High Court grants security for costs against impecunious plaintiff in competition law proceedings due to risk of injustice.

THE HIGH COURT

Record no. 2024/2143 P [2026] IEHC 449

Between

STUDBOOK DEVELOPMENT IRELAND LIMITED TRADING AS WARMBLOOD STUDBOOK OF IRELAND

PLAINTIFF

– AND –

HORSE SPORT IRELAND (A COMPANY LIMITED BY GUARANTEE), IRISH HORSE BOARD COOPERATIVE SOCIETY LIMITED, MICHAEL DOWLING, DENIS DUGGAN, SONJA EGAN, RONAN MURPHY, JOSEPH REYNOLDS, ALISON CORBALLY, JIM BEECHER AND JACK MURPHY (hereafter “Proceedings #1”)

DEFENDANTS

Record No. 2023/3935 P [2026] IEHC 449

Between

STUDBOOK DEVELOPMENT IRELAND LIMITED

PLAINTIFF

– AND –

IRISH SHOWS ASSOCIATION COMPANY LIMITED BY GUARANTEE, CATHERINE GALLAGHER, JAMES HARRISON AND RAY BRADY (hereafter “Proceedings #2”)

DEFENDANTS

JUDGMENT of Mr Justice Max Barrett delivered on 8th July 2026.

1. The plaintiff limited liability company has commenced competition law proceedings against Horse Sport Ireland (HSI), the Irish Horse Board (IHB), and several named individuals. Parallel, separate proceedings have been initiated by the plaintiff against the Irish Shows Association and several named individuals. Each set of defendants has brought applications for security for costs. While the proceedings and applications remain separate and legally distinct, the parties in both matters have relied upon common arguments in support of their respective applications. Consequently, it is helpful to issue a single judgment, while avoiding any improper conflation.

2. In Proceedings #1, the plaintiff brings a claim against the defendants alleging anticompetitive conduct and unlawful interference with economic interests. More particularly, the plaintiff seeks declarations that the defendants are in breach of both Irish and EU competition law. In addition, the plaintiff seeks declarations that certain directors and officers authorised those breaches and that the defendants engaged in tortious interference with the plaintiff’s economic and contractual relations. The relief sought includes injunctive relief to restrain the defendants from the continuation of the alleged conduct. Additionally, the plaintiff claims damages, an inquiry as to damages, and an account of any profits or benefits derived by the defendants from the impugned activities. Finally, the plaintiff seeks the recovery of legal costs and interest.

3. Proceedings #2 arise from a dispute within the equestrian sector regarding eligibility criteria for competitions organised by the first defendant and associated agricultural shows throughout the State. The plaintiff, which operates a studbook for Irish Warmblood horses, contends that the rules and practices implemented by the defendants restrict or otherwise disadvantage Irish Warmblood horses and their associated studbooks. Specifically, the plaintiff alleges that such conduct constitutes a breach of both Irish and European Union competition law. In these proceedings, the plaintiff seeks declarations of unlawful conduct, injunctions restraining anti-competitive and discriminatory practices, and damages, interest, and costs.

4. Section 52 of the Companies Act 2014 governs security for costs where a plaintiff is a limited liability company registered in Ireland. It provides that:

“Where a company is plaintiff in any action or other legal proceeding, any judge having jurisdiction in the matter, may, if it appears by credible testimony that there is reason to believe that the company will be unable to pay the costs of the defendant if successful in his or her defence, require security to be given for those costs and may stay all proceedings until the security is given.”

5. Quinn Insurance Ltd v. PricewaterhouseCoopers [2021] 2 IR 70 is the leading precedent governing exercise of judicial discretion under s.52. In that decision, the Supreme Court clarified that a defendant must establish both the existence of a bona fide defence and the plaintiff’s inability to discharge any potential liability for costs. Upon the satisfaction of these criteria, a court should grant an order for security for costs, unless the plaintiff establishes the existence of special circumstances warranting a departure from that course. Even where a plaintiff fails to establish a causal nexus between their impecuniosity and the alleged wrongdoing of the defendant, a court retains the discretion to consider whether an order for security for costs would stifle the proceedings. This inquiry necessitates an assessment of whether the litigation would be genuinely stifled and an identification of the parties who stand to benefit from its continuation.

6. As noted by Clarke CJ at §100 of Quinn, the Court must seek the path that minimises the risk of injustice, while acknowledging that a residual risk of injustice is often unavoidable. In the context of corporate plaintiffs, the default position remains that an order for security for costs should be granted once the defendant has demonstrated a prima facie defence and the plaintiff’s inability to meet a potential costs liability: see CMC Medical Operations Ltd v Voluntary Health Insurance Board [2015] IECA 68.

7. The courts have consistently highlighted the significance of a plaintiff’s status as a limited liability company when adjudicating applications for security for costs. In Quinn, Clarke C.J. and O’Donnell J. affirmed that the court may take into account whether the company is supported by wealthy individuals who stand to derive a benefit from the continuation of the litigation.

8. To ground an application for security for costs, a defendant must establish a prima facie defence. The evidentiary requirements for this threshold depend upon whether the proposed defence is primarily factual or legal in nature. As noted in Oltech (Systems) Ltd v. Olivetti UK Ltd [2012] 3 IR 396, a sustainable defence may be established through legal argument alone, in which event the necessity for an affidavit may be obviated. Furthermore, as affirmed in Usk District Residents Association Ltd v. Environmental Protection Agency [2006] 1 ILRM 363, a defendant may satisfy this threshold by relying upon properly presented factual matters or legal arguments predicated upon established facts. Once a prima facie defence has been established, the established case law confirms that the deciding court will not undertake an assessment of the strength of that defence. Consequently, an order for security for costs should be granted unless a plaintiff discharges the burden of proving that special circumstances exist which warrant the exercise of this Court’s discretion to refuse such an order.

9. A defendant seeking an order for security for costs must also establish the plaintiff’s inability to discharge the defendant’s legal costs should the proceedings be successfully defended. This limb of the test is not in issue in the present application.

10. Where a defendant has established a prima facie defence and the plaintiff is demonstrated to be impecunious, a court will order security for costs against a corporate plaintiff, absent the demonstration of special circumstances sufficient to warrant a departure from this position.

11. Here, the plaintiff asserts in each set of proceedings the existence of special circumstances, viz. that its impecuniosity is a direct consequence of the defendants’ actionable wrongdoing. Pursuant to the principles articulated in Connaughton Road Construction Ltd v. Laing O’Rourke Ireland Ltd [2009] IEHC 7, subsequently endorsed in Quinn, the plaintiff bears the burden of establishing four criteria in this regard: first, that a defendant committed an actionable wrong; second, that such wrongdoing resulted in practical consequences; third, that those consequences occasioned recoverable, legally-defined losses; and fourth, that such losses are the proximate cause of the plaintiff’s inability to discharge the defendants’ costs. As Clarke

J. clarified, at §3.5, the first and second criteria essentially require the plaintiff to establish a prima facie case regarding both liability and causation. Absent such a showing, there exists no sufficient foundation to link a plaintiff’s financial position to the alleged wrongdoing. Here, the plaintiff’s assertion in each set of proceedings is speculative and lacks the requisite independent expert economic evidence to facilitate any reliable quantification; consequently, the plaintiff has failed to discharge the requisite burden of proof.

12. In Connaughton Road Construction Ltd v Laing O’Rourke Ireland Ltd [2009] IEHC 7 (endorsed in Quinn), Clarke J. held that a plaintiff must establish a prima facie case that any prospective damages would be of sufficient magnitude to rectify its current inability to discharge the defendant's costs. Furthermore, in Quinn (§§105–106), Clarke C.J. observed that a plaintiff must adduce evidence to substantiate the contention that its impecuniosity was occasioned by the alleged wrongdoing, and must demonstrate that it is arguable that the entirety of its financial shortfall is attributable to that conduct.

13. In Protégé International Group (Cyprus) Ltd v Irish Distillers Ltd [2021] 1 IR 134, the Supreme Court examined the circumstances in which a plaintiff asserts that its impecuniosity arises from a defendant's abuse of dominance. Clarke C.J. identified two distinct scenarios. The first concerns companies that previously enjoyed financial stability. In such instances, the analysis focuses on whether a prima facie case establishes a causal link between the alleged wrongdoing and the company’s transition from past solvency to its current state of impecuniosity. The second concerns companies claiming lost profits. Where a plaintiff was already impecunious, it must adduce sufficient, clear evidence to establish a credible basis for the contention that the alleged wrongdoing precluded it from attaining the profitability necessary to discharge legal costs. In the latter instance, a court must subject the contention to rigorous scrutiny, and the burden remains firmly upon the plaintiff to provide clear evidence. While expert evidence is not a strict procedural requirement, its absence may result in a determination that the plaintiff has failed to discharge the requisite burden of proof.

14. In Protégé, the Supreme Court endorsed the Court of Appeal’s finding that the plaintiffs had failed to adduce sufficient evidence to establish that their impecuniosity was a consequence of the defendant’s wrongdoing. The Court of Appeal observed that the plaintiffs had submitted only minimal financial data, lacked essential business documentation such as commercial plans or projections, and failed to furnish an expert affidavit. Furthermore, the Supreme Court characterised as speculative in the extreme any attempt to infer causation solely by comparing the plaintiffs’ circumstances to those of other market participants without providing more cogent evidence.

15. In the present case, the plaintiff’s reliance upon internal projections and anecdotal evidence falls short of the evidentiary standard established in Protégé. The Supreme Court requires that a corporate plaintiff provide clear evidence to enable the deciding court to conduct a thorough analysis as to whether its impecuniosity was, in fact, caused by the defendant's alleged wrongdoing; such evidence is absent in these proceedings.

16. In Protégé, it was argued that the imposition of an order for security for costs contravenes the EU principle of effectiveness, by rendering the pursuit of remedies under EU law excessively difficult. However, Clarke C.J. held that while such requirements interfere with the right of access to the courts, nonetheless the Irish legal framework does not undermine the right to an effective remedy. The requirement serves legitimate objectives under EU law, including the protection of the rights of the defence and the discouragement of meritless litigation, and thereby satisfies the requirements of proportionality. While the starting point remains the ordering of security for the full estimated costs, the Court is not strictly obliged to order that amount in every instance. For the sake of completeness, I note that I am bound by the decision in Protégé.

17. In Protégé, it was contended by the plaintiffs that their proceedings raised a matter of public interest, insofar as they concerned issues of competition law within a significant market. A similar contention is advanced here. However, the Court of Appeal in Protégé rejected such arguments, and the Supreme Court further clarified that the public interest only assumes relevance as a special circumstance where the claimant has first established that the proceedings would, in fact, be stifled by an order for security for costs. As this requirement has not been satisfied in the present case, I have not found it necessary to consider this matter further.

18. The plaintiff contends that the economic significance of the equestrian sector renders the proceedings ones of exceptional public importance. I respectfully reject this submission. They are, in essence, private proceedings, and the mere economic scale of the sport horse industry does not elevate a standard commercial dispute to a matter of significant public interest. Moreover, the applicable legal principles are well-established, and the case presents no novel points of law requiring urgent clarification.

19. In Quinn, the Supreme Court established that a court may take into account whether a claim will be stifled when assessing the overall risk of injustice. Following the guidance in Protégé, this test necessitates a clear distinction between a claim that would be genuinely stifled and a situation where the plaintiff's backers have made a deliberate commercial choice not to risk further costs. Because the plaintiff has failed to provide any evidence regarding the funding of these proceedings or evidence as to how the claim would be truly stifled, I can and do conclude that their refusal to provide security reflects a commercial assessment of the merits of their claims, rather than a genuine inability to fund the litigation.

20. All defendants in both sets of proceedings, with the exception of the sadly now-deceased tenth defendant, have established prima facie defences to the plaintiff’s claims. Before identifying these defences, I must note that while it is accepted that the HSI defendants bear the burden of establishing a prima facie defence to the action, there are clear limitations on the extent to which I may adjudicate upon the merits of the parties’ respective positions. In this regard, O’Donnell J. observed in Quinn, at §140, that an application for security for costs must be made early on. This being so, deciding courts cannot fully evaluate the merits of the case because they lack live witness testimony and only have written pleadings and affidavits. Therefore, they must ensure that these preliminary applications do not turn into premature mini-trials. This limitation, it seems to me, applies with force in the context of competition law proceedings such as the present case. In such proceedings, the analysis of any alleged breach of Irish and/or EU competition law will inevitably depend upon detailed and complex expert economic evidence regarding matters such as the definition of the relevant market, the extent to which any act or omission had an anti-competitive effect, and whether there existed any objective justification for any act or omission said to represent a prima facie infringement.

21. Notwithstanding the just-described limitations, it remains my view that all defendants in both sets of proceedings, with the exception of the now-deceased tenth defendant, have established prima facie defences to the plaintiff’s claims:

22. IHB: Argues it was not acting as an undertaking regarding the defined market, the plaintiff failed to establish a market for substitutable membership services, and it did not hold a dominant position. Furthermore, it contends that the plaintiff failed to identify behaviour constituting an abuse of dominance. In competition cases, it is sufficient for a defendant to raise a purely legal argument that the plaintiff lacks a valid claim, even if all alleged facts were accepted by me.

23. Ms Corbally: Argues that in her HSI role, she held no decision-making functions, rendering the plaintiff’s claims against her fundamentally misconceived. She also provided evidence to show the allegations made are baseless, establishing that she did not authorise or consent to the specific actions alleged.

24. As to what were referred to at the proceedings as the HSI defendants, viz. HSI and the third, fourth, fifth, sixth, seventh and ninth defendants to Proceedings #1, the following points might be made:

• The plaintiff defines the relevant geographic market as the island of Ireland, yet this characterisation is open to question for three reasons. First, the plaintiff’s reliance on collaborations with entities in other Member States arguably undermines this narrow geographic focus. Second, its emphasis on the performance of foreign studbooks arguably challenges the limitation to Ireland. Third, the rationale for including Northern Ireland in this market while excluding the rest of the United Kingdom remains unclear. Although I cannot definitively determine the market’s scope at this interlocutory stage, these factors surely demonstrate that the plaintiff’s definition is at least contestable.

• The plaintiff claims that the HSI defendants abused a dominant position by appropriating the Studbook genetic market. The defendants contend that this is not a recognised category of abuse and lacks legal authority. Effectively,

this line of claim appears to allege that the defendants’ mere act of competing with the plaintiff constitutes abuse; however, competition on the merits is not, per se, an abusive practice.

• The plaintiff identifies the appropriation of its genetic market as a specific form of abuse of dominance; however, the HSI defendants argue this claim lacks a proper legal basis.

• The HSI defendants argue the plaintiff’s claim is speculative, as it asserts a high degree of projected success that contradicts its actual poor financial performance to date.

• The HSI defendants argue that even if their conduct were deemed an infringement of competition law, they are not liable for any resulting loss.

They contend that the Minister for Agriculture, Food and the Marine holds ultimate responsibility for the sector’s regulatory and governance framework.

Because the Minister possesses the authority to shape the studbook market and competitive landscape, the defendants submit that the plaintiff’s grievances should be addressed to the Minister as the competent authority, rather than to HSI.

• The HSI defendants further maintain that allegations regarding the exclusion of the plaintiff's horses from competitions, facilitated by ministerially-granted derogations under EU law, are matters for which the Minister and/or their Department must account.

• The plaintiff claims HSI received unlawful State aid to fund its activities;

however, the HSI defendants argue this allegation concerns only the Minister (who is not a party to either set of proceedings).

25. In Proceedings #2, the defendants deny the allegation that their eligibility criteria discriminate against Irish Warmbloods, arguing these rules apply generally to equine categories rather than targeting that specific breed or studbook. They further contend that many of the complained-of competitions are organised by independent affiliates that operate autonomously. Finally, the defendants raise a limitation defence regarding the relevance of events occurring many years prior to these proceedings.

26. It follows from the foregoing that the plaintiff’s argument that the defendants in both sets of proceedings have failed to identify a prima facie defence is respectfully rejected. As established in Euro Safety v An Foras Áiseanna [2016] IEHC 161, providing a draft defence is not a prerequisite for a security for costs motion.

27. The plaintiff has failed to establish any special circumstances sufficient to warrant a departure from the requirement to provide security for costs. My analysis of the plaintiff’s position is as follows. First, the quality of the financial evidence provided regarding the plaintiff’s current position is deficient and lacks verification from any independent, objective source.

Second, as to any notion that the imposition of an order for security for costs contravenes the EU principle of effectiveness, Clarke C.J. held in Protégé, a decision binding on me, that while such requirements interfere with the right of access to the courts, the Irish legal framework nonetheless does not undermine the right to an effective remedy. Third, following the analysis in Protégé, because the plaintiff has failed to establish either the alleged wrongdoing or the necessary causal link, and has merely asserted that the claim would be stifled, an order for security for costs appears to me to be appropriate. Fourth, the contention that either or both proceedings are of public importance is respectfully rejected. The two sets of proceedings have been brought by the plaintiff in its private capacity to further its own commercial interests.

28. Although the plaintiff asserts that an order for security for costs would stifle its sets of proceedings, this claim remains entirely unevidenced. Under the principles set out in Quinn by Clarke CJ and O’Donnell J., I may only accord weight to this factor if it is satisfied that there is no viable mechanism for security to be provided, even in a limited form, notwithstanding reasonable efforts. Furthermore, I am entitled to examine for whose benefit the proceedings are maintained and to discern whether the failure to provide security stems from a desire to mitigate commercial risk rather than a genuine inability to satisfy the order. Because the plaintiff has failed in the context of either set of proceedings to disclose its funding arrangements or provide evidence to substantiate the claim that the litigation would be stifled, I cannot be satisfied that the orders would result in the termination of the proceedings to which the respective orders relate.

29. Even if there were a credible risk that one or both sets of proceedings would be stifled, that risk is in any event outweighed in each case by the potential for injustice should the proceedings continue in the absence of security. This conclusion is predicated upon the unsubstantiated nature of the plaintiff’s claims in each set of proceedings, its acknowledged inability to discharge the substantial costs involved, and its failure in each set of proceedings to establish any special circumstances warranting a departure from the standard orders.

30. In determining whether to order security for costs, I must assess where the greater risk of injustice lies, as articulated by Clarke C.J. and O’Donnell J. in Quinn. The following factors are particularly relevant to this assessment. First, it would be inherently unjust to permit speculative competition law proceedings brought by a limited liability company to proceed without the provision of security. Second, the plaintiff has failed in each set of proceedings to adduce convincing evidence that the relevant set of proceedings would, in fact, be stifled by an order for security; furthermore, it has failed to explain how either set of proceeding is maintained or to identify the beneficiaries thereof. Third, the natural defendants remain personally exposed to the burden of legal costs which the corporate plaintiff is unable to discharge. This situation stands in stark contrast to the plaintiff’s ability in each set of proceedings to utilise its status as a limited liability company to insulate itself from such financial liability.

31. In all the circumstances of this case, it is manifest that the greater risk of injustice in each set of proceedings arises if the plaintiff, notwithstanding its acknowledged impecuniosity, is permitted to prosecute the relevant proceedings without providing security for each of the defendants' costs.

32. I indicated at the conclusion of the hearing that I would grant the orders for security for costs sought. Counsel for Studbook then again indicated that an accountants’ report would be forthcoming, and I stipulated that my judgment would be subject to the contents of that report. I have now read the reports received by me. While these give greater granularity to the likely costs arising for those defendants, I do not see that they contain anything that would alter the outcome of this judgment.

33. Following, my exchanges with counsel at the hearing of these applications, I will not set the quantum of the security at this time but will instead hear the parties further on the issue of quantum.

34. In reaching my decision, I have considered every point raised by the plaintiff in its submissions. Any argument not explicitly detailed in the body of this judgment is considered by me to be subsumed by the plaintiff’s failures in these proceedings as detailed above.

35. Nothing in this judgment should be read or construed as indicating a view on the ultimate outcome of these proceedings. I hold no such view.