The “Flatley Test”: Determining Ordinary Residence and Sufficient Domestic Assets in Security-for-Costs Motions

Introduction

Flatley v. Austin Newport Group Ltd & Ors ([2025] IEHC 461) is a Commercial-List judgment of Roberts J. that revisits the principles governing security for costs against personal plaintiffs residing outside the EU/Lugano area. The plaintiff, the well-known entertainer Michael Flatley, sues a building contractor and several Lloyd’s market insurers for alleged negligent restoration of his historic Irish home, Castlehyde. The defendants, contending that enforcement of a possible costs order abroad would be difficult, sought security under Order 29 RSC.

Unusual features included:

A natural (not corporate) plaintiff who does not plead impecuniosity.
Disputed “ordinary residence” (Monaco v. Ireland).
Conflicting valuations of the sole Irish asset (Castlehyde).
Alleged delay of roughly one year between first intimation and motion issue.

The Court allowed both security motions and, in doing so, articulated a structured approach—here dubbed the “Flatley Test”—to (i) deciding ordinary residence, and (ii) gauging whether assets within the State are sufficient to obviate security.

Summary of the Judgment

1. Threshold satisfied: (a) defendants have a prima-facie defence, (b) plaintiff is ordinarily resident in Monaco (non-EU, non-Lugano).
2. No “special circumstances” proved to justify refusal.
3. Delay not culpable; plaintiff’s shifting information caused much of it.
4. Assets test: equity in Castlehyde (~€1.6 m) insufficient versus estimated combined costs (~€2.86 m). Rights in “Lord of the Dance” and whiskey business were too nebulous or offshore to count.
5. Court ordered security (quantum to be fixed later) and gave liberty to apply if residency changes (e.g., plaintiff elected President).

Detailed Analysis

Precedents Cited and Their Influence

Tahboub v. Joint Arab-Irish Chamber (2024): Restated two-limb threshold—non-EU residence & prima-facie defence. Flatley applies this uncontroversially.
Quinn Insurance v. PWC (2021): Emphasised “balance of justice”; Roberts J. uses this to frame discretion after threshold.
Harlequin Property v. O’Halloran (2012): Explained jurisdictional rationale; Roberts J. relies on it to dismiss “I will pay anyway” argument.
Ditt v. Krohne (2012): Difficulty of enforcement abroad = determinative factor; quoted in asset sufficiency discussion.
Green v. Highcross Bars (2015): Barrett J.’s “dictionary definition” of ordinary residence adopted; citizenship ≠ residence.
Moorview Developments v. Cunningham (2010) & Beauross v. Kennedy (1995): Delay jurisprudence; distinguished on facts.
Sweeney v. VHI (2025 CA): Plaintiff must show he’d have litigated differently but for delay; undermined Flatley’s delay argument.

Legal Reasoning

“It would strain credulity to suggest that a gentleman who presently lives and works far outside Ireland … can properly be described as ‘usually’ resident in Ireland.”

Roberts J. proceeds in four analytical stages:

Residency Determination. Applying the Green dictionary approach, the Court finds Monaco to be Flatley’s habitual centre of life for more than a decade. A campaign-related sojourn in Ireland is “temporary and conditional”. Thus Order 29 is engaged.
Special-Circumstance Matrix. Plaintiff bears onus. The five pleaded circumstances (intention to return, delay, ample assets, right of access, “man of his word”) are examined sequentially and rejected. Notably, the link-back argument (“but for defendants I’d live in Ireland”) fails on causation.
Asset Sufficiency Test. Court synthesises prior dicta (“ample” v. “sufficient”) and opts for “sufficient”. It compares net, realisable Irish-based assets against estimated party-and-party costs, discounting speculative or offshore assets. Competing valuations are weighed; midpoint of reputable affidavited valuations (€9.5 m) minus secured debt (€7.9 m) leaves equity (~€1.6 m) below cost exposure.
Discretion and Proportionality. Given plaintiff’s professed wealth, security will not stifle claim. Court orders security but will permit variation if residency turns domestic (e.g., presidential election).

Impact of the Decision

Clarifies “Ordinarily Resident”. Temporary electioneering or other episodic presence will not defeat a security motion; citizenship/intentions are irrelevant without tangible relocation.
Introduces a Valuation Methodology. Where valuations diverge, a court may adopt a midpoint of affidavited expert valuations and ignore hearsay valuations.
Burden on Plaintiff. A personal plaintiff must produce verifiable evidence of domestic/EU assets sufficient to cover costs; mere assertions of wealth are inadequate.
Delay Defence Narrowed. Defendants who engage, seek information, and rely (in good faith) on plaintiff’s data will not be penalised for waiting until inconsistencies emerge.
Liberty to Re-apply. The judgment formalises a pragmatic mechanism for future residency changes—useful in a globalised era with mobile plaintiffs.

Complex Concepts Simplified

Security for Costs (Order 29): Money or a bond ordered by the Court, lodged by a plaintiff, to ensure that if he loses the case the winning defendant can recover legal costs without having to chase assets abroad.
Ordinarily Resident: Where a person usually lives; more than mere presence, less than permanent immovability. Determined factually—length, continuity, purpose, family ties.
Prima-facie Defence: A defence that is “not doomed to fail”; the defendant shows a real, arguable answer to the claim.
Special Circumstances: Factors that can persuade the Court to refuse security even when the threshold is met (e.g., stifling of claim, ample Irish assets, culpable delay).
Party-and-Party Costs: The scale of legal costs the losing side must normally pay; excludes solicitor-client extras.

Conclusion

Flatley establishes a pragmatic, evidence-focused template—the “Flatley Test”—for future security-for-costs applications against individuals domiciled outside EU/Lugano jurisdictions. Plaintiffs must now (1) rebut foreign-residence allegations with detailed, practical proof of ordinary residence, and (2) disclose verifiable, domestic assets of sufficient net value to cover estimated costs. Defendants, for their part, should raise security early but will not be penalised when delay stems from the plaintiff’s own opaque information. The ruling thus balances access to justice with the legitimate concern of unenforceable costs, and its structured reasoning is likely to guide Commercial-List (and general High Court) practice for years to come.