H560
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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Mike O'Dwyers Motors Ltd -v- Mazda Motor Logistics Europe NV [2012] IEHC 560 (21 December 2012) URL: http://www.bailii.org/ie/cases/IEHC/2012/H560.html Cite as: [2012] IEHC 560 |
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Judgment Title: Mike O'Dwyers Motors Ltd -v- Mazda Motor Logistics Europe NV Neutral Citation: 2012 IEHC 560 High Court Record Number: 2011 784 P Date of Delivery: 21/12/2012 Court: High Court Composition of Court: Judgment by: Laffoy J. Status of Judgment: Approved |
Neutral Citation 2012 [IEHC] 560 THE HIGH COURT [2011 No. 784 P] BETWEEN MIKE O’DWYER MOTORS LIMITED PLAINTIFF AND
MAZDA MOTOR LOGISTICS EUROPE NV (TRADING AS “MAZDA MOTOR IRELAND”) DEFENDANT Judgment of Ms. Justice Laffoy delivered on 21st day of December, 2012. The application
5. Four affidavits have been filed in support of, and in response to, the application, namely:
(b) two affidavits sworn by Mike O’Dwyer, the Managing Director of the plaintiff, the first, in response to the grounding affidavit, having been sworn on 11th December, 2012, and the second, in response to Mr. Jellis’s second affidavit, having been sworn on 17th December, 2012. 3. As the analysis of s. 390 contained in Delany and McGrath on Civil Procedure in the Superior Courts (3rd Ed.) at para. 13 – 56 sets out clearly, s. 390 requires a defendant to establish two separate matters, namely:
(b) that the plaintiff will not be able to pay the defendant’s costs if successful in his defence. 4. I propose considering each of the components of the application as outlined in the previous paragraph in turn, but before doing so I propose summarising the plaintiff’s case, as pleaded, and the defendant’s answer to it, as pleaded. The plaintiff’s case as pleaded and the defendant’s response to it as pleaded 6. In additional to replies to particulars dated 19th October, 2012, the plaintiff has contended that, but for the matters the subject of the proceedings, “it would have sustained an average annual turnover of approximately €1,000,000 higher” than it achieved, as tabulated in the turnover table in the replies, “with an approximate gross margin of twenty per cent, giving an annual loss of €200,000 which is claimed for a five year period”. The table, which covers the five years from 1st June, 2007 to 31st May, 2012, shows a turnover in respect of, inter alia, new car sales, second-hand car sales and servicing and repairs decreasing over the five years. In his first affidavit Mr. O’Dwyer has referred to the replies and has averred that the unlawful actions of the defendant have had a devastating effect on the business of the plaintiff, with an estimated loss of turnover to May 2012 of €1m and further loss of turnover is expected over the next five years. In his second affidavit Mr. Jellis has taken issue with the accuracy of the figure of €1m and has also asserted that the loss of turnover is due to economic circumstances or the actions of the directors of the plaintiff, not the actions of the defendant. At the hearing, counsel for the plaintiff submitted that the economic downturn only accounted for part of the diminution of the plaintiff’s turnover, which he also attributed to the effects of the communications by the defendant to its customer base. In reality, it is not possible for the Court, and it would be wholly inappropriate, to express any view on the quantum of the plaintiff’s claim for damages. 7. The defendant in its defence delivered on 13th March, 2012 traversed all allegations of wrongdoing against it and asserted that the Repairer Agreement had been terminated on various bases, for example, by fundamental breach by the plaintiff, by mutual agreement, and in consequence of its entitlement to repudiate, which it had done by letter of 3rd February, 2012. Estoppel was also pleaded against the plaintiff. The defendant denied that the Repairer Agreement remains in force and it also denied all wrongdoing. As regards the communication with customers of the plaintiff, which was denied, it was asserted that the plaintiff’s claim has failed to disclose any cause of action for the alleged damage due to the communications complained of. In general, the defendant has denied that the plaintiff has suffered any loss of damage attributable to its conduct. 8. As regards the related proceedings, the defendant in these proceedings, which is one of the plaintiffs in the related proceedings, the other plaintiff being a Japanese company which is the owner of the “Mazda” Trademark, seeks various injunctive reliefs against the plaintiff in these proceedings restraining the use of the brand name “Mazda” and its logo, the “Mazda” Trademark and so forth. In its defence, which was also delivered in February 2012, the plaintiff in these proceedings has denied all wrongdoing alleged by the Mazda companies against it, but has asserted that it remains “an authorised Mazda repairer”. It has denied that the Mazda companies are entitled to any of the reliefs claimed against it. Inability of the plaintiff to meet the defendant’s costs established? 10. Essentially, Mr. Jellis has advanced three reasons for the defendant’s concern that the plaintiff may be unable to meet the defendant’s costs, if the defendant is successful. They are:
(b) The plaintiff is defending summary proceedings brought against it by ACC Bank Plc in the Commercial Court, the sum being claimed by the Bank being €1,925,463.25. A motion for summary judgment was heard in the Commercial Court on 15th November, 2012 and judgment was reserved. (c) There are other proceedings in being in the High Court Chancery List against the plaintiff (the reference to the defendant in paragraph 11 of the grounding affidavit is clearly erroneous). Those proceedings are proceedings by Mr. Doheny seeking directions under s. 316 of the Companies Act 1963 as to the validity of the debenture under which he was appointed and as to the validity of his appointment as receiver. Those proceedings were first returnable on 26th November, 2011 and were adjourned to 10th December, 2012. On that day, the proceedings were adjourned to 21st January, 2013 for mention. The averment by Mr. O’Dwyer in his replying affidavit that the Court “refused to grant the directions sought” is incorrect. The Court made no determination on the application and merely adjourned the matter for mention until 21st January, 2013. 12. Having regard to the evidential position, I think it is proper to conclude, for the purposes of this application, that the defendant has established an inability on the part of the plaintiff to meet its costs if it is successful in defending the proceedings. Prima facie defence to plaintiff’s claim established? 14. Counsel for the plaintiff took the Court through the provisions of the Repairer Agreement on “Duration/Termination”, that is to say, Article 16 and also Attachment 5B (“Exceptional Events” Termination) referred to in Article 16. In particular, counsel for the plaintiff focused on Article 16(6) which provides that the notice of termination must be in writing, and suggested that it would be a simple matter for the defendant to exhibit the notice of termination in writing, if such existed. Counsel for the plaintiff certainly raised issues as to whether the Repairer Agreement was in fact terminated, in the context in which he submitted that the core issue in these proceedings is whether the Repairer Agreement was validly terminated. 15. Counsel for the plaintiff submitted that the test to be applied by the Court in determining whether the defendant has established that it has a prima facie defence to the plaintiff’s claim is the test set out by Finlay Geoghegan J. in Tribune Newspapers v. Associated Newspapers Ireland (High Court, 25th March, 2011), which is referred to in paragraph 13 – 65 of Delany and McGrath (op. cit.) The test outlined by Finlay Geoghegan J. in that case is summarised as follows by the authors:
‘In my judgment, what is required for a defendant seeking to establish a prima facie defence is to objectively demonstrate the existence of admissible evidence and relevant arguable legal submissions applicable thereto which, if accepted by a trial Judge, provide a defence to the plaintiff’s claim’.”
18. Accordingly, the question for this Court is whether Mr. Jellis has objectively demonstrated the existence of admissible evidence, which is supported by relevant arguable legal submissions applicable thereto, which, if accepted by a trial Judge, would provide a defence to the plaintiff’s claim. While I have set out the substance of Mr. Jellis’s averments in support of his contention that the defendant has established a prima facie defence accurately above, it is necessary to focus on one aspect of his answer to Mr. O’Dwyer’s contention that a prima facie defence had not been made out. In paragraph ten of his first affidavit, Mr. O’Dwyer set out his belief that the defendant’s assertion that the Repairer Agreement has terminated “in tandem with” the Dealer Agreement was manifestly false and was in violation of the Repairer Agreement and also of Commission Regulation (EC) 1400/2002. Mr. O’Dwyer then outlined the various grounds on which it was alleged that the Repairer Agreement had not been terminated referring, inter alia, to Article 16, to the fact that no written notice had been given, and to the fact that no “Exceptional Event as outlined in Attachment 5B” had arisen. In his second affidavit Mr. Jellis merely averred that “the averments at paragraph 10 . . . are incorrect” and he went on to deny that the Repairer Agreement was not terminated, as I have recorded. In my view, for the purposes of this application for security for costs, in merely answering the plaintiff’s contentions in paragraph 10 of Mr. O’Dwyer’s first affidavit on the basis that they are “incorrect”, the defendant has not objectively demonstrated the existence of admissible evidence which, if accepted by the trial Judge, would provide a defence to the plaintiff’s assertion that the Repairer Agreement has not been terminated. Emphasising that I have formed no view as to the strength of the plaintiff’s case or the defendant’s defence or as to the likelihood of either party being successful in the action, I have come to the conclusion that, for the purposes of this application, the defendant has not met the appropriate threshold of establishing that it has a prima facie defence to the plaintiff’s claim. On that basis alone the application for security for costs may be dismissed. 19. However, I propose to consider the arguments made on behalf of the plaintiff that there are “special circumstances” which, in any event, would justify refusal of an order for security for costs. Any special circumstances established? 21. It is interesting to note that, despite the bait cast by Mr. O’Dwyer in his first affidavit, the defendant has not indicated whether it proposes pursuing the related proceedings on 16th January, 2013 or not. Accordingly, it must be assumed that it does intend to proceed with the related proceedings. However, the plaintiff has advanced no convincing argument as to why the defendant should be deprived of an order for security for costs merely because the related proceedings are probably proceeding. While this is wholly hypothetical, presumably, if the plaintiff were to successfully defend the related proceedings, it would be in a position to have any stay on these proceedings in consequence of the non-compliance with an order for security for costs vacated. 22. Delay or, more correctly, the late stage in the proceedings at which the application for security for costs was brought, in my view, is a relevant factor. In this connection, the following passage from the judgment of Clarke J. in Mooreview Developments Ltd. v. Cunningham [2010] IEHC 30 explains the rationale in treating delay as a special circumstance to be considered on an application for security for costs:
24. It is not surprising that any previous concerns of the defendant as to the financial status of the plaintiff were exacerbated by the appointment of a receiver and the existence of the Commercial Court proceedings being in the open. However, what is surprising is that the defendant has brought an application for security for costs, very late in the process at a time when the validity of the appointment of the receiver is before the Court and whether there will be summary judgment against the plaintiff in the Commercial Court proceedings remains to be determined. Moreover, while the defendant has been accommodated by the Court with an early hearing of this application, nonetheless it has had to be heard and decided almost on the eve of the date fixed for the substantive hearing, given the intervention of the Christmas vacation from 21st December, 2012 to 11th January, 2013. That highlights that the defendant moved at a time when it was aware, and the evidence indicates, that the plaintiff had taken all the steps necessary to have the proceedings ready for hearing on 16th January, 2013. 25. Mr. O’Dwyer, in his second affidavit, has averred that the plaintiff’s affidavit of discovery was sworn on 19th October, 2012, yet the defendant had not sought inspection of the documents discovered. In addition, in the additional replies to particulars dated 19th October, 2012, to which I have referred above, it was stated that the plaintiff’s accountant was willing to liaise with any accountant retained by the defendant in relation to the table containing the turnover summary. However, there had been no response to that invitation. The fact that the plaintiff has obviously incurred very substantial costs in bringing its claim to the point where it is ready for hearing on 16th January, 2013 is a factor to be taken into account in determining where a fair balance lies as between the rights of the parties. While it must be acknowledged in this case that the rights are finely balance, I think it is probable that the likely prejudice to the defendant in refusing to make an order, when balanced against the likely prejudice to the plaintiff of making an order at this late stage in the process, militates against making an order. 26. Finally, I should make it clear that the practical difficulties which were adverted to during the hearing of the application of having the security to be awarded quantified at this late stage has not influenced the decision I have reached. Such practical difficulties can always be overcome. Order |