The High Court ordered Harlequin Property (SVG) Limited to provide €150,000 in security for costs in its proceedings against Padraig O’Halloran and Donal O’Halloran. The sum includes VAT and covers the case through pre-trial directions. The court left the amount of any further security to be determined later.
Mr Justice Clarke delivered the judgment on 19 January 2012, following a hearing in Cork on 12 January about how much security should be required. The order followed an earlier decision that Harlequin should provide security because the defendants had established a prima facie defence and there was evidence it might be unable to pay their costs if they succeeded.
The plaintiffs allege that money paid under a construction contract to companies incorporated in the Caribbean was misapplied by Padraig O’Halloran. They also allege that a limited amount was paid from those companies to Donal O’Halloran, and claim a right to trace or follow that money. These are allegations in the proceedings, not findings made in this judgment.
The court decided that irrecoverable VAT should be included in calculating security. It also ruled that, ordinarily, only costs arising after the defendants’ initial request for security should count. The court applied full estimated costs, rather than the usual one-third practice for orders under Order 29, because the plaintiffs were foreign companies and the security order had been made on grounds analogous to those applicable to an Irish company under section 390 of the Companies Act 1963. The judge also said the case appeared extremely weak on the evidence then available, while making clear that this did not mean it must fail.
The court did not set security for the entire case at this hearing. It said the likely trial scope, costs and need for expert evidence remained uncertain, in part because related proceedings were underway in the Caribbean. After pre-trial directions clarify how the issues will proceed, both sides’ cost accountants are to file revised estimates. The court will then determine any additional security needed to bring the total to the revised estimate. The precise timing and method for lodging the initial €150,000 were left for further submissions.