The High Court has ordered Delta Index Limited to provide €192,050, excluding VAT, as security for the legal costs of Bux Financial Services Limited in an ongoing contract dispute. The court also stayed Delta’s proceedings until the security is provided.
In a judgment delivered on 26 January 2021, Mr Justice Heslin considered the defendant’s application under section 52 of the Companies Act 2014. The parties had agreed that the defendant had a prima facie defence and that Delta, an Irish company, would struggle to pay the defendant’s costs if its claim failed. The dispute was whether special circumstances justified refusing security.
Delta alleges that the defendant, formerly called Ayondo Markets Limited, under-reported revenue under two “White Label” contracts and continued trading with Delta’s customers after the contracts ended by agreement in April 2018. Delta says the alleged breaches and misrepresentations caused losses and left it unable to meet an adverse costs order. Those claims remain allegations; the security application did not decide liability in the underlying action.
Delta relied on reports estimating lost revenue of €775,147 and arguing that, without those losses, it would have been able to meet the defendant’s costs. The defendant disputed that analysis and submitted that Delta was already insolvent before the business relationship began.
The judge found that Delta had not produced prima facie evidence connecting alleged wrongdoing to its financial position or showing that recoverable losses would bridge the gap between its resources and the likely costs. He said the reports relied on assumptions and calculations based on Delta’s pleaded case, without evidence supporting those assumptions. The court also noted evidence that Delta was insolvent before contracting with the defendant and that its balance sheet improved during their relationship. It was not determining whether Delta’s underlying claim would ultimately succeed.
The defendant’s costs were estimated at €192,050, excluding VAT. Delta did not dispute that total with evidence from a costs accountant. The judge ordered that full amount as security and stayed the proceedings pending payment. The parties were invited to agree the form of any costs order; failing agreement, they were directed to file short written submissions within 21 days.