The High Court has ruled that Goode Concrete must provide security for the costs of CRH plc, Roadstone Wood Limited and Kilsaran Concrete as its competition case proceeds. The order will be phased; the court did not set an amount in this judgment or decide the underlying claims.
Mr Justice Cooke gave judgment on 21 March 2012 on applications by the defendants. Goode Concrete, an unlimited company that had ceased trading and was insolvent, argued that the court had no jurisdiction to require security. The applications relied on section 390 of the Companies Act 1963, Order 29 of the Rules of the Superior Courts, or the court’s inherent jurisdiction.
The judge held that section 390 applies to limited companies and did not cover Goode Concrete. But he found that Order 29 permits a security order against a resident plaintiff in appropriate circumstances. He concluded that Goode Concrete was effectively lending its name to the action, which was being pursued by its directors for the benefit of creditors and potentially its members. On that basis, the company could be treated as a nominal plaintiff for the applications.
The case concerns allegations that the defendants breached competition law in cement and readymix concrete markets, including through below-cost sales and collusive tendering. The defendants deny unlawful conduct. They argued that the company’s financial difficulties reflected factors including the construction-sector downturn, its debt and operating costs, and changes in its plant operations. These were submissions, not findings on the merits.
For the security applications, the court found the defendants had shown a stateable basis for defending the action. It did not determine whether those defences would succeed. The judge also concluded that Goode Concrete had not established a prima facie case that the alleged wrongdoing caused its insolvency and inability to provide security. The court therefore acceded to the applications.
The defendants had sought security based on the estimated costs of a six-to-eight-week trial, with CRH’s legal costs accountants estimating more than €1 million. The judge did not make an immediate order for that full-trial amount. He proposed a first phase covering the completion of pleadings and discovery, followed by a review and possible further security for preliminary issues. The parties were to be heard on the terms of the phased order.