The High Court has directed Fortberry Limited to provide €129,470, excluding VAT, as security for the defendants’ costs in its dispute over the sale of Dowth Castle and Netterville Manor in County Meath. The ruling was made at an interlocutory stage and does not decide Fortberry’s underlying claims.
Mr Justice Twomey delivered the judgment on 19 July 2021 in an application by Promontoria (Aran) Limited. The company sought security for costs under section 52 of the Companies Act 2014. The other defendants are receivers Luke Charleton and Andrew Dolliver.
Fortberry claims the defendants acted unlawfully and in bad faith in appointing receivers and selling the property. It says it had agreed a sale for €2.2 million, more than the €1.95 million achieved by the defendants, and alleges the sale was delayed to increase costs. The defendants dispute those claims.
The judge said a 2016 letter from Fortberry director James Flynn referring to a €2.2 million sale did not provide compelling evidence of an agreement. The letter named Mr Flynn and his wife, Carmel Flynn, as well as Fortberry, and did not clarify how much of the price related to the castle. The judge also noted that mortgagee consent had not been obtained and that the proposed sale was conditional on resolving an alleged interest overcharge.
The court also considered a 2017 waiver in which Fortberry and its directors said they had no claim against the receivers or Promontoria. Fortberry later alleged the waiver had been given under economic duress. The judge found that the defendants had a prima facie defence, while expressly leaving open the possibility that Fortberry could establish at trial that the waiver was invalid for economic duress.
On Fortberry’s ability to pay costs, the court relied on company accounts showing a €3.68 million balance-sheet deficit and that the latest filed accounts were for the period ending February 2012. The judge said an assertion that Fortberry expected to recover an apartment worth at least €400,000 was unsupported by credible evidence. He concluded the company was unlikely to pay the defendants’ costs if it lost.
The judge rejected the argument that the case raised an issue of exceptional public importance requiring an exception to the usual security rule. He set security at €129,470 excluding VAT, based on a possible four-day hearing. The judgment proposed that the parties try to agree outstanding matters; if they could not, the case would be listed for mention one week later. The judgment itself did not record final orders being made.