succeeded on liability in the Supreme Court in 1995. The Taxing Master assessed those costs at €1,595,118.60, of which €335,380.80 remained unpaid, according to the judgment. The plaintiffs sought a High Court review of the taxation decision.
The three defendants had, in turn, been awarded costs after a 281-day damages hearing. Their solicitor’s evidence was that the likely taxed costs would exceed €5 million, with about €500,000 in additional taxation expenses. The judge recorded that the plaintiff companies were insolvent.
The defendants argued that the review had little prospect of reducing their costs exposure enough to justify proceeding without security. The plaintiffs disputed that the defendants could set their later costs award against the earlier costs award before taxation. Justice Quirke rejected that argument in deciding the security application, finding that allowing the review to proceed without security would likely lead to substantial expense in seeking costs from insolvent companies.
The judge did not decide whether the principles governing security for costs had been affected by the European Court of Human Rights decision in Tolstoy Miloslavsky v United Kingdom. He said it was sufficient to decide the application on its evidence and facts. The order requires security for the three defendants’ costs of the review; it does not determine the review itself or fix the security amount.