The Court of Appeal has dismissed an appeal by Limerick Private against an order requiring it to provide security for costs to the Voluntary Health Insurance Board (VHI). The court affirmed the High Court order, which limited security to costs the VHI estimated it would incur from the date of that court’s judgment.
The dispute arises from the VHI’s refusal to approve a proposed private hospital in Limerick for insurance cover. Shay Sweeney and Limerick Private are pursuing claims for declaratory relief and damages. The appeal concerned only the security for costs order, not the underlying claims.
Limerick Private argued that its inability to meet the VHI’s costs had been caused by the VHI’s alleged wrongdoing, and that the VHI had waited too long to seek security. The Court of Appeal agreed that the delay should be counted from October or November 2015, when the VHI’s solicitors said they were instructed to issue a motion unless the company agreed to provide security. The VHI did not issue its motion until June 2023. The court described the period as exceptional and noted that the VHI had provided no explanation for it.
But the court found that delay alone did not justify refusing security. Limerick Private had not provided evidence establishing that the delay caused it prejudice, such as costs or liabilities it would probably have avoided if the motion had been made earlier. The court also noted that the company continued the proceedings after the VHI’s 2015 demand, and that there was no clear evidence it had relied on the VHI having abandoned its intention to seek security.
The company also argued that the VHI’s refusal of cover had prevented the hospital project from succeeding and caused its financial difficulties. The court found that the evidence did not show the project’s funding conditions could have been met. The only identified proposed finance was an AIB loan of €54.6 million towards a projected €75 million cost, subject to conditions including €21 million in upfront funds. The court also noted that the company’s audited accounts showed it was effectively insolvent from 2006, before the alleged wrongdoing.
The appeal was dismissed and the High Court order affirmed. The appeal judgment stated a provisional view that the VHI was entitled to its appeal costs. Any request for a different costs order was to be notified by 14 February 2025; the judgment did not record a final appeal costs order.