Dana’s application for security for legal costs in ongoing defamation proceedings refused by the High Court

About this case:

• Judgment:
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Delivering the judgment of the Court, Mr Justice Edgar found that the plaintiffs (Dana’s sister and niece) had established the existence of special circumstances allowing him to refuse the application for security.

Defamation proceedings

In October 2011, TV3 broadcast an interview with Ms Scallan who was at that time running a political campaign to become President of Ireland. The subject matter of the interview concerned what Ms Scallan alleged to be false allegations of a sexual nature which had been circulated by her sister, Ms Susan Stein, and her niece, Ms Susan Gorrell, (hereafter “the plaintiffs”) in relation to Ms Scallan’s brother, Mr John Brown.

In the course of the interview, Ms Scallan stated that the allegations she was referring to were of a sexual nature and had emanated from certain members of her family against another member of her family. She stated that these same members of her family were engaged in a campaign of threats, bullying, lies and deception.

Ms Scallan knew that it was public knowledge that the plaintiffs were involved in a court case with the defendant and her brother John Brown in and around the same time and at one stage in the interview stated “much of the detail of the court case is now on social websites and a lot of people will know what we are talking about”. Ms Scallan agreed with this, thereby confirming that the people to whom she was referring were the plaintiffs.

Accordingly, the plaintiffs brought defamation proceedings against Ms Scallan and TV3 Television Network Ltd, seeking:

a. damages for defamation;

b. punitive and aggravated damages pursuant to the Defamation Act 2009;

c. a correction order pursuant to the Defamation Act 2009;

d. an order, pursuant to the Defamation Act 2009 prohibiting the further publication of the statement the subject matter of these proceedings.

TV3 settled with the plaintiffs, however the case against Ms Scallan is ongoing.

Security for costs

Since the plaintiffs both reside outside of the Irish jurisdiction, Ms Scallan made an application for security for costs under Order 29 of the Rules of the Superior Courts.

Justice Edgar cited Connaughton Road Construction Road Limited v. Laing O’Rourke Ireland Limited IEHC 7 as the leading case on security for costs applications, and discussed the relevant test as set out in Inter Finance Group v. KPMG, Pete Marwick (Unreported, High Court, 29th June, 1998).

It was emphasised that in considering a security for costs application, the Court ought not to embark upon a substantive assessment of the merits of the plaintiff or defendant’s case, as per Oltech (Systems) Ltd. v. Olivetti UK Ltd. IEHC 512.

Justice Edgar stated that Security for costs applications serve a legitimate aim and purpose, in enabling the courts to engage in a balancing of the right of a plaintiff to litigate a case and the right of a (potentially) successful defendant not to be left without a remedy. That being said, the Supreme Court has recognised that security for costs applications, if fixed at too high a sum, may lead to a situation where a defendant “may be able to defeat an honest and substantial claim because the plaintiff cannot find the necessary security” as per Thalle v. Soares I.R. 182

Special circumstances

Justice Edgar stated that in order for the Court to refuse an order for security for costs the plaintiff must prove that there are special circumstances justifying such a refusal (as per Connaughton Road).

The plaintiffs identified the public interest as such special circumstances in that the comments made by Ms Scallan, in the currency of her running for the position of the Head of State, were a matter of public interest.

The Court agreed with the plaintiff, and noted that Ms Gorrell’s failure to make a complaint in the 1960s, when the alleged abuse by Ms Scallan’s brother took place, could be understood in the terms of evidence given by Professor Harry Ferguson in S.H. v. The Director of Public Prosecutions 3 IR 575: “it cannot be said that child sexual abuse had a sufficient public or official reality at that time such that would have made it possible to a victim successfully to initiate a complaint and/or bring a case against an alleged perpetrator”.

Conclusions

Justice Edgar found that the hurdle of establishing a prima facie defence was met by Ms Scallan, as per Tribune Newspapers (in receivership) v. Associated Newspapers Ltd (Unreported, High Court, 25th March, 2011). Citing See Company Limited v. Public Lighting Services Limited I.L.R.M and Mooreview v. Cunningham IEHC 30; it was also found that there was no delay on the part of Ms Scallan in issuing these proceedings.

Further, Justice Edgar emphasised that the Court was not in any way influenced by the argument made by the plaintiffs that if security for costs was granted, this would bring the plaintiffs’ claim to an end.

Notwithstanding these findings, Justice Edgar held that that the plaintiffs sought to bring a genuine claim alleging “very serious matters”, and found that Ms Scallan’s arguments based on the plaintiffs’ disputed impecuniosity was not a reason to grant the application for security.

Justice Edgar also found that the plaintiffs identified special circumstances which justified a refusal to grant security for costs. Therefore, in all the circumstances, the Court refused Ms Scallan’s application to direct that the plaintiffs furnish security for costs of the defamation proceedings.