The recent Court of Appeal judgment of Platt v OBH Luxury Accommodation Limited & Anor [2017 IECA 221] concerned an exaggerated claim and the Plaintiff was found to have lied.

Case Overview:

Mr Jason Platt, (known as the plaintiff) had travelled to Kinsale for a Valentine’s weekend break and he and his partner were staying at the Old Bank House, Pearse St, Kinsale where he claims the accident took place on February 15, 2009. The plaintiff alleged he fell from a windowsill in a room in the defendant’s hotel. As a result, his ribs, spine and hip were severely damaged. Mr Platt had sued OBH Luxury Accommodation Ltd with offices at Pearse St, Kinsale and company director Ciaran Fitzgerald.

Nevertheless, the hotel owners contended that Mr Platt threw himself from the window of his guestroom following a heated argument with fiancée.

Mr Platt sought compensation for his injuries and was presented through his testimonies as a poor man suffering chronic pain and discomfort. The plaintiff had also submitted under oath, an affidavit verifying a schedule of special damages and future loss claiming almost £1.5 million. It became apparent that he was found to have intentionally deceived the court and overstated the level of his agony and the degree of his incapacitation.

High Court:

Regardless of finding the Defendants 60% responsible, Barton J. discharged the Plaintiff’s claim after video evidence submerged of him going shopping, driving, carrying bags, and walking unassisted. (a clear disparity to the testimony from the Plaintiff who emphasized how extremely incapacitated he was as the Plaintiff had previously specified that he was now duty bound to use a wheelchair, crutches or a commode.)

Court of Appeal:

Irvine J. dismissed the appeal, relying on Section 26 of the Civil Liability and Courts Act 2004 to discharge the whole claim.

The Court of Appeal specified that the 2004 Act was designed to ensure that incorrect or deceptive declarations, accusations or evidence would “not lightly be tolerated”.

Section 26 of the Civil Liability and Courts Act 2004:

Section 26 states:

“If, after the commencement of this section, a plaintiff in a personal injuries action gives or adduces, or dishonestly causes to be given or adduced, evidence that—

(a) is false or misleading, in any material respect, and

(b) he or she knows to be false or misleading,

the court shall dismiss the plaintiff’s action unless, for reasons that the court shall state in its decision, the dismissal of the action would result in injustice being done.”

Barton J stated, the standard of proof that is essential to effectively appeal Section 26 was the balance of probability, nonetheless the seriousness of the matter being alleged must be taken on board as well as the gravity of the issue and the consequences in considering the evidence essential to discharge the onus of proof.

Importantly, it was verified by the court that if a Section 26 application is successful the entire claim must fail. This was confirmed in Meehan v BKNS Curtain Walling Systems Ltd. [2012] IEHC 441. Irvine J. went on to state that “the plain and ordinary meaning of the words make clear that if the evidence is false and misleading in a material respect “the action” shall be dismissed. The section is simply incapable of any other construction”.

Secondly, before dismissing a claim under Section 26 the Court must also look at the consequences for the plaintiff where a claim is discharged under Section 26.

However, although adverse penalties must not be the only influence considered, the Court continued that it can be considered amongst other relevant factors. A failure by a court to do so would conflict against the Court’s obligations to interpret legislation in accordance with the legitimate principles of fairness and proportionality.

Nevertheless, the Court of Appeal maintained that the finding of Barton J. in the High Court was correct. The Court of Appeal agreed with the defence that a claim such as this was “indeed the type of case the Oireachtas had in mind when the (Section 26) legislation was enacted”.

Conclusion:

This is a very significant judgement.

Firstly, it reiterates the transparency of the law. If a Plaintiff is found to have exaggerated his or her claim, the entire case will be dismissed and he or she may be prosecuted.

Dismissing a fraudulent claim like this is a victory for the defendants and insurers. As a result, the compensation money that would have gone to the plaintiff, can now be used to compensate the numerous honest victims of personal injury when required.

Moreover, any claim that goes in favour of the injured party has been supported by comprehensive medical records, expert reports, widespread evidence and cross examination.

It is hoped the courts judgement will mark the beginning of a change in attitude from the courts when considering Section 26 applications in the future.

BY COLLEEN WARD – TRAINEE SOLICITOR

The article illustrates the difficulties arising from pursuing an order under Section 26 of Civil Liability and Courts Act 2004. Outlined below is a recent High Court highlighting the difficulty insurers have on pursuing a case dismissal under Section 26.

Section 26 states that “if a plaintiff claiming injury does not tell the truth on affidavit or does not tell the truth in Court, then the Court has discretion to either dismiss the claim in its entirety or penalise the plaintiff in respect of any damages made. Even on the occasion where a plaintiff has done so unwittingly or even innocently. Where a Court is satisfied that the requirements of Section 26 have been met, then the provisions of Section 26 are binding.

Buncrana Circuit Court awarded seven plaintiff’s damages between €5,050 and €9,550 as a result of a collision on 28 June 2011 involving two cars on a roundabout in Lifford, County Donegal.

The plaintiff’s each claimed for soft tissue injury. Firstly, against the driver of the vehicle responsible for the accident and secondly, against Ryan’s Investments NI Ltd trading as Hertz Rent-A-Car whom the negligent driver’s car was hired.

Ryan’s investments insurers appealed the award made by the Circuit Court branding the accident as a “fraud.” They claimed those involved knew each other via membership of Republican commemoration groups and that the accident had been fabricated with the sole purpose of extracting the maximum compensation from the driver’s insurance company.

Mr. Justice Charles Meenan, who delivered the High Court judgement in July rejected this claim. He maintained the most that was admitted by the plaintiffs was that some of the men knew each other in an only “to see” capacity.

Though the evidence, in some instances, concerning prior knowledge of each other, was “less than forthright” he remained unconvinced that such evidence went so far as to establish the collision was a ‘set up.’

The Circuit Court understood that the negligent driver had contacted one of the injured men by telephone when returning his car to the Hertz office. The call was overheard by a Hertz employee, who stated, that the ‘friendly manner’ of the discussion was evidence that the collision was a complete fraud.

Yet, Judge Meenan maintained the awards made by Buncrana Circuit Court. Referring to the phonecall, he believed that if the accident was staged “the communication during the telephone call would previously have been decisively fixed in the negligent driver’s mind previous to returning the hire car.”

The defendants’ lawyers relied on the plaintiffs’ medical evidence which was disclosed during the hearing. All seven reports indicated that a complete recovery was made within a short time frame.

Unfortunately, Mr. Justice Meenan rejected the allegation the accident was a ‘set up.’ affirming there was not sufficient evidence adduced to make an order pursuant to Section 26. Total damages of €52,350 were awarded against the Defendants.

Farrell v Dublin Bus is an illustration of the court exercising its discretion on Section 26.

Mr. Justice Quirke held that Ms. Farrell, had, given evidence which she knew was false and she did so to support her claim that her injuries deprived her of any income from the date of her accident.

On this foundation, the judge held Dublin Bus was entitled to a Section 26 Order dismissing the claim.

We understand relying on Section 26 can sporadically miscarry. However, it is one of the limited provisions of the 2004 Act that can be used to discourage dishonest and exaggerated claims.

In our experience, we have found that the leading reasons for discharging cases under Section 26 are often one or more of the following: –

• Prior injuries to the accident not revealed during the course of the case.
• False loss of earnings claims as one of the reasons in Farrell v Dublin Bus.
• Articulate fabrications in evidence of a severe and substantial nature.

At Lacey Solicitors, our team of legal professionals are highly trained in dealing with fraudulent and exaggerated claims. We can ensure all clients, both plaintiff and defendant are given full professional directions throughout the entire claims process.

BY COLLEEN WARD – TRAINEE SOLICITOR

Mr. Justice Barr delivered his judgement on the 31st day of May 2017 in the matter of Duffy v Lyons. The action involving a road traffic accident which took place on 8th September 2014 at the junction of Crumlin Road and Rafters Road, Dublin 12. This High Court case centred around liability and contributory negligence.

The plaintiff stated that he was in the process of making a right-hand turn on his bicycle, he was collided into by the defendant’s car, which was proceeding along Crumlin Road coming in the opposite direction. The plaintiff’s case was, had the defendant been driving with reasonable care, he ought to have seen the plaintiff’s bicycle on the junction and should have avoided the collision.

The defendant (Mr Lyons) case was that the plaintiff emerged suddenly onto his side of the road, from between a line of traffic that was backed up on the opposite side of the road and that he had no chance to avoid the collision.

Mr Justice Barr favoured the evidence given by the defendant because the plaintiff had contributed to his own misfortune. The judge explained, the accident was predominantly caused by the negligence on the part of the plaintiff in failing to yield right of way to the defendant’s vehicle and in failing to keep a proper lookout to his left before crossing onto the far carriageway on Crumlin Road.

The judge found that Mr Duffy was clearly negligent in relation to his own safety in failing to wear a helmet. While the failure to wear a helmet had no causative effect in relation to causation of the accident, it is nevertheless indicative of a somewhat cavalier attitude on the part of the plaintiff as to his own safety. While there was no expert evidence as to the extent to which they can reduce the level of head injuries suffered by a cyclist, Mr Justice Barr was prepared to take judicial notice of the fact that by wearing a cycle helmet, a cyclist can greatly reduce the risk of suffering a serious head injury.

Furthermore, Mr Duffy’s admitted failure to have any lighting on his bicycle on the night in question was relevant to causation of the accident. Mr Justice Barr stated, “when cycling in the city, or in the country during the hours of darkness, a cyclist is obliged under the law to have front and rear lights on his bicycle.”

Mr Justice Barr held that the plaintiff in this case, as a grown man, was highly negligent to cycle from the city centre to his home in Drimnagh without any lights on his bicycle. Thus, failure to have such lighting was highly negligent behaviour on the part of a cyclist.

High Court judgement can be found here:

By Colleen Ward – Trainee Solicitor

The Irish government has agreed upon the outline of the insurance amendment bill 2017. Minister for Finance, Mr Paschal Donohoe outlined yesterday “The failure of Setanta and the ambiguity that followed over the compensation arrangements for claimants emphasised weaknesses with the current insurance compensation framework.”

The new legislation will implement the recommendations of the report written by the Framework for Motor Insurance Compensation, therefore greater certainty for both consumers and industry will be provided, concerning the insurance compensation framework in Ireland.

As well as seeking clarity on the insurance compensation framework in Ireland, the Bills key objective, when enacted, will be to increase the level of cover to clients of insolvent insurance companies to 100 per cent instead of the existing level, currently at 65 per cent.

This will bring it into line with the compensation levels paid out by the Motor Insurer’s Bureau of Ireland (MIBI).

In addition, this increase will be backed by the insurance industry with safety measures implemented to protect the industry in the unfortunate event a motor insurer finds itself in liquidation. A legal basis will also be delivered for motor insurers functioning in the Irish market to contribute an amount equal to 2% of gross written motor premiums to an ex-ante fund which will be held by MIBI enabling the industry to meet its 35% commitment.

The Central Bank of Ireland and the State Claims Agency will now have an official role regarding administering the funds if any insurance company finds itself in financial difficulty.

A time limit for making applications to the High Court for payments from the ICF will also be amended to any 3-month period, enabling payments to be made more frequently.

The press release which can be found here, summaries main changes which the Bill will follow.

By Colleen Ward -Trainee Solicitor.

Mr Justice Stephens recently pondered alternatives to the customary investment of Minor damages in a Minor personal injury case brought by this firm, Lacey Solicitors. It is understood that this is the first time the Court has considered an alternative to the conventional mechanism in place whereby compensation is paid to the Accountant General and managed by the Court Funds Office. Mr Justice Stephens was minded, if possible, to invest the sum approved into a Child Specific ISA or some other similar type product that would provide maximum security and interest for the Minor’s damages until reaching the age of majority.

The Minor’s legal representatives were asked to assist the Court in assessing whether such a step would be permissible under the current Statutory arrangements and Court powers. Having considered the relevant legislation and the Court of Appeal decision and Judgement of McCloskey J, the Judge at first instance in the case of The Northern Ireland Courts and Tribunals Service –v- The Official Solicitor to the Court of Judicature in Northern Ireland, it would appear that the Court has the power to direct that the monies are invested as they see fit.

In this particular case, on balance, taking in to account the circumstances of this particular Minor Plaintiff, it was found that there would be no benefit in diverging from the Court Funds investment route. As this would appear to be the first time the Court considered alternative routes, some guidance for practitioners will be set out in a publication which will be available on the NI Courts Service website in due course.

Jenna Curran

After four recent Court of Appeal decisions on the assessment of damages in personal injuries cases where the court on each occasion lowered awards of damages, one might be tempted to think that the court had indeed recalibrated damages in personal injury cases in Ireland. In Shannon and Shannon v O’Sullivan, the court was asked to accept that it had. In the judgment delivered by Ms Justice Irvine the court did not accept that it had that saying that the decisions had clarified “the principles to be applied and the proper approach to be taken by a trial judge when making an award for damages for personal injuries so as to ensure that the award made is just, equitable and proportionate”.

If proof was at all needed that there had not been a wholesale recalibration, the case of Murphy -v- County Galway Motor Club Limited & Ors, illustrates that the court is not afraid to raise an award of damages where it deems it appropriate.

Damages Lowered

The Court of Appeal in Nolan v Wirenski reduced a general damages award of €120,000 made by Mr Justice Barr for the plaintiff’s shoulder injury. The award by the trial judge was for €90,000 damages for pain and suffering to the date of trial and €30,000 for pain and suffering in future. The Court of Appeal consisting of Judges Ryan, Irvine and Peart reduced the award for general damages to €65,000 consisting of €50,000 for pain and suffering to date of trial and €15,000 for pain and suffering in the future.

Ms Justice Irvine of the Court of Appeal halved damages awarded to Rita Shannon and Anthony Shannon by Justice Donnelly on the of 25th March 2015 at the High Court, Kilkenny. Justice Donnelly assessment of general damages in respect of Mrs Shannon had been one of €130,000. Justice Donnelly assessed general damages in respect of Mr Shannon at €90,000 in total. Justice Irvine allowed Rita Shannon €40,000.00 in respect of general damages with an additional €25,000.00 in respect of pain and suffering in the future – a reduction of 50%. In respect of Mr Shannon she allowed €25,000.00 in respect of general damage for pain and suffering to date and €15,000.00 in respect of pain and suffering in the future – a total award of €40,000.00 and a variation downwards of €50,000.00.

In In Payne v Nugent (Court of Appeal 2015/67) the court comprising of recently appointed appellate Judges Irvine, Ryan and Peart heard an appeal against the decision and judgment of High Court (Cross J.) dated 15th January 2015. In that case the court assessed general damages for pain and suffering to date in the sum of €45,000and pain and suffering into the future in the sum of €20,000. The Defendant/Appellant sought to argue that the award was excessive. The Court said that “Modest injuries should attract moderate damages” and reduced the award to the Plaintiff to €35000 general damages.

Murphy -v- County Galway Motor Club Limited & Ors

Issues

In this case which concerned an award of the High Court by McGovern J., the court was asked to review the decision on liability, assessment of general damages and the calculation of special damages.

Liability

The plaintiff was a spectator at a motor rally who suffered severe injuries when a car left the road and struck him. McGovern J., held him to have contributed to the accident and found him to be two thirds responsible. The Court of Appeal upheld the appeal of the plaintiff on the liability finding and held that in fact the onus on the organisers was greater and that the plaintiff’s degree of culpability was reduced from two thirds to one quarter.

In considering the issue of contributory negligence the court considered the leading cases of O’Sullivan v. Dwyer [1971] IR 275 and Hay v. O’Grady.

Special Damages

The court considered the assessment of special damages to include the approach in calculating loss of earnings to trial and future loss of earnings (in doing so considering the application in Reddy v Bates). The court held that the trial judge had erred and it raised the award.

Damages for personal Injury

McGovern J, in the High Court had held that damages for the significant injury sustained by the plaintiff be measured at €200,000 being half for pain and suffering to trial and the other half for future pain and suffering. The plaintiff sustained a severe compound fracture to his left lower tibia with disruption of the tibiofibular joint, a dislocation of the left knee with rupture of all of the ligaments around the joint and severe skin loss of the lower left leg. He also sustained a number of small lacerations to his left upper forearm and left hand. Because of the severity of the injury to his leg the plaintiff required an amputation initially at knee level and then later above the knee. He was wheelchair bound for a significant period prior to being fitted with a prosthesis.

The Court of Appeal raised the award for injury to €275,000, agreeing that the award for pain and suffering to trial would amount to an award of €100,000, but taking issue with the award for future pain and suffering.

The court said “To achieve proportionality the judge ought to have regard to the entire spectrum of personal injury claims which includes everything from the most modest type of injury, such as soft tissue injuries, to those which can only be described as extreme or catastrophic and which tend to attract damages of in or about €450,000. It is helpful for a trial judge to endeavour to locate where, within that spectrum, the injuries of any particular plaintiff would appear to lie: see, e.g., Nolan .v. Wirenski, judgment of Irvine J. 25th February 2015. After all, damages are only fair and just if they are proportionate, not only to the injury sustained by an individual plaintiff but also proportionate when assessed against the level of the damages commonly awarded to other plaintiffs who have sustained injuries which are of a significantly greater or lesser magnitude. There must be a rational relationship between awards in personal injury cases. That said each case must turn on its own facts.

Applying these principles to the present case, it is undoubtedly the case that the plaintiff’s injury must be viewed as a very serious and significant one when considered in the context of the overall spectrum of personal injuries claims. Any amputation, and particularly the amputation of a leg at a young age, will have permanent and irremediable consequences for the victim. It is an injury destined to adversely influence every area of his life”.

“When I think of the entries that might be made by this plaintiff in a diary to be kept by him over the next 50 years or so concerning his pain, distress, disadvantage, embarrassment and upset deriving from his injuries, I am quite satisfied that the sum awarded by the trial judge in respect of future pain and suffering was wholly inadequate by way of compensation and that it must be set aside. It does not fall within what I consider to be the acceptable parameters for future pain and suffering for this particularly significant injury. I would propose a sum of €175,000 be substituted to replace the sum awarded in respect of this category of loss“.

The Court set aside the order of the High Court of damages €199,166 and in its place made an award of €564,682

Comment

The writer agrees that the original decision on the assessment of damages for injury was too low for such an appalling injury, just as I agree that the original decisions in the cases mentioned above were clearly too high. These decisions illustrate that, at last plaintiffs and defendants have a quick and accessible means of appealing judgements such as these. It should not be lost on us that on each of the five cases the court upheld the appeals; that they found for the appellants. Parties do not appeal decisions lightly, given the significant costs implications, but when a decision is clearly too generous or quite the opposite the Court of Appeal is an effective remedy and a welcome addition to the Irish court system.

The decision can be read in full here.

Awards of appeal costs have been made against plaintiff’s whose damages awarded by the High Court were reduced by the Court of Appeal.

Appeal

In Anthony and Rita Shannon v Debbie O’Sullivan the Court of Appeal significantly reduced High Court damages awards. The Appeal Court accepted that the Plaintiff’s were entitled to the costs of the High Court proceedings.

Costs

There was contention regarding the costs of Appeal. During the Appeal the defendant had made Calderbank offers which were not accepted and which were remarkably close to the awards given by the Court of Appeal, each being just above the amount awarded.

Defendant case

The Defendant contended that as per Ord. 99 r. 1(4) of the Rules of the Superior Courts, costs should follow the event. That being so, it was contended that the defendant’s costs of both appeals should be set off against the orders for costs made in favour of the plaintiffs in the High Court. In addition, Mr. Fox S.C., on the defendant’s behalf relied upon the two letters of offer in support of his application. These, he submitted, may be taken into account by the court under the provisions of Ord. 99 r. 1A (b) when considering the costs of the appeal.

Plaintiff’s case

Mr Treacy S.C., for the Plaintiff’s asked the court to note that the Calderbank offers represented 55% of the award made to Rita Shannon and 40% of that made to Anthony Shannon and that the Calderbank offers were less than the amounts which the defendant was required to pay to the plaintiffs as a condition of the stay granted by the trial judge, i.e. €80,000 in the case of Rita Shannon and €55,000 in the case of Anthony Shannon. These amounts, he said were accordingly considered unappealable by the High Court judge. Plaintiff counsel noted that the awards of the Court of Appeal were a multiple of the original tenders made by the defendants, i.e., €24,600 in Mrs. Shannon’s case and €14,600 in Mr. Shannon’s case. He argued that the Calderbank offers lacked certainly as they did not specify that the defendant would discharge the plaintiffs’ costs incurred between the date of judgment and the date upon which the offer was too close. Certainty was a prerequisite to penalising the plaintiff for non acceptance of such an offer and there was no certainty in the offers made by reason of the lacunae identifie.

Counsel for the Plaintiffs sought to advance the argument that they were wrong footed by the judgments of the same court in Payne v. Nugent [2015] IECA 268 and Nolan v. Wirenski [2016] IECA 56, decisions which Mr Treacy S.C., said had led to a recalibration of damages in personal injuries actions. He further argued that the Court of Appeal had endorsed the views expressed by the trial judge as to the good character of both plaintiffs.

The Decision

“The starting point for the court’s consideration must be Ord. 99 of the Rules of the Superior Courts which provide that costs shall, unless otherwise ordered, follow the event. Hence, without ever engaging with Calderbank letters the costs should, having regard to the fact and extent of the defendant’s success on each appeal, be awarded to the defendant”.

The Court rejected that the Calderbank offers were defective. Further the court denied that the previous recent cases cited had recalibrated damages in personal injuries. The Court awarded the costs of appeals against the Plaintiffs to be set off against the High Court costs orders.

The full decision is here

The issue of when a security of costs application should be granted was considered by Mr Justice Barrett in the recent case of Euro Safety and Training Services Limited v FAS [2016] IEHC 161.

Section 390 of the Companies Act 1963 provides:-

“Where a limited 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 defence, require sufficient security to be given for those costs and may stay all proceedings until the security is given.”

Section 390 was repealed on 1st June, 2015, through a combination of s.4 and Sch.2, Pt.1 of the Act of 2014, and reg. 3 of the Companies Act 2014 (Commencement) Order 2015. Section 52 of the Act of 2014, the replacement provision for s.390, now provides 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.”

Below is an excellent summary of the applicable law given by Mr Justice Barrett. He references the Connaughton and Oltech cases as the leading cases in the jurisdiction which “when read together, provide a quite comprehensive account of the current principles and practices that inform s.390 (and now s.52) applications. Combined into one, stripped of all commentary, and presented in what the court hopes is a coherent sequence, it appears to the court that those principles and practices can be summarised as follows”.

The court did so having heard from counsel on both sides who had presented the court with a substantial body of case law supporting their cases. The judge said “as always, counsel have laboured in the vineyard and plucked a rich crop of case-law from the ever-fruitful vine of precedent to guide the court in reaching its decision“.

It was the cases of Connaughton Road Construction Ltd v. Laing O’Rourke Ireland Ltd [2009] IEHC 7 and Oltech (Systems) Limited v. Olivetti UK Limited [2012] IEHC 512 that the court considered as leading.

The following extract of the judgment is very helpful to practitioners and sets out the guidelines that the court will adopt in security for costs applications.

“Part 7: Connaughton and Oltech SummarisedA. Overview.

24. The court has already indicated above that it considers that the decisions in Connaughton and Oltech, when read together, provide a quite comprehensive account of the current principles and practices that inform s.390 (and now s.52) applications. Combined into one, stripped of all commentary, and presented in what the court hopes is a coherent sequence, it appears to the court that those principles and practices can be summarised as follows.

B. Connaughton and Oltech Summarised.25. 1. GENERAL APPROACH

2. BASIC REQUIREMENTS3. SPECIAL CIRCUMSTANCES
i. Generalii. Alleged Wrong Engendered

Inability to meet Costs?

iii. Delay

iv. Important point of law

v. Adequately funded as co-plaintiff

vi. Constitution

vii. Point of fact of national importance

viii. Counterclaimants

4. QUANTUM

5. COMPANY WITH NO SIGNIFICANT NET ASSETS

BEFORE EVENTS IN ISSUE

6. AMOUNT OF SECURITY1. GENERAL APPROACH

(1) To obtain security for costs, an initial onus rests on the moving party to establish (i) a prima facie defence to the plaintiff’s claim, and (ii) that the plaintiff will not be able to pay the moving party’s costs if the moving party be successful. [Connaughton, para.2.1].

(2) If (1)(i) and (1)(ii) are established, security ought to be ordered unless it can be shown there are special circumstances in the case which ought to cause the court to exercise its discretion not to make such order. [Connaughton, para.2.1].

(3) It is no part of the task of a court on an application for security for costs to take a view as to who ought to win at trial. No assessment of liability ought to be made, much less any decision beyond stating whether there is a reasonable prospect of a defence succeeding at trial. [Oltech, paras.4-5].

(4) The task for the court, rather than to attempt to decide the case, is to apply the tests mandated by case-law. [Oltech, para.5].

(5) Section 390 (now s.52) expressly envisions that an impecunious plaintiff company may be required to give security for costs and that in many cases this may mean the end of an action, unless someone other than the company is prepared to put up the security. [Oltech, para.7].

(6) To refrain from granting an order for security, save in certain exceptional (and allowed) circumstances, just because it might stifle the plaintiff company’s actions would render the section nugatory. [Oltech, para.7].

2. BASIC REQUIREMENTS

(7) There are two basic requirements to meet before the discretion of the court to order security for costs may be invoked: (i) the defendant must show it has a reasonably sustainable, i.e.prima facie, defence. Second, a defendant must show the plaintiff company is either (i) insolvent, or (ii) so financially challenged that it will not be able to pay the defendant’s costs, if the defendant is successful. [Oltech, para.8].

(8) The reference to a prima facie defence does not just mean a barely arguable defence, since experience suggests that there is little that cannot be argued. [Oltech, para.8].

(9) A defendant seeking to establish a prima facie defence based on fact must objectively demonstrate the existence of evidence upon which he will rely to establish those facts. Mere assertion will not suffice. [Oltech, para.9].

(10) If such objective evidence as is referred to in (9) is adduced, the defendant is entitled to have the court determine whether or not it has established a prima facie defence (on the assumption such evidence will be accepted at trial). [Oltech, para.9].

(11) A defendant such as is referred to in (9) and (10) must establish an arguable legal basis for the inferences/conclusions which it submits the court may arrive at based on such evidence. [Oltech, para.9].

(12) Section 390 (now s.52) contains no reference to the establishment of a prima facie defence. However, it requires a company to provide security where it would be unable to pay the costs of a successful defendant. It is therefore relevant to consider whether or not a defendant has a prima facie defence. Unless the defendant has a prima facie defence, the purpose of s.390 (s.52) would not come into play. [Oltech, para.9].

(13) A reasonably sustainable defence may be one in fact or in law. If in law, then even an affidavit is not required on an application for security for costs. [Oltech, para.10].

(14) The essence of the order for security for costs (or not) is to advance the ends of justice, not to hinder them. It is for a court on such an application to consider, and to balance, the interests of the plaintiff company and those of the defendant in a fair and proportionate manner. [Oltech, para.16].

3. SPECIAL CIRCUMSTANCES

i. General

(15) There is a multitude of special circumstances identified in case-law as allowing the court in its discretion to decline to make an order for security for costs. The terms of this discretion are wide and cannot be regarded as finally settled. [Oltech, para.15].

(16) The burden of proof of special factors rests on the plaintiff company once the defendant has shown a prima facie defence. [Oltech, para.16].

(17) Special circumstances exist in order to enable cases to proceed even where a defence is reasonably open despite the inability to pay such a costs order by the plaintiff. This is because the justice of a case may require that notwithstanding that the defendant has a reasonable defence and that the plaintiff company is financially challenged the case ought to proceed. [Oltech, para.16].

(18) The requirement that special circumstances be established by a plaintiff company, does not have to be complied with in any particular way. [Connaughton, para.4.11].

ii. Alleged Wrong Engendered Inability to meet Costs?

(19) Where it is asserted that the plaintiff’s inability to discharge the defendant’s costs of successfully defending the action flow from the wrong allegedly committed by same, (a) the onus of establishing this rests on the plaintiff, and (b) the obligation of the plaintiff in such circumstances is to establish a prima facie case that its inability to pay the defendant’s costs of the defendant, in the event the defendant were successful, stems from the wrongdoing alleged in the overall proceedings. [Connaughton, para.2.3].

(20) For a plaintiff to be correct that his inability to pay stems from the wrongdoing asserted, four propositions, it seems, must necessarily be true: (i) that there was an actionable wrong on the part of the defendant; (ii) that there is a causal connection between the actionable wrongdoing and one or more practical consequences for the plaintiff; (iii) that the consequence(s) referred to in (ii) have given rise to some level of loss in the hands of the plaintiff which is recoverable as a matter of law; and (iv) that the loss concerned is sufficient to make a difference between the plaintiff being in a position to meet the costs of the defendant in the event that the defendant should succeed. [Connaughton, para. 3.4]. Each of these steps falls to be established on a prima facie basis only. [Connaughton, para.3.5].

(21) As part of the overall question of assessing whether it has been shown, on a prima facie basis, that a plaintiff’s inability to pay potential costs is due to the wrongdoing asserted, the court must look at all the circumstances asserted on behalf of the parties. [Connaughton, para.3.10].

(22) Despite (18), when it comes to this form of special circumstance, i.e. that a plaintiff’s inability to pay potential costs is due to the wrongdoing asserted, in normal circumstances one would expect that a plaintiff company would put before the court (i) some evidence of its current financial position, (ii) some account of its financial position prior to the incident giving rise to the alleged wrongdoing, and (iii) some evidence to suggest that all, or a sufficient portion of, the difference in position can be attributed to the wrongful actions of the defendant. [Connaughton, para.4.11].

(23) If a plaintiff company seeks, without presenting approximate accounts, to assert that all of its current financial difficulties are attributable to a defendant’s alleged wrongdoing (and thus that there is, in effect, an equivalence between the prima facie scale of the alleged wrongdoing and the said financial difficulties), it would be necessary (i) in addition to showing that the plaintiff company would have made profits in the first place, to demonstrate (ii) a prima facie basis for assuming that no other causes could be said to have generated the current inability to pay costs. [Connaughton, para.4.14].

iii. Delay

(24) An order for security for costs may be refused where there has been delay in bringing the application for such order. [Oltech, para.19].

(25) When it comes to instances of alleged delay: (i) any court considering delay as grounds for refusing an order for security for costs would need to analyse (a) the nature of the delay in light of the means of knowledge of the moving party (as to what that party knew or ought reasonably to have known), and (b) assess its impact on the course of the case in order to decide whether the order ought to be refused; (ii) the reason for the delay must be important; (iii) delay as a reason for refusing to make an order can be very important where the plaintiff company has acted to its detriment in incurring a level of costs that it would not have incurred had it known it would have been required to provide security. [Oltech, para.19].

iv. Important point of law

(26) An order for security for costs may be refused where a point of law arises for decision in the case that is so important that the process of the case should not be interrupted. [Oltech, para.20].

(27) The point of law in issue must not simply be any ordinary point of law that might be argued before the courts on a month-to-month basis; it must transcend the interests of the parties and require as a matter of public interest that it be decided for the benefit of the community as a whole. [Oltech, para.20].

v. Adequately funded as co-plaintiff

(28) Where there is a corporation as plaintiff and an individual as co-plaintiff, both are making the same factual case and the corporation is insolvent but the natural person is adequately funded to meet an eventual costs order against her or him, the order may be refused because the defendant, if successful, is not going to be impeded in recovering costs. [Oltech, para.21].

(29) The same point may apply where (a) where two corporations are co-plaintiffs, and one is adequately resourced and the other not, and (b) where there are two plaintiffs in similar circumstances, one within the European Union and the other not. [Oltech, para.21].

vi. Constitution

(30) The constitutional (though not absolute) entitlement of citizens to access to the courts applies to defendants/respondents as well as plaintiffs. A defendant ought not to be forced to forego (though one would imagine that generally a defendant would be delighted to forego) defending an action against which there is a stateable defence on the merits, out of the fear or being bankrupted by having to incur substantial costs which will be irrecoverable from an insolvent plaintiff. [Oltech, para.21].

vii. Point of fact of national importance

(31) A point of fact of national importance can arise in litigation that is inescapably central to a case and which will settle a concern of great public moment. Such an issue will arise rarely. Litigation between private entities is by nature compensatory or restorative. It is only in the most extreme circumstances that any fact in contention between litigants can keenly affect the public interest. Where such does present, this can be a special factor in refusing to order security for costs. [Oltech, para.22]. [The court notes in passing the somewhat more nuanced approach adopted in this regard by the court in Dublin Waterworld, at para.34 of its judgment, quoted elsewhere above].

viii. Counterclaimants

(32) A defendant may also be a counterclaimant on a subject-matter that identifies as the plaintiff’s defence the same issues that the plaintiff company seeks to plead against the defendant. This could bring about the undesirable situation where an impecunious plaintiff could have its claim frustrated by the granting of an order for security for costs, yet would fall to defend the counterclaim on the very facts in issue in the claim. In such instances, the order for security may be granted on the giving of an undertaking that the defendant’s counterclaim will not be pursued. [Oltech, para.23]. A further undertaking may be sought that the defendant will consent to dismissal of its counterclaim, should the plaintiff fail to lodge the sum ordered by way of security. [Oltech, para.27]. Of course, if the trial of a counterclaim would be substantially unaffected by the absence of a plaintiff’s allegation against the defendant, there is no reason for the counterclaim not to proceed. [Oltech, para.25].

4. QUANTUM

(33) It is not correct that a court should have no regard to questions of quantum in a s.52 (s.390) application. A plaintiff must at least establish a prima facie case that the quantum of damages which he might obtain in the event that he is successful is of an order of magnitude sufficient to reverse the current financial position whereby the plaintiff company would be unable to pay the defendant’s costs in the event that the defendant was successful. [Connaughton, para.3.6].

(34) It does not flow from (33) that it is necessary for a plaintiff to establish a precise quantum of damages which it might recover in the event of it being successful. But it must show, at least on a prima facie basis, that the losses allegedly attributable to the defendant’s wrongdoing are sufficiently large to justify a finding that those losses can explain, by themselves, the plaintiff’s inability to pay costs. [Connaughton, para.3.6].

5. COMPANY WITH NO SIGNIFICANT NET ASSETS BEFORE EVENTS IN ISSUE

(35) When it comes to a plaintiff company which had no significant net assets prior to the events which gave rise to the proceedings, there are no special considerations to be given to such a company one way or the other. [Connaughton, para.3.8].

(36) Unless such a plaintiff company (as referred to in (35)) can establish, on a prima facie basis that, were it not for the wrongdoing asserted, (i) it not only would not have lost the money, but (ii) would have made sufficient profits so as to be in funds sufficient to pay the likely costs of a successful defendant, then it will have been unable to show that its inability to pay costs is due to the wrongdoing at the heart of the proceedings. [Connaughton, paras. 3.8–3.9].

6. AMOUNT OF SECURITY

(37) If an order for security for costs is to be made, it must be for the full sum of the estimated costs: the court has no discretion to award merely a percentage. [Oltech, para.13].

(38) The courts have a discretion as to the awarding of costs; the lure of over-proofing can be factored into the court’s estimation of costs (and hence the level of order for security made). [Oltech, para.13]”.

I the case at hand where the Defendant had sought a security of costs order against the Pplaintiff the court found that Euro Safety had:-
“(i) established on a prima facie basis that its inability to discharge FÁS’ costs of successfully defending these proceedings (if FÁS so succeeds) flows from the wrong allegedly committed by FÁS; and

(ii) made detailed and serious allegations of misfeasance in public office against FÁS (all of which allegations are denied), rendering this a case where, for the reasons stated above, an airing of, and adjudication upon, those detailed allegations is a matter of public moment and interest; and
(2) to a lesser but still significant extent, the notable delay that FÁS has manifested in bringing the present application”.The court declined to grant the order for security for costs sought of it by FÁS.

The judgment is here

General Notices: 23rd March 2016 P.I. Direction

Practitioners note the recent direction of the President of the High Court that allows personal injury assessment cases that would normally be heard in Cork, Limerick and Sligo to be transferred to Dublin, if both parties consent.

See wording below.

Direction

1. I, Peter Kelly, President of the High Court pursuant to the provisions of Order 36, rule 2(c) of the Rules of the Superior Courts (Trial) 2012 (S.I. No. 355 of 2012), hereby direct that the trials of personal injuries cases consisting only of assessments of damages which would, but for this direction, take place at Cork, Limerick and Sligo, shall take place at Dublin, provided that all parties to such cases consent.
2. This direction applies to assessments of damages which have already been set down for trial and those which have yet to be set down.
3. Those cases which have yet to be set down shall continue to be set down for a venue in accordance with Order 36, rule 2(b) of the Rules of the Superior Courts.
4. Applications to transfer appropriate cases to Dublin and for the allocation of a hearing date may be made each Monday in term in the Master’s Court before the Deputy Master at 10.30 a.m.

Dated the 23rd day of March, 2016

Peter Kelly,
President of the High Court

A consultative case stated by Judge Patrick Durcan of Ennis District Court sought clarification from the High Court on whether exemptions that applied to vehicles involved in road maintenance and control applied in the instant case where the owner of the vehicle was prosecuted for allowing a driver of a haulage vehicle to exceed permitted hours of driving without a break.

Offences

The accused was charged with two offences as follows:-

(a) That you did on the 29th day of August, 2012 being the operator and owner of a motor vehicle registration number 07TN1545 and the employer of Alan Hayes, the driver of the said vehicle did cause or purport to authorise the said driver to contravene the provisions of Article 6(1) of Council Regulation (EC) No. 561/06 of the 15th of May, 2006 in that the day driving period was exceeded.

Contrary to regulation 41(2)(b) of the European Communities (Road Transport) (Working Conditions and Road Safety) Regulations 2008 made under section 3 of the European Communities Act, 1972 as amended.

(b) That you did on the 29th day of August, 2012 being the operator and owner of a motor vehicle registration number 07TN1545 and the employer of Alan Hayes, the driver of the said vehicle did cause or purport to authorise the said driver to fail to take an uninterrupted break of at least forty-five minutes after four and half hours driving in contravention of Article 7 of Council Regulation (EC) No. 561/06 of the 15th of May, 2006.

Contrary to regulation 41(2)(b) of the European Communities (Road Transport) (Working Conditions and Road Safety) Regulations 2008 made under section 3 of the European Communities Act, 1972 as amended.”

The Facts

The facts were that the vehicle in issue was stopped by Ennis Traffic Corps 29th August, 2012 during a road side check point. On approaching the stationary vehicle the prosecutor examined the tachograph record and interviewed the driver. The tachograph recorded that the driver had driven for eleven hours and twenty-three minutes covering a distance of 697km up to the point where he was stopped at the road side check point. The evidence indicated that the only break taken by the driver over the course of the day was for a period of thirty-one minutes from 7:26hrs to 17:57hrs.

It was accepted that when the accused’s lorry arrived at the locus of the road works, it joined a queue of vehicles which would each in turn be pushed along by a Batelli Paver machine which received asphalt from the accused’s vehicle, at a rate controlled by the Batelli Paver. The process of resurfacing was then completed by steam roller following behind after which the accused’s vehicle would return to base to pick up a further load.

The Issue to be determined

The District Judge posed the following question for the opinion of the High Court:

“Was the accused’s vehicle on the date of the alleged offence being used in connection with road maintenance so as to entitle it to avail of the exemption provided in Article 5(1)(h) of the European Communities (Road Transport) (Working Conditions and Road Safety) Regulations 2008?”

The Legislative framework

Article 6 of the Regulations provides that the daily driving time shall not exceed nine hours.

Article 7 provides that after a driving period of four and half hours, a driver shall take an uninterrupted break of not less than forty-five minutes, unless he takes a rest period.

The 2008 Regulations which transpose the 2006 Regulations into national law provide at regulation 41(2)(b) that a person commits an offence if the person causes, or purports to authorise, another person who is employed by the person, or is under the person’s control, to contravene, inter alia, articles 6 and 7. The penalty for so doing as provided by regulation 52 is on summary conviction a fine not exceeding €5,000 or imprisonment for a term not exceeding 6 months or both. Regulation 53 empowers the prosecutor to prosecute offences under the Regulations.

Article 5(1)(h) provides, inter alia, that certain categories of vehicles are exempted from articles 6 and 7.

These include a vehicle used in connection with road maintenance and control.

The issue was whether, on the agreed facts, the vehicle in question was being used in connection with road maintenance and control. Regulation 5 constitutes an exemption from the operation of the 2006 Regulations and section 53(3) provides that in proceedings for an offence under the 2008 Regulations, it is to be presumed until the contrary is proved that none of the exemptions contained in Regulation 5 apply. Therefore the onus of establishing the exemption rested on the accused.

Relevant case law

Mr Justice Noonan noted that a similar issue was considered by the European Court of Justice in Karuse AS v. Politsei-ja Piirivalveamet (C-222 12 A 13th March, 2014). This was a reference from the Estonian Courts. The facts were that during a roadside inspection, the relevant authority stopped a lorry owned by Karuse which was carrying a load of gravel to a road maintenance works site. The regulatory breach complained of in that case was not the hours of driving, but rather the failure to have the lorry equipped with a tachograph. Karuse pleaded that it was entitled to the exemption. In the course of the judgment, the Court said:-

“Firstly, as regards whether the transport at issue in the main proceedings was exclusive, it is apparent from the file that, in the main proceedings, the gravel was intended solely for use in road maintenance works. It follows that that transport was carried out wholly and exclusively in connection with road maintenance, within the meaning of article 13(1)(h) of Regulation No. 561/2006.

Secondly, as regards whether the transport at issue was not ancillary to the road maintenance works, the view must be taken, for that to be the case, that the vehicle concerned must be used directly to spread the gravel on the damaged sections of the roads… However, the mere transport of gravel intended for use in road maintenance works cannot be regarded as being covered by the derogation laid down in article 13(1)(h) of Regulation No. 561/2006.”

The ECJ, following its earlier decision in British Gas, held that the exemption could only apply to vehicles used wholly and exclusively in connection with road maintenance and control and not to vehicles used wholly or partly for that purpose. The prosecutor submitted to the Irish High Court in this case, the primary use of the vehicle was for road transport and the actual laying of the tarmac was merely ancillary to that purpose.

The ECJ in Karuse continued:-

“In addition, although Regulation No. 561/2006 does not provide that the vehicles used for road maintenance and monitoring must be used only near to the road maintenance work site in order to benefit from the deregulation laid down in article 13(1)(h) of that Regulation, that is nonetheless a factor which must be taken into consideration for the purposes of assessing the ancillary nature of the transport as regards those works (see by analogy Morzek and Jager paragraph 12).

Vehicles which travel for a short period of time and over a limited distance may be exempted from the obligation to be equipped with a tachograph without that undermining the objectives of Regulation No. 561/2006 as regards the improvement of working conditions and road safety.

However, an extension of the deregulation provided for in article 13(1)(h) of that Regulation to vehicles which travel over a long distance would have the effect that the drivers of such vehicles maybe induced to drive long hours without a rest, which would be likely to undermine those objectives (see comment to that effect, Seeger, paragraph 36) …

In the present case, it is apparent from the decision for reference that the vehicle in question was stopped approximately 42km from the head office of Karuse and approximately 10km from the site of the works. However, the distance between the site of those works and the loading site has not been given.

Consequently, it is for the referring court, taking into account all the factors in the dispute before it and the above mentioned considerations concerning the geographical and climatic conditions prevailing in the region in question, to assess whether the journey of the vehicle at issue meets the requirement of limited distance and short period of time in order that the transport in question does not undermine the objectives pursued by Regulation No. 561/2006.”

The application of the law

Noonan J noted that in Karuse, as in British Gas, the court came to the conclusion that the exemption contended for could be justified in certain circumstances where the relevant vehicle was travelling a limited distance and for a short period of time. The purpose underlying the regulation would otherwise be frustrated.

The Judge noted that in this case stated the facts were somewhat different holding:-

“The “limited distance” requirement can have no bearing in the present case where the regulations themselves impose no limit as to the distance which may be driven. All that is relevant is the period of time which under article 6 may be up to ten hours provided a break is taken after four and half, as per article 7. Neither of these periods could be reasonably described as being of short duration. Consequently, it seems to me that the caveat stipulated in Karuse must be approached with some caution as it is difficult to see how it could logically be applied to the facts of this particular case.

It seems to me that applying Karuse to the facts of the present case, it is clear that the accused’s vehicle was being used in connection with road maintenance and control at all material times. Whether the actual transportation formed the greater or lesser part of the time seems to me to be largely irrelevant. For example, the regulation does not provide that the vehicle must be “primarily” or “principally” used in connection with road maintenance and control. It either is or it is not. In this case it clearly was”.

The prosecutor had argued that the jurisprudence of the ECJ establishes that derogations or exemptions are to be strictly construed so as to not to frustrate the purpose underlying the particular regulation, and in this case if the exemption applied it would have that effect given the length of time spent driving and the distance driven. Mr Justice Noonan reiterated that the distance was immaterial because there could be no complaint about it if it was driven within two consecutive four and half hour periods. What remained therefore is the time duration.

The Court noted the duty of the prosecution in a criminal law case saying “one cannot lose sight of the fact that this is a criminal prosecution and if there is ambiguity in the relevant provision relied upon by the prosecutor, any such ambiguity must be construed in favour of the accused. There are many cases in which penal statutes have been found to be unconstitutional on the grounds of vagueness and uncertainty – see for example Dokie v DPP [2010] IEHC 110 and the judgment of Hogan J. in Douglas v DPP [2013] IEHC 343.

As the exemption applies in this case, the question then becomes at what point past four and half hours does the exemption cease to apply? Does it apply at five hours, six hours, seven hours and so forth? And more importantly, how can an accused person know when he is breaking the law? If the legislature wishes to render particular conduct penal, it must do so with sufficient particularity to enable every citizen to know what he is and is not lawfully permitted to do. It would for example be perfectly open to the legislature to say that where the exemption applies, the time periods specified may be increased to identified limits. They have not done so”.

The Decision

The Court found that the exemption did apply.

“In those circumstances I am satisfied that the exemption applies to the accused in this case and I propose answering the question posed by the learned district judge in the affirmative”.

Click here link to the Judgment