The High Court has ruled that Rayan Restaurant Limited must provide security for the costs of its appeal against a Circuit Court ruling over a restaurant lease in Athlone. The court did not specify the amount, saying the parties could agree a figure or the county registrar could determine it, subject to an appeal to the High Court.
The ruling, delivered by Mr Justice Declan Budd on 18 April 2005, concerned two applications under section 390 of the Companies Act 1963. The second and third defendants sought security for the costs of defending the company’s appeal. A third party had also appealed the Circuit Court decision, but these applications concerned the plaintiff company’s appeal only.
The underlying dispute concerns premises on High Street, Athlone, leased to the company for use as a restaurant. The company claimed it was the lawful tenant and sought possession, an injunction and damages after the premises were re-entered and the locks changed in July 2003. The third defendant’s case was that the lease had been lawfully determined for rent arrears. The Circuit Court dismissed the company’s claim and declared that the lease had been lawfully determined. The company and the third party appealed.
Justice Budd stressed that he was not deciding the lease dispute, the alleged rent arrears, whether the re-entry was lawful, or whether notice was required. Those issues remained for the appeal hearing. The applications were decided on the motions and affidavit evidence before him, alongside the existing Circuit Court order.
The defendants argued that the company had no assets and could not meet an adverse costs order. The company’s director, Fatma-Zohra Azizi, said its financial difficulties resulted from the defendants’ actions and that it had spent about €131,000 equipping the restaurant. She also referred to €11,250 lodged in court. The third defendant’s solicitor disputed the spending figure and said the company had been insolvent before the re-entry. The judgment records that the company acknowledged having no assets other than the disputed lease; the lodged money remained in court pending related proceedings.
The judge found there was insufficient evidence to show that the company’s financial position had been caused by the alleged wrongdoing or that it could have traded out of its difficulties. He said the evidence lacked accounts or other material establishing the company’s viability before the re-entry. He therefore ordered security for the second and third defendants’ costs of the appeal. The amount remained to be agreed or assessed, and the court said it would hear further submissions on the precise order.