Court directs Michael Flatley to provide security for costs in €30m action over Castlehyde restoration
Seán McCárthaigh
Lord of the Dance star and potential candidate in the presidential election, Michael Flatley, has been ordered by the High Court to provide security for costs in advance of his upcoming legal proceedings against a number of parties over restoration work on his Cork mansion after a fire in June 2016.
Mr Justice Eileen Roberts granted applications taken by UK building restoration firm, Austin Newport Group and various insurance underwriters seeking Mr Flatley to provide security for costs in the event they are successful in defending a €30 million legal action being taken by the dancer.
They estimate their legal costs could be €2.86 million.
Ms Justice Roberts ruled that the dancer’s intention to return to live in Ireland and to contest the presidential election was not a basis for refusing an order for security.
Mr Flatley, who was one of the original performers in Riverdance, claims he and his family had to vacate his Castlehyde property outside Fermoy, Co Cork, in October 2023 after alleged toxic chemical residue was detected during routine maintenance.
In the main legal action, he is suing Austin Newport for carrying out alleged defective restoration work after the fire as well as insurance underwriters - MS Amlin Underwriting Ltd, AXA XL Underwriting Agencies Ltd, Hamilton Managing Agency Limited and Lloyds Insurance Company.
Mr Flatley claims the various insurers had knowledge of certain issues about the alleged contamination of Castlehyde which they failed to disclose to him when negotiating a settlement agreement.
Ms Justice Roberts said the application for security for costs in the case had some unusual aspects as the plaintiff was a person rather than a corporate entity who was claiming he could afford to pay any costs that might ultimately be awarded against him.
The judge noted there was also a dispute about whether Mr Flatley is ordinarily resident outside Ireland as well as about the assets he held within the jurisdiction.
The Riverdance performer claims he and his family had to vacate Castlehyde, the country estate he bought in 1999, after the main house became uninhabitable in October 2023.
The court heard there were various estimates on the value of Castlehyde up to €20 million.
However, the defendants became concerned that there would be sufficient equity in the property to cover their legal costs if successful when they became aware there was a legal charge of €7.9 million on Castlehyde.
Lawyers for the dancer had argued the application for security for costs was “a final effort to derail” his legal action against the defendants as well as being an attempt to embarrass him.
They claimed it would also be a form of discrimination if Mr Flatley as an Irish citizen with assets in the jurisdiction had an order for security of costs made against him.
Ms Justice Roberts noted that a personal plaintiff who is ordinarily resident in Ireland, cannot have an order for security of costs made against them, unlike someone living outside the EU.
However, the court heard that Mr Flatley has been living in Monaco since at least 2014 and had effectively used Castlehyde as a holiday home up to October 2023.
During the proceedings, Ms Justice Roberts was also informed that Mr Flatley intended moving back to live in Ireland and to seek a nomination to run for President of Ireland.
Lawyers for the defendants objected to the admission of such claims on the basis they had previously been advised by Mr Flatley’s lawyers that he was moving to live in Paris and later Valencia which never actually happened.
The dancer’s lawyers claimed special circumstances existed which should result in the court refusing the order for security of costs.
They included that Mr Flatley had expressed an intention to return to live in Ireland permanently and an undue delay by the defendants in bringing the application for security.
Mr Flatley’s lawyers also argued that he was “a man of means” who had ample assets within Ireland to meet any award of costs and was “a man of his word” who would pay any costs ordered against him.
In her ruling, Ms Justice Roberts said it appeared that Mr Flatley’s stated intention to return to Ireland was not open-ended or unconditional but there was no evidence he would remain living in Ireland if he was unsuccessful “in his Presidential ambitions.”
However, she ruled that he has been ordinarily resident in Monaco for more than 10 years.
The judge said his intention to return to Ireland and contest the presidential election seemed at odds with his argument that he would be residing in Ireland but for the actions of the defendants.
“There appears to be no reason why the plaintiff could not previously have returned to live in Ireland even if Castlehyde was uninhabitable,” she added.
The judge noted he has also taken a commercial decision not to live in Castlehyde due to an agreement in September 2023 to lease the house for an annual minimum rent of €1.35 million.
Ms Justice Roberts said she could not take into account Mr Flatley’s rights to the Lord of the Dance which were variously valued at between £90 million Stg (€104 million) and €200 million in assessing the sufficiency of his assets within Ireland.
She made a similar finding in relation to Flatley Whiskey Limited as she observed that the dancer had not provided any evidence of his ownership of the company which was valued at €10 million.
The judge said taking a midway point of €9.5 million on valuations on Castlehyde was fairest to all parties which would leave net equity of €1.6 million allowing for secured debt on the property.
Ms Justice Roberts ruled Mr Flatley is in Ireland on a temporary and conditional basis and the defendants’’ actions had not caused him to live in Monaco.
The judge said he had not discharged the burden of proof to show he had sufficient assets within the EU against which a successful defendant could enforce a costs order.
She instructed the parties to file and exchange written submissions about the amount of the security by November 14th.
