MOORVIEW DEVELOPMENTS Ltd v FIRST ACTIVE Plc

• Jurisdiction: Ireland
• Judge: Mr. Justice Frank Clarke
• Judgment Date: 16 March 2011
• Neutral Citation: [2011] IEHC 117
• Court: High Court
• Docket Number: [2003 No. 9018 P & 2005 No. 272 S]
• Date: 16 March 2011

Moorview Developments Ltd & Ors v First Active Plc

BETWEEN

MOORVIEW DEVELOPMENTS LIMITED, SALTHILL PROPERTIES LIMITED, VALEBROOK DEVELOPMENTS LIMITED, SPRINGSIDE PROPERTIES LIMITED, DRAKE S.C. LIMITED, MALLDRO S.C. LIMITED, THE POPPINTREE MALL LIMITED AND BLONDON PROPERTIES LIMITED

PLAINTIFFS

AND

FIRST ACTIVE PLC, RAY JACKSON AND BY ORDER BERNARD DUFFY

DEFENDANTS

AND

BETWEEN

FIRST ACTIVE PLC

PLAINTIFFS

AND

BRIAN CUNNINGHAM

DEFENDANT

[2011] IEHC 117

[No. 9018 P/2003]

[No. 272 S/2005]

THE HIGH COURT

PRACTICE AND PROCEDURE

Costs

Non-party funder - Liability of non-party - Order for costs against unsuccessful plaintiff companies - Recoverability of costs orders - Non-party owner and controller of plaintiff companies - Role in litigation - Whether jurisdiction to make non-party liable for costs of unsuccessful party - Relevant factors to exercise of jurisdiction - Whether reasonable to think unsuccessful party could meet costs if it failed - Degree of possible benefit of proceedings to non-party - Whether proceedings pursued reasonably and in reasonable fashion - Byrne v John S O'Connor & Co [2006] IESC 30, [2006] 3 IR 379 applied; Aiden Shipping Ltd v Interbulk Ltd [1986] AC 965, Carborundum Abrasives Ltd v Bank of New Zealand (No.2) [1992] 3 NZLR 757, Forest Pty Ltd (Recs and Mgrs apptd) v Keen Bay Pty Ltd & Ors [1991] 4 ACSR 107 and Knight & Anor v FP Special Assets Ltd & Ors [1992] 107 ALR 585 followed - Rules of the Superior Courts, 1986 (SI 15/1986), O 15 r 13 - Supreme Court of Judicature (Ireland) Act 1877 (40 & 41 Vict, c 57), s 53 - Bank granted relief (2003/9018P & 2005/272S - Clarke J - 16/3/2011) [2011] IEHC 117

Moorview Development Ltd v First Active plc

PRACTICE AND PROCEDURE

Judgment

Execution of judgment - Cross-examination in aid of execution - Debtor's means - Oral examination - Scope of inquiry - Absence of express provision in Rules of Superior Courts - No provision requiring debtor to make information available prior to cross-examination -Whether power to order prior disclosure of relevant information - Whether power to order discovery of relevant information - Rules of the Superior Courts, 1986 (SI 15/1986) O 42, r 36 - Bank granted relief (2003/9018P & 2005/272S - Clarke J - 16/3/2011) [2011] IEHC 117

Moorview Development Ltd v First Active plc

Facts: The proceedings concerned long-running litigation in respect of the Cunningham Group. Mr. Cunningham and companies associated with him were unsuccessful in litigation. The first application sought to have Mr Cunningham personally liable to pay costs awarded in favour of First Active in linked proceedings. The second application sought to have Mr. Cunningham cross-examined in aid of execution of orders made against him personally. The Court had to consider inter alia whether it had jurisdiction to make the order, and what the criteria for that order were.

Held by Clarke J. that it was appropriate to make an order directing Mr. Cunningham be personally liable for the costs orders made against the appropriate plaintiffs in the proceedings in the title and schedule. First Active was correct that there was jurisdiction to join a party as a defendant for the purposes of making that party liable for the costs that might ordinarily be ordered against a plaintiff. A similar jurisdiction existed under the Judicature (Ireland) Act 1877. It was appropriate to direct that Mr. Cunningham attend for cross-examination in accordance with Order 42, rule 36, Rules of the Superior Courts, 1986 in respect of the judgment already given against him for an inquiry as to income and future income or future debts.

Reporter: E.F.

RSC O.42 r36

DANSKE BANK A/S (T/A NATIONAL IRISH BANK) v MCFADDEN UNREP CLARKE 27.4.2010 2010 IEHC 119

BYRNE v JOHN S O'CONNOR & CO 2006 3 IR 379

SUPREME COURT OF JUDICATURE (IRELAND) 1877 S53

SALTHILL PROPERTIES LTD & CUNNINGHAM v ROYAL BANK OF SCOTLAND & ORS UNREP CLARKE 5.2.2010 2010 IEHC 31

COMPANIES ACT 1963 S390

CARBORUNDUM ABRASIVES LTD v BANK OF NEW ZEALAND (NO.2) 1992 3 NZLR 757

RSC O.15 R13

FOREST PTY LTD v KEANE BAY LTD 1991 4 ACSR 107

SUPREME COURT ACT 1867 S58

KNIGHT v FP SPECIAL ASSETS LTD 1992 107 ALR 585

RSC O.91 r1

NEW ZEALAND JUDICATURE ACT 1908 S51(G)

AIDEN SHIPPING COMPANY LTD v INTERBULK LTD 1986 AC 965

SUPREME COURT ACT 1981 S51(1) (UK)

1. Introduction

2 2 1.1 Two further issues fall for decision in the long running litigation in respect of the Cunningham Group. The first issue arises out of a motion brought on behalf of First Active plc ("First Active") seeking to have Mr. Brian Cunningham made personally liable to pay costs awarded in favour of First Active in certain of these linked proceedings. The relevant costs were awarded against various companies of which Mr. Cunningham and his wife are the beneficial owners and in respect of which Mr. Cunningham is a director and, it would appear, prime mover. The second application seeks to have Mr. Cunningham cross examined in aid of execution (together with various connected reliefs) in the context of orders which have already been made, in one of the linked proceedings, against Mr. Cunningham personally.

3 3 1.2 The background to both applications is the long running litigation to which I have referred. Most of that litigation has now been determined, at least so far as this Court is concerned, with only a small number of tangential issues remaining for decision. In general terms Mr. Cunningham and companies associated with him ("the Cunningham Group") were unsuccessful in that litigation to the effect that there are a substantive range of orders for costs standing against the Cunningham Group together with substantive and costs orders against Mr. Cunningham personally. In some of the relevant litigation only companies within the Cunningham Group were parties so that the orders for costs made in favour of First Active in those proceedings are orders as against the companies concerned. In one relevant case Mr. Cunningham was himself a litigant so that an order on foot of a guarantee was made against Mr. Cunningham personally. There is nothing unusual in either of those situations. The orders for costs were made, in the ordinary way, against unsuccessful parties to the cases concerned. The order on the guarantee was made against Mr. Cunningham as guarantor.

4 4 1.3 Against that general background it is appropriate to turn to the issues which arise.

2. The Issues

2 2 2.1 The application on behalf of First Active seeking to have Mr. Cunningham made personally liable for costs which currently stand ordered to paid by companies within the Cunningham Group arises both in the case which first appears in the title to this judgment and a series of other connected cases, details of which are set out in a schedule hereto. There is no material difference between the position in any of the cases concerned. In each case there is already in being an order for costs against companies within the Cunningham Group. First Active seeks to make Mr. Cunningham personally liable for those costs.

3 3 2.2 Two real issues arise. The first is as to whether there is any jurisdiction to make an order of the type sought by First Active. Second, in the event that there be such a jurisdiction, issues arise as to the criteria to be applied by the court in deciding whether to make such an order and whether those criteria are met on the facts of this case.

4 4 2.3 The second motion is brought in the proceedings second mentioned in the title to this judgment. In that case, as pointed out, there already is an order against Mr. Cunningham personally. It is sought on behalf of First Active that Mr. Cunningham be required to disclose his assets or other sources of potential payment of his liability to First Active arising out of that order. Two bases are put forward, in general terms, on behalf of First Active. First, it is said that a jurisdiction to have Mr. Cunningham orally examined in relation to his debts arises under O. 42, r. 36 of the Rules of the Superior Courts. As part of such an examination in aid of execution, First Active asserts that it is appropriate for the court to make an order requiring Mr. Cunningham, in advance, to disclose his assets or any other means which he might have to satisfy the relevant order. In addition, First Active asserts that it is appropriate to require Mr. Cunningham to disclose, in discovery form, any documents which he might have relevant to his assets or other means of satisfying the relevant order. Under this heading the primary dispute between the parties is as to whether the court has jurisdiction, or whether it is, in any event, appropriate, to make the ancillary orders to which I have referred.

5 5 2.4 A second basis is put forward on behalf of First Active for seeking similar relief. When the order against Mr. Cunningham personally was originally made, the question of a stay pending appeal to the Supreme Court was raised. For reasons set out by me in an ex-tempore ruling at the time in question, I came to the view that it would be appropriate to make an order in Mr. Cunningham's case similar to an order which I had made in Danske Bank v. McFadden [2010] IEHC 119. The substance of that order was to the effect that no stay would be given but that First Active would be required to give an undertaking similar to the undertaking as to damages which a plaintiff is normally required to furnish as a term of obtaining an interlocutory injunction. Thus, to the extent that First Active might actually collect monies due on foot of the relevant order in circumstances where that order was reversed on appeal, First Active would be required to pay back the monies concerned and compensate Mr. Cunningham in the event that he could establish any further losses associated with the recovery of the...