High Court grants security for costs against non-resident plaintiff despite lack of merit defense.

[2017] IEHC 446

THE HIGH COURT

2017 No. 10CA

Between:

FABIELE MARQUES de ABREU

Plaintiff

– and –

FINDLATER HOTELS LIMITED TRADING AS THE CASTLE HOTEL

Defendant

JUDGMENT of Mr Justice Max Barrett delivered on 11th July, 2017.

I. Background

1. Ms Marques de Abreu is a Brazilian national who lived in Ireland for a time in the past. While here, she worked at The Castle Hotel in

Great Denmark Street in Dublin City. She returned to Brazil a number of years ago and now works there as a flight attendant with a

Brazilian airline. Thus she is neither resident nor ordinarily resident in Ireland.

2. Ms Marques de Abreu appears to have suffered an injury while she was working at The Castle Hotel. It is claimed that a door with

some sort of closing mechanism closed on one of her hands while she was carrying a glass, thereby occasioning a laceration of the

hand. Following on the just-described incident, Ms Marques de Abreu instituted the within personal injuries proceedings. The

proceedings failed before the Circuit Court; however, Ms Marques de Abreu intends bringing an appeal to the High Court. It is

estimated by counsel for The Castle Hotel that the all-in cost of bringing the High Court appeal will be €25k. But this does not include

the existing costs order made in favour of The Castle Hotel by the Circuit Court. So if Ms Marques de Abreu were not to succeed on

appeal and a further costs order were made against her, she would be liable to The Castle Hotel for a substantial sum of money.

II. Application Now Made

3. The Castle Hotel is concerned at the scale of costs presenting and has brought the within application seeking security for costs.

Such an order falls to be made (if made) under O.29, r. 3 of the Rules of the Superior Courts 1986, as amended. The court indicated

at the close of hearing that it would make the order sought and that it would return with written reasons as to why it would do so.

Those reasons are set out in this judgment.

4. Order 29, rule 3 provides as follows:

“No defendant shall be entitled to an order for security for costs by reason of any plaintiff being resident out of

the jurisdiction of the Court, unless upon a satisfactory affidavit that such defendant has a defence upon the

merits.”

5. Such an affidavit has been provided in the within application. Indeed, counsel for Ms Marques de Abreu made no objection to the

satisfactoriness of the affidavit, conceding that where, as here, a defence has succeeded in the court below, following consideration

by the learned trial judge, there can be no doubt but that a defence upon the merits exists.

III. Some Key Points Made

6. Counsel for The Castle Hotel, in advancing his client’s case, referred to the scale of the anticipated cost presenting, the scale of

the costs order outstanding at the Circuit Court level, and the fact that Brazil, being so very far away, presents practical challenges

as regards enforcing orders of the Irish courts (which challenges, it can reasonably be anticipated, would entail even further cost).

Counsel for The Castle Hotel rightly conceded that if Ms Marques de Abreu were now living in another European Union member state,

he would not succeed in the within application, given the relative ease with which judgments can now be enforced in the other 27

member states of the European Union. (See in this regard, inter alia, Maher v. Phelan [1996] 1 I.R. 95, Proetta v. Neil [1996] 1 I.R.

100, Pitt v. Bolger [1996] 1 I.R. 108, and Salthill Properties Ltd v. Royal Bank of Scotland plc [2010] IEHC 31).

7. Ms Marques de Abreu has not averred that if an order for costs were now to issue that that would effectively foreclose the

continuation of the within proceedings. What Ms Marques de Abreu has averred, and what her counsel has contended, is that for the

court to make the order for security for costs now sought would be unlawfully to discriminate against her on the grounds of her

nationality. Her counsel went further and contended that to grant the order for security for costs on the basis now sought “would be

to impose a bar on non-EU citizens from litigating claims arising from the time they spent living and working in this jurisdiction”.

These contentions are respectfully not accepted by the court for the reasons set out in the next section of this judgment.

IV. The Suggestion of Discrimination

8. The Oxford Online Dictionary defines the word “discrimination” as follows:

“1. The unjust or prejudicial treatment of different categories of people…

2. Recognition and understanding of the difference between one thing and another.”

9. The unjust or prejudicial treatment of different categories of people is anathema to our system of law, and rightly so. Ms Marques

de Abreu was welcome to work in Ireland; indeed one of the great pleasures of present life in Ireland is the great breadth of diversity

that exists within contemporary society. Ms Marques de Abreu is also welcome to bring and continue the within proceedings in

Ireland. However, it is not unjust or prejudicial treatment of Ms Marques de Abreu for the courts of Ireland to recognise that there is

or may be a difference of consequence arising between the situation where a foreign national (i) resident in Ireland or another

European Union member state is prosecuting court proceedings here in Ireland and (ii) a foreign national resident in a far-away

jurisdiction that is not within the European Union is prosecuting proceedings here in Ireland. The situation referred to at (i) does not

entail the same potential difficulties as regards enforcement that can arise in (ii). To recognise that potential difficulty does not

involve the court in unjust or prejudicial treatment. Rather, it involves the court seeking to achieve the greatest fairness possible

between the parties to such proceedings by making a proper differentiation as to circumstance and seeking to ensure, assuming it

makes the order for security for costs sought, that if the party situate in Ireland triumphs in those proceedings, the said party has a

prospect of recovering some of the costs of the proceedings. As to the contention that for the court to grant an order for security

for costs on the basis now sought “would be to impose a bar on non-EU citizens from litigating claims arising from the time they

spent living and working in this jurisdiction”, there is no such bar arising. Non-European Union citizens who reside and/or work for a

time in Ireland and then leave are entirely free to litigate claims before the Irish courts arising from their time here. But where such

persons have moved on to live outside and far from the European Union, they may find that, in a bid to achieve the greatest fairness

possible between the respective parties, an Irish court will make an order for security for costs, if sought, so that (again) if the party

situate in Ireland triumphs in those proceedings that party has a prospect of recovering some of the costs of the proceedings. Justice

for all, not injustice to any, is ever the object of the court, and so it is in an application for security for costs.

V. Applicable Case-Law

10. The court has been referred to five previous decisions of the Superior Courts, each of which it now turns to consider in

chronological order.

(i) Flynn v. Rivers

[1951] 86 I.L.T.R. 85, HC.

11. This case involved an application for security for costs brought by Mr Rivers, the defendant, against Mr Flynn, the plaintiff, who

was then living in England. Mr Flynn averred in his replying affidavit that he had continuously resided all his life, bar the previous six

years, in Ireland. Thereafter he had resided in England where he worked as a labourer. He also averred that as a labourer, he was

contributing the greater part of his wages to support his family and thus was unable to furnish any security for costs. In the High

Court, Casey J. held that he was “satisfied that having regard to the financial circumstances of the plaintiff to make an order for

security for costs would be tantamount to a judicial determination of the action” and in order to avoid this he refused the order.

However, as will be seen below, the exclusive focus by Casey J. on the plaintiff’s financial circumstances was the subject of criticism

by the Supreme Court in its later decision in Heaney, such that Flynn ought no longer to be treated as involving a good statement of

applicable law or of its operation in practice.

(ii) Heaney v. Malocca

[1958] I.R. 111, SC.

12. Ms Heaney, an impoverished widow living in Newry commenced personal injuries proceedings in this jurisdiction after suffering

injury at a restaurant shop and premises in Dundalk. Ms Malocca brought a motion for security for costs. In ordering the security for

costs, Maguire C.J., for the Supreme Court observed, inter alia, as follows, at 114-5:

“In Flynn…Mr Justice Casey did not consider any circumstance other than the poverty of the plaintiff and refused

to make the order on the ground that to do so would be tantamount to a judicial determination of the action. In

my opinion this goes too far….[T]he position is that prima facie a defendant is entitled to an order for security for

costs where the plaintiff resides outside the jurisdiction. In order to deprive him of this right some special

circumstance must be shown, e.g., that there is no defence to the action…or where there is shown to be ample

assets within the jurisdiction.”

13. Although it remains the case today that to focus on the financial circumstance of the plaintiff alone would be to err in law, the

decision of the Supreme Court in Heaney needs itself to be viewed in light of the Supreme Court’s own later decision in Malone,

considered elsewhere below.

(iii) Collins v. Doyle

[1982] I.L.R.M. 495, HC.

14. Here the plaintiff, who resided in England, claimed damages for personal injuries which he alleged were caused by the defendant’s

breach of duty to him as an invitee on the latter’s premises. Notably, however, Finlay P. was confronted with a plaintiff who claimed

that, by reason of the injuries suffered by him in the accident complained of, he had been unable to earn money and so was unable to

provide security for costs. (By contrast, Ms Heaney was an impoverished woman whose limited circumstances were not claimed to

have been occasioned by the incident in respect of which she brought her proceedings. Ms Marques de Abreu has made no

substantive averment as to the state of her finances).

15. Per Finlay P., at 496, following a review of Flynn, Heaney and certain other precedents:

“From these decisions the following principles of law appear to arise.

(1) Prima facie a defendant establishing a prima facie defence to a claim made by a plaintiff residing outside the

jurisdiction has got a right to an order for security for costs.

(2) This is not an absolute right and the court must exercise a discretion based on the facts of each individual

case.

(3) Poverty on the part of the plaintiff making it impossible for him to comply with an order for security for costs

is not even when prima facie established, of itself, automatically a reason for refusing the order.

(4) Amongst the matters to which a court may have regard in exercising a discretion against ordering security is if

a prima facie case has been made by the plaintiff to the effect that his inability to give security flows from the

wrong committed by the defendant.

In this application the case made by the plaintiff on his affidavit precisely is that his inability to give security for costs arises from an

inability to earn caused by the defendants wrong.

Although I accept the disapproval expressed by the Supreme Court in Heaney…of the decision in Flynn…holding poverty in effect to

be an absolute answer to an application for security I am impressed by the apparent injustice of requiring a person who cannot

provide security to do so when his inability may flow from the wrong of the defendant. In general it would appear to me that the

principle underlying a defendant’s right to security for costs must be that he should not suffer from an inability to recover the cost

of successfully defending the claim arising from the fact that the unsuccessful plaintiff resides and has his assets outside the

jurisdiction of the court. Such a principle does not seem to me to justify giving to a defendant an adventitious protection against the

claim of a plaintiff whom he may have impoverished, by reason of the place of residence of that plaintiff which is on the individual

facts irrelevant to the reality of recovering costs.”

16. There is no suggestion in the within case that Ms Marques de Abreu has been impoverished as a consequence of the defendant’s

behaviour. Thus the basis on which Finlay P. was able to ground a refusal of the application for security for costs in Collins does not

present in the within proceedings.

(iv) Malone v. Brown Thomas & Company Limited

[1995] 1 I.L.R.M. 369, SC

17. Ms Malone sued the respondents for damages consequent upon certain alleged torts. Because she was resident outside Ireland,

Brown Thomas brought an application for security for costs, which was furnished by her in the form of a lodgement for £7,500. Ms

Malone’s claim against the respondents was dismissed and she was ordered to pay the respondents’ costs. She served a notice of

appeal from this decision. Brown Thomas then applied unsuccessfully to the Supreme Court for an order for security for costs, the

Supreme Court holding, inter alia, that :

(i) the ordering of security for costs is a matter for the discretion of the court, and in the exercise of its discretion,

the court must consider all the circumstances of the case;

(ii) per Hamilton C.J., at 372 (by reference to the decision of the then Supreme Court in Perry v. Stratham Ltd

[1928] I.R. 580) “neither mere residence outside the jurisdiction nor the poverty of the appellant is a sufficient

justification for compelling an appellant to lodge security for costs”;

(iii) the onus is on the applicant to establish reasonable grounds for his entitlement to the order of security for

costs;

(iv) access to the courts is the constitutional right of every citizen and no unnecessary monetary obstacle should

be placed in the path of those who seek access to the courts.

18. Notably, the Supreme Court in Malone stated that poverty alone did not offer such a justification: it could offer a justification

when viewed in tandem with all the other circumstances of the case.

19. In Malone, the fact that Ms Malone (i) intended to return permanently to Ireland within seven months of the date of judgment in

the security for costs application, (ii) had lodged £7,500 (which would be a not insignificant sum in the context of the within

proceedings, never mind proceedings in motion in 1995), and (iii) was bringing an appeal focused in part on her constitutional right of

access to the courts, the Supreme Court was satisfied in all the circumstances presenting to decline to make the order for security

costs sought of it. No like factors present in the within proceedings.

20. In passing, the court would note that it is difficult to see that the Supreme Court did not in Malone resile considerably from the

position staked out by it in Heaney. In the earlier case, Maguire C.J. had, in the text quoted previously above, stated that “prima

facie a defendant is entitled to an order for security for costs where the plaintiff resides outside the jurisdiction”; he then went on

to describe this as a “right” of which a defendant could only be deprived if “special circumstance” was shown. Thus, applying

Heaney, mere residence outside the jurisdiction would suffice as a basis for an order for security for costs (absent some special

circumstance presenting). By contrast, in Malone, the Supreme Court adopted a more nuanced approach whereby “neither mere

residence outside the jurisdiction nor the poverty of the appellant is a sufficient justification for compelling an appellant to lodge

security for costs”.[1] If Malone marked the suggested departure from Heaney, then it is difficult to see that it does not also

supersede the above-quoted observations of Finlay P. in Collins except as regards point (4) and thereafter.

[1] The Oxford Online Dictionary defines poverty as ‘the state of being extremely poor’. However, given the scale of legal costs now

so often presenting as an aspect of court proceedings and the fact that many people do not have the many thousands of euro

necessary to commence and continue such proceedings, the court would make the obiter observation that it may be that the

concept of ‘poverty’ in this particular regard is a relative concept that falls properly to embrace the many on middling means who

cannot reasonably afford the present cost of High Court litigation and not just those on even more limited means who, regretfully, find

it a challenge to afford much at all.

(v) Jahwar v. Betta Livestock 17

[2001] 4 I.R. 42, HC

21. This was primarily a forum non conveniens application. However, it also involved an application for security for costs against an

individual whom, if the court was to make the order sought would, per Barr J., at 51, “be prevented from pursuing a claim for a basic

right, i.e., payment of wages and master’s disbursements in connection with his employment as captain of the ship”. No such basic

right is at stake in the within proceedings. And, again, Ms Marques de Abreu has made no averment that if an order for costs were

now to issue that that would effectively foreclose the continuation of the within proceedings.

VI. Conclusion

22. Having regard to all of the foregoing and having considered all the facts of this case, in particular the fact that: (i) Ms Marques

de Abreu is neither resident nor ordinarily resident in Ireland; (ii) Brazil, the country where she now resides, is a far-away jurisdiction

that is not a European Union member state; (iii) challenges will present as regards enforcement of any (if any) costs order that would

be made in favour of the defendant after the within proceedings are heard by the High Court, as well as the order for costs of the

Circuit Court (if that is allowed to stand on appeal); (iv) Ms Marques de Abreu has not averred that if an order for costs were now to

issue that that would probably determine the within proceedings; (v) no claim is made by Ms Marques de Abreu in her appeal as to her

constitutional right of access to the courts, and (vi) no basic right such as that at issue in Jahwar is in play in the within

proceedings, the court will acquiesce to the application made by the defendant and grant the order for security for costs now sought.