Ireland: Applicable Test For Ordering Of Security For Costs

Last Updated: 10 February 2014
Article by Gearóid Carey


Although an award of costs is at the discretion of the court,1 the general underlying principle is that costs should follow the event, such that the successful party should be awarded its costs against the unsuccessful party.2 However, an award of costs may, in practical terms, be of little or no value if the unsuccessful party is impecunious. Since a defendant has little or no control over whether proceedings issue against it, in order to shield defendants from spurious litigation and irrecoverable costs awards against impecunious plaintiffs, a defendant can seek security for its costs as against the plaintiff. A recent case3 considered the test applicable to the ordering of security for costs.


The defendant was a quarry supplier of concrete, stone, sand, gravel and related products. The plaintiff claimed that the defendant had acted negligently and was in breach of contract in supplying stone, which allegedly contained pyrite and was allegedly used in a development undertaken by the plaintiff. The plaintiff sought an indemnity and damages from the defendant arising from alleged pyrite-induced damage.

The defendant brought an application seeking security for its costs as against the plaintiff. Although there is a general jurisdiction to grant security for costs in the relevant court rules, the application for security for costs against the plaintiff company was founded on Section 390 of the Companies Act 1963, which provides that:

"where a limited company is plaintiff in any action or other legal proceedings, 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."

The court noted that the central elements in such an application for security for costs are for the applicant (the defendant) to show that it has a prima facie defence to the plaintiff's claim and to satisfy the court that the plaintiff would be unable to pay the defendant's costs in the event that the defendant succeeded at trial. If the defendant can meet these requirements, security for costs will usually be granted, absent special circumstances.

In this case, the court observed that the plaintiff openly admitted that it would be unable to meet the defendant's costs if the defendant succeeded at trial. Accordingly, the question to be determined as part of the application was whether the defendant could show it had a prima facie defence to the plaintiff's claim. Although the defendant had put forward extensive affidavits and exhibits in support of its denial of liability, the court found the plaintiff's affidavit evidence to be "impressive" in that it "meticulously deals with the various aspects as set out on the defendant's behalf and the basis on which they are disputed on the plaintiff's behalf".


In considering the applicable test, the court noted that it had been considered extensively in Tribune Newspapers (in receivership) v Associated Newspapers Ireland,4 where a review of previous authorities resulted in the following conclusion:

"...both the Supreme and High Courts have used slightly different terminology to describe the nature of the defence which must be established on an application for security for costs. Whilst there is generic use of prima facie defence there is it appears also references, apparently in the alternative, to good defence, real defence or even to the plaintiff's case as being required to be unanswerable, with the consequential impact on the defendant's defence. What appears from the judgments, in a manner similar to the judgments in relation to summary judgement [cases], is that a defendant seeking to establish a prima facie defence which is based on fact must objectively demonstrate the existence of evidence upon which he will rely to establish these facts. Mere assertion will not suffice. This appears to me also to follow from the reference in the Superior Court Rules to a defence on the merits. If such evidence is adduced then the defendant is entitled to have the court determine whether or not it has established a prima facie defence upon an assumption that such evidence will be accepted at trial. Further, the defendant must establish an arguable legal basis for the inferences or conclusions which it submits the court may arrive at based upon such evidence... in my judgment, what is required for a defendant seeking to establish a prima facie defence is to objectively demonstrate the existence of admissible evidence and relevant arguable legal submissions applicable thereto which, if accepted by the trial judge, provide a defence to the plaintiff's claim. I propose applying this test. Further, it appears to me that such a test is supported by s. 390 as enacted by the Oireachtas [Parliament], which I am applying in this application for security for costs. The section as enacted contains no express reference to the establishment of a prima facie defence. The application of the prima facie defence test is applicable for the purposes of this section, in the sense that the section requires the company to provide security where it would be unable to pay the costs of the defendant if successful in its defence. It is therefore relevant to consider that, or whether or not, a defendant has a prima facie defence in the sense that he might succeed but [this jurisdiction] does not warrant the imposition of a higher threshold. Unless the defendant has a prima facie defence the purpose of this section would not come into play."(5)

The court expressed its agreement with this statement of the law. In doing so, it found the evidence put forward by the plaintiff to be more compelling than that of the defendant. In particular, it observed that the content of the defendant's affidavits were matters of assertion and, in order to set out a prima facie defence the defendant should have carried out an inspection of the properties with the relevant necessary experts to give credence to the assertions. On that basis, the court found that the defendant had not objectively demonstrated the evidence on which it would rely to establish a prima facie defence. Accordingly, the second essential proof required for an order for security for costs had not been met and the motion was refused.


The decision represents a useful restatement of the requirement that in an application for security for costs the defendant must show that it has a prima facie defence to the claim advanced against it. The objective of protecting a defendant from incurring irrecoverable costs arising from unmeritorious claims could not be met if a threshold of a prima facie defence were not required as part of the test, as recognised in Tribune Newspapers. Accordingly, in considering an application for security for costs, a defendant applicant should think carefully about how it will demonstrate that it has a prima facie defence, particularly by reference to the evidence.


1. Order 99, Rule 1(1), Rules of the Superior Courts.

2. Order 99, Rule 1(4), Rules of the Superior Courts.

3. Marchbury Properties Ltd v Murphy Concrete Limited [2013] IEHC 525.

4. Unreported, High Court, March 25 2011.

5. Ibid.

This article first appeared in ILO magazine in January 2014.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.