The High Court has ordered the management company for Elton Court in Sandycove to provide security for the costs of solicitors it is suing over alleged defects in the title to the development's common areas.
Ronbow Management Company Ltd manages the 37-townhouse development, with entrances from Breffni Road and Castlepark Road. It brought proceedings arising from a 2005 conveyance by developer Sorohan Builders Ltd which transferred common areas to the management company.
Ronbow alleges that parts of the title it received were defective. Its case includes claims that it obtained only the freehold reversion to certain laneways still subject to an 1863 lease, that the developer had no title to another area forming part of an access from Castlepark Road, and that neighbouring owners later established a parking easement over part of the property.
The company sued several parties, including members of Beauchamps Solicitors, which had acted for the developer. It alleges professional negligence, breach of contract, conflict of interest and misrepresentation. The solicitors deny liability and applied for security for costs under section 390 of the Companies Act 1963.
Ms Justice Laffoy found credible evidence that Ronbow could be unable to meet the solicitors' costs if its case fails. Its accounts showed net current assets of €4,390 at the end of 2008 and just €23 in cash at bank. The common areas themselves were considered to have little or no realisable value because they were subject to residents' and third-party rights.
The solicitors estimated their defence costs at €97,450 excluding VAT. The court accepted that estimate as reasonable for the purpose of the application.
The judge also held that Beauchamps had established a prima facie defence. Among other arguments, the firm contends that purchasers' own solicitors were responsible for assessing the adequacy of the title and that professional advice from the development architect could be relied upon on title identity issues.
The court rejected arguments that delay or the solicitors' conduct justified refusing security. The amount and form of security were left to be determined by the Master unless the parties agreed otherwise.