The High Court has refused to order Oltech (Systems) Limited to provide security for the costs of Olivetti UK Limited in a dispute over printer performance and unpaid invoices. The motion was heard before Mr Justice Charleton in the Commercial list on 30 November 2012.
The dispute concerns 707 printers Oltech says it ordered from Olivetti in 2009 and supplied to Paddy Power Ltd. Oltech alleges the printers used more toner than their specifications and representations indicated. It claims €2.8 million in additional costs and about €200,000 in damages following termination of its distribution agreement. Olivetti counterclaims for about €2.3 million for printers and toner cartridges supplied. These are parties’ claims, not findings made at trial.
Olivetti sought security for its estimated trial costs. The judgment records that Oltech accepted it was unlikely to meet an eventual costs order if Olivetti successfully defended the claim. The court also found that Olivetti had shown a reasonably sustainable defence, including through a letter signed by Oltech’s directors acknowledging substantial outstanding debt while identifying about €500,000 as disputed over toner usage.
Those findings established the basis for the court to consider ordering security, but did not decide who was liable or whether the printers were defective. The judge assessed the competing cost estimates and said any security order would have been based on Oltech’s lower estimate of €175,000 plus VAT, rather than Olivetti’s estimate of €407,000 plus VAT.
The decisive factor was the close overlap between Oltech’s claim and Olivetti’s counterclaim. Oltech relies on alleged excessive toner use both to seek damages and to defend against Olivetti’s demand for payment. The judge concluded that staying Oltech’s claim for failure to provide security would allow Olivetti to pursue its counterclaim while preventing a proper trial examination of the same printer-performance issues.
The court therefore declined to order Oltech to lodge security for Olivetti’s trial costs. The judgment resolved only the security-for-costs motion. It did not determine the underlying claims, the counterclaim or the parties’ ultimate liability.