Comcast International Holdings Incorporated and Others v Minister for Public Enterprise and Others
| Jurisdiction | Ireland |
| Judge | Mr Justice Ryan |
| Judgment Date | 24 January 2014 |
| Neutral Citation | [2014] IEHC 18 |
| Court | High Court |
| Date | 24 January 2014 |
BETWEEN
AND
[2014] IEHC 18
THE HIGH COURT
High court - Breach of contract - Breach of duty - Breach of statutory duty - Interlocutory application - Security for costs - Prima facie defence - Ability to pay costs - Special circumstances - Discretion - Rules of the Superior Courts
Facts: In these proceedings, the plaintiffs argued that the first named defendant had committed a breach of contract, breach of duty and breach of statutory duty by interfering with the integrity of the tender process for the State”s second GSM licence. It was said that he abused his position by intervening in the tender process to ensure that the licence would be awarded to ESAT, the third named defendant, after receiving monies from the fourth named defendant who was a major financial stakeholder in the company. The corporate plaintiffs were parties to a joint venture agreement that originally submitted a tender for the licence.
This application, which was brought by the fourth defendant pursuant to Order 29 of the Rules of the Superior Courts, was for orders directing that the first and third plaintiffs furnish security for his costs in these actions. The fourth plaintiff was no longer in existence and it was agreed at this juncture to strike them from the action without further order. It was argued that the first and third plaintiffs were out of the jurisdiction, had no assets and would not be able to meet any order for costs in favour of the fourth defendant if he was successful in the case. The plaintiffs argued that the application had not been properly brought because the fourth defendant had failed to present a prima facie defence to the action. Alternatively, it was said that there were special circumstances in the case that meant the application should be refused, namely the allegation that the financial incapacity of the first and third plaintiffs was caused by the actions of the defendants, the delay in the bringing of the application, the availability of the second plaintiff as a mark for damages, and the public interest in refusing the application.
Held by Ryan J. that where an application for security of costs is brought and the defendant establishes a prima facie defence to a claim made by a plaintiff residing outside the jurisdiction, he has got a prima facie entitlement to an order for security for costs, though the Court has a discretionary power to refuse. It was also said that such a discretion may be exercised in circumstances where the plaintiff establishes a prima facie case that he is unable to meet costs because of the actions of the defendant.
It was held that it was clear that the first and third plaintiffs would not be able to meet the costs of the fourth defendant if he was successful. It was also said that whilst the presentation of the fourth defendant”s application did not contain a defence in particularly specific terms, it had been made clear over the course of the substantive proceedings what exactly that defence was. The Court, therefore, refused to strike out the application on that basis. In regards to the allegation that the financial incapacity of the first and third plaintiffs was caused by the actions of the defendants, it was held that this was a case where the plaintiffs did not suffer loss, per se, but instead did not enjoy gain. It was also said that even if the plaintiffs were correct in saying that the first defendant interfered in the tender process for the GSM licence, it could not be assumed that it would have been awarded to the plaintiffs had that not occurred. This was, therefore, not considered a special circumstance to justify the refusal of the application. Similarly, the allegation of undue delay in bringing the application was said to be unfounded.
It was held, however, that because the application was not being made against the second plaintiff, who would continue to litigate the case even if the application was granted, the principle that disallows an application for security when there is a co-plaintiff mark applied and was decisive. This was because there was no doubt that this plaintiff could meet the fourth defendant”s costs in the event that the latter was successful. Similarly, it was said that a refusal of the application should be refused on the basis that this was an action that involved significant public controversy and it was in the public interest to have it determined in a court of law.
Application refused.
RSC O.29 r3
COLLINS v DOYLE 1982 ILRM 495
MAVIOR v ZERKO LTD 2013 2 ILRM 167
OLTECH (SYSTEMS) LTD v OLIVETTI UK LTD UNREP CHARLETON 30.11.2012 2012/37/10865 2012 IEHC 512
PEPPARD v BOGOFF 1962 IR 180
COMPANIES ACT 1963 S390
GOODE CONCRETE v CRH PLC & ORS UNREP COOKE 21.3.2012 2012/16/4718 2012 IEHC 116
POWER v IRISH CIVIL SERVICE (PERMANENT BUILDING SOCIETY) 1968 IR 158
AER RIANTA v RYANAIR 2001 4 IR 607
CONNAUGHTON ROAD CONSTRUCTION LTD v LAIN O'ROURKE IRELAND LTD UNREP CLARKE 16.1.2009 2009/9/2055 2009 IEHC 7
S.E.E. CO v PUBLIC LIGHTING SERVICES 1987 ILRM 255
IRISH CONSERVATION & CLEANING LTD v INTERNATIONAL CLEANERS LTD UNREP SUPREME 19.7.2001 2001/12/3351
MOORVIEW DEVELOPMENTS LTD v CUNNINGHAM UNREP CLARKE 5.2.2010 2010/37/9304 2010 IEHC 30
BULA LTD & ORS v TARA MINES LTD & ORS 1987 IR 494
HARLEQUIN PROPERTY (SVG) LTD v O'HALLORAN 2013 1 ILRM 124 2012 IEHC 13
GOODS OF MOONEY, IN RE 1938 IR 354
MILLSTREAM RECYCLING LTD v TIERNEY & NEWTON LODGE LTD UNREP CHARLETON 9.3.2010 2010/34/8547 2010 IEHC 55
COMCAST INTERNATIONAL HOLDINGS INCORPORATED v MIN FOR PUBLIC ENTERPRISE UNREP SUPREME 17.10.2012 2012/7/1702 2012 IESC 50
JUDGMENT of Mr Justice Ryan delivered the 24th January, 2014
This is an application by the fourth defendant, Denis O'Brien, pursuant to Order 29 of the Rules of the Superior Courts. He seeks orders that the first plaintiff, Comcast International Holdings Inc, and the third plaintiff, Ganley International Ltd, furnish security for his costs in these actions. The fourth plaintiff, GCI Limited, is no longer in existence, having been dissolved on the 18 th September, 2003 and it is agreed that it may be struck out of the action without further order. Mr O'Brien does not seek an order for security for costs against Mr Ganley.
The basis of the application is that these two companies are out of the jurisdiction, have no assets and will not be able to meet any order for costs in favour of Mr O'Brien if he wins the case.
Order 29 is as follows.
1. When a party shall require security for costs from another party, he shall be at liberty to apply by notice to the party for such security; and in case the latter shall not, within forty-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.
2. A defendant shall not be entitled to an order for security for costs solely on the ground that the plaintiff resides in Northern Ireland.
3. No defendant shall be entitled to an order for security for costs by reason of any plaintiff being resident out of the jurisdiction of the Court, unless upon a satisfactory affidavit that such defendant has a defence upon the merits.
The background to this application and these claims is well known to everybody living in Ireland who has taken any interest in public affairs over the past 20 years. Following a tender process that began in March 1995, the State's second GSM licence was awarded in May, 1996 to ESAT Digifone, a company in which the fourth defendant Mr. O'Brien had a major financial stake. The corporate plaintiffs were parties with others to a joint venture agreement that submitted a tender for the licence in August 1995 under the name Cellstar. On the 4 th February, 1997. the fourth plaintiff assigned all of its rights arising out of the Cellstar consortium to the second plaintiff, Mr. Ganley.
There are two sets of proceedings that are in very similar terms except that No. 9288 P seeks "a declaration that the decision of the 16 th June, 1995, whereby the deadline of the 23 rd June, 1995, for the receipt of tenders for the award of the second GSM Mobile Telephone Licence was extended, is null and void and of no effect". It goes on to claim damages. In proceedings No. 15119 P, the first claim is for "a declaration that the decision, announced on the 25 th October, 1995, to award the second GSM Mobile Telephony Licence to ESAT Digifone Limited is unlawful, null and void and to no effect". That summons also proceeds to claim damages.
The plaintiffs' complaint is expressed as follows at para. 15 of the statements of claim:-
"Wrongfully, and in breach of contract, breach of duty and breach of statutory duty, the Minister interfered with the integrity of the tender process. He abused his public office by intervening in the tender process to ensure that the licence would be awarded to ESAT. He accepted payments made by or on behalf of ESAT and/or Denis O'Brien to ensure the award of the licence to ESAT and/or as a reward for having intervened to ensure the awarding of the licence to ESAT. In so doing, he breached the Prevention of Corruption Act 1906. In representing the tender process and the award of the licence to ESAT as having been the result of a fair and honest tender process, he engaged in fraud and deceit and abused his office."
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