The High Court has ordered Luxembourg-registered Carlo Tassara Assets Management S.A. to provide €200,000 as security for costs in proceedings against Éire Composites Teoranta and four other defendants. The order followed an application by the first defendant, Éire Composites, under Order 29 of the Rules of the Superior Courts and section 390 of the Companies Act 1963.
Mr Justice Brian J. McGovern said the company’s foreign registration did not prevent the court from applying the principles used for security applications involving Irish companies. Éire Composites had to show a prima facie defence and credible testimony giving reason to believe the plaintiff could not pay the defendants’ costs if successful in defending the case. The judge found the first requirement met on the affidavits and written submissions.
On the company’s ability to pay, the judge noted that its 2013 accounts subordinated short-term receivables to loans from Carlo Tassara SpA, but did not show those loans on the balance sheet. The accounts’ auditors said they could not obtain sufficient audit evidence to express an opinion. Grant Thornton had reported a net asset position of €6.8 million, but the judge preferred the auditors’ position and the account notes. Further information sought by Éire Composites had not been provided. The judge said there was at least a question about balance-sheet or cash-flow insolvency, including whether income and accumulated funds controlled by Carlo Tassara SpA would be available to meet a costs award.
The court fixed security at €200,000, estimating reasonable costs for this purpose on the basis of one senior counsel. It considered competing legal-cost estimates and set out allowances for counsel, solicitors, witnesses and other expenses. The amount is security for costs, not a finding on the merits of the underlying claim or a final assessment of costs.
Éire Composites also asked the court to strike out paragraphs 24 and 25 and the relief sought at paragraph (h) of the statement of claim, which included a claim for conspiracy. The judge accepted that conspiracy was not in the general endorsement of claim, but found the allegations arose from the same facts supporting the pleas in the writ. He was not satisfied that allowing them in the statement of claim would unfairly prejudice the first defendant; disputed allegations could be addressed in a defence, which had yet to be delivered. The motion to strike them out was refused.