The High Court has ruled that Brian Cunningham is personally liable for costs awarded against companies in the Cunningham Group’s litigation with First Active plc. It also directed him to disclose his assets, income and related documents before being cross-examined about how he could meet a separate judgment debt.
Mr Justice Frank Clarke delivered the judgment on 16 March 2011 in linked proceedings, including First Active’s case against Mr Cunningham and proceedings brought by eight corporate plaintiffs. The court said that most of the long-running litigation had been determined, with some tangential issues remaining.
On the costs application, the judge held that the court had jurisdiction under both the Rules of the Superior Courts and section 53 of the Supreme Court of Judicature (Ireland) Act 1877 to join a non-party as a defendant so that they could be made liable for costs ordinarily ordered against a party. He then considered whether that power should be used in this case.
First Active argued that Mr Cunningham funded and directed the companies’ litigation, and would have been its principal beneficiary if successful. The judge drew the inference that Mr Cunningham had funded the litigation. He also found that the companies could not meet the costs and that the proceedings’ conduct had significantly increased First Active’s costs through serious procedural failures. The judgment said the company’s claims had been unsuccessful and that the companies were insolvent. It concluded that Mr Cunningham should be personally liable for the costs orders against the corporate plaintiffs in the proceedings before the court and those listed in a schedule.
The second application concerned an existing personal judgment against Mr Cunningham in separate proceedings. First Active sought an examination in aid of execution and advance disclosure about his means. The judge held that Order 42, rule 36 allowed the court to require sworn disclosure of present and anticipated assets, income and other means of satisfying the judgment, along with relevant documents, before examination. The precise wording of the orders was left for further submissions from First Active’s counsel, and the examination date was to follow compliance with disclosure.
The court did not grant additional disclosure orders under the undertaking given pending appeal. It said that undertaking was intended to preserve the position while appeals were pursued, and that the circumstances did not justify adding disclosure requirements on that basis. The ruling also said Mr Cunningham could spend reasonable sums on his appeals, subject to notifying First Active and its ability to challenge the amount as unreasonable.