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Application for security for costs not invalidated by failure to make prior demand

Lancefort Limited (applicant) v An Bord Pleanala, Ireland and the Attorney General (respondents) and Treasury Holdings Limited…

By SASHA GAYER
Mon Sept 15 1997 - 01:00

Lancefort Limited (applicant) v An Bord Pleanala, Ireland and the Attorney General (respondents) and Treasury Holdings Limited (notice party)

Practice and Procedure - Challenge to constitutionality of part of planning legislation - Applicant company without assets - Application for security for costs - Whether prior demand for security should have been made - Whether point of law of public importance raised in proceedings - Companies Act 1963 (No 33), section 390 - Local Government (Planning and Development) Act 1976 (No 20), section 14(8) - Rules of the Superior Courts 1986 (SI No 15) Order 29 rule 1.

The High Court (before Mr Justice Morris); judgment delivered 23 June 1997.

Failure to make a prior demand that a party furnish security for costs does not invalidate an application pursuant to RSC Order 29 rule 1 but is relevant to the question of the costs of the application.

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Although a challenge to the constitutionality of a statutory provision must be regarded as of importance, the point in issue was not of such gravity and importance that it transcended the interests and considerations of the parties actually before the court.

The High Court so held in granting the application by the second respondent and the notice party for security for costs and directing that the proceedings be stayed until the security was given.

Paul Callan SC, Patrick Hanratty SC and Colm MacEochaidh BL for the applicant; James Macken SC and Nuala Butler BL for the first respondent; Jeremiah Healy SC and Eamon Galligan BL for the second respondent; Rory Brady SC and Denis McDonald BL for the notice party.

Mr Justice Morris said that the applicant had obtained leave to apply to the court by way of judicial review, seeking an order that a decision of the first respondent, granting permission to the notice party to develop a site in Dublin City, was invalid and should be quashed. The applicant also obtained leave to apply for a declaration that section 14(8) of the Local Government (Planning and Development) Act 1976 was repugnant to the Constitution and void. Section 14(8) allows the first respondent to grant permission for a development even where that 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. The applicant submitted that by giving the first named respondent, an un-elected body, these powers the State had set at naught the democratic process and had failed to comply with its constitutional obligations to protect the right of private ownership of external goods.

The applicant was a company limited by guarantee which had been incorporated to, inter alia, preserve listed buildings in Dublin; it was without assets. The second respondent and notice party now applied for an order for security for costs pursuant to section 390 of the Companies Act 1963. That section provides that where a limited company is a plaintiff in any action, an order for security for costs may be made if it appears, by credible testimony, that the company would be unable to pay the costs of the defendant if successful in his defence. Mr Justice Morris rejected the applicant's preliminary point that no prior demand had been made to the applicant for security for costs in accordance with Order 29 rule 1 of the Rules of the Superior Courts.

The failure to make such a demand would only be relevant if it transpired that the applicant was prepared to give security for costs and had not been given the opportunity to do so. In addition, Mr Justice Morris was satisfied that an application under section 390 of the Companies Act 1963, was not improperly before the court if brought under Order 29 rule 1.

Mr Justice Morris said that the applicant had submitted that, by obtaining the leave of the Court to apply for judicial review, it had established that it had a "substantial case" within the meaning of the Local Government (Planning and Development) Act 1963, as amended. It was further submitted that this case was one which raised a question of law of public importance and in those circumstances the court should not entertain an order for security for costs.

Mr Justice Morris then considered the Supreme Court authorities in Midland Bank Limited v Crossley-Cooke [1969] IR 26 and Fallon v An Bord Pleanala [1992] 2 IR 380 and, agreeing with the decision of the Chief Justice in the latter case, he concluded that the point of law in dispute was a point of law of importance but that so was every point of law which arose in any case. Mr Justice Morris said that, while a challenge to the constitutionality of a section which permitted the first respondent to materially contravene a development plan had to be regarded as of importance, he was unable to conclude that the point was of such gravity and importance that it transcended the interests and considerations of the parties before the Court This was not a case where the common good required clarification of the law to enable the courts to administer it in future cases.

Mr Justice Morris concluded by saying that the opportunity now presented itself to those persons who had incorporated the applicant, to demonstrate their commitment by providing the necessary funds to support the application.

Solicitors: David Soden (Dublin) for the applicant; T.T.L. Overend, McCarron & Gibbons (Dublin) for the first respondent; Chief State Solicitor for the second respondent; Arthur Cox (Dublin) for the notice party.