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1. This is a Motion to fix the amount of the security for costs to be given by the Plaintiff to the First and Second named Defendants in proceedings which have a long and chequered history. The Plenary Summons is dated as long ago as 20th April, 1990 and the Statement of Claim was delivered on 8th April, 1991. By two Orders of the High Court both dated 2nd March, 1992 it was ordered that the Plaintiff do furnish security for the costs of the First and Second named Defendants in the action in such amount as should be determined by the Master of the High Court and that all further proceedings be stayed pending the furnishing of security. Similar orders were also made in favour of the Third and Fourth named Defendants, but an Order for security for costs was refused in relation to the Fifth named Defendant.

2. The situation is somewhat complicated by the fact that there is also in existence an action taken by an associated company of the Plaintiff, namely Lismore Builders Limited (in receivership) against the same Defendants, and both actions have proceeded in tandem, and there were similar applications for security for costs in that action. There is also an Order of the High Court dated 30th July, 1992 that both actions shall be heard together, but they have not been consolidated. In the present proceedings, the Plaintiff did not appeal the Orders for security for costs obtained by the First and Second named Defendants, although the Orders in relation to the Third and Fourth Defendants were appealed by the Plaintiff, and the Order refusing security for cost to the Fifth named Defendant was appealed by him. There were similar appeals in relation to the associated action, and all were heard together in the Supreme Court, and ultimately on 12th February 1998 these appeals were decided. In the meantime, no steps have been taken in either set of proceedings other than in relation to security for costs.

3. The Motions before me are to fix the amount of the security in relation to the First and Second named Defendants, a task which it is impossible to carry out with any degree of certainty in the present case because of the complications arising from the fact that there are five Defendants all separately represented and that a second action is going to be heard at the same time as the present action. I suspect that even after the event a Taxing Master would have considerable difficulty, but to attempt to reach accurate figures before the event is well nigh impossible.

4. The security for costs was granted in this case pursuant to Section 390 of the Company's Act 1963 which reads as follows:-

5. What I have to determine, therefore, is what is "sufficient security". The jurisprudence was considered at length by Kingsmill Moore J. in Thalle -v- Soares & others (1957) I.R. 12. At that time the relevant section was Section 69 of the Company's Act 1862, but that section also used the words "sufficient security". He said at page 192:-

6. The equivalent section has also been considered in several more recent cases in England where it has been held that the words still left a very considerable discretion in the court in assessing the amount of security. In Innovare displays Plc -v- Corporate Broking Services Ltd (1991) BCC 174 at page 179 Leggatt L. J. in the Court of Appeal said:-

7. This was followed, again in the Court of Appeal, in Roburn Construction Limited -v- William Irwin (South) and Company Limited (1991) BCC 726, which emphasised that the Court had to carry out a balancing exercise between the right of the Plaintiff to bring proceedings, even if it were an insolvent company, and the right of a Defendant to recover costs should the action fail.

8. I am not aware of any decision of the Courts in this jurisdiction in which the English authorities have been considered. However, they do not seem to me to be compatible with the decision of the Supreme Court in Thalle -v- Soares , which emphasises the statutory nature of the provisions. It is certainly arguable that the use of the word "may" in Section 390 gives a general discretion to the Court, but on the whole I think it more likely that that word refers to the making of the Order for security for costs rather than to the amount thereof. In other words, even if there is credible testimony that there is reason to believe the company will be unable to pay the costs, there is still a discretion in the Court whereby an Order for security for costs may be refused. If the discretion was intended to be in relation to the amount, I think the word "sufficient" would not have been used, but it is in the section and it must have a meaning. The question can be posed: sufficient for what?. I think that question is answered in the section by saying "for those costs", that is the costs of the Defendant if successful in his defence. This seems to me to be the only logical construction of the section. Where the Court orders security for costs to be given in other circumstances, such as where the Plaintiff is out of the jurisdiction, it is customary to require security of approximately one third of the probable costs. I do not see how under any circumstances this could be called "sufficient security", and I think the section can only mean that the security required must approximate to the probable costs of the Defendant should he succeed.

9. To turn to the actual amounts to be calculated, it is necessary to consider the nature of this action. I should say that it appears to be agreed by all parties that, as two actions are to be heard together, the amount I should require to be given as security in this action should be fifty per cent of the probably total amount, and I entirely agree with that proposition. To turn to the nature of the action, there is a very lengthy Statement of Claim running to some 25 pages. The Plaintiff was the owner and developer of certain lands at Newcastle in County Dublin on which it was intended to erect a large housing estate. The Plaintiff's sister company, being the Plaintiff in the other proceedings, was the construction company which was going to actually build the houses. Before the development was completed the Plaintiff ran into financial difficulties and the Fifth named Defendant was appointed receiver over the assets of the Plaintiff. The scheme was being financed by the First Defendant, and sometime prior to the appointment of the receiver, the Plaintiff was unable to meet it's liabilities to the First Defendant and following a letter of demand from the First Defendant an agreement was entered into whereby further finance would be made available by the First Defendant but in return the First Defendant would require the appointment by the building company of a financial controller, a quantity surveyor and an auctioneer, which said appointments were to be with the approval of the First Defendant. The financial controller appointed was a nominee of the Second Defendant, the quantity surveyor is the Third Defendant and the auctioneer is the Fourth Defendant. Not withstanding such appointments, the business still failed and on 26th September, 1989, some 18 months after the appointment of the various parties, the First Defendant appointed the Fifth Defendant as receiver.

10. The Plaintiff's claim is that the Second Defendant, through its nominee, was negligent in the management of the financial affairs of the Plaintiff, the Third Defendants were negligent in their professional capacity and the Fourth Defendants were negligent in that they failed to market the houses properly. The First Defendant is being sued as being the party, in effect, in overall control, and thus liable for the negligent acts of the other Defendants. The claim against the Fifth Defendant is that, as receiver, he ultimately sold the properties at an undervalue, and indeed a claim on this basis is also being made against the Fourth Defendant, who advised the Fifth Defendant.

11. As can be seen, there are in effect five separate actions with different particulars of negligence claimed against the Second to Fifth named Defendants, and a serious issue as to the liability of the First Defendant for the actions, of the Second to Fourth Defendants. In addition, there will undoubtedly be claims for contribution and indemnity as between the Defendants themselves, which will give rise to additional issues for the Court.

12. I have been furnished with wildly differing estimates as to the length of the case and as to the probable costs. The Plaintiff estimates the case will last for some eight days while the First and Second Defendants estimate it will last some forty days. The Plaintiff estimates that the case will only require one Senior Counsel on behalf of each Defendant, and that his brief fee would be £5,000. The First and Second Defendant contend that it would be essential to have two Senior Counsel for each of them, and that the brief fee of each Senior Counsel will be £45,000. The Plaintiff estimates the solicitor's instructions fee to be £57,000, while the Defendants estimated to be £250,000. This may give some idea of the parameters within which I am asked to estimate what is sufficient security.