Tahboub v Joint Arab-Irish Chamber of Commerce CLG

• Jurisdiction: Ireland
• Court: High Court
• Judge: Ms Justice Nessa Cahill
• Judgment Date: 31 October 2024
• Neutral Citation: [2024] IEHC 616
• Docket Number: Record no. 2023/3453 P

Between:

Mohammad Tahboub

Plaintiff

and

The Joint Arab-Irish Chamber of Commerce Clg

Defendant

[2024] IEHC 616

Record no. 2023/3453 P

THE HIGH COURT

Security for costs – Prima facie defence – Special circumstances – Defendant seeking an order requiring the plaintiff to provide security for the costs of the proceedings – Whether the defendant had demonstrated a prima facie defence to the plaintiff’s claim

Facts: The plaintiff, Mr Tahboub, issued proceedings on 13 July 2023 seeking an order re-appointing him as director and vice-chairman of the defendant, the Joint Arab-Irish Chamber of Commerce CLG, among other reliefs, including a declaration that all proceedings, decisions and resolutions of the defendant since May 2022 are invalid and of no legal effect. The defendant sought an order under Order 29, Rule 1 of the Rules of the Superior Courts, requiring the plaintiff to provide security for the costs of the proceedings. The primary issue between the parties was whether the defendant had demonstrated a prima facie defence to the plaintiff’s claim. The plaintiff relied on certain “special circumstances” which he submitted justified the refusal of the security for costs order. This included the unique character of the defendant and the plaintiff’s largely uncontradicted evidence that he was a man of significant means; had ties to Ireland, through his involvement with the defendant and otherwise; and that there were reasons why he would honour his legal obligations. The plaintiff also relied on an allegation of delay as a “special circumstance”. In that respect, there was a difference between the parties as to how delay should be calculated when an order under Order 29 is sought.

Held by the High Court (Cahill J) that the defendant had failed to present sufficient objective evidence to demonstrate the existence of a prima facie defence to the plaintiff’s claim and had further failed to present an arguable legal basis (to a prima facie standard) for the inferences or conclusions which the defendant submitted the Court may derive from the evidence that was presented. For that reason, Cahill J refused the order under Order 29, Rule 1 requiring the plaintiff to provide security for costs. She noted that if the criteria of Order 29, Rule 1 had been satisfied, there were certain unusual features of the case which the plaintiff relied on, including the nature of the defendant and the largely uncontradicted averments by the plaintiff that he had significant assets and connections to Ireland, including through the defendant, and there were reasons why he would honour his legal commitments. However, she found that the factors and evidence presented would not be sufficient to outweigh the risk faced by the defendant, which Order 29 aims to guard against. Therefore, she held that those considerations would not amount to special circumstances such as to justify a decision to refuse the relief sought (if the defendant had made out a prima facie defence). She rejected the plaintiff’s contention that delay was a special circumstance which warranted the refusal of the relief sought; while there had been some delay, there was not sufficient delay or prejudice in the particular circumstances of the case to justify refusal of the relief sought (if the requirements for granting such relief were otherwise met).

Cahill J’s provisional view was that the defendant should be liable for the costs of the application, having failed to obtain the reliefs applied for.

Order refused.

JUDGMENT of Ms Justice Nessa Cahill delivered on 31 October 2024

Introduction

1 By this motion, the Defendant seeks an order under Order 29, Rule 1 of the Rules of the Superior Courts, requiring the Plaintiff to provide security for the costs of the proceedings.

2 There are two criteria that must be satisfied for an order under that provision: first, the party against whom security is sought must be resident outside the jurisdiction of the Court, the EU and the Lugano Convention contracting states; and, second, the defendant must demonstrate a prima facie defence on the merits to the claim. If the defendant discharges this burden, the plaintiff then bears the onus in relation to any special circumstances which are asserted to warrant a refusal of the order sought.

3 In this matter, it is common case that the first criterion is satisfied, the Plaintiff being resident in Jordan. The primary issue between the parties is whether the Defendant has demonstrated a prima facie defence to the Plaintiff's claim. This in turn raises questions regarding the scope of the obligation of the Defendant to put its cards on the table and whether that obligation was sufficiently complied with here.

4 The Plaintiff also relies on certain “ special circumstances” which he submits justify the refusal of the security for costs' order. This includes the unique character of the Defendant and the Plaintiff's largely uncontradicted evidence that he is a man of significant means; has ties to Ireland, through his involvement with the Defendant and otherwise; and that there are reasons why he would honour his legal obligations.

5 The Plaintiff also relies on an allegation of delay as a “ special circumstance”. In this respect, there is a difference between the parties as to how delay should be calculated when an order under Order 29 is sought.

Background

6 The Plaintiff is a businessman who resides in Jordan.

7 The Defendant is a company limited by guarantee which was incorporated in Ireland in 1984 for the stated purpose of promoting commercial, industrial, tourist and financial relations between “ the Arab Countries” and Ireland. The Defendant was established under the General Union of Chambers of Commerce, Industry and Agriculture (“ the General Union”).

8 The board of directors (“ the Board”) of the Defendant is typically made up of 12 Irish directors and 12 directors from Arab countries It is usual – and required by the articles of association (articles 39 and 40) – that the board members are nominated by the chamber of commerce of their home state and that each Arab State has one representative on the board of directors. It is common case that there is not strict adherence to these requirements. It is also common case that one Arab State has two members on the Board.

9 The process of nomination is that the home Chamber of Commerce sends the proposed nomination to the General Union for approval and the General Union then submits this nomination to the Board.

10 Article 41 of the Articles of Association of the Defendant limits the term of appointment to six years and requires each director to retire by rotation, but there has not been strict adherence to, or enforcement of, this requirement.

11 The Plaintiff was a member of the Board of the defendant since 2014, having been nominated to that office by Jordan, and was appointed as vice chairman of the Board in or about 2018.

12 Separately and distinctly from this, each ‘ qualified association’ has the power to nominate a ‘ representative member’ of the Defendant and the Plaintiff was nominated by Jordan as its representative member.

13 The plaintiff was not re-elected by the Jordan Chamber of Commerce at the annual election of that body in 2018.

Events of June – October 2022

14 The Defendant asserts that, on 29 June 2022, the General Union nominated two individuals to the Board on behalf of the Jordan Chamber of Commerce, the Plaintiff and Mr Al-Refai. The Defendant did not exhibit any documentation related to this nomination in this Motion.

15 The Plaintiff's case is that this was a “ re-confirmation” of his nomination and was prompted by a wrongful communication from the Defendant to the General Union that the Plaintiff's term as director and/or representative member had ended. There is likely to be some dispute as to what did transpire, which it is neither necessary nor appropriate to address or seek to resolve in this Motion.

16 It is the Plaintiff's case that he continued to discharge his duties as director and vice-chairman of the Defendant after 29 June 2022, including raising management and governance concerns. He asserts that it was only after, and because of, this that the Defendant then decided not to accept his nomination. This is disputed by the Defendant.

17 On 29 September 2022, an email was sent to the Plaintiff by a Mr Corneille indicating that the Defendant was treating the nomination of 29 June 2022 as a valid nomination of Mr Al-Refai and not of the Plaintiff. In that email, the Plaintiff was asked to step down as director and vice-chairman.

18 The email of 29 September 2022 is important and is set out below in full for this reason:

“Subject: Jordian Board Nomination

Dear Mohammad

I do hope you are well.

A situation has arisen that I wish to discuss with you, but I thought it appropriate to first set out the details in writing in advance.

On 29 June, the Security General of the General Union, Dr Khalid Hanify, wrote to the Chamber confirming the General Union had received a letter from the Chairman of the Jordian Chamber of Commerce nominating Mr Jamal Al-Rifai and yourself to the Board of the AICC. As you may be aware, Mr Al-Rifai is a Board member and Vice Chairman of the Jordian Chamber of Commerce however I note that you are no longer a member of their Board.

This poses an issue for the Chamber as there is only one Board position available and this should go to Mr Al-Rifai, being the most senior, given that he is not only a Board member of the Jordian Chamber of Commerce but also the Vice Chairman.

In this regard we have no option but to put Mr Al-Rifai nomination to the AICC board for confirmation at the next Board meeting and to ask you to step down from the Board and relinquish the position of Vice Chairman, however you would remain a member of the Chamber representing the Jordian Business Council.

This is...