Interfund Global Services Ltd v Pascarn Services Ltd
| Jurisdiction | Ireland |
| Judge | Mr. Justice Barr |
| Judgment Date | 28 March 2014 |
| Neutral Citation | [2014] IEHC 164 |
| Court | High Court |
| Date | 28 March 2014 |
[2014] IEHC 164
THE HIGH COURT
BETWEEN
AND
RSC O.19 r28
RSC O.29
COMPANIES ACT 1963 S390
HARLEQUIN PROPERTY (SVG) LTD & HARLEQUIN HOTELS & RESOURCES LTD v O'HALLORAN 2013 1 ILRM 124 2012/17/4887 2012 IEHC 13
RSC O.40 r15
A (S) [AFHGANISTAN] v REFUGEE APPEAL TRIBUNAL & ORS UNREP HOGAN 17.1.2012 2012/1/86 2012 IEHC 8
RSC O.29 r1
SEE CO LTD T/A SOUTH EAST ELECTRIC CO v PUBLIC LIGHTING SERVICES LTD & PETIT JEAN (UK) LTD 1987 ILRM 255 1986/4/1452
HIDDEN IRELAND HERITAGE HOLIDAYS LTD T/A HIDDEN IRELAND ASSOCIATION v INDIGO SERVICES LTD & ORS 2005 2 IR 115 2005 2 ILRM 498 2005 30 6159 2005 IESC 38
COUNTY MONAGHAN ANTI-PYLON LTD v EIRGRID PLC UNREP UNREP CHARLETON 30.3.2012 2012/7/1968 2012 IEHC 103
BEAUROSS LTD v KENNEDY UNREP 18.10.1995 1995/15/3854
DITT v KROHNE 2012 3 IR 120 2012/9/2519 2012 IEHC 312
Company Law – Contract – Written agreement – Security for Costs – s. 390 of the Companies Act 1963 – O. 29 of the Rules of the Superior Courts
Facts: In this case the plaintiff was a company incorporated under Nigerian law and the defendant was an Irish company with its registered office in Dublin. Both were parties to a written agreement where the plaintiff agreed to disperse remittances collected by the defendant from third parties in various jurisdictions and pay them to beneficiaries in Nigeria. The plaintiff claimed that the defendant failed to pay a sum of £785,067.77 which was lawfully due and owing under the contract. The defendant pointed out that there were technical deficiencies in affidavits sworn on behalf of the plaintiff in Nigeria. However, Barr J decided to admit the affidavits under O. 40, r. 15 despite the deficiencies in the exhibits and jurats because to do otherwise would cause injustice to the plaintiff. The defendant also sought an order for security of costs but confusion arose as to whether the application would proceed under O. 29 of the Rules of the Superior Courts or s. 390 of the Companies Act 1963. Under s. 390 of the Companies Act 1963 the applicant has to establish a prima facie defence and prove that the plaintiff is not in a position to discharge an order for costs made against it. If the defendant can demonstrate both matters, then it is up to the plaintiff to establish that special circumstances exist for the court to exercise its discretion against making an order for security of costs. The plaintiff resisted the application on two grounds; first, that the financial evidence before the court illustrated that it was solvent and in a position to discharge an order for costs, and secondly, the defendant”s delay in seeking security for costs meant they were disentitled to such relief. The court considered both issues.
Held by Barr J:
The defendant had provided no evidence that the plaintiff would be unable to discharge the costs if it were to lose the action. Therefore, Barr J held that the defendant was not entitled to an order for costs pursuant to s. 390 of the Companies Act 1963. In this case there had been three year period between the commencement of the action and the issuing of the motion seeking security for costs. Barr J was satisfied that there had been such a delay on the defendant”s part that the application seeking security for costs should be refused. It was unclear to what extent the defendant was pursuing the application under Order 29. However, the relevant part of the rule under this order relates to applications for security for costs in situations where the plaintiff is resident outside of the jurisdiction. Although the plaintiff company was registered in Nigeria Barr J held that the defendant was not entitled to an order for security for costs under Order 29 due to the inordinate delay in bringing the application. For these reasons Barr J refused the defendant's application for an order that the plaintiff should provide security for costs.
JUDGMENT of Mr. Justice Barr delivered the 28th day of March, 2014
1. The plaintiff in this action is a company incorporated under the laws of Nigeria. The defendant is an Irish company which has its registered office at Chequepoint House, Clifton House, Fitzwilliam Street Lower, Dublin 2. On or about 30 th May, 2008, the plaintiff entered into a written agreement with the defendant whereby the plaintiff agreed to disperse remittances collected by the defendant from third parties in various jurisdictions and to pay these to beneficiaries in the Federal Republic of Nigeria. The business operated in the following manner. People would deposit money with the defendant at various outlets throughout the United Kingdom. The defendant would take details of the intended beneficiaries in Nigeria. The defendant would then instruct the plaintiff in Nigeria to disperse the funds to the designated beneficiaries. The defendant was to reimburse the plaintiff in pounds sterling and to pay interest on the remittances on the Monday and Thursday of each week.
2. Unfortunately, the contract between the parties did not work out in the manner intended. The plaintiff claims that the defendant has failed to pay to it the sum of STG£785,067.77 which it says is lawfully due and owing to it under the contract. The proceedings have had a fairly tortuous progress to date. For reasons that will become apparent later in this judgment, it is necessary to set out the chronology of the proceedings to date:
| 09.03.2010 | Plenary summons |
| 24.03.2010 | Entry of appearance |
| 19.04.2010 | Statement of claim |
| 29.11.2010 | Plaintiff's motion for judgment in default of defence |
| 19.01.2011 | Defence and counterclaim |
| 14.02.2011 | Plaintiff's notice for particulars |
| 27.05.2011 | Defendant's replies to particulars |
| 07.07.2011 | Rejoinders |
| 30.01.2012 | Plaintiff's first motion to compel replies to particulars |
| 27.04.2012 | Defendant's second replies to particulars |
| 25.05.2012 | Second motion to compel defendant's replies |
| 30.07.2012 | Order of Gilligan J. compelling replies to particulars |
| 10.01.2013 | Plaintiff's third motion seeking replies to particulars |
| 20.02.2013 | Defendant issues motion to dismiss claim pursuant to Order 19, rule 28 and/or for security for costs |
| 04.03.2013 | Return date for plaintiff's motion for particulars |
| 22.04.2013 | Return date for defendant's motion |
| 08.07.2013 | Defendant's third replies to particulars |
| 16.12.2013 | Hearing of both motions. |
3. The plaintiff had to bring three motions in order to obtain particulars from the defendant of its defence and counterclaim. When the matter was before me on 16 th December, 2013, I directed that the plaintiff should set out the areas in which it is felt that the latest set of replies were deficient. The defendant then had four weeks to furnish the replies. The costs of the motion were awarded to the plaintiff.
4. The second matter before me on that occasion was an application by the defendant seeking security for costs. There was quite some confusion as to whether the application was to be moved under O. 29 of the Rules of the Superior Courts, or s. 390 of the Companies Act 1963. The notice of motion sought the following reliefs:-
(1) An order pursuant to O. 19, r. 28 of the Rules of the Superior Courts dismissing the plaintiff's action on the basis that the case is frivolous and vexatious and there is no reasonable cause of action.
(2) In the alternative, an order for security pursuant to s. 390 of the Companies Act 1963.
5. However, at the hearing of the motion and in their written submissions, the defendants sought to move the application pursuant to O. 29 of the Rules of the Superior Courts. The defendant maintains that the legal principles applicable to applications pursuant to s. 390 of the Companies Act 1963, would apply to this case. Counsel for the defendant pointed to the decision in Harlequin Property (SVG) Ltd & Anor v. O'Halloran & Anor [2013] 1 ILRM 124. It is to be noted that, at para. 1.3 of his judgment, Clarke J. stated as follows:
a A. That, by virtue of the fact that the Companies Act 1963 ('the 1963 Act') did not apply to either of the plaintiff companies (both being foreign companies), the application fell to be considered under O. 29 of the Rules of the Superior Courts ('Order 29').
b B. That the parties agreed that, in all the circumstances of the case, the question of whether Harlequin should be required to provide security for costs under Order 29 fell to be considered by reference to the same principles as would, in fact, apply in an application for security for costs under s. 390 of the 1963 Act.
6. Before coming to the substantive matter in this motion, it is necessary to deal with a technical issue which was raised by the defendant.
7. The defendant made the point that there were a number of technical deficiencies in the affidavits sworn on behalf of the plaintiff in Nigeria. In particular, it is argued that the jurats in a number of the affidavits were deficient in that it was not stated therein that the Commissioner for Oaths knew the deponent. Furthermore, it was noted that various exhibits had not been signed by the deponent.
8. Order 40, rule 15 of the Rules of the Superior Courts provides as follows:-
The Court may receive any affidavit sworn for the purpose of being used in any cause or matter notwithstanding any defect by misdescription of parties or otherwise in the title or jurat, or any other irregularity in the form thereof and may direct a memorandum to be made on the document that it has been so received.
9. In S.A. v. Refugee...
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