2026 IESC 32

AN CHÚIRT UACHTARACH THE SUPREME COURT [2026] IESC 32 Supreme Court Record No.: S:AP:IE:2025:000041 Court of Appeal Record No.: A:AP:IE:2023:000304 High Court Record No.: 2015/4210 P O’Malley J. Woulfe J. Hogan J. Murray J. Donnelly J. Between/ SHAY SWEENEY AND THE LIMERICK PRIVATE LIMITED Appellants AND THE VOLUNTARY HEALTH INSURANCE BOARD Respondent JUDGMENT of Ms. Justice Donnelly delivered on the 9th day of June 2026 1. Delay is a special circumstance on the basis of which a court may refuse an application for security for costs even where it has been established that the plaintiff company will be unable to pay any costs award against it and that the defendant has a prima facie defence. This judgment addresses the approach a court ought to take where there has been a significant period of delay on the part of a defendant in making the application for security and the extent to which a plaintiff must demonstrate that it has been prejudiced by the delay in resisting such an application. 1 2. Security for costs is provided for in s. 52 of the Companies Act, 2014 (“the 2014 Act”) as follows: “Where a company is plaintiff in any action or other legal proceeding, any judge having jurisdiction in the matter, may, if it appears by credible testimony that there is reason to believe that the company will be unable to pay the costs of the defendant if successful in his or her defence, require security to be given for those costs and may stay all proceedings until the security is given.” 3. Since at least 1857 (see s. 24 of the Joint Stock Companies Act), legislation has made provision for orders for security for costs to be made with respect to companies. The legislation immediately prior to s. 52 of the 2014 Act, namely s. 390 of the Companies Act, 1963, was worded similarly to the 2014 Act save that it included the term “sufficient security”. Section 52 has been interpreted as permitting a phased approach to orders for security for costs. The statutory provision permits a judge, if it appears from credible testimony that there is reason to believe that the plaintiff company will be unable to pay the costs of the defendant if it were to be successful in its defence, to require the plaintiff to provide security for those costs. The judge may stay all proceedings until the security is given. 4. Both parties agree that the correct approach to applications for security for costs concerning corporate parties was set out in Quinn Insurance Ltd v PricewaterhouseCoopers [2021] 2 IR 70, [2021] IESC 15 (“Quinn Insurance”) by Clarke CJ. This Court held that the “initial onus rests on a defendant seeking security for costs to establish [i] that it has a bona fide defence to the proceedings and also [ii] that the plaintiff concerned would not be in a position to meet the costs of the proceedings were it to lose and costs be awarded against it” (para [5]). Once this has been established, security will ordinarily be ordered unless there is a sufficient countervailing factor (referred to as 2 a “special circumstance”) which means that the balance of justice is against the making of an order. The jurisdiction to order security for costs is a discretionary one. Background 5. Mr Shay Sweeney and The Limerick Private Ltd (“the appellants”) wished to set up a private hospital in Limerick. They engaged in negotiations with the Voluntary Health Insurance Board (“the respondent”) to have the intended facility approved for insurance purposes. The respondent refused to provide such cover and, as a result, negotiations ceased. 6. The appellants commenced proceedings on 26 May 2015 and sought various declaratory reliefs and damages arising from the decision of the respondent. The primary focus of the proceedings was on an alleged abuse of a dominant position by the respondent in violation of competition law. The proceedings were, by order of the High Court, entered into the competition list. After a protracted period, during which the respondent was granted an order to compel replies from the appellants, the respondent delivered its defence on 18 June 2018. The respondent was awarded the costs of that motion. A comprehensive chronology of the proceedings is set out in full at para [12] of the Court of Appeal judgment. 7. By way of correspondence beginning on 28 May 2015, the respondent sought the provision of security for costs stating that this was based upon an examination of the appellant company’s accounts. After further exchanges, in a letter dated 23 October 2015, the respondent’s solicitors stated that if security for costs was not provided on a voluntary basis by 3 November 2015, it would issue a motion for security. No agreement was provided by the appellants. The motion was ultimately issued against the second named appellant (“the appellant company”) almost eight years later on 28 June 2023 (indeed more than eight years after the first request for security). A curious feature is that the motion 3 for security for costs seems to have been defended by both plaintiffs i.e. the first plaintiff who is a natural person and the corporate entity that is the appellant company. The order was made against the appellant company only. Both plaintiffs appealed to the Court of Appeal and to this Court. 8. It is particularly significant that after the defence was filed on 18 June 2018, the respondent, rather than file a motion for security, issued a motion on 26 November 2018 to exclude the evidence of the appellants’ expert witness on the basis of a conflict of interest. The High Court refused that application ([2019] IEHC 360), but that decision was overturned on appeal in both the Court of Appeal ([2022] 2 IR 327, [2020] IECA 150) and the Supreme Court ([2022] 2 IR 327, [2021] IESC 58). The substantive judgment of this Court was delivered on 9 September 2021 with the costs ruling delivered on 10 November 2021. Costs in each court were awarded against the appellants. 9. The appellants filed a Notice of Intention to Proceed on 6 January 2023. The application for security for costs was made after the appellants’ solicitor wrote to the respondent in April 2023 seeking an early date for hearing because of a difficulty with the availability of their alternative expert witness. The respondent then issued its application for security on 28 June 2023. On 11 October 2023, the High Court ordered that the appellant company provide security for costs. That decision was upheld by the Court of Appeal. Costs were awarded against the appellant company. Judgment of the High Court [2023] IEHC 553 10. The High Court (Barrett J.) ordered that the appellant company provide security for costs in the sum of €1,790,500 in favour of the respondent or the proceedings would be stayed. That sum amounted to the undisputed anticipated costs of the respondent from the date of the High Court judgment. 4 11. Before the High Court, the appellants raised two ‘special circumstances’ in opposition to the respondent’s application; first, the delay on the part of the respondent in bringing the application and second, a claim that the respondent was the cause of the appellant company’s impecuniosity. This second ground is not the subject of the present appeal. 12. Barrett J. recorded that Mr Keogh, the managing director of the respondent, referred, in his grounding affidavit sworn on 28 June 2023, to an affidavit sworn by the appellants’ solicitor on 27 April 2023 in which it was averred that both appellants are “straitened”. Mr Keogh observed that the April 2023 affidavit was the first occasion on which a statement had been made on the financial situation of the first named appellant, Mr Sweeney. In his replying affidavit, Mr Sweeney rejected any contention that the respondent was caught unawares by his or the appellant company’s financial states. Mr Keogh averred to the fact that the future costs of the respondent’s defence “will be very significant” and that further, the respondent has an order in its favour for the costs of the interlocutory motion regarding expert evidence. 13. Mr Sweeney averred that the delay in bringing the proceedings was truly staggering and that it was obvious from the correspondence that any intention to bring an application had effectively been abandoned by the respondent “[who] first raised the issue of security for costs back in 2015, some eight years ago”. The High Court found that the respondent did not abandon its entitlement to seek security and that the appellants did not rely on such a purported abandonment. Regarding the reference to “eight years”, the trial judge held that this was not the correct calculation of the applicable period. With reference to previous authorities, the Court stated that the delay in a case was to be calculated from the filing of the defence. Thus, the period of delay in the present case was found to be four years and eleven months. 5 14. Barrett J. found that the appellants failed to establish the existence of special circumstances which would justify the refusal of an order for security. On delay, the High Court held that the mere establishment of some element of delay, rather than an element of delay coupled with significant prejudice, is unlikely in and of itself, to yield a decision to refuse an order for security for costs. With reference to Dublin International Arena v Waterworld Ltd [2008] 1 ILRM 496, [2007] IESC 48 (“Dublin International Arena”), the Court stated that the delay must be of “an undue and substantial kind” in order to justify the refusal of an order for security. 15. On the evidence in the present case, the Court found that the delay had not caused significant prejudice to the appellants. Even if there was a degree of prejudice, Barrett J. held that this was far outweighed by the fact that if the respondent was successful in its defence, the prospects of recovering the substantial costs which would be incurred would be very low. Barrett J. considered that the affidavit of Mr Sweeney provided little evidence demonstrating that prejudice had been occasioned onto the appellants by the delay. Furthermore, Mr Sweeney was found not to have engaged with the appellants’ own contribution to the period of delay. While there had been a significant passage of time, Barrett J. stated that, in reality, the proceedings did not progress any further in substance between the time of the delivery of the respondent’s defence in 2018 and the correspondence between the parties in April-June 2023. 16. The height of the appellants’ case on the issue of prejudice was identified by the trial judge as being that the appellants had continued to progress their case with all the attendant cost implications. The Court found that no effort had been made to quantify or break down the costs actually incurred by the appellants to date so that the trial judge could understand what exactly was at stake. The Court found that there was no evidence that the appellants 6 had altered their position to their detriment by reason of the application for security not having been made earlier. 17. The High Court found that that the appellants failed to establish any special circumstance that would shift the balance of justice against the making of an order for security. With reference to Quinn Insurance, Barrett J. noted that in the absence of any special circumstance being established, a court can consider whether the making of an order would stifle the proceedings. No submission was made in this regard in the present case. Judgment of the Court of Appeal [2025] IECA 15 18. On 31 January 2025, O’Moore J. (with whom Binchy and Pilkington JJ. agreed) upheld the decision of the High Court. On appeal, the appellants sought to argue that the trial judge was incorrect in his approach to delay and in his finding that the appellant company’s impecuniosity was not caused by the respondent (the latter finding is not addressed here as it is not relevant to this appeal). 19. O’Moore J. dealt with the issue of delay under three limbs: (

1. a)the identification of the period of delay, (
2. b)the correct approach to the question of prejudice, and (
3. c)the lack of explanation by the respondent for its delay in seeking security. Period of delay 20. O’Moore J. stated that the unexplained nature of the delay and the fact that the respondent did not initially follow through with its position to seek an order for security was significant. He also noted that it was not open to a court to introduce its own views in the absence of the necessary evidence. 21. The Court placed emphasis on the letter of 23 October 2015 where the respondent’s solicitors stated that they had instructions to issue a motion seeking security for costs. O’Moore J. found that the meaning of that letter was unambiguous and that it was incumbent on the respondent in bringing the application for security to justify why the 7 motion was not brought in accordance with instructions given to its solicitors in October 2015 at the latest. Contrary to the trial judge’s conclusion, the Court said that it was from that time that the respondent’s delay in bringing the application ought to be calculated. Prejudice 22. In answer to the appellants’ argument that they had been adversely affected by the respondent’s delay as they had lost the opportunity to make a fully informed decision as to whether they should proceed with the case, the Court reiterated that the onus was on the appellants to demonstrate that they were disadvantaged by the respondent’s delay. The Court agreed with the submission of the respondent that Mr Sweeney had not adduced any evidence of prejudice or disadvantage and described the absence of any such evidence as “stark”. O’Moore J. recognised that costs could have been incurred by the appellants during this period of delay including the delivery of further particulars of the claim and the unsuccessful defence of the application regarding the original expert. However, the extent of these costs was not provided in any way by the appellants. Further, it was not said on affidavit that the making of an order for security was a stifling of the case. Lastly, O’Moore J. noted that no evidence was provided by Mr Sweeney that, had the application been brought without delay, he would not have proceeded with the action. It was observed that in the absence of any evidence of prejudice a court should only infer prejudice where this can properly be done (Marlan Homes Ltd v Egan [2022] IEHC 35 (“Marlan Homes”)). O’Moore J. held that this was not such a case where an inference of prejudice could be found. 23. The Court of Appeal observed that the judgments of Baker J. in Werdna Ltd v MD Insurance Services Ltd [2018] IEHC 194 (“Werdna”) and Clarke J. (as he then was) in Moorview Developments Ltd v Cunningham [2010] IEHC 30 (“Moorview”) appeared to be at odds with each other. O’Moore J. preferred the view of Baker J. in Werdna that a 8 plaintiff must provide evidence that it would not have incurred costs had it known that a security for costs motion would be brought. In so doing, the Court did not accept the appellants’ submission that Clarke J. in Moorview had indicated that sufficient prejudice could come from the lack of opportunity to make a “fully informed decision” about commencing or continuing a claim. 24. The Court of Appeal noted that the appellants could have incurred costs from the delivery of particulars and the resisting of respondent’s application to exclude the evidence of their expert witness. However, O’Moore J. observed that the decision to contest the respondent’s application was the appellants’ own. The Court stated that it was logical when making a determination on whether the appellants had been prejudiced to require evidence as to whether the costs incurred during the period of delay would in all likelihood have been incurred in any event. In the absence of such evidence, the Court held that there was no prejudice in the Werdna sense. 25. O’Moore J. went on to state that even under the Moorview approach, the appellants had made a decision to proceed with their action notwithstanding the fact that they were aware of the possibility that security for costs might be sought by the respondent. The appellants had such knowledge as a result of the “categoric” letter of 23 October 2015. Regarding any argument of the appellants that the respondent had abandoned its request for security for costs, O’Moore J. stated that Mr Sweeney did not clearly and unequivocally say that he had formed the opinion that the threat of security for costs had gone away at any particular point in time. The lack of explanation 26. The Court noted that no explanation for the delay on the part of the respondent was provided in either of Mr Keogh’s affidavits. The Court held that the lack of an explanation does not in itself support a refusal of an order for security. The authorities have identified 9 prejudice as the critical issue in determining whether an order should be granted or not. While O’Moore J. stated that the period of delay (just shy of eight years) was an exceptional period of time, he went on to say that the delay must be viewed in the context of the general progress of the case. In the absence of any prejudice, the Court held that the High Court was correct not to refuse security by reference to this special circumstance. The Appeal 27. The main issue in this appeal is whether, in seeking to rely on the respondent’s delay in resisting the respondent’s application for security for costs, the appellants (the plaintiffs in the proceedings) are entitled to rely on (
4. a)the length of the delay per se and/or presumed or inferred prejudice or (
5. b)if they must demonstrate actual prejudice. If the latter, a derivative issue is whether the appellants have demonstrated on the evidence before the High Court any prejudice or detriment to their position by reason of the delay. A subsidiary issue is whether the appellants are entitled to argue in this appeal that there is no requirement for prejudice at all; particularly having regard to Kirwan v Connors [2025] IESC 21. 28. As this appeal presents issues concerning the special circumstances in which a plaintiff may successfully ask the court to refuse security which would otherwise be granted, it is helpful to consider both the rationale behind the security for costs jurisdiction and the rationale behind the special circumstances defence to such applications with particular regard to delay as a special circumstance. I will also address the manner in which the period of delay ought to be calculated and the effect that period may have on issues of prejudice. Rationale behind the statutory provision for security for costs 29. In Quinn Insurance, this Court (Clarke CJ.) made general observations on the rationale behind the statutory regime. Clarke CJ. outlined that in our common law system, unlike 10 in many civil law systems, it is the parties who bear the costs of research in relation to the facts and the law. He noted that the State spends significantly lower sums on maintaining the civil justice system than in other jurisdictions. That brings problems; high costs of access to the courts for those bringing proceedings and for those who wish to defend such proceedings. Impecunious corporations bring additional difficulties; if proceedings are successfully defended there is no prospect of recovering those costs. 30. These risks to defendants are, according to Clarke CJ., as weighty a consideration concerning access to justice as that which applies to the position of a plaintiff. There can be a significant injustice to a defendant if they are forced to defend without any prospect of recovery even if successful. That is a barrier of access to justice for the defendant. Security for costs applications involve a court attempting to do justice at a time when it will not be possible to form any strong view as to the merits or otherwise of the claim brought. That analysis should, he concluded “inform the proper approach to the jurisprudence concerning special circumstances.” Special circumstances 31. That a discretion exists to refuse to make the order for security for costs even where a prima facie defence and the insolvency of the plaintiff are shown is well-established. Even prior to the Companies Act, 1963, Kingsmill Moore J. stated that this discretion may be exercised in special circumstances (Peppard and Co Ltd v Bogoff [1962] IR 180). As Clarke CJ. stated in Quinn Insurance, there can be countervailing factors which shift the balance that ordinarily arises. Clarke CJ. referred to the special circumstances at issue in that case in terms of being sufficient countervailing factors to the balance that ordinarily arises. In that sense I accept the respondent’s submission that the term sufficient countervailing factor aptly captures the necessity for something sufficient to shift the balance when the two required factors of a prima facie defence and the plaintiff company’s 11 inability to pay costs have been established. The important principle remains that the jurisdiction is one in which there is an attempt to do justice between the parties. Onus of proof of special circumstances 32. In Hidden Ireland Heritage Holidays Ltd v Indigo Services Ltd [2005] 2 IR 115, [2005] IESC 38 (“Hidden Ireland”), this Court settled a possible burgeoning dispute as to the implication of finding that the two preconditions under the statute for the making of the order had been established when Fennelly J. stated that: “Where a defendant can produce ‘credible testimony that there is reason to believe that the company will be unable to pay the costs of the defendant if successful in his defence’ and evidence of a prima facie defence, I believe the order will follow almost as a matter of course … [T]he court retains discretion to refuse to make the order. However, that will depend on a showing of special circumstances. In that respect, … the burden of proof falls on the plaintiff.” 33. In Quinn Insurance, O’Donnell J. (as he then was and with whom the majority agreed) referred to the “presumptive rule of security” where the defendant has established a prima facie defence and the plaintiff’s inability to pay costs. O’Donnell J. emphasised that a special circumstance is an “exception” to this rule and that it should not be applied loosely. Therefore, where the defendant satisfied the two statutory requirements, the presumption of security will require the plaintiff to discharge a burden of demonstrating a special circumstance. 34. It is important to bear in mind however, that the role of the special circumstance or countervailing factor is that it acts as a counterbalance as “a matter of justice” which causes the court to conclude that the order should not be made (see Hidden Ireland at para [28]). In Quinn Insurance, the Court referred to the approach that a court should take as one of adopting “the course of action giving rise to the least risk of injustice” or as being 12 an attempt “to minimise the overall risk of injustice.” Moreover, as the respondent submitted, there is an emphasis on fairness in these applications (relying on Savanne Ltd v Irish Bank Resolution Corporation [2021] IEHC 535 (“Savanne”) and Quinn Insurance). Cards on the table 35. The respondent quite correctly pointed out that in both Quinn Insurance and Protégé International (Cyprus) Ltd v Irish Distillers Ltd [2021] 2 IR 134, [2021] IESC 16 (“Protégé”) (at para [52]) this Court stated that there was an obligation on both sides in applications such as this to put their cards on the table. A court must be given all relevant information to enable it to interrogate carefully not only the defence claims but also the plaintiff’s claims in answer to those claims as well as the plaintiff’s claim to a special circumstance. A failure to do so, as pointed out in Quinn Insurance, may result in the court concluding that it has insufficient information to make a proper and sustainable finding in favour of a plaintiff on any relevant issue. The party who fails to put their case fully on affidavit risks an adverse outcome. 36. In the present case both parties claimed insufficient information by the other. These claims will be addressed as they arise. Cases are fact specific 37. Each case will turn on its own facts and the evidence presented (Protégé at para [59]). There are nonetheless general principles that can be extracted from the case law and the particular facts of each case can usually be accommodated within a consideration of those principles. Delay as a special circumstance 38. It is also well established that delay is a special circumstance which may disentitle a defendant to the relief sought (Oakes v Lynch & White (Unreported, Supreme Court, 27 November 1953)). As the authors of Delany and McGrath on Civil Procedure (5th edn, 13 Round Hall Press 2024, [13-146]) note, undue delay on the part of the moving party amounts to a special circumstance which may justify a court refusing an order for security and, often it is the prejudice which has been caused to the plaintiff as a result of delay rather than the length of the delay itself which is the key issue. 39. The appellants submitted that the authorities are not clear on the issue of prejudice and that as a result the courts below fell into error in their approach. The appellants viewed the case law as demonstrating that while prejudice is a relevant factor it is not determinative of the issue. It is also a relevant consideration, they submitted, that a plaintiff has the benefit of full information before incurring costs or expense. The respondent submitted that the case law reveals that prejudice must be demonstrated on the evidence and that no such evidence appeared in these proceedings. 40. As the Court of Appeal indicated, the authorities which appear at odds are the High Court authorities of Moorview and Werdna. Analysis of those decisions necessitates identification of the rationale behind delay as a special circumstance. Rationale for delay as a special circumstance 41. The earliest case on delay as a special circumstance to which the Court was referred – Oakes v Lynch & White – did not concern a company law statute but addressed provision by individuals of security for costs in respect of an appeal. From the earliest cases to which the Court was referred concerning companies and security for costs, it is apparent that the length of the delay (and culpable delay in particular) was one among many factors that the court considered in assessing the balance of justice. In SEE Co v Public Lighting Services [1987] ILRM 255 (“SEE”), this Court said that the delay in bringing the application was of considerable significance when pointing to the costs which, while they “must have been substantial”, were limited to the production of the transcript rather than lawyers’ fees. Culpable delay in the circumstances of the appeal was given as a reason to 14 refuse the order for security rather than simply ordering a reduction in the amount of security. Beauross Ltd v Kennedy (Unreported, High Court, 18 October 1995) (“Beauross”) was another case where the delay was short but nevertheless unreasonable and the costs incurred – which were not itemised – were not identified as particularly large but were clearly not insignificant. Morris J. stated: “If the party seeking security has delayed to such an extent as to commit the other party to an amount and a level of costs which it would never have become committed to had it known that it was to be required to provide security for costs and thereby altered its position to its detriment, then the Court will not make the Order.” 42. In Hidden Ireland, this Court engaged in a review of the existing case law in this jurisdiction as well as relevant English authorities on delay as a special circumstance. Fennelly J. referred to the Court of Appeal (England and Wales) in Janred Properties Ltd v Ente Nazionale Italiano per il Turismo [1986] 1 FTLR 14 where it was said that delay is a factor which can always be taken into account and can sometimes be treated of importance particularly where it has, or may have, led to the plaintiff to act to his detriment in the meantime. Fennelly J. concluded that a court “will look at the facts of the particular case, the impact of the delay, other surrounding circumstances and, in the end, will seek to find a fair balance.” That balancing exercise, which must be carried out by the court, is, as the case law clarifies, of considerable importance. 43. In Hidden Ireland, Fennelly J. said that the delay in seeking security, being one year, was a material matter. The respondents being aware of the financial weakness of the plaintiff allowed and encouraged the action to proceed. That finding was the basis for allowing the appeal and substituting an order dismissing the application for security. 44. Dublin International Arena dealt with the issue of security for costs in the context of judicial review proceedings of the awarding of a public contract. Two particular points 15 were made about delay in that case, the first was that judicial review required parties to act promptly, and that public contracts were also the subject of special rules requiring rapid proceedings. In all the circumstances, the delay of about nine months from the issue of proceedings or five months from the filing of the statement of opposition was itself a specific circumstance which required the appeal to be allowed and the application to be refused. That case demonstrates that in some situations at least, delay in and of itself is a sufficient countervailing factor. 45. Moorview was decided by the High Court after those judgments. It did not involve judicial review. In some respects, it is a judgment implementing the Hidden Ireland principles. Its focus was not limited to delay but also on the effect, if any, of the delay. I do not think that it is of any import that prior to Moorview, none of the judgments used the word ‘prejudice’. As in Beauross however, there were references to detriment and I consider that in this context, detriment and prejudice are so closely linked that making a distinction does not advance the principle at issue. Whether there has been loss, impairment, disadvantage or some other sort of damage incurred by the plaintiff as a result of the delay is a factor that must be considered in the overall balancing exercise carried out by the court. 46. Importantly, in Moorview, reflecting what was said in Hidden Ireland, Clarke J. addressed why and in what manner delay was a factor that needed to be taken into account in determining whether there are special circumstances justifying a refusal of security. He held that “the extent of the delay, any explanation or reason for the delay, any prejudice (and the degree thereof) which may have been incurred, for example, by additional costs having been incurred by the relevant plaintiff, together with any other factors that may arise in the circumstances of the individual case, should be taken into account.” Of 16 particular relevance is para [3.7] of the judgment where Clarke J. referred to all the matters to which a plaintiff must have regard. He went on to say: “However, an order for security for costs is an added factor to be taken into account by a plaintiff in a case where security is ordered. In my view, the rationale behind the delay special circumstance jurisprudence is that a party is entitled (where security is to be ordered) to be able to include that factor in its judgment as to whether to progress the proceedings from as early a time as is reasonably practicable. The test is not as to whether the relevant plaintiff might not nonetheless have gone ahead with the proceedings even had security been ordered earlier and, thus, would have incurred any costs arising in the intervening period in any event. Rather it is that the plaintiff incurring costs in the intervening period ought to have been entitled to make its decision, as to whether to incur those costs, in the light of full information, including the fact that security for costs would have to be put up.” (Emphasis added) 47. In Werdna, Baker J. said as follows: “Unless the plaintiff can say, which it has not said, that it would not have commenced or continued these proceedings had it known that an application for security for costs would be brought by any of the defendants, I am not satisfied that the delay has been such as would disentitle the … defendants to the reliefs sought, save with regard to the amount in respect of which security is to be provided.” (para [73]). Baker J. said that the expenditure incurred by the plaintiff in bringing the case on for hearing must be balanced against the fact that security is to be given only for post-request costs, and delay is a relevant discretionary factor “if it can be shown that the delay caused detrimental loss or expenditure which would not have otherwise been incurred.” She said one discretionary factor was not sufficient to wholly disentitle the defendants to the order 17 and she considered that justice can be done by making an order for an amount less than that claimed. 48. Baker J. referred to the test that Clarke J. had set in Moorview. She did so, in my view, in a manner which implied that she approved of it as she did not state that she was adopting a different test. It can be seen that she took the view that what the Moorview test meant was “that the amount of the claim, and whether the amount directed to be secured is disproportionate to the amount of the claim, are relevant factors.” 49. The Court of Appeal in the present proceedings observed: “The difference between the view taken by Baker J. and the comments of Clarke J. appears to be that the former expects a plaintiff to provide evidence that it would not have incurred costs had it known that a security for costs motion would be brought, while the latter finds sufficient prejudice in the lack of the opportunity to make a “fully informed decision” about commencing or continuing a claim. On the basis that this correctly describes the difference in approach, I would prefer the view of Baker J.” 50. With respect to the specific facts of the case, O’Moore J. went on to say: “Undoubtedly, the steps taken by the Sweeney interests—either in delivery of particulars or in resisting the application with regard to their first expert—have been taken in advancing their proceedings. While the outcome with regard to the recusal of the first expert was disappointing from the point of view of the Sweeney interests, and while this issue certainly resulted in costs orders against them, it was their decision to dispute VHI’s original application and continue to do so at every level of the Superior Courts. In deciding whether or not prejudice has resulted to the Sweeney interests as a result of VHI’s delay, it seems logical for the court to enquire as to whether any costs or liabilities incurred by the Sweeney interests over the relevant period would in all likelihood have been incurred in any event. That is why the sort of evidence described 18 by Baker J. at para. 70 of Werdna seems to me to be essential. It is not forthcoming here.” 51. The appellants submitted that Baker J. never explained the difference in her approach from that taken in Moorview. I agree that it is by no means clear that she intended to depart from the view in Moorview having cited it in what appeared to be favourable terms. It is also clear that she was not challenging the rationale that Clarke J. gave as to the delay special circumstance. From the research of the parties, it appears that the rationale given by Clarke J. is similar to the rationale identified in England and Wales in the case of Hniadzdzilau v Vajgel [2015] EWHC 1582 (Ch) (also referred to as Re Bennet Invest Ltd). 52. In my view, the rationale identified by Clarke J. in Moorview is the correct basis on which delay as a special circumstance is to be understood. A plaintiff ought to be entitled to factor in the issue of security for costs when making any decision to progress the matter. Delay in bringing the application (and proceeding with that application up to the point of the making of the order) takes from the plaintiff the entitlement to full information when taking a decision. To that extent it is the loss of opportunity to have a full consideration of the position which is at issue. The effect of the delay may well produce different kinds of prejudice or detriment to the plaintiff, and I will examine the nature of that effect presently. In so far as that rationale is directed to the private interests of the plaintiff, it does not however shut off consideration of certain public interest factors. Culture of delay, no longer acceptable? 53. An application for security for costs is but one situation where the court can be called upon to consider delay as a factor in the grant or refusal of an application. Two recent decisions of this Court demonstrate two points that I consider to be of general application:
6. a)“there is a need for a stricter judicial attitude, since to do otherwise would simply encourage a culture of delay” (Hogan J. in Kirwan v Connors) and
7. b)public interest considerations 19 may be relevant to considerations of delay (Hogan J. in Tweedswood Ltd & Anor v Power [2025] 2 ILRM 83, [2025] IESC 18 (“Tweedswood”)). 54. As is by now well known, this Court in Kirwan v Connors took the opportunity to consider and reformulate the test first outlined in Primor plc v Stokes Kennedy Crowley [1996] 2 IR 459 (“Primor”) concerning the courts’ jurisdiction to strike out proceedings for want of prosecution and/or delay. Four judgments were delivered from the seven member Court. As the judgment of the Chief Justice indicates, three of the judgments took different approaches but it was clear from all judgments that the Primor test had not achieved the objectives for which it was devised. 55. Hogan J. delivered the judgment with which the majority of the Court agreed while the Chief Justice drew together the principles upon which there was agreement. In articulating various weaknesses of the Primor test, the Chief Justice observed that the test had not given sufficient weight to “the fact that lapse of time alone is harmful to the administration of justice, and should be a sufficient basis in itself for dismissal of proceedings” (emphasis added). He did not accept that much weight should be given to the idea that the jurisdiction at issue was an interference with the right of access to courts; that right was a right to litigate claims. Thus, “[a] system of administration of justice with scarce resources must set rules for the conduct of claims which, if not unreasonably strict or difficult to comply with, are perfectly permissible.” Later in his judgment the Chief Justice referred to “culpable plaintiff inactivity”. It is perhaps also of significance that the majority disagreed with Collins J. that defendant inactivity was relevant to the assessment of delay. As the Chief Justice distinguished, the plaintiff has an interest in and responsibility for bringing the claim to trial whereas all the defendant can gain is to be placed in the same position as they were before the claim was made against them. 20 56. Ultimately the Kirwan v Connors test simplifies the test to be applied, and, with reference to the time limit in O. 122, r. 11 of the Rules of the Superior Courts, two years of inactivity is identified as a critical milestone, as there is a different burden on the defendant to establish prejudice depending on whether the period of inactivity is greater or lesser than two years. After four years however, the shift in favour of dismissal is even greater (particularly where the claim is dependent on oral evidence) in so far as the plaintiff may be required to produce compelling reasons to demonstrate why the claim should be allowed to go to trial. After five years of complete inactivity there is an even greater power of the courts to dismiss cases unless satisfied that there is a pressing exigency of justice requiring the case to go to trial. The judgments clarify that none of these tests are mechanical and that there will be differences of views in borderline cases. 57. The respondent submitted that Kirwan v Connors was of little relevance to the present case, emphasising that the Rules of the Superior Courts are crucial to the understanding of that jurisdiction. Although the respondent relied upon the comments of Hogan J. who said that O. 122 provides an objective threshold in the form of a positive legal rule as to what constitutes inordinate delay, it is important to recall that Hogan J. viewed the jurisdiction as deduced from the inherent jurisdiction of courts who control their own affairs and it was thus peculiarly appropriate for adjustment by this Court. While the respondent is correct that no time is stipulated in the 2014 Act or in the Rules as to a time frame for bringing a security for costs application, the courts have been cognisant of delay as a special circumstance and, as will be demonstrated, have been strict in terms of the length of such delay. 58. The respondent said that the nature of the jurisdiction for security applications is radically different; in Kirwan v Connors, the delay is the basis of the claim, but in security for costs applications it is a defence. That distinction is unconvincing: delay and inaction are central 21 features in the disposal of security applications. Moreover, the unfairness to the defendant in being required to defend after plaintiff inaction (referred to in Kirwan v Connors by the Chief Justice) does not require much transposition to a security for costs application to arrive at the principle that it is unfair to disallow a plaintiff to proceed with their claim after such a period of inactivity on the part of a defendant. The moving party in the application to strike out for want of prosecution is protected against a requirement to defend whereas the respondent to the motion for security for costs is agitating for the right to proceed. 59. The respondent submitted that the nature of the prejudice in each scenario is radically different. Prejudice in security for costs applications could not be clearer it said. The respondent also stated that Hogan J. pointed to the fact that the difficulty with Primor was its uncertainty because of the inherent flexibility of that test and submitted that by contrast security applications are related to broader issues of prejudice such as damage to reputation and business which may have been caused by reasons other than delay. The respondent also contrasted the outstanding O’Domhnaill v Merrick [1984] IR 151 jurisdiction which incorporates a clear-cut prejudice focus arising out of lapse of time. Against that backdrop, it submitted that it was unsurprising that Kirwan v Connors considered it appropriate to refine the level of importance attached to prejudice in respect of the other jurisdiction. 60. While taken individually these points may have some validity in their own right, however, they do not address a particular aspect of Kirwan v Connors which is the emphasis on lapse of time being harmful in itself to the administration of justice and the recognition that having a system of administering justice with scarce resources may set rules of conduct for claims. In the main judgment of the majority, Hogan J. identified a number of themes emerging from the jurisprudence since Primor. The first was that delay which 22 would have been tolerated (in the past) may now be regarded as inordinate, and excuses which previously sufficed may no longer be accepted. There was also a need for a stricter judicial attitude since to do otherwise would simply encourage a culture of delay. Another consideration was that “there was a public interest in not permitting stale and long-running claims taking up the valuable resources of the courts at the expense of those litigants who had in fact acted in an appropriately timely fashion.” Later, in explaining why the focus should be on the lapse of time itself creating prejudice, Hogan J. explained, inter alia, that not only does the plaintiff have an obligation to ensure that the administration of justice is carried out effectively and efficiently but that “the courts system has a corresponding interest in ensuring that all cases are advanced efficiently, and that endless indulgence is inimical to the proper functioning of the court system.” 61. These dicta amount to an explicit recognition that, apart from the interests of the defending party, there is a public interest in ensuring that the most efficient and effective use is made of limited court resources. The Tweedswood case concerned a much delayed appeal hearing against the grant of an interlocutory injunction where no steps had been taken in the interim to bring on the substantive hearing. Public interest factors such as a property being left idle (at one stage being put on the Derelict Sites Register) were relevant to the discharge of the injunction. There is also a public interest in not having unnecessary court resources being utilised at the expense of other litigants whose proceedings are thereby delayed. 62. Naturally, Kirwan v Connors dealt with situations where stale and delayed cases were taking up court resources at the expense of other attentive litigants. A security for costs application is different in so far as (
8. a)the defendant’s interest is in obtaining security for costs with a view to stopping the claim from proceeding to trial if the order obtained is not complied with and (
9. b)the reliance on delay by the plaintiff will, if successful, permit the 23 trial to proceed. Yet this case is a good example of a situation where the resources of the courts were taken up by an interlocutory application in a case which, if the application for security succeeded, would have been entirely unnecessary. That was because, on the basis of the evidence before the High Court and the appropriate inference drawn from that evidence, the respondent was in full possession of information which permitted it to make the security application well in advance of the motion concerning the expert witness. That in itself is significant, and it would be highly unusual if the courts were obliged to ignore such an impact or effect on its own resources when assessing whether the special circumstances had been made out justifying the refusal of security. In my view, to ignore it would be to encourage these kinds of unexplained/culpable delays with the knock-on effect that such delays, where extensive interlocutory applications were entertained, would “create additional burdens for the legal system by detracting from their general efficiency and effectiveness” (see Hogan J. para [107] in Kirwan quoting from Quinn v Faulkner [2011] IEHC 103). Thus, the effect on the administration of justice is a relevant consideration when assessing delay as a special circumstance. It is, to use the wording of Fennelly J. in Hidden Ireland, part of the “surrounding circumstances” of the particular case which the court must consider in seeking to find a fair balance. 63. From the foregoing it can be said that Kirwan v Connors is authority for the principle that in discretionary applications, the law now gives greater weight to the factor of the passage of time. The length of the delay will therefore weigh heavily on any considerations of the appropriate exercise of discretion. I will look at its interaction with prejudice below. It is first necessary to look at how one calculates the period of delay. Commencement of period of delay 64. As a matter of principle, there is strong disagreement between the parties as to the date from which the calculation of delay must begin. The respondent submitted that delivery 24 of the defence is the appropriate time from which to calculate any delay, relying on Clarke J. in Moorview who stated that “it is reasonable for a defendant to wait until the pleadings in the relevant proceedings are or should be closed before seeking security for costs.” He went on to say that defendants should usually have “… the opportunity to consider the plaintiff’s statement of claim together with any reasonable particulars sought and answered.” Clarke J. stated that if a defence was filed late, it may be appropriate to consider the beginning of the period of the delay where “prejudice in the form of additional expenditure incurred after the time when it might have been expected that the defence would have been filed”. The respondent also relied upon Savanne where Barr J. identified the filing of the defence as the appropriate starting point of the period. 65. The appellants referred to other cases from the High Court where, they contended, a caseby-case approach for determining the starting point for the period of delay was adopted. A court must make an assessment specific to the circumstances of the case as to when the defendant knew of the case facing it and of the plaintiff’s likely impecuniosity. With reference to Euro Safety and Training Services Ltd v FÁS [2016] IEHC 161 (“Euro Safety”), it was submitted that the means of knowledge of the moving party is a relevant factor in the Court’s approach to delay. This, they submitted, was also emphasised by Charleton J. in Oltech (Systems) Ltd v Olivetii UK Ltd [2012] 3 IR 396, [2012] IEHC 512 (“Oltech”) where he stated that consideration of delay necessitated an analysis of “the nature of the delay in the light of the means of knowledge of the moving party, as to what that party knew or ought reasonably to have known, and assess its impact on the course of the case in order to decide whether the order should be refused.” 66. While other cases determined the date to be the delivery of the defence (Savanne and Moorview), the appellants submitted that it was clear that it is not a fixed rule that delay only starts from delivery of the defence. Knowledge was the important factor. 25 67. In my view, both Moorview and Savanne are decisions which focus on the defendant’s knowledge. In Moorview, the finding was based on the defendant’s knowledge of the claim at that point in time. Clarke J. stated that “a defendant should be reasonably clear as to the issues which are likely to arise in the proceedings” in saying that in the ordinary way this will be after having an opportunity to consider the statement of claim together with any reasonable particulars sought and answered. In Savanne, while Barr J. rejected a requirement on the defence to apply at the “earliest opportunity”, he viewed it as entirely logical that the delay ran from the delivery of the defence in a timely manner, because it is only when the defendant is fully aware of the plaintiff’s case that he can assess whether he has a good defence. Moreover, in Marlan Homes, having surveyed the cases on delay, Hyland J. rejected the proposition that a defendant was entitled to wait until they filed their defence before bringing an application for security. I agree with Hyland J. when she said there is no hard and fast rule and that the question of whether it is reasonable to wait to bring a motion until the defence is filed will depend on the facts of the case. Similarly, the cases of Euro Safety, Oltech and Pebble Beach Owners Management Company Ltd v Neville [2019] IEHC 111 (“Pebble Beach”) focus on the knowledge of the moving party in the application for security for costs. 68. From the foregoing, it can be discerned that the guiding principle is that knowledge on the part of the defendant is the important consideration. It will be reasonable for a defendant to wait to bring the motion until such time as it was in a position to take a view on whether it had a prima facie defence and be able to articulate that defence. That time may often, or even usually, be after receipt of the statement of claim and the answers provided to reasonable requests for particulars, but that is fact dependent. Other situations may well indicate that the defendant was in a position to take a stance at an earlier stage. A clear example may be where there has been a contested application for an interlocutory 26 injunction where affidavits have been exchanged, and the parameters of the claim and the defence have been broadly established. In that situation, a defendant would find it difficult to argue that they did not have the requisite knowledge. 69. In these proceedings, I agree with the Court of Appeal that it was important to focus on the correspondence in October 2015. It was at that time that the respondent considered it had enough information to call on the appellants to provide security for costs. The respondent has never made the case on affidavit that it did not in fact have the knowledge at that time. As the focus must be on knowledge, the Court should assess the time as beginning from when it can be said that the defendant had sufficient information to make the application. In the present case that was at least from 23 October 2015 when the respondent explicitly stated that it was instructed to issue the motion seeking security for costs. It is arguable that in the absence of evidence to the contrary that the respondent was in possession of that knowledge in May 2015 when by letter they indicated their intention to make the application. The parties’ submissions on prejudice 70. Once it is understood that the length of the delay is a significant factor in the court’s consideration of delay in the exercise of its discretion to grant (or refuse) relief, it follows that this must influence how the court will treat prejudice as a factor. The submissions of the parties must be assessed in that light. 71. Prior to examining what type of prejudice (or indeed if prejudice is required) must be demonstrated before delay as a special circumstance will be sufficient to refuse to order security for costs, it should be observed that the Court of Appeal found that the appellants had failed to establish that they had suffered prejudice under the Werdna approach and under the Moorview approach; a point that the respondent emphasised. The appellants submitted that the prejudice was both actual and to be inferred. Actual in the sense of the 27 orders for costs made against them and to be inferred because of the stress, strain and time involved in progressing litigation. In so far as the issue of legal fees is concerned, it was confirmed by counsel for the appellants to the Court that the lawyers were retained on a no foal no fee basis. Although it was submitted by counsel that outlay had been expended in respect of certain applications, it seems to me that there is no evidence of any prejudice or detriment based upon unnecessary payment of fees to lawyers. In so far as it was claimed that expense had been incurred on expert witnesses, this is the type of evidence that should have been before the High Court if reliance was to be placed upon it. 72. According to the appellants the early jurisprudence placed limited emphasis on prejudice. They pointed out that this Court in SEE held that a delay of just over six months and the fact that the plaintiffs had incurred a relatively minor cost was sufficient to disentitle the defendant to an order for security. The respondent emphasised that the plaintiff in SEE had incurred a cost and submitted that it could not be relatively minor as the costs were not just those of preparing a transcript, but of doing so with the “co-operation [of] the legal advisers of both defendants”. 73. The appellants relied upon the passage of Beauross cited at para [41] above where Morris J. referred to the court not making an order where the delay meant that the respondent to the motion altered its position to its detriment. In Beauross, while the period of the delay was short the Court found that the fact that comprehensive legal costs (which the appellants submitted were in fact relatively minor) had been incurred was significant. Thus, Morris J. did not grant an order for security. 74. The respondent by contrast submitted that this approach by Morris J. is that favoured by Baker J. in Werdna and by O’Moore J. in the Court of Appeal in the present case. Secondly, it emphasised that Morris J. suggested that there should be some evidence of the “amount” and “level” of costs incurred by the plaintiff. Thirdly, the respondent 28 highlighted the phrasing of Morris J. that the party would be “committed” to costs; there is no such commitment here. Regarding cost orders already made, the respondent stated that it cannot be said that those costs arose due to its delay. Finally, the respondent referred to Delany and McGrath on Civil Procedure (fn 343 at [13-147]) where it is stated that: “Morris J made it clear that it will be the level of legal costs incurred as a result of the delay rather than the period of the delay itself which will be the significant feature”. 75. Beauross and SEE were cited in Hidden Ireland, where Fennelly J. stated that a court “will look at the facts of the particular case, the impact of the delay, other surrounding circumstances and, in the end, will seek to find a fair balance.” The approximate delay in that case of one year was found to be a “material matter”. This Court emphasised the fact that the defendants in that case allowed and encouraged the action to proceed while being fully aware of the plaintiff’s impecuniosity. This case was cited by Denham J. (as she then was) in Dublin International Arena where an application for security also failed due to delay. This Court stated that the delay which would disentitle a defendant to an order for security would have to be of “an undue and substantial kind”. 76. The appellants referred to Moorview and emphasised that the reference to “any prejudice” in the dicta of Clarke J. where he stated that “the extent of the delay, any explanation or reason for the delay, any prejudice (and the degree thereof) … together with any other factors that may arise … should be taken into account.” The appellants relied on the rationale behind the delay special circumstance jurisprudence as identified by Clarke J. They submitted that the test is not whether the plaintiff would have progressed its action or not, rather it is that the plaintiff ought to have been entitled to make its decision, as to whether to incur costs, in the light of full information. 77. The appellants observed that in more recent judgments there is no mention of Werdna with respect to the approach to delay (Nobil Food Ltd v Campion Insurance Ltd [2021] IEHC 29 664 (“Nobil”) and Tahboub v Joint Arab-Irish Chamber of Commerce CLG [2024] IEHC 616). In Nobil, Simons J. opined that upon culpable delay being established, a court must consider whether, during the period of delay, the “plaintiff altered its position to its detriment.” The appellants also referred to Pebble Beach where they said that Noonan J. echoed the judgment in Hidden Ireland by referring to “whether the delay has had any impact on the plaintiff’s position” (emphasis added). Noonan J. stated that where costs had been incurred by the plaintiff and the likely effect of an order would be to prevent a case proceeding, that would amount to prejudice. It was submitted by the appellants that this Court should favour the approach in Moorview as it gives rise to the least risk of injustice. 78. The appellants observed that the case of Marlan Homes suggested that a court is entitled to infer prejudice. In that case, the defendant objected to any assumption that the plaintiff had incurred costs during the period of delay on the basis that it had not provided sufficient evidence of same. Hyland J. rejected this submission and noted that the defendant did not cite any authority which required a plaintiff attempting to establish prejudice by reason of delay to put on affidavit bills of costs. The plaintiff had clearly set out the activity that it had engaged in during the relevant period and the Court was willing to infer that disadvantage had been suffered by the plaintiff in being forced to take those steps. Hyland J. concluded that “[t]he core requirement is that the Court is satisfied that a plaintiff has been disadvantaged.” The appellants also placed emphasis on the comments of Hyland J. where she stated that a court was “entitled to infer prejudice not just because of … costs but also because of the very existence of the proceedings” (emphasis added). 79. The appellants confirmed that they had never made submissions that they, as plaintiffs, were not obliged to establish some form of prejudice or detriment. They said that they had always argued in the High Court and Court of Appeal that they had suffered prejudice 30 because of the protracted dispute over the retainer of their expert witness which had been heard in three courts including this Court. They suffered orders for costs, and they argued that these are a more tangible form of prejudice than the incurring of an obligation to pay one’s own lawyers. They also argued for the inferred prejudice of the type identified in Marlan Homes. They said that they should not be obliged to disclose any form of costs arrangements they have made with their lawyers. 80. The respondent, referring to the onus that lies on a plaintiff resisting an application for security for costs to demonstrate ‘special circumstances’ to displace the ‘presumptive rule’ in favour of granting an order for security, submitted that it would be inconsistent with the case law if prejudice arising by reason of delay was permitted to be inferred on the basis of the dearth of evidence in the present case. Moreover, prejudice must be demonstrated on the evidence and that is a core issue in this appeal. The respondent submitted that the appellants cannot meet that test and as a result have invited this Court to innovate a different approach to prejudice. The respondent contended that this new approach is not entirely clear and noted that in parts of the appellants’ submissions it was argued that the relief sought could be refused because the appellants could have incurred an unspecified level of costs without proof that such costs were actually expended. 81. Further emphasising the need for evidence or information as to real consequences, the respondent referred to Protégé where Clarke CJ. explained that to establish a special circumstance a plaintiff must provide to the court “adequate information to enable a proper interrogation of any relevant proposition to be conducted.” In Quinn Insurance, Clarke CJ. also emphasised the requirement on the plaintiff to “to put up whatever evidence it wishes … It is not for a defendant to ‘raise particulars’ about the evidence …”. Clarke CJ. went on to outline that a heavy onus lies on the plaintiff “to explain how there are unusual circumstances to justify the contention”. The evidence presented must go beyond 31 mere speculation and this is how the respondent characterised the evidence provided by the appellants. In both Protégé and Quinn Insurance, Clarke CJ. emphasised that parties in security applications are required to “put their cards on the table”. The respondent stated that the comments are of general application and are not limited to the ‘cause of impecuniosity’ special circumstance, that being the matter at issue in the cited cases. In Quinn Insurance, O’Donnell J. opined that neither party in a security for costs application should be permitted to “make their case on the basis of bare and unsubstantiated averments.” The respondent stated that meaningful averments are lacking in the present case. The court should engage in careful scrutiny in security applications (Quinn Insurance). 82. In Protégé, Clarke CJ. citing the decision of the Court of Appeal in that case, outlined the various types of evidence a plaintiff should adduce, including affidavits from financial advisors or other experts. In Tír Na N-Óg Projects (Ireland) Ltd v PJ O’Driscoll & Sons [2019] IECA 154, Peart J. stated that “the plaintiff must do more than merely assert the proposition on affidavit, but must bring forth some evidence which is cogent and credible”. 83. The respondent submitted that the appellants’ position is in tension with the requirements set out by this Court in Protégé and Quinn Insurance. Citing the judgment of the Court of Appeal that the steps taken by the appellant could have incurred costs, the appellants submitted that there is sufficient evidence for a court to infer a finding of prejudice in the present case. The respondent characterised this submission by the appellants as an invitation for this Court to determine that security can be refused purely because a plaintiff might have expended some costs. It was submitted that it would be incongruous to require the level of evidence which Protégé and Quinn Insurance stipulate for the ‘cause of impecuniosity’ special circumstance but then to permit prejudice for the purpose of the 32 ‘delay’ special circumstance to be simply inferred or assumed on the vague basis contended for by the appellants. 84. The respondent acknowledged the difference between the two special circumstances including the fact that the ‘cause of impecuniosity’ special circumstance necessitates the making of counterfactual assumptions whereas prejudice from delay concerns what has already occurred. Considering this, the respondent stated that this fact makes a lack of evidence of prejudice all the more inexcusable as it will be easier for a plaintiff to provide evidence of prejudice caused by delay. Decision on prejudice and the proof of prejudice Proof of prejudice 85. I agree with the respondent that the onus lies on a plaintiff to establish the special circumstance. The respondent also emphasised that this requires a party to be able to establish the special circumstance by pointing to facts and circumstances that are established in the evidence. I agree that in the normal course when seeking to establish the special circumstance of ‘cause of impecuniosity’, the plaintiff is required to place evidence before the court from which the court can reach such a conclusion. That will not be achieved through mere averment. A number of features however make it inherently unwise to impose such a categorical requirement for every situation of special circumstance. 86. In the first place, it is important to recall that the categories of ‘special circumstances’ are not closed and, as Denham J. noted in West Donegal v Údarás [2007] 1 ILRM 1, [2006] IESC 29, citing Kingsmill Moore J. in Thalle v Soares and Others [1957] IR 182, it should be remembered that the essence of the order for security for costs is “to advance the ends of justice and not to hinder them”. While this case does not deal with a new category, it is an important reminder that advancing the ends of justice is an overriding concern and it 33 cannot be the case that dicta concerning requirements of proof of one type of special circumstance can be automatically transposed to every other category. 87. Furthermore, in some situations, such as those pertaining to delay, the evidence will already be apparent from the pleadings and proceedings already before the court. For example, a court will be aware from the proceedings of the length of time since the service of the defence and the bringing of the motion for security. Indeed, if the defendant asserts that a significant lapse of time is not to be understood as culpable delay, it will be for that defendant to explain by way of evidence the reason for that delay. 88. Therefore, the general requirement to produce evidence is one which is situation dependent. That much is obvious from some of the case law. Indeed, in SEE, McCarthy J. made the observation that “the preparation and copy of the [exhibited] transcript … must have been substantial” (emphasis added); thus, allowing an inference from the facts that all lawyers/judges are able to draw from their understanding of how expensive litigation can be. In Marlan Homes, Hyland J. was prepared to accept, without a specific detailed breakdown on costs, that the plaintiff had been disadvantaged by the steps it had to take, as those steps involved the continued assistance of their solicitors. As Hyland J. observed, the nature of the evidence a court will require will vary but “[t]he core requirement is that the Court is satisfied that a plaintiff has been disadvantaged.” 89. The circumstances of the present case present an unusual situation in so far as the appellants claimed that they were prejudiced by the delay because during the relevant period they defended a motion before three courts in relation to their use of an expert witness and ultimately had orders for costs made against them. A fourth order for costs was made in respect of the motion for further particulars. It is not the costs of their own lawyers that is at issue but the fact that costs orders were made. In my view, it is acceptable to seek to establish prejudice by pointing to those orders for costs. 34 90. When one views the claim as to costs in that light, the vehemence of the respondent’s objection to the lack of proof falls away. The respondent must know exactly what the costs will amount to, as they, and not the appellant (as the party against whom the order was made), have incurred the costs. It seems to me that this is a particular situation where common sense must intervene and recognise that reality must triumph over formalism. The appellants were subject to three awards of costs in the High Court, the Court of Appeal and the Supreme Court in respect of one application (relating to the use of a particular expert witness) and an order of High Court costs in respect of another (the application for further and better particulars). By any measure these are significant costs which have been incurred by the appellants and, on the other side, the full extent of the costs incurred (even if not all are successfully claimed) are known to the respondent. In these circumstances, I do not find that the respondent has made out the case that there was a failure on the part of the appellants to provide evidence to satisfy their claim in relation to costs. Prejudice 91. That still leaves for consideration the question as to what must be established by a plaintiff who claims that delay amounts to a special circumstance, specifically regarding the issue of prejudice. Identifying the nature of the prejudice and the extent to which prejudice is required within the overall scheme of delay as a countervailing circumstance to an award of security for costs will assist in understanding what courts require a plaintiff to establish. 92. For example, Moorview addressed expenditure on costs by the plaintiff because that is what was at issue in that case, i.e. the costs of making discovery. Incurring costs defending motions must, where it has occurred, also be considered a prejudice or detriment to a plaintiff. That is logical. It fits into the rationale identified by Clarke J.: a plaintiff should be entitled to factor into its decision on whether to progress the proceedings the various costs which may be incurred from as early a time as is reasonably practicable. 35 93. Moorview addressed the test for how that prejudice is to be adjudicated upon. The test is not whether the plaintiff might have gone ahead with the proceedings had security been ordered and thus incurred the costs anyway. It is that the plaintiff incurring the costs ought to have been entitled to make its decision as to whether to incur those costs in the light of full information including that security would have to be put up. That is a logical weighing of the balance of justice. Delay takes from the plaintiff the opportunity to make a judgment on incurring more costs while factoring in the requirement to put up security. The plaintiff in Moorview had established the special circumstance because it had incurred the expenditure on discovery without the benefit of full information. 94. Baker J. in Werdna, while mentioning the Moorview test, did not address any difference with her own decision. Indeed, she took it as meaning “that the amount of the claim, and whether the amount directed to be secured is disproportionate to the amount of the claim, are relevant factors”. Perhaps that understanding of the import of what was said, provides the explanation as to why she did not see any further value in the test or any contradiction between it and her own view. The Court of Appeal said it seemed logical for the court to enquire as to whether any costs or liabilities of the plaintiffs over the relevant period would in all likelihood have been incurred in any event. I am not sure that such a proposition follows as a matter of logic. What is at issue is a loss of opportunity. On a look back it will almost be impossible to establish the precise conditions in which such a decision would have been made. Even requiring ‘evidence’ may not advance matters in a satisfactory way. What of the frank and open company director who states that, at this remove they cannot be certain of what they would have done? Is their claim to special circumstances due to culpable delay to be denied because they cannot be entirely sure of what they would have done if they had the information? 36 95. In my view, the rationale for the delay exception, together with the pragmatic realities, is that the prejudice must be viewed from the perspective of the loss of opportunity to make a fully informed decision before engaging in the expenditure (or the risk of detriment through a costs order). This also fits more comfortably into the previous case law such as Hidden Ireland which did not make it a requirement to establish that the expenditure/loss would not have been incurred if the application had been made earlier. Thus, I am satisfied that prejudice is established in circumstances where a plaintiff has proceeded with an action and incurred costs (of its own or through costs orders) where because of delay they did not have the opportunity of making any decision on the merits or otherwise of continuing proceedings with full information of all the consequences. 96. The respondent also argued that in circumstances where the costs orders were against an impecunious company who were unlikely ever to be able to pay the costs, these should be ignored as not amounting to prejudice. That is unacceptable. Costs orders must, in the first place, be given due weight due to their status as orders of the court. They cannot be ignored by parties, even by those in whose favour they are made simply because it does not suit them at that time. They remain in effect for many years and cumulative costs orders against a plaintiff could have implications in respect of later costs orders being made (for example, earlier costs orders could affect applications to stay further costs orders). They must be viewed as a prejudice or detriment to the party against whom they have been issued. 97. Therefore, what constitutes actual prejudice and how it may be proven will vary depending on the facts in any given case. The extent of the prejudice required will, as stated above, also vary in accordance with the length of the delay in assessing the overall balance. 37 Inferring prejudice 98. An issue as to whether a court should “infer prejudice not just because of the incurring of legal costs but also because of the very existence of the proceedings” per Hyland J. in Marlan Homes also arose in this appeal. It is clear that legal proceedings are by their nature demanding and difficult for all parties. In Marlan Homes, the plaintiff company was a family company run by two brothers, and it was said that the existence of the proceedings for an additional period of 18 months or so cannot be treated as a matter of no import to the company and the directors who gave instructions. 99. The particular prejudice inferred in that case was, somewhat unusually, a prejudice that applied to the individual directors rather than the company itself. This was unusual because a company cannot get emotionally stressed whereas humans can. A company may however become less able to carry out its business because its directors/employees are required to direct their attention to the legal proceedings. The concept of separate legal personality requires the law to draw a distinction between the company and its directors. Waters are muddied in that regard by the existence of the Moorview jurisprudence which acknowledged a jurisdiction to award costs against a third-party funder of litigation in certain circumstances. So too does the Quinn Insurance judgment when, although with reference to the justification for making an order for security, it acknowledged that it is only common sense to have regard to the fact that if a company is impecunious, it is usually pursued for some reason and that someone is supporting them and likely to benefit if successful. If a company is impecunious but is funded by its main shareholder/director the threat of such a costs order being made may also place an additional stress on that person. 100. It is occasionally appropriate therefore to address the practical reality of separate legal personality, particularly in respect of small or medium enterprises where there are no 38 layers of employees to deal with the stress of litigation. Barniville J. (as he then was) in Coolbrook Developments Ltd v Lington Development Ltd [2018] IEHC 634 cautioned against permitting persons to have “all of the upside in the proceedings but none of the downside risk.” While this dictum was directed towards a justification for making the order for security, it seems to me that it is an acknowledgement of the fact that behind all these companies are individuals who must bear both the upside and downside of the trials, tribulations and potential rewards of litigation. I am therefore of the view that in an appropriate case, prejudice could be inferred. 101. Hyland J. was clearly correct in her view that prejudice can be inferred in certain situations. I have referred above to the cases where the cost to the plaintiff was inferred from the fact of the legal proceedings being advanced by that party. Indeed, in the present case the Court of Appeal at times referred to “established or probable prejudice”. Courts are entitled to infer prejudice where it is appropriate to do so. The appellants in this case have not advanced a sufficient claim to prejudice in respect of their own costs to justify such an inference but they have demonstrated sufficient prejudice to justify it on the basis of the award of costs against them. Lengthy delay and inferring prejudice 102. In Kirwan v Connors, it was said that the law should recognise that the passage of time is important in and of itself and can justify a dismissal of a claim without more. While there may be differences between the nature of an order dismissing a claim because of delay and an order refusing to grant security for costs because of delay in making the application, the public interest in ensuring that delay does not harm or interfere with the proper administration of justice is a concern that applies to all courts, lists and types of actions (Tweedswood). If the Court were to accept lengthy delays in applications for security for costs, “it would effectively send a signal that the courts were all but indifferent to the 39 consequences of legal delays and litigation inefficiency for the overall protection of the public interest” (per Hogan J. in Tweedswood at para [15]). 103. In the usual course, if a plaintiff wished to demonstrate prejudice based upon emotional stress there would have to be some evidence which would form the foundation of that claim. An averment of emotional stress is less convincing than the surrounding evidence that would support such an averment. Such other evidence would in turn support, in a proper case where the delay has been significant, such an inference. It is apparent from the totality of the first appellant’s affidavit that he was the driver of the initial plan for the hospital and that he funded much of it. It is also apparent that he was the driver of the claim as it proceeded before the courts. Prejudice can be inferred but the weight of such a claim is to be assessed when balanced against the length of the delay. 104. Where, as here, there has been a very significant delay, such inferred prejudice will readily tip the balance in favour of finding that delay as a special circumstance has been established. Indeed, where the delay is as significant as here it is appropriate for a court to view the balance as having been shifted in favour of refusing the application for security in the absence of a pressing exigency of justice. Significant delay does not require prejudice (actual and proven or, presumed and inferred) 105. Where the delay is so significant that the court views the balance of justice as having shifted in favour of refusing the application in the absence of a pressing exigency of justice, there is no requirement to demonstrate prejudice either actual and proven or, presumed and inferred. That is because the significance of the delay in the context of this discretionary remedy has become so great a factor that it need not be combined with any other factor to weigh the balance in favour of refusing the application for security. Of course, a plaintiff may always rely on actual or proven prejudice but the absence of such 40 actual or proven prejudice does not prohibit the court from refusing the application where the delay has been significant. 106. Given the systemic importance of the courts upholding the fair and efficient administration of justice, there is no bar to a Court considering whether the significant delay, without the need to demonstrate specific prejudice, may in all the circumstances amount to a special circumstance warranting refusal of the application for security for costs. What may constitute a significant delay? 107. What may constitute a significant delay? The starting point is that as a discretionary remedy the application ought to be made as soon as reasonably possible after the grounds for taking the application were first known to the applicant (or with due diligence could have been known). The context here is, to borrow from the judgment of Fennelly J. in Dekra Éireann Teo v Minister for Environment [2003] 2 IR 270, [2003] IESC 25 (a public procurement challenge) that applications for security for costs “relate to decisions in a commercial field, where there should be very little excuse for delay.” 108. What amounts to a reasonable time will depend on the facts of the case but it would be usually be measured in terms of weeks or possibly months. Any further delay would have to be explained and if explained, then prejudice would be required before a court would have to engage in an extensive balancing action. Where the delay is measured in the region of six months to one year and any significant part of that delay is unexplained, that may be sufficient to tip the balance against ordering security even in the absence of specific prejudice; the court will have to weigh all matters in the balance. A delay of over a year is so significant in the context of a discretionary remedy that, where a significant part is unexplained the balance will shift to refusing the order in the absence of a pressing exigency of justice. 41 Principles regarding delay as a special circumstance 109. From the foregoing the following emerges:
10. a)Security for costs applications involve a court attempting to do justice at a time when it will not be possible to form any strong view as to the merits or otherwise of the claim. That analysis is also relevant to considerations of special circumstances.
11. b)The rationale of delay as a special circumstance is based upon the entitlement of a party to be able to include in its decision whether to progress the proceedings the fact that it will have to put up security from as early a time as is reasonably practicable.
12. c)The test is not whether the plaintiff would have progressed the action but rather whether the plaintiff ought to have been entitled to make that decision in light of full information.
13. d)Apart from the private interests of the parties, assessment of delay also incorporates the public interest in ensuring that in the administration of justice the most efficient and effective use is made of limited court resources. The courts are not indifferent to the consequences of legal delays and litigation inefficiency. Having cases linger unnecessarily in court lists takes up time in the hearing of what might have been unnecessary applications if security for costs applications were made earlier. Such late applications delay the ultimate resolution of the proceedings on the merits. These are all factors for consideration as to where the balance of justice may lie.
14. e)The length of the delay is relevant in the consideration of the overall balance of justice. 42
15. f)In general, prejudice (in the sense of detriment, loss, damage etc.) ought usually to be proven by the plaintiff but the nature of the evidence required will depend on the facts of the case. The court is entitled to look at all the evidence, such as the history of the proceedings, in making its assessment. The greater the delay, the less the weight of prejudice may be required in order to tip the balance.
16. g)Where the delay is significant and is in whole or in part unexplained the court may view the balance of justice as having shifted in favour of refusing the application in the absence of a pressing exigency of justice. In such a situation, prejudice is to be inferred from an especially lengthy delay and the delay of itself shifts the balance.
17. h)There is an obligation to apply for the discretionary order for security for costs as soon as reasonably possible, a period usually measured in terms of weeks or possibly months. Where the delay is measured in the region of six months to one year and any significant part of that delay is unexplained, that may be sufficient to tip the balance against ordering security even in the absence of specific prejudice; the court will have to weigh all matters in the balance. A delay of over a year is so significant in the context of a discretionary remedy that where a significant part is unexplained the balance of justice shifts to refusing the order in the absence of a pressing exigency of justice. Application to the facts of this appeal 110. In the context of the foregoing principles, the facts lead to one result. The length of the relevant delay here is truly extraordinary. It is a sufficient countervailing factor which justifies refusal of the application for security for costs. Even if one takes the delay as being five years from the filing of the defence, that delay was also inordinate. From the first time the respondent indicated it wanted security for costs (28 May 2015) to the issuing 43 of the motion there was a delay of over eight years. Even taking the delay from the date the respondent categorically said that it would issue a motion for security for costs (23 October 2015), the delay was almost eight years. The respondent must be taken to have had sufficient knowledge of the relevant facts when they first made this demand in the context of the litigation. Nowhere has it been explained why an eight year delay was permitted to take place. 111. That delay led to significant judicial resources being expended through the hearing of the motion to exclude the appellants’ expert and subsequent appeals. Even without such specific court time being taken up, the resolution of the proceedings, in the sense of the possibility of a stay or in the sense of the final decision on the merits, has been delayed for a length of time that per se has an impact on the efficient administration of justice. It is perhaps unnecessary to state this, but if there had been inactivity on the part of the plaintiff in moving the litigation along, the defendant would, of course, have a full entitlement to bring a motion seeking to dismiss the proceedings. The type of delay that occurred here was in the context of activity taking place, nonetheless the impact on the administration of justice is real. 112. At the hearing, counsel for the respondent stressed the importance of the motion that was pursued by them in respect of the conflict of interest of the appellants’ expert witnesses. He acknowledged and indeed emphasised that he was not giving this as evidence that this was the reason for the delay. What is of relevance however is that the respondent chose to pursue that motion in a situation where it could, in all likelihood, have prevented the proceedings from progressing if it had chosen to bring the motion for security for costs. That was a strategic choice the respondent made. The only inference one can draw is that for some reason this was a tactical decision on the part of the respondent to pursue the motion up to and including the Supreme Court appeal; perhaps to obtain a beneficial ruling 44 on expert witnesses in general. That choice has a consequence and the importance (to the respondent specifically and more generally in the development of the law) of its motion cannot change the fact that this contributed to an egregious delay in bringing forth the application for security for costs. 113. In my view, the length of the delay and the absence of any exigency of justice (indeed any explanation) is sufficient to allow this appeal and thereby set aside the order requiring that security for costs be provided. 114. Even if the delay had not been so lengthy, there was sufficient prejudice to determine that the balance of justice lay in refusing security for costs. The appellant company was not given the required information before the motion in relation to the admissibility of evidence from its expert to enable it to make a fully informed decision as to whether to defend that motion and to pursue appeals to the Court of Appeal and to the Supreme Court. The prejudice suffered in doing so was real; orders for costs were made against it. That prejudice is established from the history and record of the proceedings. The respondent is aware of the extent of those costs (even if the precise amount cannot be known until after adjudication). A defendant who chooses to pursue another motion – excluding a motion to dismiss for want of prosecution – rather than an application for security for costs cannot be heard to complain if the costs orders imposed on the plaintiff (or, if established in evidence, the costs of defending such a motion) are weighed heavily in the balance. The absence of any explanation, still less any compelling explanation, tips the balance of justice and requires refusal of the security application. 115. In all the circumstances, I would allow the appeal and set aside the Order of the High Court requiring the appellant company to provide security for costs. 116. In light of the delay to date, I would direct that this case be listed before the High Court no more than four weeks from today for case management. 45