The High Court has refused an application by Planitas Airline Systems Limited and four other respondents requiring shareholder Neal Cyr to provide security for their costs in his ongoing dispute over PASRM Limited.
Mr Justice Mark Sanfey delivered the ruling on 22 March 2023. He accepted that Mr Cyr was ordinarily resident outside Ireland, the European Union and Lugano Convention countries, and that the respondents had established a prima facie defence to the substantive claim. But, exercising the court’s discretion, he dismissed their application for security for costs.
Mr Cyr’s underlying proceedings, brought under section 212 of the Companies Act 2014, allege that the respondents oppressed him as a minority shareholder and disregarded his interests. He seeks, among other relief, an order requiring the respondents to buy his 25 per cent shareholding at a price fixed by the court. The respondents deny wrongdoing and dispute his account of their arrangements concerning the software, customers, income and management of PASRM.
The judge stressed that the security application did not decide those disputed issues. He said the respondents had put forward evidence which, if accepted at trial, could support a defence based on Mr Cyr’s alleged awareness of and acquiescence in the way the PASRM project was run through Planitas. Whether oppression or disregard of his interests occurred remains for the trial judge.
A key factor in refusing security was the circumstances surrounding Mr Cyr’s departure from Ireland. His evidence was that statements by the respondents’ solicitor in a June 2020 letter and at a later settlement meeting led him and his wife to believe he could be reported and deported after his Planitas employment ended. The solicitor disputed making a threat, but acknowledged that he had conveyed that Planitas might have reporting obligations; he later accepted that the stated position was mistaken. The judge inferred that the letter, and possibly the meeting, significantly influenced Mr Cyr’s decision to leave.
The judge said the respondents had themselves contributed to the circumstance that enabled them to seek security, because of the erroneous statements about the legality of Mr Cyr’s residence. He considered that ordering security could prevent the claim from reaching a full trial and that the greater injustice would be to block that opportunity. He also noted that some recovery of costs might be possible from the software’s intellectual property or Mr Cyr’s shares if the respondents later obtained a costs order.
The court dismissed the security application. It invited written submissions on costs and ancillary orders, with each side given an opportunity to respond. The judgment did not determine the underlying shareholder dispute or make findings on the oppression allegations.