Jack O'Toole Ltd v MacEoin Kelly Associates

• Jurisdiction: Ireland
• Judgment Date: 01 January 1987
• Date: 01 January 1987
• Docket Number: [1984 No. 6051P]
• Court: Supreme Court

(H.C., S.C.)

Jack O'Toole Ltd

and

MacEoin Kelly Associates

Limited company - Application by one defendant for security for costs in pending action - Plaintiff company unable to meet any order for costs - Whether plaintiff's impecunious state caused by wrong the subject matter of claim - Onus of proof on plaintiff - Standard of proof - Prima facie case -Discharge of onus - Whether bald statement sufficient - Supreme Court - Jurisdiction -Review of High Court discretion - Whether Supreme Court jurisdiction limited - Companies Act, 1963 (No. 33), s. 390.

The plaintiff, a building company formed for the purpose of contracting with the second defendant to build a large number of houses, commenced proceedings for damages for breach of contract against both the first defendant, the firm of architects appointed by the second defendant under the contract, and the second defendant. In its statement of claim the plaintiff alleged, inter alia, that the first defendant knowing the plaintiff's weak financial situation, had failed and neglected to measure, quantify and adjudicate on amounts of claims submitted by the plaintiff under the contract, thereby causing the plaintiff damage and loss. On the application of the first defendant for security for costs under s. 390 of the Companies Act, 1963, it was conceded on behalf of the plaintiff that it would be unable to pay the defendants' costs should they succeed in their defences. It was further stated in an affidavit filed on behalf of the plaintiff that because of the second defendant's actions the plaintiff "had to suspend its principal activity of contractor for public works." The High Court (Barr J.) refused the application, saying that the plaintiff had established a prima facie case that it had been put out of business by the wrong-doing of both defendants and that its inability to give security for costs was a consequence of that wrong-doing. On appeal by the first defendant against the refusal it was contended, inter alia, on behalf of the plaintiff that, in the absence of an error in principle on the part of the High Court in the exercise of the discretion under s. 390, the Supreme Court should not...