The High Court has refused Commissioning Services Ltd’s application to require Bionomica Ltd to provide security for its legal costs in a dispute over an alleged €300,000 loan. The court also ordered the company to provide further particulars of its defence. It made no findings on whether the money was a loan or whether it remains payable.
In a judgment delivered electronically on 15 July 2020, Mr Justice Garrett Simons said Gretta Daly, the individual co-plaintiff, had given credible sworn evidence that her net worth exceeded €1.7 million, excluding the disputed loan. Her counsel accepted that she would be personally liable for any costs order made if the defence succeeded. The judge concluded that her presence as a co-plaintiff, and her ability to meet a costs order, were special circumstances against requiring the corporate plaintiff to provide security.
The plaintiffs’ case, as summarised by the court at this interlocutory stage, is that Response Engineering Ltd advanced €300,000 to Commissioning Services Ltd in 2007, then transferred the loan to Bionomica in 2012. The transfer document misdescribed the borrower as “CSL Commissioning Services Ltd”. The plaintiffs say Bionomica obtained beneficial ownership despite that defect, and that the interest was later assigned to Ms Daly during Bionomica’s winding up. The defendants deny liability. Commissioning Services has pleaded that the original transfer was not a loan, that any loan was later written off, and that the assignment was defective. The court said the legal consequences and underlying facts remain for trial.
The security application was brought under section 52 of the Companies Act 2014. The judge found that Commissioning Services had shown a prima facie defence to Bionomica’s claim, including possible issues with the loan transfer and the company’s interest after the alleged assignment to Ms Daly. He stressed that this did not mean the defendant would necessarily succeed at trial. He did not decide whether Bionomica would be unable to pay the defendant’s costs: the parties’ estimates differed substantially, and he said the application could be resolved on the special-circumstances ground.
The court allowed the plaintiffs’ application for further and better particulars. Commissioning Services must respond to specified requests about the basis for the €300,000 transfer, the alleged write-off, the accounting treatment of the sum in the company’s financial statements, and the alleged agreement and acquiescence connected with the write-off. The correct version of the 2012 financial statements containing the reference to released liabilities is also to be produced.
The judgment proposed that Commissioning Services pay two-thirds of the plaintiffs’ costs of the linked strike-out and security motions, and the plaintiffs’ costs of the particulars motion. Those proposed costs orders remained subject to written submissions within 14 days. The judge also set a remote directions hearing for 29 July 2020 and said the plaintiffs might need to amend their statement of claim; any draft amendment was to be provided by 22 July.