Security for Costs Ordered Against Non-Resident Personal Plaintiff

The High Court has addressed whether security for costs may be ordered against a non-resident personal plaintiff. In doing so, the court had to rule on a number of special circumstances relied on by the plaintiff to avoid being required to provide security. Our Commercial Disputes team examines the decision.

Michael Flatley, the well-known entertainer/entrepreneur, has been involved in high profile litigation concerning alleged defects arising out of remediation works at his Castlehyde mansion. Applications were made to the High Court seeking security for costs against him. The decision reached confirms that personal plaintiffs are not required to provide security for costs unless resident outside Ireland, the EU or EFTA State. Since Mr Flatley was resident in Monaco, and was therefore not resident in an EU or EFTA State, the court had to consider whether special circumstances meant the security order should not be made. The claimed special circumstances were all rejected and security for costs was ultimately ordered against Mr Flatley.

Background

The dispute at hand related to remedial works undertaken at Mr Flatley’s mansion at Castlehyde in Cork. He alleged that the works carried out by the defendant parties made the property uninhabitable. He sued those parties which he alleged bore responsibility, chief among them the company that undertook the works and the relevant insurers. Given the nature of the dispute, which is likely to involve a lengthy trial, the legal costs would be significant. This prompted some of the defendants to raise the issue of obtaining security for costs against Mr Flatley. This ultimately led to the issuing of two motions by some of the defendants. The High Court judgment addressed both motions and required Mr Flatley to provide security for costs.[1]

Decision

The Court noted at the outset that the applications here involved some unusual aspects. The plaintiff was a natural person who maintained he could pay any and all costs that might be ordered against him. Whether he was ordinarily resident in the jurisdiction and the extent of his assets here was disputed. Issues were also raised about delay in bringing the applications and alleged prejudice to Mr Flatley.

Security for costs cannot usually be ordered against a personal plaintiff ordinarily resident in Ireland or an EU or EFTA Member State. However, Ms Justice Roberts noted that security would generally be granted where the plaintiff was resident outside the jurisdiction and the defendant can show an arguable, prima facie defence.[2] The rationale for security for costs against non-resident plaintiffs was based on the practical difficulty in recovering costs if there were no assets within Ireland to enforce against.[3] That reason, she said, “is designed to ensure that defendants do not face jurisdictional obstacles in enforcing costs orders in their favour.” However, special circumstances may require a different outcome if established.

It was not disputed that the defendants had met the threshold of a prima facie defence, so the sole focus of the threshold test was whether Mr Flatley was ordinarily resident outside of Ireland, or an EU or EFTA Member State. At the hearing, the uncontroverted evidence was that he was residing in Monaco, with a Monaco address given in the pleadings delivered and affidavits sworn by Mr Flatley. The evidence was that he had lived there since at least 2014 and that he stayed in Castlehyde whenever he was in Ireland. Monaco, however, was not in the EU or subject to the Lugano Convention. This meant there was a jurisdictional basis to order security for costs. Although it was indicated that Mr Flatley would be moving to Ireland, and the defendants had previously been advised he would move to Paris or Valencia, the Court distinguished between temporary residence and ordinary (equivalent to ‘usual’) residence.[4] Holding an Irish passport was not enough to establish ordinary residence. Nor was it relevant that Mr Flatley had previously lived in Ireland or intended to return in the future. Ms Justice Roberts concluded on this point that “unless he in fact returns to live in Ireland on a long term basis he cannot be said to be ordinarily resident here.”

She also rejected Mr Flatley’s argument that, if he was resident outside Ireland or the EU/EFTA, this was due to the defendants’ actions, which he said had made Castlehyde uninhabitable. Ms Justice Roberts noted that the alleged actions did not prevent him from living in other homes he owned within the EU.

Special circumstances

She then considered the special circumstances relied on by Mr Flatley, as follows:

• Mr Flatley had expressed an intention to live in Ireland permanently. Ms Justice Roberts did not believe that the expression of a general intention to return to Ireland permanently was a basis to refuse an order for security for costs. She noted that Mr Flatley could have returned at any time, irrespective of the status of Castlehyde.

• Undue and prejudicial delay by the defendants in bringing the applications. Although Ms Justice Roberts accepted delay could be a special circumstance to justify not ordering security for costs, here the defendants had written regarding security for costs during the spring of 2024, shortly after receiving the Statement of Claim. Accordingly, “the defendants were prompt in flagging the possibility of seeking security for costs”. Mr Flatley was on notice of that and progressed his litigation with that knowledge. He had not identified any specific prejudice or anything he would have done differently had the motions issued earlier.

• Mr Flatley had ample assets in the jurisdiction to meet any award of costs. Ms Justice Roberts was not satisfied on the evidence before her that Mr Flatley’s rights to Lord of the Dance or Flatley Whiskey constituted tangible assets available to him within the jurisdiction. Concerning Castlehyde itself, various valuations with significant variations between them were put forward. Ms Justice Roberts considered the higher valuation put forward on behalf of Mr Flatley to be an outlier and discounted it, preferring the more modest valuations put forward by the defendants. Based on those valuations and taking account of the secured debt on the property, the evidence was that the residual value could be eclipsed by the likely costs.

• An order for security would inhibit Mr Flatley’s right of access to the courts. Ms Justice Roberts considered this to be inconsistent with Mr Flatley’s “insistence” that he was a man of means in a position to discharge any costs order made.

• Mr Flatley was a man of his word and would pay any costs if so ordered. In the context of a non-resident individual, ordering security was a procedural remedy potentially available against similar plaintiffs. Whether a plaintiff would or would not pay was not a necessary proof and there was no attack or questioning of character in making an order for security for costs.

Ms Justice Roberts therefore determined that Mr Flatley had failed to make out any of the special circumstances claimed. She was therefore satisfied to make an order directing Mr Flatley to provide security for costs. Directions were made regarding submissions and a subsequent hearing date was set for the quantum and conditions of the security, although it was noted that the parties were free to agree the terms between themselves. Ultimately, in a subsequent hearing, the Court directed that Mr Flatley should pay security for costs in the amount of €1.1 million into court. However, an appeal has since issued so the question of security in Mr Flatley’s case is likely to be revisited by the Court of Appeal in due course.

Conclusion

The decision is a stark reminder that security for costs is available against personal plaintiffs not resident in Ireland or an EU/EFTA Member State. The judgment further demonstrates that a common sense and practical approach is taken to a personal plaintiff’s ‘ordinary residence’ for these applications. It is also clear that establishing special circumstances so as to avoid security for costs can be difficult to make out, although much will depend on the position of the specific individual plaintiff and the applicable special circumstances they intend to rely on. The position of the Court of Appeal regarding security for costs in this case remains to be seen but it potentially may yield important statements of principle.

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[1] Flatley v Austin Newport Group Limited & Others [2025] IEHC 461

[2] Order 29 of the Rules of the Superior Courts; Tahboub v The Joint Arab-Irish Chamber of Commerce [2024] IEHC 616.

[3] Per Clarke J. in Harlequin Property (SVG) Ltd v. O’Halloran [2012] IEHC 13

[4] Citing Barret J. in Green v Highcross Bars Ltd [2015] IEHC 654