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OUTER HOUSE, COURT OF SESSION
[2007] CSOH 140
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OPINION OF LORD UIST
in the cause
ALBERT BARTLETT & SONS (AIRDRIE)
LIMITED
Pursuers
against
GILCHRIST & LYNN LIMITED
Defenders
and
ATLAS WARD STRUCTURES LIMITED
First Third Party
and
THE KERR PRACTICE
Second Third Party
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Parties Participating at this hearing:
Defenders: G J Walker; McGrigors
First Third Party: Miss Higgins; Simpson & Marwick
Non-participating parties:
Pursuers: MacRoberts
Second Third Party: Dundas & Wilson
3 August
2007
Introduction
[1] The
pursuers have brought this action against the defenders claiming the sum of £2
million for alleged breach of a contract for the construction of a potato
processing and packaging plant. The
defenders have brought in two third parties, against whom they claim relief. The first third party, Atlas Ward Structures
Limited, was the nominated subcontractor responsible for the design and
construction of the building "envelope" comprising a steel frame and composite
metal roof and wall cladding.
[2] The
first third party has enrolled a motion in the following terms (with
appropriate spelling, syntactical and grammatical corrections):
"On behalf of the First Third Party to ordain the defenders to find
caution of £120,000 for expenses and to sist the matter until caution is found
in terms of section 726(2) of the Companies Act 1985 in respect that credible
testimony based on the defenders' latest accounts dated 31 May 2006 reveals
that the acid test ratio is 0.41 and a result of less than one means that the
defenders cannot pay their current liabilities and their borrowing ratio is
243.23% against an industry median of 14.2%, which means that the defenders
have a significant amount of borrowing, and in the event that the First Third
Party is successful there is a concern that the defenders will not be able to
fund any liability in respect of the First Third Party's expenses."
[3] The
defenders have opposed the motion on the grounds that
"(1) caution is not required in the interests of justice; and,
separately, (2) if required, the level of caution sought is excessive."
The statutory
provision
[4] Section 726(2) of the Companies Act 1985
provides:
"Where in Scotland a limited company is a pursuer in an action or other
legal proceedings, the court having jurisdiction in the matter may, if it
appears by credible testimony that there is reason to believe that the company
will be unable to pay the defender's expenses if successful in his defence,
order the company to find caution and sist the proceedings until such caution
is found."
Lord Drummond Young sought to explain the meaning and
effect of that provision in Monarch
Energy Ltd v Powergen Retail Ltd [2006] CSOH 102 at paras 10 and 11, where he stated as follows:
"[10] The purpose of that provision is clear; it is designed to prevent
the device of limited liability from being used as a means of litigating without
fear of having to meet the other side's expenses if the litigation is
unsuccessful. The court's power under
the subsection is discretionary. It is
dependent on evidence that the pursuer will be unable to pay the defender's
expenses if the defender is successful. If
such evidence is available, however, caution will normally be ordered: Dean Warwick Ltd v Borthwick 1981 SLT (Notes) 18, at 19, where Lord Maxwell states
that the primary question is whether there is a substantial risk that the
defender will be unable to recover expenses if successful in the action. In some cases, of course, even if the
statutory test is satisfied caution will not be ordered. That might occur because of the relative
strengths of the parties' cases. If the
pursuer's case appears strong and there is no obvious stateable defence, it
would be unusual to order caution; an example of that is where the pursuer sues
for the price of goods supplied and the defender does not allege any defects in
the goods. Nevertheless, such proceedings
are the exception; if both sides have put forward what appear to be clearly
arguable cases, it will rarely be possible to refuse caution on this basis.
[11] Under section 726(2) a
pursuer may be required to find caution.
Caution involves a secondary obligation on the cautioner that is
co-extensive with the primary obligation of the principal debtor. That indicates in my opinion that the
subsection envisages a guarantee of the defender's judicial expenses, rather
than a level of comfort. That view is
supported by the purpose of the subsection, which is to ensure that limited
liability is not used as a means of evading the payment of expenses. That purpose can only be properly achieved if
those who provide security for the company are liable to the defender in
exactly the same manner as the company; otherwise there is a risk that part of
the judicial expenses will not be paid. This
is confirmed by the terms of Rule of Court 33, which supplements section 726(2). RC 33.6 provides that the bond of caution
should oblige the cautioner, his heirs and executors to make payment of the
sums for which he has become cautioner to the party to whom he is bound "as
validly and in the same manner as the party and his heirs and successors, for
whom he is cautioner, are obliged". In
my opinion that provision indicates that any caution ordered under section
726(2) should normally amount to a full guarantee of the defender's judicial
expenses, in such a way that the cautioner is bound in exactly the same way as
the pursuer itself. That seems
inconsistent with any form of security that merely provides a level of comfort
rather than an outright guarantee. RC
33.4 permits the court to accept other forms of security as an alternative to
caution; consignation is specifically mentioned, but others may be approved. In such cases the security is plainly
designed to operate as an alternative to caution; consequently, it must fulfil
the same essential purpose. It follows
in my opinion that any such alternative form of security must provide the
defender with a guarantee of its expenses, rather than merely a degree of
comfort."
Subject to the reservation that I do not think that
the Rules of Court, a form of subordinate legislation, can be used as an aid to
construction of a statute (Jackson v Hall [1980] AC 854 per Viscount
Dilhorne at p 884, where he said that he "had no hesitation in rejecting the
contention that rules made in the exercise of a statutory power can be relied
on as an aid to the construction of a statute"), I agree with and adopt the
substance of Lord Drummond Young's above comments.
Competency of the
motion
[5] Although it was not foreshadowed in the
reason for opposition to the motion, a preliminary point about the competency
of the motion was taken on behalf of the defenders. The contention was that, as section 726(2)
stated that where in Scotland a limited company "is a pursuer in an action or
other legal proceedings .........(and) will be unable to pay the defender's
expenses", it could not apply to the present case in which a third party was
asking that the defenders should find caution for expenses. The situation in the present case was that
the defenders were making a claim for relief against the first third party. There was no reported case under the
subsection where the court had ordered defenders to find caution at the request
of a third party.
[6] In my
opinion the question of competency which arises is whether the words "pursuer"
and "defender" in the context of the subsection require to be construed
literally. This point was considered by
Lord Gill in Asssuranceforeningen Skuld v International Oil Pollution Compensation
Fund (No 3) 2000 SLT 152, in which a salmon farming company sought
compensation under the Merchant Shipping (Oil Pollution) Act 1971 arising out
of the grounding of the Braer oil
tanker off the coast of Shetland, in respect of a contract which they were
allegedly unable to implement as a result.
After the ship's insurer's limitation fund was paid into court all
parties seeking compensation were required to lodge claims on the fund for
determination as part of the process in the limitation action. A preliminary proof was appointed on the
question of the claimants' alleged fraud in the submission of their claim. Two objectors to the claim each sought
caution for expenses in the sum of £40,000.
The claimants were no longer trading and it was accepted that at 30 June 1999 shareholder funds were £142,305 subject to securities
and that in 1997 funds had amounted to £1,000,000. The claimants submitted that they should be
regarded as claimants in a multiplepoinding rather than pursuers in an action,
and that their financial position was a result of the incident giving rise to
the claim. Lord Gill ordered that
caution be found, restricted to £20,000 in each case. Dealing with the question of interpretation
of the subsection, Lord Gill stated at p 1354, paras 8 and 10 to 14:
"[8] In support of the first
ground of opposition counsel for the claimant argued that the subsection should
be construed literally. The claimant was
not a 'pursuer'. On the contrary, the
claimant was a defender convened to the multiplepoinding raised by
Assuranceforeningen Skuld ('Skuld'), the insurer of the Braer. It had been held that
the expression 'pursuer' in one of the forerunners of this provision did not
apply to a company that was the respondent in an appeal (Star Fire and Burglary Insurance Co v Davidson (1902) 4F 997).
[10] In my opinion the first
point taken on behalf of the claimant is unsound. It is a point that could not be taken if the
motioners, as is open to them, were to enrol motions for caution at common law. In my view, the word "pursuer" in the
subsection should not be construed literally as counsel for the claimant
suggests. The subsection refers to the
"pursuer in an action or other legal proceedings". In an ordinary action the party raising it is
designed as the 'pursuer', but in other legal proceedings he is not. Moreover, in other legal proceedings the
party against whom they are raised is not designed as the 'defender'. This points against a strictly literal
interpretation of these expressions in the context of this subsection.
[11] If the interpretation
suggested for the claimant were correct, the provision would never apply in any
claim by a company that had to be pursued by means of a petition process. Such a restriction would be pointless. I fail to see why the subsection should
protect a defender against whom a claim is made in an ordinary action, but not
protect a respondent against whom a claim is made by way of petition. Moreover, on the claimant's argument the
subsection would operate rather arbitrarily in relation to remedies that can be
sought either by action or by petition (cf Exchange
Telegraph Co Ltd v White 1961 SLT 104).
[12] In my view, the
subsection is designed to give protection to a party against whom an
impecunious company litigates. In my
view the subsection should be construed by reference to the reality of the
situation rather than to the labels by which parties are formally designed. The present claim was initiated by an action
in which the claimant was the pursuer and the Braer Corporation and Skuld were
the defenders. That action remains in
dependence. After Skuld lodged its
limitation fund and was exonered and discharged, the claims made in the action
raised against the Braer Corporation and Skuld had thereafter to be pursued as
claims in the Skuld limitation process in accordance with the practice note
dated 15 May 1999. The claimant's status as pursuer in the
original action underpins the claim made by it in the present process.
[13] The reality here is that
the claimant is seeking payment of £1, 428,891.12 out of the fund in medio. The motioners have undisputed title and
interest to oppose the present claim. A
decree in favour of the claimant will deplete the amount available to meet
other valid claims and will increase the contingent liability of IOPCF. If the fund in medio is insufficient to meet
all valid claims, liability in respect of the deficiency will then transmit to
IOPCF. IOPCF in turn will be entitled to
seek limitation. In that event it is
possible that the IOPCF limitation fund will be insufficient too. It is obvious therefore that the interests of
the claimants and those of the motioners are directly opposed. These are 'other legal proceedings' within
the meaning of the subsection. In my
opinion the claimant is in substance the pursuer of a claim and in opposing it
the motioners are in substance defenders in respect of it.
[14] Star Fire and Burglary
Insurance Co Ltd v Davidson is
distinguishable. In that case the
company was the successful pursuer in the action. It was held that, in resisting an appeal by
the defenders, the company was not a pursuer in the sense of the section. In the present case the claimant remains the
party seeking the remedy at first instance."
It was submitted for the first third party that the
relationship between the defenders and the first third party fell squarely
within what was adumbrated by Lord Gill in the above case, although no mention
was made by him of the case of a defender and a third party falling within the
terms of the subsection.
[7] Having
regard to the above observations of Lord Drummond Young and Lord Gill, I think
that the situation in this case involving the defenders and the first third party
falls within the meaning of the subsection despite the use of the words
"pursuer" and "defender" therein. I
accept, as Lord Drummond Young pointed out, that the purpose of the provision
is to prevent the device of limited liability from being used as a means of
litigating without fear of having to meet the other side's expenses if the
litigation is unsuccessful. If a
purposive construction is then applied to the words "pursuer" and "defender" in
the subsection, it is clear that the word "pursuer" must be read to mean "the
party bringing the claim" and the word "defender" must be read to mean "the
party resisting the claim". I agree with
Lord Gill's statement in para 12 above that the subsection should be
construed with reference to the reality of the situation rather than to the
labels by which the parties are formally designed. In the present case, as in Assuranceforeningen Skuld, the point of
competency taken by the defenders could not be taken had the motion been
enrolled at common law, as was possible.
Further, the claims made by the defenders against the first third party
are made under the third party procedure under Chapter 26 of the Rules of
Court for relief and contribution in terms of section 3(2) of the Law
Reform (Miscellaneous Provisions) (Scotland) Act 1940, and also separately for
breach of their contract with the defenders.
Such claims could be made in separate proceedings, in which event the
defenders would be the pursuers in the action and the first third party would
be the defender and there would be no question about the competency of a motion
by the defender for the pursuers to find caution under the subsection. I do not see why the first third party in the
present action should be prejudiced in relation to the finding of caution under
the subsection because the defenders brought them into this action by way of
third party procedure rather than by raising a separate action against them.
[8] The point
was forcibly made by the defenders that, as the subsection envisages the
sisting of the action until caution is found (a matter with which I deal more
fully below), this would result in proceedings being brought to a halt until
caution were found, to the prejudice of the other parties to the action,
namely, the pursuers and the second third party. I think that there are two answers to that
point. First, it is open to any other
party to the action to oppose the present motion for the finding of caution. Neither the pursuers nor the second third
party have opposed the motion, and I think it can fairly be taken from that
that they do not consider their interests would be prejudiced if the action
were to be sisted. Secondly, it is
always to open to any party to an action which has been sisted to enrol a
motion for recall of the sist, and either the pursuers or the second third
party could do so if this action were sisted for such period as to amount to
prejudice to their interests. I
therefore do not think that the sisting of the action points away from the
interpretation of the words "pursuer" and "defender" which I favour.
Credible
Testimony
[9] The subsection, applied to the facts of
this case, requires that, before I can order the defenders to find caution for
the first third party's expenses, it must appear by credible testimony that
there is reason to believe that the defenders will be unable to pay the first
third party's expenses if the first third party is successful in resisting the
claim against it by the defenders. The
question of credible testimony was dealt with by Lord Maxwell in Dean Warwick Ltd v Borthwick 1981 SLT (Notes) 18, in which the information placed
before him consisted of , first, copies of documents lodged with the Registrar
of Companies giving details of the company in question, which showed that no
annual returns had been lodged for three years and none of which indicated that
the company had traded or had not traded or that it had any assets or
liabilities, and, secondly, a sheriff court decree against the pursuers for a
principal sum of £581. At pages 18-19
Lord Maxwell said:
"There was a question raised as to whether information of the kind to
which I have referred was sufficient 'testimony' for the purposes of the relevant
section of the Companies Act .... and I
was referred to a case on this subject, Edinburgh
Entertainments Ltd v Stevenson 1925
SLT 557; 1925 SC 848. In the light of
the 1925 case I am satisfied that the documents can properly be taken into
account and the information which I have with regard to the decree in the
sheriff court can also properly be taken into account in a case of this type
where I have counsel for the pursuers' company before me and the facts are not
disputed."
The information with which I have been provided in the
present case, and which is said to amount the necessary credible testimony,
consists of a document headed "Limited Company Gold Report" (15/1 of process)
prepared by Experian Limited on 3 July 2007 ("the report"). The report provides considerable detail about
the defenders, their management and their financial position. Particular reliance was placed on behalf of
the first third party on the "acid test" of 0.41 for the accounts to 31 May 2006, the figures for the previous three years having been
0.40, 1.31 and 2.31. The acid test
represented the ability of the company to use cash to extinguish its current
liabilities. The lowest acceptable ratio
was 1, and the ratio had therefore gone from 2.31 in 2003 to 0.41 in 2006. Reliance was also placed on the defenders'
borrowing ratio %: the average in the industry was 14.2% and the defenders'
borrowing ratio was 243.23% in 2006. It
was submitted that these two figures gave rise to a basis for concern. The sum sought as caution was £120,000. The fees incurred to date by the first third
party amounted to £47,000, the likely cost of an expert's report was £48,000
and likely further fees of counsel and solicitors were £25,000.
[10] On
behalf of the defenders it was pointed out that the justification for the
motion was to be found in only two factors contained in the report. It was submitted that there were three
reasons why the report did not constitute the necessary credible testimony in
terms of the subsection.
[11] First,
the first third party had "cherry picked" among the contents of the report and
ignored the points in the report which were favourable to the defenders. The Credit Summary on page 1 of the report
stated: "A below average risk company; little reason to doubt credit
transactions to the limit assigned". The
limit assigned was £65,000. The defenders had a three star Commercial
Delphi Rating, their Commercial Delphi Score was 74 out of 100, they were
described in the Commercial Delphi Band as "Below Average Risk" and their
Failure Odds were given as 36:1. In the
Payment Profile on page 3 of the report it was stated that the defenders paid
consistent with the industry average, that there was a consistent payment
pattern, that they had no accounts placed for collection and no outstanding
accounts and that they paid beyond their terms.
In the Commentary on page 4 it was stated: "This company pays its
accounts on average 10 days beyond terms.
The payment information we have for this company over the last 6 months
available shows a consistent payment pattern." In paying on average 10 days
beyond terms the defenders performed considerably better than the industry
average. Looked at as a whole,
therefore, the report was favourable to the defenders.
[12] Secondly,
the Acid Test itself was in this instance entirely misleading as it left out of
account heritage owned by the company worth £2.3 million. The defenders were also a property
development company and had secured loans of £1.8 million. The
Acid Test consisted of current assets minus stock (inventories), excluding
heritage, divided by current creditors: it therefore effectively took the asset
of the heritage out of the equation but left in the secured debt. When like was compared with like there was in
effect a comfortable asset surplus.
[13] Thirdly,
the borrowing ratio could be explained in the same way as the Acid Test. It was entirely misleading as there were
significant borrowings over land to be developed. The heritage had been valued at £2.3 million
by surveyors in 2003 and was probably now worth considerably more than that:
there had been an offer of £4 million for the land in March 2005.
[15] In
summary, it was submitted that the report did not constitute the necessary
credible testimony. On the contrary, it
demonstrated that the defenders were "a good bet". The accounts showed that it was a solvent
company with a year on year profit of around £700,000. There had been sheriff court decrees against
them in August 2001 and July 2003, which were both met with payment. They were a family company which had been
incorporated on 24 April 1954.
[16] In
response to these points it was conceded for the first third party that the use
of ratios may not be "particularly helpful", but if one had regard to the
accounts the position was that the cash in hand was over £6,000 and debts
amounted to £1.8 million. Heritage
was not normally taken into account because of the difficulty in realising it. If the first third party were successful it
would have a claim for £2 million plus expenses against the defenders. It was then that the figures began to stack
up and against those figures the cash at the bank became a very small amount. The defenders had admitted liability to the
pursuers (although not for £2 million) and the dispute was between the
defenders and the two third parties. If
the first third party were successful, the defenders would be liable to them. The relative strengths of the parties' cases
had not been raised and did not require to be considered: the position on that
point was therefore neutral.
[17] Having
considered the whole report on the defenders by Experian Limited, I am not
satisfied, essentially for the reasons advanced on behalf of the defenders,
that it appears from it that there is reason to believe that the defenders will
be unable to pay the expenses of the first third party should the latter be
successful in the litigation. The terms
of the report, looked at as a whole, do not satisfy me that the defenders will
be unable to pay the first third party's expenses if the latter is successful
against the defenders. The two ratios in
the report relied upon by the first third party are, for the reasons advanced
on behalf of the defenders, in a sense artificial in nature and in my opinion
do not reflect the reality of the defenders' financial position. The reality is that the defenders are a long
established family company who have been trading for over 50 years, who are
able to meet their current liabilities as they arise and, indeed, who settle
their invoices ahead of the average time in the industry. Decrees granted against them in the sheriff
court in 2001 and 2003 were satisfied, and there are no outstanding decrees or
forms of diligence against them. The
terms of the Credit Summary in the Report, which I have quoted above at para
[11], speak for themselves. The
financial position of the defenders is far removed from that of the pursuers in
Monarch Energy Ltd, and even further
removed from that of the pursuers in Dean
Warwick Ltd, which may appropriately be described as being at the other end
of the spectrum. In my opinion there is,
on the basis of the report, no substantial risk that should the first third
party be successful, it will then be unable to recover the expenses which might
then become due to it from the defenders (see Lord Maxwell in Dean Warwick Ltd at p19).
Discretion
[18] Had I been satisfied that the necessary
credible testimony existed, I would then have had to decide whether to exercise
my discretion in favour of ordering that caution be found (Lord Maxwell in Dean Warwick Ltd at p 19 and Lord
Drummond Young in Monarch Energy Ltd at
para [10]). It was not suggested in the
course of submissions that the first third party had an unarguable case, nor
was any other reason put forward as a basis for suggesting that, if I were
satisfied on the test of credible testimony, I should exercise my discretion by
refusing to order caution. Accordingly,
had I been satisfied that the necessary credible testimony existed, I would
have exercised my discretion by ordering the finding of caution in the sum of
£120,000, as sought by the first third party (see Lord Drummond Young in Monarch Energy Ltd at para [11]).
Sist
[19] Had I decided to order that caution be
found, the question would have arisen whether the action had to be, or should
be, sisted.
[20] In Augustinus Ltd v Anglia Building Society 1990 SLT 298 Lord Morton of Shuna, in a
case under s 726(2), did not sist the case when ordering caution but fixed a
period of time (which he subsequently prorogated by one week) in which caution
was to be found. When it was not found
in the required time he assoilzied the defenders. It was argued for the pursuers in that case
that s 726(2) did not provide for anything other than a sist of proceedings
until caution was found. It was argued
for the defenders that in the absence of any provision about time the common
law procedure should prevail and that the court should fix a reasonable time
within which caution should be found and if it were not found in that time the
defenders should be entitled to absolvitor. No authority supporting either side was
referred to. Lord Morton of Shuna stated
in his opinion:
"The report in Dean Warwick Ltd v Borthwick 1981 SLT (Notes) 18 is silent
on whether any time limit was imposed in that case. I considered that Parliament must have
contemplated that caution might not be found and that in the absence of any
provision dealing with that situation must have intended that the common law procedure
of fixing a time during which caution should be found should apply in cases
under s 726(2) of the Companies Act."
[21] In Metric Modules International Ltd v Laughton Construction Co Ltd 1996 SCLR
676 Sheriff Principal C G B Nicholson QC held that the word "may" in s 726(2)
qualified both the phrase "order ... to find caution" and the phrase "sist the
proceedings until caution is found", with the consequence that the court had a
discretion whether to sist a cause when ordering caution to be found and
expressed the opinion that a court was entitled to impose a time-limit for the
finding of caution when a pursuer company is ordered so to do in terms of s 726(2).
[22] In Pioneer Seafood Ltd v The Braer Corporation (21 May 1999,
unreported) counsel for the defenders submitted that the court could order
caution under s 726(2) without necessarily sisting the action and that it was
open to the court to fix a time limit for the finding of caution, as the Lord
Ordinary had done in Augustinus Ltd. At pages 8-9 Lord Gill stated:
"The natural reading of section 726(2) is that if the court decides to
order caution it should also sist the action.
The difference between the wording of subsection (1) and subsection (2)
gives some support for this interpretation.
Subsection (2) makes no reference to time limits. In Augustinus
Ltd v Anglia Building
Society, of which there is
only a brief report, the Lord Ordinary imposed a time limit without sisting the
cause. I notice that in Metric Modules International Limited 1995
SCLR 676, which was not cited by counsel in this case, Sheriff Principal
Nicholson examined the point thoroughly and reached the same conclusion as the
Lord Ordinary in Augustinus Ltd v Anglia Building Society.
The problem of interpretation arises from the fact that the subsection
does not provide for the case where caution is not found. In most cases an indefinite sist for the
finding of caution penalises the pursuer and is to the advantage of the
defender. But there are cases where the
defender has an urgent interest in having the action brought to a conclusion. This is such a case ..... I appreciate that even where a statutory
provision is silent on the matter of time limits, the court may be able to
exercise a general discretionary power to adject time limits to its procedural
orders. But I am inclined to think that
in a case under section 726(2) the express provision for sisting points against
the imposition of a time limit. Sisting
puts a stop to all further procedural steps.
If a time limit is imposed, the action continues and judicial expenses
continue to be incurred.
It is unnecessary for me in this case to reach a concluded view on the
point because I am satisfied that the appropriate course in this case is to
order caution and to sist the cause until caution is found. If the pursuer fails to find caution within a
reasonable time, the defenders will be entitled to enrol for recall of the sist
and, on the view that the pursuer is in default, for decree of absolvitor (cf Augustinus Ltd v Anglia Building
Society)."
[23] I share
Lord Gill's view on the procedure which should be followed when the court
decides to order the finding of caution under s 726(2). It seems to me from the wording of s 726(2)
that Parliament was envisaging that the procedure to be followed if caution
were ordered to be found under the subsection was that the action should be
sisted. I suppose it is possible to
figure cases where that would not be necessary, such as if caution were
immediately tendered at the Bar on the order being made or if for some reason
the defender did not wish the case to sisted, but I think the procedure to be
followed, if time is required for caution to be found, is that the action must
be sisted. I can see no warrant for the
imposition of a time limit until caution is found. Accordingly, had I been ordering that caution
be found I would have followed the same course as Lord Gill in Pioneer Seafoods Ltd and sisted the
action until caution had been found. If
the defenders had failed to find caution within a reasonable time it would then
have been open to the first third party to enrol for recall of the sist and for
absolvitor.
Decision
[24] As I
am not satisfied, for the reasons set out above, that it appears by credible
testimony that there is reason to believe that the defenders will be unable to
pay the first third party's expenses if the latter is successful against the
defenders, I shall refuse the motion.
