The High Court has ordered Hedgecroft Limited, trading as Beary Capital Partners, to provide security for the defendants’ costs and struck out its claim against Cantor Fitzgerald Ireland Limited, the third defendant in the proceedings.
Mr Justice Binchy delivered the judgment on 28 April 2017. The court was considering two applications: one for security for costs under section 52 of the Companies Act 2014, and another to strike out the claim against the third defendant under Order 19, rule 28 of the Rules of the Superior Courts. The judgment does not state the amount of security ultimately ordered.
The dispute arises from a 2010 asset purchase agreement under which Hedgecroft acquired certain business and assets from the first and second defendants, formerly Dolmen Securities Limited and Dolmen Corporate Finance Limited. Much of the purchase price depended on income from specified contracts and projects. Hedgecroft says it received no such income and alleges that the first and second defendants breached the agreement, including in connection with pipeline projects and work that might have been referred by NAMA. The defendants contest the claims. The judgment addressed the applications, not the underlying liability.
On security for costs, the defendants estimated their likely costs at €236,507.50, an estimate Hedgecroft accepted for the application. The court found reason to believe Hedgecroft would be unable to pay an adverse costs order. It considered the company’s latest filed audited accounts, which showed net assets of €14,427 for 2014, and did not rely on a claimed success fee or the value attributed to its indirect interest in a proposed Bray primary care centre project. The court found that project was not sufficiently advanced to be treated as a dependable source for paying costs.
The judge accepted that Hedgecroft had made a prima facie case that alleged breaches by the defendants could have caused losses affecting its ability to pay costs. However, he declined to treat this as a reason to refuse security, citing inaccurate information provided to the court about the company’s interest in the project. The court therefore ordered security for the defendants’ likely costs.
The third defendant’s application concerned the pleaded allegation that it had unlawfully interfered with Hedgecroft’s economic interests by providing services to clients whose business Hedgecroft said it had purchased. The judge held that the claim, as pleaded, did not identify an actionable wrong by the third defendant and relied on its relationship with the other defendants, without pleading conspiracy. The court struck out the claim against the third defendant. The judgment records no order dismissing the wider proceedings against the first and second defendants.