The High Court has ordered Paulson Investments Limited and Albert Enterprises Limited to provide security for the costs of two defendants in a dispute over a planned basement development in Drogheda. It also refused the companies’ application to strike out the first defendant’s defence over failures in discovery.
In a judgment dated 2 November 2012, Mr Justice Birmingham ruled on three motions: the plaintiffs’ application to strike out the defence of Jons Civil Engineering Limited, and separate applications by Jons and specialist piling contractor P.J. Edwards & Company Limited for security for costs under section 390 of the Companies Act 1963.
The plaintiffs claim that problems with piling at a Dyer Street site led to the abandonment of their planned three-storey basement. They seek about €2 million for professional fees and about €22 million for the reduced capital value of the development that was built instead. The claims and the defendants’ responses remain to be determined at trial.
The judge said the plaintiffs could not pay the defendants’ costs if both defendants succeeded. The parties estimated trial costs at about €785,000 plus VAT for Jons and €769,000.73 plus VAT for Edwards. The defendants had shown arguable defences, including disputes about who contracted with whom, responsibility for the design, ground conditions, negligence and whether the claimed losses could be recovered. The judge did not decide those issues, which he said required trial evidence and cross-examination.
The plaintiffs argued that the defendants had delayed seeking security and that Jons’ discovery failures were special circumstances that justified refusing security. The judge found the delay did not justify refusing the applications: the defendants were not aware of the plaintiffs’ financial position until February 2011, and the discovery work was already under way before then.
The discovery dispute concerned piling-rig records that emerged during the motions hearing. The judge found that Jons had failed to make proper discovery and described the error as culpable. But he accepted that the records had been overlooked through inadvertence, not deliberately withheld. Although the documents could be significant to issues for trial, the late disclosure would not prevent a fair trial, he said.
The court therefore declined to strike out Jons’ defence and ordered both plaintiffs to provide security for costs to each defendant. The judgment did not resolve liability or the underlying damages claims; the separate challenge to whether the claim against Edwards disclosed a cause of action had been adjourned to trial.