The Irish High Court has refused Eirgrid’s application for security for costs against County Monaghan Anti-Pylon (CMAP), a company formed for the purpose of opposing the proposed North/South Meath-Tyrone electricity interconnector.
Eirgrid applied for planning permission for the interconnector but, on the twenty-third day of the oral hearing before An Bord Pleanála, it abandoned the application due to an error on its part in advertising the application. By that stage, CMAP had incurred €250,000 on legal fees and an expert report in opposition to the application. In County Monaghan Anti-Pylon Limited v. Eirgrid Limited, CMAP sued Eirgrid for those costs. Eirgrid applied for security for its costs of the action. CMAP acknowledged that it would not be able to pay Eirgrid’s costs if Eirgrid defended the case successfully.
The facts pointed to a routine order for security, but the Court exercised its discretion not to grant it. Judge Charleton held that there was a special circumstance in this case, in that CMAP’s inability to pay Eirgrid’s costs resulted from the alleged wrong committed by Eirgrid. The judge confirmed that a party could rely on such a circumstance not only in cases of commercial damage, but also where the applicant’s actions caused loss that prevent a company from pursuing the purpose for which it was set up. The judge considered it arguable that companies formed specifically for participation in planning hearings should not be judged on the same basis as economic undertakings. In any event, allowing democratic participation in physical development was at the heart of the Irish planning code, and that was a relevant consideration in refusing to grant security.
Normally, a party seeking security for costs against a company will obtain its order if it proves that it has a reasonably sustainable defence, and that the plaintiff company would be unable to pay his costs if successful. CMAP v Eirgrid is a reminder that even where those two elements are proved, the courts retain a discretion not to grant security. In exercising that discretion in this case, the judge relied on a number of special circumstances and was plainly influenced by a particular vision of the planning process. Yet the case is not just important in the planning context. The judge noted that the list of special circumstances is not a closed list. The court will exercise its discretion based on the facts of each individual case, considering the nature of the plaintiff’s claim and conduct of the defendant.
The position is even stricter in relation to individual plaintiffs. The Irish courts will not grant security for costs against an individual plaintiff resident in Ireland or another Brussels Regulation country. Even for plaintiffs resident outside the EU, an applicant for security must prove that the plaintiff does not have sufficient assets in Ireland to satisfy a costs award.