Lancefort Ltd. v. An Bord Pleanala [1997] IEHC 103; [1998] 2 IR 511 (23rd June, 1997)

Judgment of Mr. Justice Morris delivered the 23rd day of June, 1997 . 1. This judgment is given on the application for security for costs brought by the Notice Party and the Second named Respondent, namely, Treasury Holdings Limited and Ireland and the Attorney General. 2. The applications are based on Section 390 of the Companies Act, 1963 which provides:- "390. Where a limited company is plaintiff in any action or other legal proceedings, any judge having jurisdiction in the matter, may, if it appears by credible testimony that there is reason to believe that the company will be unable to pay the costs of the defendant if successful in his defence, require sufficient security to be given for these costs and may stay all proceedings until the security is given." 3. Counsel for the Applicant has accepted, on behalf of the Applicant Company, that the Applicant Company is without assets and it follows that it would be unable to pay the costs of the Respondents and the Notice Party if successful. 4. It is also accepted on behalf of the Applicant Company that the section by providing that it applies to "any action or other legal proceedings" is sufficiently wide and embraces an application for Judicial Review which is the case before the Court at the present time. 5. Counsel for the Applicant has made what I perceive to be a preliminary point in response to the application. It is submitted that the application is brought pursuant to Order 29 of the Superior Court Rules and that on the authorities the Court does not have any jurisdiction to entertain such an application based upon this Order. Section , Rule 1, provides:- "When a party shall require security for costs from the other party, he shall be at liberty to apply by notice to the party for such security and in case the latter shall not within 48 hours after service thereof undertake by notice to comply therewith the party requiring the security shall be at liberty to apply to the Court for an order that the said party do furnish such security." 6. The point is taken by Counsel for the Applicant that no demand was made in accordance with the Rule. A second point is taken that on the authorities the Court does not have power to grant the relief under that Rule. 7. With regard to the first of these points, while undoubtedly the party requiring security for costs is required to make the appropriate demand, the failure to make such a demand would only be relevant, in my view, if it transpired that the Applicant were prepared to give the security for costs and never had the opportunity to do so by reason of the failure on the part of the moving party to make the demand. In these circumstances, in my view, the appropriate relief would be to make such Order as to costs as the occasion required including the cost of such party attending Court. In my view a failure to make a demand of this nature does not invalidate the application. 8. The second point on this issue arises in the following way. Counsel for the Applicant submits that in recent cases, and in particular Maher -v- Phelan , 1996 1 I. R. 95, Carroll J. held that an Order should not be made when the application is based on Order 29, Rule 1. Counsel cites the following passage from her judgment at page 89 in support of that submission:- "...... as the law stands it is not possible to get an order for security of a cost against an individual litigant resident in the jurisdiction regardless of circumstances. Different considerations apply in companies which are not relevant to consider here"........... "Since an individual litigant being a plaintiff resident in Ireland cannot be ordered to pay security for costs therefore a plaintiff resident outside Ireland within the E. U. should not be so ordered." 9. In my view in this and the other cases referred to (including Carmen Proetta -v- Andrew Neill , 1996 1 I. R. 100, the basis upon which the claim was made for security for costs was the Plaintiff's residence abroad. 10. The issue before the Court was whether the fact that there was a machinery created by the Jurisdiction of Courts and Enforcement of Judgments (European Communities) Act, No. 3 of 1988 and other E. U. legislation effected the established practice that security for costs would be granted where, among other matters, the plaintiff resided out of the jurisdiction but in the E. U.. 11. The extracts to which Counsel refers in the judgments must, in my view, be read in the context of being applicable to that issue. I do not believe that they support the submission that an application under Section 390 of the Companies Act, 1963 is improperly before the Court if brought under Order 29, Rule 1 or that the Court has no power to make an Order under the Rule. 12. The facts in relation to this application are already fully set out in judgments which I have delivered in this case and I extract the following facts as being, in my view, relevant to the present issues. 13. The Applicant has obtained leave to apply to the Court by way of Judicial Review seeking an Order that a decision of An Bord Pleanala dated the 11th December, 1996, granting a permission to the Notice Party to develop a site in the City of Dublin is invalid and should be quashed by way of an Order of Certiorari. 14. The Applicant has also obtained an Order granting it leave to apply to the Court by way of Judicial Review for a Declaration that Section 14 (8) of the Local Government (Planning and Development) Act, 1976 is repugnant to the Constitution and is void. 15. The application for leave to seek Judicial Review was resisted by certain of the Respondents and by the Notice Party on the grounds that the Applicant, being a limited liability company limited by guarantee, did not have the locus standi necessary to maintain a Judicial Review application. In the course of my judgment I said that I was satisfied that Mr. Michael Smith and the persons who associated with him were people genuinely committed and concerned to the protection of, inter alia, listed buildings in the City of Dublin. Mr. Smith had effectively carried the full weight of the opposition mounted by An Taisce to the granting of the permission and had attended at the hearing of the appeal before An Bord Pleanala. 16. After An Bord Pleanala gave its decision, An Taisce resolved not to challenge the decision through the Courts. Accordingly, Mr. Smith and his associates incorporated the Applicant for the purpose of co-ordinating their efforts in advancing their resistance to, what they saw, as the destruction of important listed buildings in the City of Dublin. They used the Applicant Company as the named Applicant in these proceedings. 17. In determining the issue of the locus standi of the Applicant to maintain the proceedings, I held that, being satisfied of Mr. Smith's bona fides, he and his associates should not be shut out simply because they chose to mount their application in the name of a limited company and that this amounted to contravening circumstances upon which the Court should exercise its discretion to allow the application. 18. It is necessary to summarise the case upon which the Applicant will rely in seeking the Declaration that Section 14 (8) of the 1976 Act is repugnant to the Constitution and void. 19. Subsection (8) of Section 14 provides:- "(8) The Board may in determining an appeal under Section 26 or of the Principal Act decide to grant permission or approval even if the proposed development contravenes material particularly the development plan or any special amenity area order relating to the area of the planning authority to whose decision the appeal relates." 20. It is submitted that by giving the Board, an un-elected body, these powers the State has set at naught the democratic process and has failed to comply with its constitutional obligations to protect the right of private ownership of external goods. 21. The grounds upon which the Applicant resists the application for security for costs can, I believe, be summarised as follows:- 22. It is submitted that by obtaining the leave of the Court to apply for Judicial Review, the Applicant has established that it has a "substantial case" within the meaning of the Local Government (Planning and Development) Act, 1963 as amended. It submits that this case is one which raises a question of law of public importance and it submits that in these circumstances the Court should not, on the authorities, entertain an Order for security for costs. 23. I have considered the Supreme Court authorities in Midland Bank Limited -v- Crossley-Cooke , 1969 I. R. 26 and Fallon -v- An Bord Pleanala , 1992 2 I. R. 380. I consider in the context of the Applicant's opposition to the application these are the relevant authorities and in particular that part of the judgment of the Chief Justice where he says at page 384:- "The second mandatory condition, as it were, laid down in the judgment of the Court (in Midland Bank Limited -v- Crossley-Cooke ) is that the Court should not ordinarily entertain an application for security for costs if it is satisfied that the matter at issue in the case is a question of law of public importance. That, therefore, is the next issue that this Court must determine and I am satisfied that the issue outlined with regard to the powers of the planning authority under Section 28 of the Act of 1963, and the events which have happened in this case, and in the manner in which the issue arises in this case is not, and could not be characterised as a point of law of public importance. It is a point of law of importance, but so is every point of law arising in any case, but it is peculiarly to deal with and arising from a series of complex facts in this particular case. A simple analogy which I think is the standard I would be bound to apply is that if this were a point of law arising of the same character and type and in the same way on individual facts in a criminal case, there could be no question of giving a certificate under Section 29 of the Courts of Justice Act, 1924 so as to lead to an appeal from the Court of Criminal Appeal to this Court." 24. I am of the view that while a challenge to the constitutionality of a section which permits An Bord Pleanala to materially contravene a development plan must be regarded as of importance, I am unable to conclude that the point is of such gravity and importance that it transcends the interests and considerations of the parties actually before the Court. On the facts of this case I find myself of the same view as the Chief Justice was in Fallon's case that "it is a point of law of importance but so is every point of law arising in any case". The Chief Justice suggests that an analogy would be whether the question was one which would give rise to the granting of a certificate under Section 29 of the Courts of Justice Act, 1924 . I have been unable to discover any statement of principle upon which the Court of Criminal Appeal acts in granting or withholding such a certificate and Section 29 refers only to "a point of law of exceptional public importance", however, in Attorney General -v- Giles , 1974 I. R. 423, Walsh J. reviews the circumstances in which certificates were granted in the 50 years prior to that hearing. He found that there were only 22. One related to the fundamental question of whether a successful appellant in the Court of Criminal Appeal was entitled to costs; several related to points fundamental to the convictions; one dealt with the question of whether the sentence for murder was a mandatory sentence of penal servitude and another whether the mandatory sentence was death. 25. I am unable to identify any threat or common strain running through the cases in which the Court of Criminal Appeal granted the certificate, save this: it seems to me that in all cases the law, at the time of granting the certificate, remained in a state of uncertainty and it was in the common good that the law be clarified so as to enable the Courts to administer the law not only in the instant case but in future cases. 26. I see a clear distinction between that situation and the present case. Apart from the Applicant asserting that the section is unconstitutional and wishing to make a case to that effect, no uncertainty exists nor has existed. An Bord Pleanala can continue to operate as heretofore without the need for clarification or enlightenment from the Court. 27. There is, in my view, a further factor to be considered in this case. In Fallon -v- An Bord Pleanala , the applicant was identified as someone who had been "specifically chosen from a number of people to take the action, in that he was not a mark for costs and had no special material interest in the result of the action or any very special aesthetic or general interest". He was in fact a 28 year old telephonist and receptionist. In the present case Counsel for the Applicant identified as one of the reasons for the incorporation of the Plaintiff Company and its use as the Applicant, was to avoid the risk of financial ruin to Mr. Smith and his associates, should the application fail. While I felt that the mistake which they made in taking this step, should in justice not prejudice their rights to maintain the claim in the name of the company, I believe that the opportunity now presents itself to them to demonstrate their commitment by providing the necessary funds to support the company's application. For this reason I do not see that an Order requiring that provision be made for security for costs will in any way stifle the action. If Mr. Smith and his associates choose to do so they can finance the company to meet the Order I propose to make. 28. Being satisfied, as I am, that the requirements of the section have been complied with, I propose to make an Order requiring that the Applicant pay sufficient security for the costs of Ireland and the Attorney General and Treasury Holdings Limited and I direct that the matter be set down before the Master of the High Court for the purpose of assessing the amount of the costs. 29. I direct that there will be a stay on all the proceedings in this case until the security is given in accordance with the section. © 1997 Irish High Court BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII