The High Court has directed McAdam Food Products Ltd to provide security for costs if its defamation proceedings against ABP Food Group are to continue. The order followed an application under section 390 of the Companies Act 1963; the court was not deciding the defamation claim itself.
The proceedings concern an ABP press release issued on 5 February 2013 during the horsemeat controversy. McAdam Food Products and its co-plaintiff, Martin McAdam, claim the release defamed them. ABP disputes that it referred to either plaintiff and has pleaded, among other defences, truth, fair and reasonable publication on a matter of public interest, and qualified privilege.
President of the High Court Kearns delivered the judgment on 14 November 2014. He said ABP had established a prima facie defence and evidence showed the company plaintiff could not pay ABP’s costs if ABP succeeded. An accountant’s estimate put those defence costs at about €640,000. The company’s latest financial information, cited in the judgment, showed cash of €3,490 and current liabilities exceeding current assets by €107,271.
The burden therefore fell on McAdam Food Products to show special circumstances for refusing security. It argued that ABP’s statement caused its financial difficulties, that the case served the public interest, and that the presence of an individual co-plaintiff was a relevant circumstance.
The judge rejected the contention that the company’s inability to pay had been caused by ABP’s statement. He considered evidence concerning a proposed enterprise grant, a Bank of Ireland invoice-discounting facility, Bibby Financial Services and lost business. He concluded the material pointed to multiple causes of the company’s difficulties and that the press release had not played a significant role. He also noted that Silvercrest had suspended payments to suppliers before the release and that adverse media coverage had already associated the plaintiffs with the controversy.
The court held that the defamation claim was a dispute about the company’s own commercial reputation, not a claim raising wider public significance. It also considered Martin McAdam’s position as an individual co-plaintiff but found he was not a reliable source of recovery for a potential costs award against the company.
Kearns acknowledged that the order might prevent the company from proceeding. He nevertheless directed it to provide security if the proceedings were to continue. The judgment does not specify the amount or deadline for security, and it does not resolve whether the alleged defamation occurred.