etorzl leHt slz
THE HIGH COURT
[2009 No. 861 Sl
BETWEEN
RALF DITT
PLAINTIFF
AND
MICHAEL KROHNE
DEFENDANT
JUDGMENT of O'NeilI J. delivered on the 20th dav of Julv.2012
1. In this motion, the defendant seeks pursuant to O.29 of the Rules of the
Superior Courts, an order directing the plaintiffto provide security for costs of the
action.
2. In the action, the plaintiff, by way of summary summons, seeks to recover
from the defendant a sum of €109,638.03 as money which the plaintiff claims is owed
by the defendant to the plaintiff on foot of an agreement between the plaintiff and the
defendant in respect of work done and professional services rendered by the plaintiff
at the defendant's request. The professional services in question were architectural
services allegedly provided by the plaintiffto the defendant in respect of properties
owned by the defendant in lreland, specifically a dwelling project for the defendant at
Mageragh, Mount Shannon, County Clare, and a property development of the
defendant at Rahena Moore, Ogonnelloe, County Clare, andaproperty at 3, Moynoe,
Scariff County Clare.
3. The defendant fully contests the plaintiff s claims and avers that he has a full
defence to these claims. The summary proceedings were remitted for plenary hearing
and a statement of claim was delivered by the plaintiff on l4th March 20ll,a defence
2
was delivered on 246 May 2}ll,and a reply to that defence was delivered on 12fr
July 2011.
4. Subsequently, by notice of motion dated 7tr June z}ll,and retumable for lSth
July 201 l, the defendant sought an order for security for costs pursuant to O.29 of the
Rules of the Superior Courts and a further order staying any further steps in the
proceedings until that security was provided.
5. The affidavits filed in support of and opposing the motion reveal that the
plaintiff is a German national and EU citizen, that he resided in Germany since birth,
and worked in Germany and lreland. The plaintiff is now resident in Switzerland and
does not have any valuable assets apart from a boat valued at between €5,000 and
€8,000, which is situated at Mount Shannon Harbour, County Clare. The plaintiff
also has a lease of a residential property at 2, Moyne Marina, Scariff, County Clare.
The plaintiff is currently employed by Zurich Insurance Company as a project
manager in corporate real estate and facility management and earns €78,000 per
annum gross. The leasehold interest which the plaintiffhas in the property in County
Clare does not appear to have any capital value.
6, Order 29, rules I to 4 of the Rules of the Superior Courts 1986 make provision
for the granting of orders for security for costs as follows:
"1. l[hen a party shall require securityfor costs from another party, he shall
be at liberty to apply by notice to the partyfor such security; and in case the
latter shall not, withinforty-eight hours after service thereof, undertake by
notice to comply therewith, the party requiring the security shall be at
liberty to apply to the Court for an order that the said party do furnish such
security.
J
2. A defendant shall not be entitled to an order for security for costs solely
on the ground that the plaintiffresides in Northern lreland.
3. No defendant shall be entitled to an orderfor securityfor costs by reason
of any plaintiff being resident out of the jurisdiction of the Court, unless
upon a satisfactory ffidavit that such defendant has a defence upon the
rnerits.
4. A plaintiff ordinarily resident out of the jurisdiction may be ordered to
give securityfor costs though he may be temporarily resident within the
jurisdiction. . ."
7 . A curious feature of these Rules, noted by Murphy J . in Proetta v. Neil 11996]
I I.R. 100, was that the Rules do not expressly set out the basis of an entitlement to an
order for security for costs and seem to proceed upon the assumption that foreign
residence is the factor which leads to the entitlement .
8. Finlay P. as [he then was], in Fares v. Wiley U99412 I.R. 379, said the
following concerning the basis of entitlement to an order for security for costs at
p.495:
o'In general terms, it would appear to me that the principle underlying a
defendant's right to securityfor costs must be that he should not suffer from
an inability to recover the costs of successfully defending the claim arising
from the foct that the unsuccessful plaintiffresides and has his assets outside
the jurisdiction of the court . . ."
9. Thus, it is clear that notwithstanding the absence of express provision in that
regard in O.29, the determinative factor entitling a defendant to seek to an order for
security for costs in Irish law is that the plaintiffboth resides and has his assets
4
outside of the jurisdiction of the Irish courts, or to put it another way, does not have
assets within the jurisdiction.
10. In this respect, it is to be noted that the corresponding provisions in the
English Rules of Court have been interpreted by the Court of Appeal in Berkeley
Administration Inc. v. McClelland ll992l2 Q.B. 407, as postulating foreign residence
as a precondition to the invocation of the jurisdiction created in the Rules rather than
the basis of entitlement to an order for security for costs.
11. When considering this matter in Proetta v. Neil atp. 104, Murphy J. said the
following:
"Under the lrish rule, residence abroad is not merely a precondition but it is
of itself the factor which gives the right to demand security subject only to
the qualiJication that the right is not absolute andfalls to be exercised
having regard to all of the appropriate matters which the court would take
into account in exercising its discretion. . ."
12. Thus, whilst foreign residence may be the necessary basis which must be laid
by a defendant in order to claim an order for security for costs, ofitself, foreign
residence does not give rise to a"right" to such an order, all the authorities making it
clear that the court retains a wide discretion as to whether to grant or refuse the order.
That being so, whether foreign residence is to be seen as the basis for the claim for an
order for security for costs, or a precondition to invoking O. 29 jurisdiction would
appear to me to be immaterial.
13. The Supreme Court in Malone v. Brown Thomas & Company Ltd.ll995l I
ILRM 369 atp.372, set out the following principles as applying to the provision for
security for costs in an appeal:
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" (I) That the ordering for security for costs is a matter for the discretion of
the court;
(ii) that in the exercise of its discretion, the court must consider all the
circumstances of the case;
(iii) that neither mere residence outside the jurisdiction or the poverty of the
appellant is sufficient justi/icationfor compelling an appellant to lodge
securityfor costs;
(iv) that the onus is on the applicant to establish grounds for his entitlement
to the order . . ."
14. An additional requirement, is that expressly stated in r. 3, namely, that the
defendant disclose on affidavit that he has a defence upon the merits. In this case, as
noted earlier and as set out in the affidavits, the claim, having been made by way of
summary summons, was remitted for plenary hearing and a statement of claim and
defence have been delivered. I am satisfied from all of this that the defendant in this
case has satisfied the requirement of demonstrating on affidavitaprimafacie defence
on the merits.
15. If residence outside the jurisdiction and impecuniosity are not of themselves
the factors which entitle a defendant or respondent to an order for security for costs,
but are merely matters to be taken into account by the court in exercising its
discretion, what then is the decisive or determinative factor which establishes a
threshold or test which will lead the court to exercise its discretion in favour of the
granting or refusing of the order.
16. In my opinion, this can only be the impossibility of enforcement of a costs
order against the plaintiff in question; or substantially increased difficulty or expense
6
in enforcing such costs order as compared to the enforcement of such an order against
a plaintiffresident in Ireland or who had suffrcient assets in Ireland.
17. In this context, it is to be observed that impecuniosity would have to be
considered an irrelevance because if impecuniosity of an Irish resident plaintiff is not
a ground for security for costs, then impecuniosity of a foreign resident should, in like
manner, be discounted. To do otherwise is to risk breaching the principle of equality
before the law as set down in Article 40.1 of the Constitution.
18. The foregoing, is, I hope, a reasonably accurate description of the state of the
law on the question of security for costs prior to the introduction of European Union
law by way of the decision of the European Court of Justice in the case of Mund &
Fester v. Hatrex International Transport fl9941ECR 1-467, and hopefully represents
the state of the law currently in force where no Intemational Treaty obligations or
unilateral enforcement provision in the country of residence of a plaintiff, intervene.
19. In the Mund & Fester case, the issue before the European Court of Justice
concerned whether the following provision in the German Civil Code offended
Article 7 of the EEC Treaty read in conjunction with Article220 of the Treaty and the
oBrussels Convention'. The relevant provisions of the German Code is para.9l7 of
ZPO as follows:
" (i) An order for seizure of assets shall be made when it is to be feared that
enforcement of the judgment would otherwise be made impossible or
substantially more dfficult.
(ii) The fact that judgment is to be enforced abroad shall be considered
sfficient groundsfor a seizure order."
20. In that case, an order had been made by a German court directing the seizure
of a lorry belonging to the respondent who were intemational carriers whose
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registered office was in the Netherlands. In the main proceedings, the applicants
claimed damages in respect of goods transported by the respondents from Turkey to
Hamburg which were damaged in transit by moisture allegedly arising from failure to
make the lorry transporting them watertight. In reliance upon the foregoing provision
of the ZPO,the German court made an order for the seizure of the lony of the
respondents used in that transportation which was still in Germany on the grounds
that if the applicants were successful in the case, they would have diffrculty in
recovering on foot of their judgment against the respondent in the Netherlands. The
matters came before the European Court of Justice on foot of a reference under the
then Article 177 of the EEC Treaty in which the question was as follows:
'oDoes the need to enforce a seizure order abroad (paragraph 917(2)) of the
Zivil Prozess Ordnung) also constitute grounds for seizure where such
enforcement would take place in a State which has adhered to the EEC
Convention on Jurisdiction and the Enforcement of Judges in Civil
Commercial Matters of 27fr September 1968 Qhe Brussels Convention)?"
Article 7 of the EEC Treaty, now Article 12 of the Treaty, establishing the EC
provides as follows:
21.*Within the scope of application of this Treaty andwithout preiudice to any
special provisions contained therein, any discrimination on the grounds of
nationality shall be prohibited."
Article 220 of the EEC Treaty reads as follows:
"Mernber States shall, so far as is necessary, enter into negotiations with
each other with a view to securingfor the beneJit of their nationals . . . the
s impl ifi c at i on of for malit i e s gov erning the r e c ipr o c al r e c o gni t i o n and
enforcement ofjudgments of courts or tribunals and of arbitration awards."
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22. As noted in the judgment of the ECJ, the Brussels Convention was concluded
within the framework defined by Article 220 of the EEC Treaty. Consequently, the
court concluded that the provisions of the Brussels Convention and national
provisions to which that Convention referred were linked to the EEC Treaty. The
court went on to consider whether the impugned seizure order at issue in the main
proceedings introduced discrimination on the grounds of nationality prohibited by
Article 7 of the Treaty. They observed that this Article forbade, not only overt forms
of discrimination based on nationality, but also covert forms of discrimination, which
by the application of other criteria of differentiation led in fact to the same result.
They concluded that the national provision at issue, namely, the seizure order, did not
overtly discriminate on the basis of nationality, but it did entail covert discrimination
because the great majority of enforcements abroad were against persons who were not
German nationals, leading to a conclusion that the national provision in question led
in fact to the same result as discrimination based on nationality.
23. They went on to consider whether the foregoing discrimination was justified
by objective circumstances. The court noted that para. 917(2) of the ZPO presumed
that enforcement of a judgment would be made impossible or substantially more
diffrcult, merely by virtue of the fact that enforcement was to take place in a State
other than the Federal Republic of Germany. The court concluded as follows:
*While such a presumption is justi/ied where the subsequent judgment is to
be enforced in the territory of a non-Member country, it is not justified
where enforcement is to take place in the tenitory of the Member States of
the Community. All those States are contracting parties to the Brussels
Convention whose territories may be regarded as forming a single entity as
24.9
indicated in the report on the Brussels Convention (Official Journal 1979
C59, p. 100, particularly at p. 13)."
Accordingly, they concluded that the national provision at issue in that case
was not justified by objective circumstances. The impact of that decision was first
felt in this jurisdiction in three cases decided in close proximity in time to each other.
The first of these was the case of Maher v. Phelan U996] I I.R. 95, in which Carroll
J. delivered judgment on 3'd November 1995, and at p. 98 said the following apropos
the Mund & Fester iudgment:
"Considering the ffict of that judgment within this iurisdiction, as the lnv
stands it is not possible to get an order for security for costs ogainst an
individual plaintiff resident in the jurisdiction regardless of circumstances.
Dffirent considerations apply to companies which are not relevant to
consider here. So if it were possible to get an order for security for costs
against a plaintiff resident abroad but within the E.U. if circumstances so
justi/ied it, this would constitute covert discrimination on the grounds of
nationality.
Since an individual litigant, being a plaintiffresident in lreland, cannot be
ordered to give securityfor costs, therefore a plaintiff resident outside
Ireland within the E.U. should not be so ordered.
The English Court of Appeal took a dffirent view in De Bry v. Fitzgerald
F9901 I W.L.R. 552 and Berkeley Administration Inc. v. McClelland
[]9901 2 Q.B. 407, but that was before iudgwent was handed down in the
Mund & Fester v. Hatrex Internationaal (Case C-398/92) []9941 I E.C.R.
467 case. The judgment of the European Court of Justice in my opinion puts
the matter beyond doubt . . ."
25.l0
Carroll J. went on to say the following:
"In case I am wrong in that view, I must add that I would not in any case
grant an order for security for costs. Since the Act of 1988, the rationole for
granting such an order, namely dfficulty, whether in relation to time or
money, in enforcing an order for costs in aforeign country no longer exists so
far as the E.(1. is concerned. Judgments are enforceable within the E.U. with
comparative ease under the Brussels Convention. . ."
26. I will retum to this aspect of the judgment of Carroll J. in due course.
27. The second case in the series was that already mentioned, namely, Proetta v.
Neil inwhich Murphy J. delivered judgment on 17th November 1995, in the course of
which the learned judge at pages 105 and 106 considered in detail the findings of the
European Court of Justice in the Mund & Fester case and in respect of the court's
conclusion on the issue of covert discrimination based on nationality he said the
following:
"It seerns to me that that conclusion is at least equally applicable to the lrish
rule dealing with security for costs."
Murphy J. then went on to consider the European Court's findings on objective
justification and said the following:
"Accordingly, the European Court rejected the contention that the national
provision was justified by objective circumstances. In my view that
conclusion too is equally applicable to the present case."
28. In the third case in the series, namely, Pitt v. Bolger [1996] 1 I.R. 108, in
which Keane J. (as he then was) delivering judgment on2nd February 1996,
considered the judgment of the European Court in the Mund & Fester case and also
the opinion of Mr. Advocate General Tesauro which was subsequently upheld by the
ll
court. Keane J. went on to consider the judgments just mentioned of Carroll J. and
Murphy J. in Maher v. Phelan and Proetta v. Neil and concluded by saying:
"I respectfully agree with and adopt the principles of law laid down in the
decisions of Carroll and Murphy JJ. and by the Court of Appeal in England in
the case just rnentioned. Itfoltows that the undoubted discretion under the rutle
should never be exercised by an lrish court to order security to be given by an
individual plaintiff who is a national of and resident in another member state
which is a party to the Convention, subject to the possible qualification
referred to in the judgment of the Master of the Rolls"
29. In the case of European Fashion Products Ltd. and Robert Mura and David
Murav. Rudolf Theodom Eenkhoorn & Others in which Ba:r J. delivered judgment
on 21't December 200l,where security for costs was sought, he said the following:
$First, that the personal plaintffi are Dutch citizens resident in Holland,
and therefore, within the ambit of Order 29 of the Rules of the Superior
Courts. Secondly, that the second and third plaintiffs appear to have hidden
substantial personal assets with a view to frustrating the defendants in the
event that they obtain an orderfor costs against them."
I am satis/ied that neither of the foregoing grounds are sustainable. It has
been held by the High Court in a series ofjudgruents - see Pitt v. Bolger
[]9961 I LR. 108 (Keane J. as he thenwas); Maher v. Phelan F996J I I.R.
95 (Carroll J.) and Proetta v. Neil []996J I LR. 100 (Murphy J.) that EU
citizens have the same status as lrish citizens vis a vis security for costs and
are not within Order 29. AU three cases were decided in the light of the
judgment of the European Court of Justice in Mund & Fester v. Hatrex
[]994J EU 3 p. 467."
30.t2
The learned judge goes on to say:
"As to the defendant's second point i.e. whether in given circumstances an
order for security for costs could be given against an lrish or EU citizen:
Murphy J. makps clear in his judgment in Proetta v. Neil at p. 104 that
orders for security for costs under Order 29 may be obtained only against
plaintffi who are resident outside the EU and the right to such seek
security depends upon thatfact."
31. That theme is echoed in the judgment of Clarke J. in Salthill Properties &
Another v. The Royal Bank of Scotland and Others, judgment delivered 5ft February
2010- where he said:
"Such external residence (i.e. outside the area governed by the Brussels
Regulation) would appear on the authorities to date to be a condition
precedent on the exercise of the part order securityfor costs."
Later, atpara.5.5 in the judgment, the leamed judge says:
32."There would, in my view, be important policy considerations underlying
any decision to extend thejurisdiction to order securityfor costs to cases
involving persons resident in this jurisdiction or in Brussels Regulation
countries. Such an expansionwould, in my view, if desiroble, be properly
brought about by a change in the rules or legislative intervention. To
embark on whot would be a radical change in the relevant low on the basis
ofjudicial decision would be going too far. . . "
In that case, Clarke J. had to deal with a somewhat different issue to anything
encountered in this case, namely, whether or not there was a jurisdiction under O.29
to order security for costs in any circumstances against a plaintiff who was a resident
either in this jurisdiction or another Member State of the European Union, thus,
l3
subject to the provisions of the Brussels Regulation. The case is, of course, of
relevance insofar as it sounds a wise note of caution against the overly adventurous
exercise of discretion in effecting change by judicial decision where the entire ambit
of political, social and commercial consequences might not be readily apparent to a
court.
33. In this case, the plaintiff is resident in Switzerland. Switzerland is not in the
European Union and is not a party to the Brussels Regulation. Switzerland is,
however, party to the Lugano Convention which, inter alia, in Title 3 thereof provides
for the recognition and enforcement ofjudgment given by a court or Tribunal of a
Contracting State, whatever the judgment may be called, including a decree, order,
decision or writ of execution, as well as the determination of costs or expenses by an
offrcer of the court, as provided for in Article 25 of the Convention. Three countries,
namely, Switzerland, Iceland and Norway, which are not members of the European
Union, are parties to this Convention, as are several of the Member States of the EU,
including Ireland. This Convention makes provision for the recognition and
enforcement ofjudgments in a manner similar to the Brussels Regulation as between
members of the European Union. It is commoncase that under the Lugano
Convention, any judgment for costs obtained by the defendant in this case can be
enforced against the plaintiff in Switzerland where he is resident.
34, For the defendant, it was submitted that until the Mund & Fester case, an order
for security for costs under O.29 could be obtained against a plaintiff who was
resident outside of Ireland and did not have assets within Ireland. T\e Mund & Fester
case had the effect of extending to citizens of the European Union the same status as
plaintiffs so far as the operation of O. 29 was concerned as citizens of Ireland. It is
submitted by the defendant that because the plaintiffwas resident in Switzerland
t4
which is not in the European Union, no question of discrimination contrary to Article
12 of the EC Treaty arises and, hence, the reasoning which underpins the Fester &
Mund case does not apply in favour of the plaintiff in this case. Furthermore,
notwithsknding the Lugano Convention, the extension to the plaintiffin this case of
the status enjoyed vis a vis O.29 by plaintiffs who are citizens of the European Union,
similar to Irish citizens, would involve an extension of the law which it was submitted
following upon the approach taken by Clarke J. in the Salthill Properties Ltd. case,
should not be done by judicial decision but should be left to be effected by either a
change in the Rules of the Superior Courts or by legislation.
35. For the plaintiff, it was submitted that because the Lugano Convention
provides for the enforcement of any judgment obtained by the defendant for costs in
this case against the plaintiffin Switzerland, there is no impossibility of enforcement,
and there are no substantial difficulties in terms of delay or expense in so doing.
Thus, it was argued that the plaintiff in respect of O.29, should be treated in the same
way as a resident of a country other than Ireland that is aparty to the Brussels
Regulation.
36. In attempting to resolve the contentious issues in this case, I am very mindful
of the fact that the jurisdiction to order security for costs under O.29 involves
essentially the exercise of a discretion by the court. As discussed earlier, the
authorities satisfr me that the starting point is foreign residence which I would accept
is a trigger point or precondition to the exercise of the jurisdiction conferred by Order
29. The same authorities make clear, in my opinion, that foreign residence does not
entitle a defendant as of right to an order for security for costs but is a factor to which
the court must have regard in its assessment of how its discretion is to be exercised.
l5
As indicated earlier, in my view, the impecuniosity of a personal plaintiff resident
abroad should be discounted as it is in respect of a plaintiffresident in Ireland.
37. Clearly, the harm sought to be prevented by a costs security order, is that a
defendant would be compelled to defend a claim against a person resident abroad
where it would be impossible to recover costs if successful against the plaintiff or
where a recovery of costs would be fraught with very substantial difficulty, delay or
expense. It necessarily follows, in my view, that the factors which must weigh
heavily in the exercise of the court's discretion must be related to the prospect of
recovery of costs against the plaintiff in his country of residence.
38. If it is accepted in this case, that by virtue of the Lugano Convention the
defendant's costs can be enforced against the plaintiff in Switzerland in the same way
as if he was resident in a country govemed by the Brussels Regulation, the question
arises as to why a court should exercise its discretion in favour of an order for security
for costs, when a real risk attached to that, would be to prevent the plaintifflitigating
his claim.
39. I am persuaded that the court's discretion, because of the Lugano Convention,
must be swayed in favour of refusing the order sought. In this regard, I am somewhat
reinforced by the passage from the judgment of Canoll J. in the Maher v. Whelan
case, where the leamed judge says that apart from consequence of the Mund & Fester
case, she would have refused the order anyway, because of the availability of an
enforcement process in that case as provided for under the Brussels Convention. As
there is little or no difference between the Brussels Regulation process of enforcement
and that available under the Lugano Convention, and as the core issue in the
application relates to difficulties in enforcement, the balancing exercise inherent in the
exercise of the court's discretion tilts against granting security for costs as sought.
16
40. I am further persuaded to refuse the order sought by a judgment of the Court
of the European Free Trade Area (EFTA) cited by the plaintiffwhich in many ways
was very similar to the Mund & Fester case, but involved Article 4 of the Agreement
on the European Economic Area which is in terms similar to Article 7 of the EEC
Treaty and contains a prohibition on discrimination on the grounds of nationality.
The European Economic Area includes the countries of the European Union and
Norway, Iceland and Lichtenstein. The agreement on the European Economic Area
provides for a single market encompassing the parties to the agreement. In the case of
Dr. Joachin Kottke & Prasidial Anstalt and Sweetyle Stiftung, in which judgment was
delivered on 17ft December 2010, the issue before the court was whether a provision
of Lichtenstein law to the effect that aplaintiff in a suit in Lichtenstein who was not
resident in Lichtenstein was obliged, at the request of a defendant, to provide security
for costs simply on the basis of not being a resident within Lichtenstein, infringed the
prohibition on discrimination on grounds of nationality in Article 4 of the EEC, and if
so, could it be justified on objective grounds. A secondary question posed was to the
effect that if the provision of Lichtenstein law which required security for costs as
aforesaid was not discriminatory contrary to Article 4 of the EEA Agreement, did
another provision of the Lichtenstein Code of Civil Procedure whereby a waiver of
the obligation on plaintiffs who reside in another State, to provide security, which was
conditional upon the possibility of enforcement in the country of residence of that
person, breach the prohibition on discrimination in Article 4.
41. The EFTA Court found, and in summary form expressed its conclusions as
follows:
" (i) A provision of national law pursuont to which non-resident plaintiffs in
civil litigation must provide securityfor costs of court proceedings, while
t7
resident plaintffi are not obliged to provide such security entails indirect
discrirninationwithin the meaning of Article 4 EEA.
(ii) In order for such a discrimination to be justified on the basis of public
interest objectives, the provision of national law must be necessary and not
excessive in attaining them.
(iii) The latter condition is not met in cases where the State in which the
plaintiffis resident allowsfor the enforcement of a court's award, whether
on the basis of Treaty obligations or unilaterally . . .
(iv) h is for the national court to determine in a particular case whether the
conditions for justiJication are satisJied."
42. As is apparent, the approach adopted by the EFTA Court was very similar to
that of the ECJ in Mund & Fester case. Additionally, in assessing justification for a
discriminatory national provision, the EFTA Court specifically used a proportionality
test. If one were to apply a proportionality test in assessing whether or not the
defendant in this case should have an order for security for costs, the answer would be
emphatically, a rejection of the defendant's application on the basis that the Lugano
Convention does provide an effective enforcement procedure in the event that the
defendant obtains an order for costs against the plaintiff, and hence, an order for
security for costs is not necessary to attain the objective ofprotecting the defendant
from the harm of an unenforceable costs award and manifestly in that regard would be
excessive.
43. In my opinion, a proportionality test in these circumstances is a useful tool to
enable the court to exercise its discretion in a predictable and consistent manner.
44. I do not see the approach adopted by me as changing the law in the way
envisaged or apprehended by Clarke J. in the SalthiU Properties Ltd. case, as
l8
requiring either legislation or a rule change. All that is involved here is no more than
a recognition by this court of the existence and legal effect in the domestic law of this
State of the provisions of the Lugano Convention as is required by law under s. 18 of
the Jurisdiction of Courts and Enforcement of Judgments Act 1998, which reads as
follows:
45."18- The Lugano Convention shall have theforce of law in the State and
judicial notice shall be taken of it."
Far from extending the law, as was submitted by the defendant, this court is
merely complying with its obligation under the foregoing statutory provision to give
force and effect in our domestic law to the Lugano Convention. If I were to accede to
the defendant's submission, that would necessarily involve excluding a consideration
of the Lugano Convention in the exercise of the court's discretion which, of course,
would be an obvious and impermissible failure on the part of the court to comply with
s. l8 of the foregoing Act of 1998.
46. The Lugano Convention involves reciprocal recognition and enforcement of
judgment obligations on the Contracting States. This imposes upon Ireland the
obligation to recognise and enforce within its jurisdiction the judgments and orders
provided for in the Convention, of the other contracting parties. It also means,
manifestly, in my opinion, that the obligations under the Convention of the other
Contracting States to recognise and enforce judgments and orders of the Irish courts
must be taken into account, when, as in this case, the court is asked to grant or refuse
an order for security for costs, where the primary consideration for that purpose are
the processes of enforcement in another State that is a contracting party to the Lugano
Convention. To do otherwise, would, in my opinion, be a failure to"take judicial
t lr
19
notice" as is required by s. 18 of the foregoing Act of 1998, of the operation of the
Convention in these other States, and in this case, Switzerland.
47. The use of a proportionality test as a tool in the exercise of the court's
discretion to grant or refuse the order sought, might in the context of applications of
this sort be perceived as novel, but these tests are, and have been for some time,
established in our jurisprudence and the application thereof comfortably within the
competence of the court and clearly would not require any legislative or rule change.
48. For all of the foregoing reasons, therefore, I have come to the conclusion that I
must refuse the defendant's application for security of costs.
IIIo Redaetfoa lteodd