By: Mark Tottenham BL, on April 26th, 2012

ABM Construction v. Habbingley Ltd [2012] IEHC 61 (High Court, Laffoy J, 15 February 2012)

High Court dismisses an application, made by a respondent to an arbitration, for security for costs to be ordered against an unlimited company.

Arbitration - security for costs - s 22, Arbitration Act 1954 - whether court had jurisdiction to order security for costs against claimant - claimant having been converted from limited to unlimited company - arbitration arising from construction dispute - s.390, Companies Act 1963 - Order 29, Rules of the Superior Courts 1986 - ability of defendant to recover costs of successfully defending claim - whether body corporate was resident or ordinarily resident in jurisdiction - risk that successful defendant would fail to recover costs - whether court had inherent jurisdiction to order security for costs - inherent jurisdiction of courts generally.

Quotation from judgment (courtesy of the Courts Service of Ireland):

“As regards a corporation, such as an unlimited company, which does not come within the terms of the specific statutory provision which has expressly provided for the Court making an order for security for costs against a company, but has confined the jurisdiction to a limited company, for at least one hundred and fifty years, currently s.390 of the Act of 1963, if the Court were to find that it has an inherent power to exercise a parallel jurisdiction to s.390 against such a corporation, in my view, it would be usurping the functions of the Oireachtas or the secondary legislature which is statutorily empowered to make rules for the administration of the business of the Superior Courts, the Superior Courts Rules Committee. Accordingly, I am satisfied that the Court has no inherent power to order security for costs against an unlimited company. such as the claimant.”

Full Text on Court Services Website>

Key Cases Cited

Proetta v. Neil [ 1996)1 I.R. 100
G. McG. v. D.W. (No. 2) (Joinder of Attorney General) [2000] 4 I.R. 1
European Fashion Products Ltd. v. Eenkhoorn (High Court, 21st December, 2001)
R. v. Bothwell [2007] N.I. 58
Pitt v. Bolger [1996] 1 I.R. 108
Primor Pic v. Stokes Kennedy Crowley [1996] 2 I.R. 459
Fares v. Wiley [1994] 2 I.R. 379
Jirehouse Capital v. Beller [2009] I WLR 751
Re Little Olympian Each Ways Ltd. [1994] 4 AIIER 561
Salthill Properties Ltd. and Brian Cunningham v. Royal Bank of Scotland Plc and Ors. [2010] IEHC 31
Collins v. Doyle [1982] I.L.R.M. 495
Brailhwaite &, Sons Ltd. v. Anley Maritime Agencies Ltd. [1990) N.I. 63