Flatley v Austin Newport Group Ltd & Ors (Approved)

Factual and Procedural Background

The judgment concerns two separate applications for security for costs made against the Plaintiff by the first named Defendant and by several other Defendants collectively referred to as the Lloyd's Defendants. These applications arise under Order 29 Rule 1 of the Rules of the Superior Courts, on the basis that the Defendants may face difficulty in enforcing any costs orders against the Plaintiff if successful. The Plaintiff, an international professional dancer and property owner of a protected estate in County Cork ("Castlehyde"), alleges negligence in restoration works carried out on Castlehyde following a fire in 2016. The Plaintiff claims the Lloyd's Defendants, insurers who paid for the restoration works, are responsible for the negligence of the restoration company, the first named Defendant. The Plaintiff seeks damages estimated at approximately €30 million and a declaration regarding an alleged unfair settlement agreement under consumer protection regulations.

The proceedings have progressed to an advanced stage with pleadings closed and discovery exchanged. The security for costs applications were heard together over two days. The Plaintiff does not claim impecuniosity but disputes whether he is ordinarily resident outside the jurisdiction, and there is disagreement regarding the extent of his assets within the jurisdiction. Allegations of delay and prejudice related to the applications are also raised.

Legal Issues Presented

1. Whether the Plaintiff is ordinarily resident outside the jurisdiction of the court, the EU, or Lugano Convention contracting states, thus satisfying a threshold for ordering security for costs under Order 29.
2. Whether the Defendants have demonstrated a prima facie defence on the merits to the Plaintiff’s claim.
3. Whether any special circumstances exist that warrant refusal of an order for security for costs despite the threshold criteria being met.
4. The appropriate quantum and conditions of security for costs to be fixed by the court.

Arguments of the Parties

Plaintiff's Arguments

• The Plaintiff contends that the necessary criteria for ordering security for costs are not met, focusing particularly on the issue of ordinary residence.
• He argues that even if ordinarily resident outside the jurisdiction, this status results from the Defendants' actions which allegedly rendered Castlehyde uninhabitable.
• The Plaintiff asserts several special circumstances warranting refusal of security for costs, including:
• An expressed intention to return to live in Ireland permanently.
• Undue and prejudicial delay by the Defendants in bringing the applications.
• Possession of ample assets within the jurisdiction to meet any costs award.
• That an order for security would inhibit his constitutional right of access to the courts.
• He is a man of his word and able to pay any costs if ordered.

Defendants' Arguments

• The Defendants accept they have a prima facie defence to the Plaintiff’s claim.
• They maintain that the Plaintiff is ordinarily resident in Monaco, outside the jurisdiction, EU, and Lugano states, thus satisfying the threshold for security for costs.
• The Defendants assert the Plaintiff has not discharged the burden of proof to show special circumstances justifying refusal of security for costs.
• They argue the Plaintiff’s delay in providing full and accurate information regarding assets and residence undermines his claims of prejudice from delay.
• The Defendants rely on valuations and evidence indicating insufficient unencumbered assets within the jurisdiction to cover estimated legal costs.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Tahboub v The Joint Arab-Irish Chamber of Commerce CLG [2024] IEHC 616	Threshold criteria for security for costs: residence outside jurisdiction and prima facie defence required.	Confirmed the two-step test for security for costs under Order 29 and the burden shifting to Plaintiff to show special circumstances.
Quinn Insurance Ltd v Price Waterhouse Coopers (a Firm) [2021] 2 IR 70	Security for costs applications involve balancing the justice between parties.	Guided the court’s discretion emphasizing the balance of interests and possible injustice whichever way the order is made.
Harlequin Property (SVG) Limited v O'Halloran [2012] IEHC 13	Rationale for security for costs relates to difficulty of enforcement outside jurisdiction.	Explained that Order 29 is jurisdictional and practical, focusing on enforcement difficulties rather than Plaintiff's ability to pay.
Ditt v Krohne [2012] IEHC 312	Threshold test focuses on impossibility or increased difficulty of enforcing costs orders against non-resident Plaintiffs.	Emphasized that security for costs is justified where enforcement is impractical or substantially more difficult.
Thalle v Soares [1957] I.R. 182	Security for costs against limited companies requires evidence of inability to pay costs.	Distinguished rationale for personal Plaintiffs and corporate entities regarding security for costs.
Green v Highcross Bars Limited [2015] IEHC 654	Interpretation of "ordinarily resident" for security for costs purposes.	Adopted the dictionary definition of "ordinarily resident" as "usually resident" rejecting mere citizenship or intention to return as sufficient.
Beauross v Kennedy [1995] WSJC-HC 3854	Delay in seeking security for costs may constitute special circumstances preventing order.	Considered whether delay caused prejudice sufficient to refuse security for costs.
Moorview Developments Ltd v Cunningham [2010] IEHC 30	Security for costs applications should be made timely, generally with filing of defence.	Delay and incurring of costs without notice of security for costs request is relevant to discretion.
Sweeney v VHI [2025] IECA 15	Requirement for Plaintiff to show prejudice from delay in security for costs applications.	Applied to assess whether Plaintiff would have litigated differently if aware of security for costs request.
Smyth v O'Shea Fishing Company [2015] IEHC 360	Delay may justify refusal of security for costs where Defendant delayed application despite knowledge.	Distinguished from current case where Plaintiff was on notice of security request.
Jack F. McCarthy III v Football Association of Ireland [2014] IEHC 666	Enforcement difficulty and sufficiency of assets within jurisdiction relevant to security for costs.	Outlined that increased difficulty or impossibility of enforcement justifies security for costs.
Heaney v Malocca [1958] IR 111	Special circumstances may include showing ample assets within jurisdiction.	Referenced as obiter but supports consideration of assets in discretion to refuse security for costs.
Malone v Brown Thomas Limited [1995] 1 ILRM 369	Assets within jurisdiction relevant but extent of influence on discretion unclear.	Noted presence of bank accounts but did not form a decisive factor.
Re Pasrm [2023] IEHC 149	Residence outside jurisdiction caused by Defendant’s actions may be special circumstance.	Distinguished on facts; no causal link found between Plaintiff’s residence and Defendants’ actions here.

Court's Reasoning and Analysis

The court first examined the threshold requirement under Order 29 that the Plaintiff must be ordinarily resident outside the jurisdiction, the EU, or Lugano Convention states to justify an order for security for costs. The Plaintiff’s residence in Monaco since at least 2014 was accepted as evidence of his ordinary residence outside these jurisdictions. Although the Plaintiff later indicated an intention to return to Ireland imminently to seek nomination for the Presidency, the court found this was conditional, temporary, and lacked practical arrangements to establish ordinary residence in Ireland. The court emphasized the distinction between temporary residence and ordinary residence, preferring the dictionary definition of "ordinarily resident" as "usually resident." Citizenship or intention to return was insufficient to negate the Plaintiff’s current ordinary residence in Monaco.

The court accepted that the Defendants had demonstrated a prima facie defence to the Plaintiff’s claim, satisfying the second threshold criterion. Having met the threshold, the court considered whether special circumstances existed to refuse security for costs.

Regarding the Plaintiff’s argument that his residence outside Ireland was caused by the Defendants’ actions rendering Castlehyde uninhabitable, the court rejected this. The Plaintiff had continued to reside in Monaco before and after the restoration works, and contractual and commercial arrangements precluded his living at Castlehyde. The Plaintiff’s decision to live in Monaco was not attributable to the Defendants.

The court addressed allegations of undue and prejudicial delay by the Defendants in bringing the applications. It found the Defendants had promptly raised the issue of security for costs early in the proceedings and delayed only due to reliance on information provided by the Plaintiff, including assurances of residence in the EU and the value of assets in Castlehyde. The court found no evidence of prejudice to the Plaintiff arising from the delay.

On the issue of assets within the jurisdiction, the court analyzed valuations of Castlehyde and other assets claimed by the Plaintiff, including rights to the Plaintiff’s shows and a whiskey business. The court found the rights to the shows lacked clarity and enforceability within the jurisdiction, and ownership and valuation of the whiskey business were not sufficiently evidenced. The primary asset for enforcement was Castlehyde, but valuations ranged widely, with the court rejecting the Plaintiff’s high valuation as an outlier. The court adopted a midpoint valuation of €9.5 million, less a secured debt of approximately €7.9 million, leaving net equity of about €1.6 million. This sum was insufficient to cover the Defendants’ estimated combined legal costs of approximately €2.86 million.

The Plaintiff’s assertion that security for costs would inhibit his access to the courts was not accepted, as he had not demonstrated inability to pay costs or security. The court emphasized that the security for costs regime is a procedural remedy to address enforcement difficulties, not a reflection on the Plaintiff’s character or honesty.

Balancing the interests and applying the principles established in precedent, the court concluded that the threshold criteria for security for costs were met, and no special circumstances justified refusal of the order.

Holding and Implications

The court's final decision was to ORDER the Plaintiff to provide security for costs to both the first named Defendant and the Lloyd's Defendants.

The court retained discretion over the quantum and conditions of the security, directing the parties to file written submissions on these issues by a specified deadline and scheduling a hearing for oral submissions. The parties were also free to agree terms of security between themselves in the meantime.

It was further ordered that if the Plaintiff becomes ordinarily resident in the jurisdiction by virtue of succeeding in his Presidential ambitions, he may apply to have the security for costs order vacated on the basis that the grounds for the order no longer apply.

No new precedent was established by this decision. The ruling applies the existing legal framework regarding security for costs, residence, and enforcement of costs orders in cross-jurisdictional litigation.