The Court of Appeal has dismissed AXA Insurance Limited’s appeal against a High Court decision refusing to require the National Private Hire and Taxi Association Limited to provide security for AXA’s legal costs.
The appeal concerned a procedural application under section 390 of the Companies Act 1963. It did not decide the association’s underlying contract claim. The court said whether the alleged contract existed and was breached remained matters for trial.
The association says AXA agreed to pay €27.50 for each motor insurance policy facilitated for taxi drivers and to give 24 months’ notice before ending the arrangement. It alleges that AXA reduced the payment to €15 per policy between October 2010 and September 2012, then stopped paying fees without notice. Its claim seeks the commission difference and two years’ commission after payments ended. AXA denies that the contract existed as pleaded and disputes that it was required to give 24 months’ notice.
AXA sought security for costs in a motion dated 12 November 2013. The High Court dismissed that application on 5 December 2014. On appeal, AXA argued that the association could not meet AXA’s costs if AXA successfully defended the claim, and that the association had not shown that its financial position resulted from AXA’s alleged conduct.
The Court of Appeal accepted that AXA had a prima facie defence and that the association would be unable to pay AXA’s costs if AXA won. But it agreed with the High Court that the association had shown, on a prima facie basis, alleged actionable wrongdoing and a connection between that alleged breach and the loss of a substantial income stream. The court also accepted that the claimed loss, if proved and legally recoverable, could make the difference to the association’s ability to meet costs.
The judgment noted that the association had relied heavily on income from AXA and had generally paid most of that income to its effective owner, Christy Humphries. It also said the evidence did not show that the company habitually failed to pay its bills, or that it would not have made provision for litigation costs had the income continued. Those observations were part of the court’s assessment of the security application, not a final ruling on the contract claim.
The Court of Appeal therefore dismissed AXA’s appeal and left in place the High Court’s refusal to order security for costs. It did not determine liability, damages or the ultimate outcome of the association’s claim.