Factual and Procedural Background
The appeal concerned an application for security for costs against a corporate plaintiff under s. 52 of the Companies Act 2014. The Appellants comprised (i) an individual plaintiff (“Appellant”) and (ii) a corporate plaintiff (“Appellant Company”). The Respondent was a statutory/board entity (“Respondent”).
The Appellants sought to establish a private hospital in The City and negotiated with the Respondent for approval/cover for insurance purposes. The Respondent refused, negotiations ceased, and the Appellants commenced proceedings on 26 May 2015 seeking declaratory reliefs and damages, with the primary focus being an alleged abuse of dominance in breach of competition law. The proceedings were entered into the competition list.
From 28 May 2015, the Respondent sought security for costs by correspondence. On 23 October 2015, the Respondent’s solicitors stated that, absent voluntary security by 3 November 2015, a motion would issue. No agreement was reached. The Respondent delivered a defence on 18 June 2018 (following a motion compelling replies, with costs awarded to the Respondent).
Instead of moving for security after delivering the defence, the Respondent issued a motion (26 November 2018) to exclude the Appellants’ expert evidence for conflict of interest. The High Court refused that application ([2019] IEHC 360), but the decision was overturned on appeal ([2020] IECA 150) and in the Supreme Court ([2021] IESC 58), with costs against the Appellants at each level and a costs ruling delivered on 10 November 2021.
The Appellants filed a Notice of Intention to Proceed on 6 January 2023. After correspondence in April 2023 seeking an early hearing date, the Respondent issued its security for costs motion on 28 June 2023—almost eight years after the October 2015 letter. On 11 October 2023, the High Court (Judge Barrett) ordered the Appellant Company to provide security for costs of €1,790,500 (or a stay). The Court of Appeal (Judge O’Moore) upheld that order on 31 January 2025. The Supreme Court (Judge Donnelly) allowed the present appeal and set aside the security order.
Legal Issues Presented
- How should a court approach delay as a “special circumstance” capable of justifying refusal of security for costs, including how the relevant period of delay is to be calculated?
- In resisting security for costs on grounds of delay, must a plaintiff demonstrate actual prejudice, or can prejudice be presumed/inferred, or can delay alone suffice?
- On the evidence, had the Appellants established prejudice/detriment sufficient to shift the balance of justice against ordering security?
- Whether, and to what extent, the Supreme Court’s decision in Kirwan v Connors affected the requirement for prejudice in the context of delay relied on as a special circumstance.
Arguments of the Parties
Appellants’ Arguments
- Delay by the Respondent in bringing the security motion was “truly staggering” and amounted to a special circumstance warranting refusal of security.
- The case law on whether prejudice is required (and what kind) was said to be unclear; the courts below were argued to have erred in their approach.
- Prejudice was said to arise from (i) actual costs orders made against the Appellants (including those arising from the expert-evidence motion pursued through three courts) and (ii) inferred prejudice from the stress, strain, and time involved in litigation.
- The Appellants relied on the rationale in Moorview: a plaintiff is entitled to make decisions about progressing litigation with “full information,” including the requirement to provide security.
- The Appellants contended that prejudice may be inferred (relying on Marlan Homes) and that they should not be required to disclose their costs arrangements with their lawyers.
- The Appellants contended that delay should be assessed by reference to the Respondent’s knowledge (not necessarily from delivery of the defence), and the October 2015 correspondence was said to be significant.
Respondent’s Arguments
- Once the statutory prerequisites were met (credible evidence of the Appellant Company’s inability to pay costs and a prima facie defence), security should ordinarily be ordered absent a proven special circumstance.
- Prejudice was said to be the critical issue in delay cases; it had to be demonstrated on evidence, and the Appellants had not adduced adequate proof (characterised as speculation).
- The Respondent relied on the “cards on the table” approach in Quinn Insurance and Protégé, emphasising the need for adequate information to allow the court to interrogate claimed special circumstances.
- The Respondent argued that Kirwan v Connors was of limited relevance because it concerned strike-out for want of prosecution under the Rules of the Superior Courts, whereas security for costs is a different jurisdiction.
- The Respondent argued that costs orders against an impecunious company should not be treated as prejudice (a submission rejected by the Supreme Court).
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Quinn Insurance Ltd v PricewaterhouseCoopers [2021] 2 IR 70, [2021] IESC 15 |
Framework for corporate security for costs: initial onus on defendant to show (i) bona fide/prima facie defence and (ii) plaintiff company unable to meet costs; thereafter a presumptive rule in favour of security unless special circumstances; “least risk of injustice”; obligation on parties to put “cards on the table.” |
Treated as the agreed governing approach; used to explain the rationale of security for costs and the nature of the special-circumstances inquiry. |
| Peppard and Co Ltd v Bogoff [1962] IR 180 |
Discretion exists to refuse security in “special circumstances” even where statutory preconditions are satisfied. |
Cited as early authority confirming the discretionary “special circumstances” jurisdiction. |
| Hidden Ireland Heritage Holidays Ltd v Indigo Services Ltd [2005] 2 IR 115, [2005] IESC 38 |
Where statutory preconditions are established, security follows almost as a matter of course; the burden of proving special circumstances lies on the plaintiff; delay assessed by impact and surrounding circumstances to strike a fair balance. |
Used to confirm onus on plaintiff and to frame delay as a factor requiring a balancing exercise; also used to illustrate refusal of security where delay allowed proceedings to continue despite knowledge of weakness. |
| Dublin International Arena v Waterworld Ltd [2008] 1 ILRM 496, [2007] IESC 48 |
Delay must be “undue and substantial” to justify refusing security; in some contexts (e.g., judicial review/public procurement), delay itself can constitute a special circumstance. |
Discussed to show that, depending on context, delay alone may suffice; contrasted with general cases where impact/prejudice often matters. |
| Oakes v Lynch & White (Unreported, Supreme Court, 27 November 1953) |
Delay recognised as a special circumstance that may disentitle an applicant from security (in that case relating to security for an appeal). |
Cited as early recognition of delay as a special circumstance. |
| SEE Co v Public Lighting Services [1987] ILRM 255 |
Delay is significant; costs/prejudice may be inferred from litigation steps (e.g., transcripts) and can justify refusal of security. |
Used to support the proposition that courts can draw inferences about prejudice/cost from the nature of litigation activity. |
| Beauross Ltd v Kennedy (Unreported, High Court, 18 October 1995) |
Security may be refused where delay commits the respondent to costs it would not have incurred had it known security would be required; focus on detriment/altered position. |
Discussed as part of the evolution of the delay rationale (detriment/prejudice as part of balance). |
| Janred Properties Ltd v Ente Nazionale Italiano per il Turismo [1986] 1 FTLR 14 |
English authority: delay is always a factor; particularly important where it leads a plaintiff to act to its detriment. |
Referenced through Hidden Ireland as part of the comparative approach to delay. |
| Moorview Developments Ltd v Cunningham [2010] IEHC 30 |
Delay factors include extent, explanation, and any prejudice; rationale: plaintiff entitled to decide whether to progress with “full information” including security; not necessary to prove plaintiff would have acted differently. |
Adopted as the correct rationale for delay as a special circumstance; used to reject a strict “would not have incurred costs anyway” approach. |
| Werdna Ltd v MD Insurance Services Ltd [2018] IEHC 194 |
Suggested approach: delay is relevant if shown to cause loss/expenditure that would not otherwise have been incurred; may justify reducing amount rather than refusing security. |
Considered and distinguished; Supreme Court held the Court of Appeal’s “in any event” logic did not follow and reaffirmed the “loss of opportunity/full information” rationale. |
| Marlan Homes Ltd v Egan [2022] IEHC 35 |
Prejudice/disadvantage may be inferred; no strict requirement to exhibit bills of costs; core requirement is satisfaction that plaintiff was disadvantaged. |
Approved to the extent it recognised inferred prejudice; used to illustrate that evidential demands are context-dependent. |
| Savanne Ltd v Irish Bank Resolution Corporation [2021] IEHC 535 |
Fairness emphasis in security applications; discussed as identifying delivery of defence as an appropriate starting point in some cases. |
Treated as consistent with a knowledge-based approach rather than a hard rule about defences. |
| Protégé International (Cyprus) Ltd v Irish Distillers Ltd [2021] 2 IR 134, [2021] IESC 16 |
“Cards on the table” obligation; cases are fact-specific; plaintiff must provide adequate information to allow interrogation of special-circumstance claims. |
Applied as a general approach to evidential candour, while cautioning against mechanically transplanting proof requirements across all special-circumstance categories. |
| Kirwan v Connors [2025] IESC 21 |
In strike-out for delay, lapse of time is harmful to the administration of justice and may itself justify dismissal; stricter judicial attitude to discourage a culture of delay; public interest in efficient use of court resources. |
Used as authority that the law now gives greater weight to passage of time in discretionary contexts; informed the Court’s approach that especially lengthy delay can itself shift the balance. |
| Tweedswood Ltd & Anor v Power [2025] 2 ILRM 83, [2025] IESC 18 |
Public interest considerations may be relevant to delay; courts not indifferent to litigation inefficiency. |
Supported inclusion of court-resource impacts as part of “surrounding circumstances” in assessing delay as a special circumstance. |
| Primor plc v Stokes Kennedy Crowley [1996] 2 IR 459 |
Earlier strike-out test later reformulated in Kirwan. |
Discussed only as background to the Kirwan reformulation. |
| O'Domhnaill v Merrick [1984] IR 151 |
Noted as a distinct prejudice-focused delay jurisdiction. |
Referenced to contrast different delay doctrines. |
| West Donegal v Údarás [2007] 1 ILRM 1, [2006] IESC 29 |
Security for costs should advance the ends of justice and not hinder them (citing earlier authority). |
Used to caution against categorical transposition of proof rules across special-circumstance categories. |
| Thalle v Soares and Others [1957] IR 182 |
Quoted (via later authority) for the proposition that security for costs is to advance the ends of justice. |
Used as foundational rationale supporting a flexible, justice-oriented approach. |
| Euro Safety and Training Services Ltd v FÁS [2016] IEHC 161 |
Knowledge of the moving party is relevant to assessing delay. |
Supported a fact-specific, knowledge-driven approach to when delay starts. |
| Oltech (Systems) Ltd v Olivetii UK Ltd [2012] 3 IR 396, [2012] IEHC 512 |
Delay analysis should consider the moving party’s means of knowledge and impact on the course of the case. |
Relied on to support knowledge as the guiding principle for calculating delay. |
| Pebble Beach Owners Management Company Ltd v Neville [2019] IEHC 111 |
Focus on whether delay has any impact on the plaintiff’s position. |
Used as part of the body of authority emphasising impact/knowledge. |
| Nobil Food Ltd v Campion Insurance Ltd [2021] IEHC 664 |
Culpable delay requires considering whether plaintiff altered its position to its detriment. |
Noted as an example of recent High Court emphasis on detriment during the delay period. |
| Tahboub v Joint Arab-Irish Chamber of Commerce CLG [2024] IEHC 616 |
Referred to by the Appellants as a more recent case not mentioning Werdna on delay. |
Not applied in reasoning beyond noting the Appellants’ submission. |
| Tír Na N-Óg Projects (Ireland) Ltd v PJ O'Driscoll & Sons [2019] IECA 154 |
Plaintiff must do more than assert a proposition on affidavit; evidence must be cogent and credible. |
Used in discussion of evidential standards generally in security applications. |
| Coolbrook Developments Ltd v Lington Development Ltd [2018] IEHC 634 |
Caution against permitting persons to have the upside of litigation with none of the downside risk. |
Referred to in discussing practical realities behind corporate litigation and potential inference of prejudice in appropriate cases. |
| Quinn v Faulkner [2011] IEHC 103 |
Quoted (via Kirwan) for the idea that delay can create additional burdens on the legal system. |
Supported treating court-resource impact as relevant in the delay balancing exercise. |
| Dekra Éireann Teo v Minister for Environment [2003] 2 IR 270, [2003] IESC 25 |
In commercial/public procurement contexts, there should be very little excuse for delay (in the context of security for costs). |
Used to support measuring reasonable promptness in weeks/months and treating longer unexplained delay as significant. |
| [2019] IEHC 360 |
High Court refusal to exclude the Appellants’ expert evidence (later overturned). |
Part of procedural history illustrating that substantial interlocutory litigation occurred during the period when a security motion could have been brought. |
| [2020] IECA 150 |
Overturned the High Court decision on excluding expert evidence. |
Part of procedural history relevant to court-resource expenditure and costs orders. |
| [2021] IESC 58 |
Supreme Court decision overturning the High Court on the expert issue; costs against the Appellants. |
Treated as a source of significant costs orders relied on as prejudice/detriment and as an illustration of resources spent during the Respondent’s delay. |
| Joint Stock Companies Act (s. 24) (1857 reference) |
Historical legislative provenance for company security for costs. |
Used as contextual statutory history rather than a precedent rule. |
Court's Reasoning and Analysis
The Supreme Court reaffirmed that s. 52 of the Companies Act 2014 empowers the court to require a corporate plaintiff to give security for a defendant’s costs, and to stay proceedings pending security. The Court accepted that under Quinn Insurance, once the defendant establishes (i) a bona fide/prima facie defence and (ii) credible testimony giving reason to believe the plaintiff company cannot meet an adverse costs order, security will ordinarily be ordered unless the plaintiff discharges the burden of establishing a sufficient countervailing factor (“special circumstance”).
The Court emphasised the rationale for the regime: in an adversarial common-law system with high party-borne litigation costs, defendants face potential injustice if forced to defend without any realistic prospect of recovering costs; security applications require the court to minimise the overall risk of injustice at an early stage when merits cannot be fully assessed.
On delay as a special circumstance, the Court adopted the rationale articulated in Moorview: the plaintiff is entitled, where security is likely, to have that factor available as early as reasonably practicable when deciding whether to progress proceedings and incur exposure to expenditure or adverse costs. The Court rejected an approach that would require proof that the plaintiff would not have incurred the costs “in any event”; the key harm is loss of opportunity to decide with full information.
The Court held that calculation of delay is guided by the defendant’s knowledge, not by a rigid rule that the clock only starts at delivery of the defence. Often, pleadings closure will coincide with sufficient knowledge, but the start date is fact-dependent. On the record, the Respondent’s October 2015 letter stated unambiguously that a motion would issue; the Respondent did not assert by affidavit that it lacked the requisite knowledge then. Accordingly, the relevant delay began no later than 23 October 2015 (and arguably from May 2015).
On proof of prejudice, the Court held that while plaintiffs usually must prove detriment, evidential requirements are situation-dependent. Courts may draw reasonable inferences from the record of proceedings. In this case, the Appellants relied on adverse costs orders arising from substantial interlocutory litigation during the period of delay. The Court accepted that these costs orders could constitute prejudice/detriment; the Respondent would know what costs it had incurred and costs orders remain legally operative even against an impecunious party and may have future consequences. The Court rejected the Respondent’s submission that such costs orders should be ignored.
The Court further held that especially significant unexplained delay can itself shift the balance of justice such that no separate demonstration of prejudice is required. Drawing on the post-Kirwan emphasis on the harm of lapse of time and the public interest in efficient administration of justice, the Court held that courts are entitled to consider wasted judicial resources and litigation inefficiency caused by late security motions as part of the surrounding circumstances. The Court stated that applications for security (a discretionary remedy) should be made as soon as reasonably possible—typically measured in weeks or possibly months. It indicated that where delay is in the region of six months to one year and significantly unexplained, that may tip the balance against security even without specific prejudice; delay exceeding one year, where significantly unexplained, strongly shifts the balance against ordering security absent a pressing exigency of justice.
Applying those principles, the Court found the delay here “truly extraordinary”: from 23 October 2015 to the issuing of the motion on 28 June 2023 was almost eight years, with no explanation advanced on affidavit. The Court also treated as significant that the Respondent pursued the expert-conflict motion and appeals during a period when it could, on the evidence, have brought a security motion that might have prevented the proceedings from progressing. The Court characterised this as a strategic choice whose consequences included egregious delay in seeking security and the consumption of judicial resources on interlocutory litigation that might have been unnecessary if security had been sought earlier.
On that basis, the Court concluded that the delay alone was a sufficient countervailing factor to justify refusal of security, in the absence of any pressing exigency of justice. The Court added that, even if the delay were not so lengthy, the prejudice arising from the costs orders made against the Appellant Company during the period of delay would, in the absence of any explanation, also have tipped the balance against ordering security.
Holding and Implications
ALLOWED: The Supreme Court allowed the appeal and set aside the High Court order requiring the Appellant Company to provide security for costs (and the associated stay mechanism).
The direct effect is that the Appellant Company is not required to lodge the ordered security as a condition of continuing the proceedings. The Supreme Court directed that the case be listed before the High Court within four weeks for case management.
The judgment clarifies that (i) the start date for assessing delay in security applications is knowledge-based and fact-dependent, (ii) courts may treat adverse costs orders incurred during delayed periods as relevant prejudice, and (iii) exceptionally significant unexplained delay may, of itself, justify refusal of security in the absence of a pressing exigency of justice, including by reference to the public interest in efficient use of court resources.