High Court dismisses defendant's strike-out and security for costs applications against Northern Irish franchisee plaintiffs.

Neutral Citation: [2014] IEHC 74

THE HIGH COURT

Record No. 1998/11805P

1999/4233P

BETWEEN:

PHILIP SHIELDS AND HILLGRANGE SERVICES LIMITED

PLAINTIFFS

AND

INTERLINK IRELAND LIMITED TRADING AS INTERLINK EXPRESS

DEFENDANT

JUDGMENT of Mr Justice Ryan delivered on the 7th February, 2014

Introduction

1. The first plaintiff to these proceedings is a company director resident in Northern Ireland. The second plaintiff, Hillgrange Services

Limited, is a limited liability company with a registered address in Northern Ireland. The defendant and the moving party in this

application is a limited liability company registered in the State. By notice of motion dated 25th June, 2013, the defendant seeks

orders dismissing the plaintiffs’ claim for want of prosecution for failing to serve a Notice of Trial pursuant to Order 36, rule 12 of the

Rules of the Superior Courts or an order dismissing the plaintiffs’ claim for want of prosecution pursuant to Order 122, rule 11 of the

Rules or pursuant to the inherent jurisdiction of the Court or, in the alternative, an order for security for costs pursuant to s.390 of

the Companies Act, 1963 as against the second plaintiff.

History of Proceedings

2. The plaintiffs’ claim relates to a franchise agreement which was signed by the first plaintiff and the defendant on 18th April, 1994.

The business of the defendant company is to collect parcels in one location and deliver them overnight to another location. The

business operates through a number of franchisees and network members which are located around the country and are linked

together in a network which operates from the central hub of the defendant company in Athlone, Co. Roscommon. The franchisees

use the trading name of the defendant company.

3. In 1994 the defendant extended its network of franchisees to Northern Ireland by recruiting the first plaintiff to operate on its

behalf throughout Northern Ireland. It is not necessary for the purposes of this application to set out in detail the contents of the

franchise agreement between the parties.

4. It appears that the agreement was signed by the first plaintiff and the defendant. In an affidavit sworn by the first plaintiff in the

main proceedings on 2nd November, 1998, it is averred that the second plaintiff was in fact providing a similar service to local

businesses in Northern Ireland when such services were inappropriate or uneconomic for the Interlink Network. The plaintiffs claim

that the defendant company was either aware of or agreed to the second plaintiff operating this business alongside its commitment to

the franchise. The defendant company is of the view that this was not the case and claims that the only party permitted, within the

terms of the agreement, to operate the franchise was the first plaintiff.

5. According to the grounding affidavit of Mr. Brendan O’Neill, Chief Executive of the defendant company, the defendant was aware

and agreed that the first plaintiff would carry out certain other services, namely a “trucking” service, which involves the provision of

vehicles for transport, in a personal capacity by means of a company of which the first plaintiff was a director and entitled Direct

Transport Services Limited, but that this was not unusual for the defendant’s business model and did not come into conflict with the

nature of the agreement between the first plaintiff and the defendant.

6. The main incident giving rise to the difficulties between the parties arose in October, 1998 when, according to its account, the

defendant became aware that a consignment of goods which the first plaintiff franchisee had received for delivery appeared not to

have been appropriately consigned through the network of delivery sites operated by the defendant. According to Mr O’Neill, this

made the defendant company suspicious that the first plaintiff was operating a business in direct competition with the business of the

defendant and in breach of the agreement. The first plaintiff avers that the contract for the delivery of the goods in question by the

second plaintiff was fundamentally different in nature to the usual contract which would be signed for a delivery of goods through the

defendant company’s network and therefore no conflict arose with the content of the agreement. Correspondence ensued between

the parties and meetings were held between representatives of the defendant company and the plaintiffs. At the end of October,

1998, it is alleged that the defendant company entered the premises from which the plaintiffs operated and took possession of all

computers, files, diaries, correspondence kept therein. On 30th October, 1998, a letter was sent to all franchisees of the defendant

stating that the plaintiff was no longer acting as a fellow franchisee and a further letter was sent to all customers stating that the

plaintiff had been removed as a franchisee and that the service provided by Interlink would now be provided from a different location.

7. On 2nd November, 1998, O’Sullivan J granted the plaintiff an ex parte injunction restraining the defendant to these proceedings

from trading as Interlink Northern Ireland. This injunction was discharged on 6th November, 1998, and directions were given in relation

to the proceedings.

8. The plaintiffs issued plenary summonses in respect of two separate proceedings but nothing turns on that because it is agreed that

the claims have to be tried together and that if one falls so does the other. Similarly with the security application.

9. On 2nd November, 1998, the plaintiff instituted what is referred to as the main claim. The summons seeks a declaration that the

defendant wrongfully repudiated the agreement between the parties and an injunction restraining the defendant from acting in

breach. The plaintiff seeks damages for breach of contract, breach of trust, conspiracy to induce breach of contract,

misappropriation of confidential information, defamation, injurious falsehood, trespass, detinue and or conversion among other reliefs.

10. On 21st April, 1999, the plaintiffs issued a second plenary summons in what Counsel called the commission claim. This claims

damages for breach of contract, payment of all sums due on foot of accounts owing to the plaintiff under the agreement and other

ancillary reliefs. The facts upon which the two claims are based are similar though the chronology of events in each is slightly

different.

11. The main claim was initiated by plenary summons issued on 2nd November, 1998. After the order of O’Sullivan J which was granted

on 6th November, 1998, directions were given by the Court with regard to pleadings and the litigation ran its normal course in this

regard, not being excessively delayed until the issue of discovery arose. The Reply was delivered on the 20th April, 1999.

12. The plenary summons in the commission claim was issued on 21st April, 1999 and pleadings were exchanged over the next number

of years. The defendant raised particulars in this claim on 15th October, 2004 and this was replied to by the plaintiff on 4th March,

2011. It was during this period that the difficulties relating to the discovery issue in the main claim were being dealt with by the

parties. The plaintiff served notice to proceed in this claim on 25th June, 2013 and notice of trial was served on 26th July, 2013.

13. Between September, 2000 and October, 2003 the solicitors for the plaintiffs wrote a number of times to the defendant’s solicitors

seeking voluntary discovery. An order for discovery was made on 28th October, 2003. In June, 2004 the defendant furnished an

affidavit of discovery but the plaintiffs objected to it because it did not specify the documents. The plaintiffs brought a motion to

strike out the Defence for failure to comply with the order, following which a supplemental affidavit was delivered on the 11th August,

2004. The plaintiffs’ representatives including solicitor and counsel attended the defendant’s premises on the 25th February, 2005 to

inspect the discovered documents. They complain that they were presented with boxes of unclassified and disorganised papers which

made it difficult if not impossible to carry out a thorough and proper examination. The plaintiffs once more sought further and better

discovery by a motion dated 8th August, 2005 that was adjourned by the Master from time to time until February, 2007 when it was

adjourned generally with liberty to re-enter but it was not re-entered.

14. The plaintiffs continued to complain about discovery and production of documents and there was correspondence in 2008

between the solicitors on that and on allowing a computer programmer on behalf of the plaintiffs to have access to the defendant’s

archived records with assistance from the latter’s expert. The defendant complains that its offer was not taken up for some two

years and even then not pursued. The plaintiffs’ version of this exchange is that they continued to correspond about the programmer

and outstanding discovery and in early 2010 proposed that an IT expert would attend. The defendant furnished another affidavit

dealing with discovery on the 21st July, 2010 but there is dispute whether it is an affidavit of further and better discovery as the

plaintiff expected. The defendant says that it was “a supplemental affidavit clarifying a number of matters raised in relation to

discovery.”

15. There was yet more correspondence about discovery in 2011 and 2012. On a different matter, in March, 2011 the plaintiffs sent

replies to a Notice for Particulars from the defendant dated the 15th October, 2004. In the same month, the plaintiffs delivered a

supplemental affidavit of discovery. On 17th December, 2012, the plaintiffs served their third notice of intention to proceed.

16. On the 9th April, 2013 the plaintiffs’ solicitors sent updated particulars of loss and damage, asking the defendant’s solicitors to

“confirm that it is in order for us to seek to proceed with a trial of the matter as soon as possible.” The latter responded firstly by

saying that they were taking instructions on the particulars and reserved the right to raise particulars, querying how the claim could

be advanced for losses over multiple years when the franchise agreement was terminable in any event by six months’ notice.

Secondly, they asked to see the documentation that formed the basis of the calculations. The final paragraph said: “While we look

forward to hearing from you, we will be in contact once we have had our accountants’ input on the further particulars. It would not

be appropriate to seek a trial date at this time.”

17. Inter-solicitor communication continued including a phone conversation about a meeting between the respective accountants. On

the 13th June, 2013 the defendant’s solicitors enquired about the financial status of the company plaintiff. On the 18th June, 2013

the plaintiffs’ solicitors wrote that they were going to set the matter down for hearing in the next term. On the 25th June, the

defendant issued their motion to strike out the actions for want of prosecution was. On 28th June, 2013, notice of trial was served by

the plaintiffs.

18. I have tried in the above paragraphs to give a general picture of what happened between the closing of pleadings and the notice

of motion that is now under consideration In summary, there were major disputes about discovery of documents that dragged on for

years and that even now are not entirely resolved. The plaintiffs claim that when the defendant terminated the franchise agreement

and sent in its personnel or agents to the plaintiffs’ premises and removed their computers and records that left the plaintiffs at a

severe disadvantage from which they are still suffering. They also complain that the defendant failed to store the records carefully

and actually lost some of them. They attended at the defendant’s premises in February 2005 to carry out an inspection with solicitor

and counsel present but they say that the documents were presented to them in large boxes without order or arrangement, which

made it next to impossible to examine them properly. They maintain that on this inspection they saw some documents which

subsequently appeared to have gone missing.

Dismissal for Want of Prosecution

19. Mr Michael Howard SC for the defendant and Mr Peter Bland SC for the plaintiffs referred in their oral and written submissions to

all the well-known cases in this area. The full range of authorities was cited from Rainsford v Limerick Corporation [1995] 2 ILRM 561

and Primor plc v Stokes Kennedy Crowley [1996] 2 I.R. 459 to Comcast International Holdings Incorporated & Ors v Minister for

Public Enterprise & Ors [2012] IESC 50, in addition to dicta from other earlier cases including Dowd v Kerry County Council [1970] IR

27. This is well trodden ground. Rather than repeating many familiar citations, I will endeavour to summarise and then apply the

principles established by the jurisprudence.

20. Counsel submits that the cause of action in this case occurred fifteen years prior to the date at which the pleadings were closed,

early in 2013, and therefore the delay could not but be seen as inordinate. It is submitted that the plaintiffs did not particularise their

losses until 9th April, 2013, and have issued three notices of intention to proceed in the course of the proceedings which are

currently before the Courts on 25th February, 2003, 20th May, 2009, and 17th December, 2012. During this time no notice of trial was

served and counsel for the defendant submits that the issuing of a notice of intention to proceed did not precipitate the plaintiffs

actually moving to seek a hearing date. Counsel for the defendant states that the defendant would be prejudiced by the mere fact of

the lapse of time between the event which is the cause of the difficulties between the parties and the application currently before

the Court.

21. Counsel for the defendant rebuts the contention that blame can be laid at the foot of the defendant in relation to the delay in

this case. Counsel submitted that no notice of trial was served in these proceedings until after the motion for dismissal for want of

prosecution which is currently before the Court was issued and therefore it is not possible to maintain the submission that the

defendant’s application in this regard is merely reactionary. Counsel for the defendant also submits that the plaintiffs could, in relation

to the problems which they submit arose from the defendant’s treatment of the discovery aspects of these proceedings, have at all

times brought a motion before the Court for further and better discovery or had recourse to the court in relation to compliance with

the original order for discovery made by the Master of the High Court on 28th October, 2003. Since the plaintiffs did not do this

counsel for the defendant submits that it is not open to them to now ventilate their grievances on foot of this application for dismissal

for want of prosecution and inordinate and inexcusable delay. Counsel for the defendant also points to the fact that the plaintiffs

themselves were delayed in dealing with their own discovery given that on 3rd November, 2005, they were ordered to make discovery

within eight weeks of the date of the order but did not succeed in doing so until 4th September, 2007.

22. Counsel submits that the balance of justice in this instance favours the dismissal of the plaintiff’s claim, alleging that it is now

impossible due to the delay to ensure that the defendant will benefit from a fair trial.

23. Mr Howard argued that since a significant aspect of the plaintiffs’ claim is related to defamation, there is an onus on the plaintiff

to advance such proceedings without delay because of the nature of the wrong and its consequences, a point emphasised by Keane

CJ in Ewins v Independent Newspapers (Ireland) Ltd [2003] 1 I.R. 583 at page 590.

24. In his responding submission, Mr Bland for the plaintiff argues that the periods of delay between February, 2005 and July, 2010 are

directly attributable to the defendant’s failure to furnish proper discovery and furnish the full documentation which was removed from

the plaintiffs’ premises in October 1998 when suspicion arose in relation to the plaintiffs’ business operations and the terms of the

Agreement. Counsel for the plaintiff also submits that the period of delay from July 2010 until the service of the notice of trial and this

motion in June, 2013 was directly related to the retaining of an expert witness, a forensic accountant, to quantify the losses for the

prosecution of the action. The delay was allegedly caused by the fact that the defendant had allegedly removed documents which

would have aided this process from the plaintiffs’ premises in 1998. It was decided early in the proceedings that the two claims would

be heard together. The delay in this aspect of the case, in relation to the “Main” claim, has had adverse effects on the speed with

which the prosecution of the other claim made by the plaintiff relating to the issue of whether any commission is payable to the

plaintiff under the Agreement has been progressed. Counsel for the plaintiff therefore submits that the fault for the delay in

prosecuting this case lies with the defendant rather than the plaintiff. In addition Counsel for the plaintiff submits that the need for a

forensic accountant’s opinion in the assessment of the quantification of the losses suffered by the plaintiff is derived from the

plaintiffs’ evidential deficit which was itself caused by the defendant due to the defendant’s confiscation of documents from the

plaintiffs’ premises.

25. Counsel submits that this application for dismissal for want of prosecution comes late in the day in these proceedings and is

merely a reaction of the defendants to the service of a notice of intention to proceed by the plaintiffs and the correspondence from

the plaintiffs attempting to narrow the issues so that the matter may be set down for hearing. Counsel for the plaintiff submits that

this application also comes after the defendant has spent considerable amounts of time encouraging the plaintiff to incur further

expense by obstructing the discovery process and this is the first occasion on which delay has been mentioned by the defendant.

Counsel for the plaintiff submits that the delay caused by the defendant must also be taken into account. Counsel submits that the

defendant cannot point to any prejudice which it realistically is subject to as a result of any of the delays in this case and that the

blame for the delay must also lie at the feet of the defendant.

26. Counsel says that in assessing where the balance of justice lies in any given case the contributions of both parties towards the

delay must be taken into account. Counsel also places emphasis on the passage from Anlog Irish Beef Processors Ltd v Montgomery

[2002] 3 I.R. 510 in which Fennelly J emphasised that the considerations relevant for this aspect of the test as set out in Primor

should be seen as “related matters affecting the central decision as to what is just.” It is the interests of justice which must be

protected by the Courts on such an application.

Security for Costs

27. On this issue also, the familiar authorities were cited by counsel, who were in agreement on the principles to be applied.

28. Mr Howard submits that it is common case that the second plaintiff is unable to pay the costs of the defendant if the latter is

successful in its defence of the plaintiffs’ claim. He says that the defendant has established that it at least has a prima facie defence

of the claims made against it and that the sole contractual relationship in this instance was between the first plaintiff and the

defendant and did not involve the second plaintiff in any case.

29. He says that the test to be applied in relation to s.390 of the Companies Act, 1963, is stated in Inter Finance Group Limited v

KPMG Peat Marwick [1998] IEHC 217 to the effect that the moving party must prove that it has a prima facie defence to the second

plaintiff’s claim and that the second plaintiff will not be able to pay the defendant’s costs if the latter is successful in his defence.

Counsel submits that this test is satisfied on the facts of this case. In relation to the “special circumstances” element of this test, he

submits that the plaintiffs have been unable to point to any special circumstances which would be sufficient to dissuade the Court

from granting an order and, specifically, that the plaintiffs have put forward no evidence to support their claim that the impecuniosity

of the second plaintiff is the fault of the actions of the defendant. In addition, the plaintiffs failed to particularise their losses until

more than 14 years after the issuing of the plenary summons in 1998. The replies to particulars were not furnished by the plaintiffs

until 9th April, 2013.

30. Mr Howard argues that since the second plaintiff was not a party to the agreement in the first place any damage caused to the

second plaintiff is not relevant to the issues to be decided by the court. Any delay in bringing the application for security for costs

has not created additional costs and that the nature of the plaintiffs’ conduct in the progression of these proceedings (long periods of

complete inactivity being punctuated by short periods of activity in the exchange of pleadings) has contributed to the delay in

bringing this application.

31. Mr Bland in reply says that the defendant has throughout the proceedings since issuing the plenary summons been aware of the

financial situation of the second plaintiff and of the first plaintiff’s contention that the second plaintiff was rendered impecunious by

the actions of the defendant in 1998 and thereafter. It was only on 13th June, 2013 that the defendant solicitors wrote for the first

time seeking clarification of the financial position of the second defendant. However the application currently before the Court seeks

an order for security for costs from the first plaintiff.

32. Counsel cites special circumstances which dictate that the Court should exercise its discretion in favour of refusing the order

sought. Such impecuniosity of the plaintiffs that the Court may find to exist is a direct consequence of the acts and omissions of the

defendant complained of in the within proceeding. In making this submission Counsel relied on a statement by Kingsmill Moore J in

Peppard and Co Ltd v Bogoff [1962] 1 I.R. 180 at page 187 to the effect that the Court should strive to avoid a situation where

making an order for security for costs “…would be to allow the defendants to defend an action by reason of an impecuniosity which

they have themselves wrongfully and deliberately produced…” He also relied on the decision of the Supreme Court in SEE Co. Ltd v

Public Lighting Services Ltd [1987] ILRM 255 in which the Court refused to make an order for security for costs where it found that

accountants’ and auditors’ evidence linked the failure of certain equipment, in respect of which the claim was being made against the

defendant, with the financial collapse of the company.

33. Counsel submits that any impecuniosity which may exist on the part of the second plaintiff flows from the defendant’s alleged

wrong doings which form the subject of these proceedings and this qualifies as special circumstances that favour the Court exercising

its discretion so as not to make an order for security for costs.

34. It was also submitted that the defendant has been guilty of delay in bringing the application for security for costs. Counsel relies

on the statement of Clarke J in Farrell v The Governor and Company of Bank of Ireland & Ors [2012] IESC 42 at paragraph 4.21 in

support:

“It is well settled that it is, in the absence of some significant excusing factor, essential that an application for security

for costs before a court of first instance be brought at an early stage. It is rightly considered that inducing a party to

expend its own time and resources in bringing litigation close to trial only to spring an application for security for costs at

a late stage would in itself be an unfairness which may well disentitle a party, otherwise entitled, to an order for

security.”

35. Counsel also cites Heritage Homes Ltd v Indigo Services Ltd [2005] 2 I.R. 115 in which Fennelly J found that a delay of one year

was fatal to the application for security for costs made in that case. The Court noted at p.123 that the moving party “[b]eing fully

aware of the financial weakness of the plaintiff…allowed and even encouraged the action to proceed…”

Analysis and Conclusions

Dismissal for Delay

36. The ground advanced by the defendant for its application to strike out the claims is that the cases were initiated in 1998 and

1999 and that it is unsatisfactory, unreasonable and unjust that the defendant should have to face these actions some fifteen years

after the events that gave rise to them occurred. It lays responsibility for the long delay at the plaintiff’s door, arguing that the case

law on delay supports its request. The defendant submits that the courts have exercised such a jurisdiction over many years but, in

more recent times, have adopted a less indulgent posture in cases of dilatory processing of litigation. The defendant also argues that

there is a claim for defamation in the proceedings and that that imposes an extra element of urgency.

37. The plaintiffs accept some significant elements of the criticism of delay. It is accepted that the period of fifteen years represents

an inordinate period. The defendant seeks to excuse the long delay that has occurred, at least in part, by pointing to the discovery

saga that has extended over the period from 2000 to 2010 and indeed for a time before that and later, if all the correspondence and

complaints and issues are to be taken into account. The plaintiffs emphasise the necessity of discovery in this case over and above

what would normally be important in litigation because the defendant took away the plaintiffs’ computer records, files and documents

in October 1998.

38. The defendant highlights the overall period, which is of course relevant but not, in my view, decisive. The plaintiff sets out the

various transactions which took place, including not just formal pleadings or letters seeking and supplying particulars but also inter-

solicitor communications concerning discovery and aspects of the preparation and management of the case.

39. The period is indeed long and it is less than satisfactory that a claim should be moving towards a court hearing at such a far

remove from the events in issue. No less than three notices of intention to proceed were served. On the other hand, the time can be

said to be explained, but whether it is to be excused is another question.

40. There are some unusual features about this case. It is not a situation in which there is silence for any long period, an important

feature that is present in many of these delay cases. There is active correspondence by each of the solicitors. The fact that the

defendant swore an affidavit of discovery in 2010, however it is to be characterised as to discovering new documents or merely

clarifying or explaining previous affidavits, is nevertheless very significant. Then there is the subsequent exchange on the inspection

of the defendant’s computer records and how that would be affected. Finally, there is the defendant’s solicitors’ letter of April 2013

saying that it is inappropriate to set the case down for trial at that time, which on any view must be considered to be an unusual and

surprising prelude to a motion to dismiss the claim entirely.

41. Let me turn to the law that is applicable. Mr. Howard SC for the defendant and Mr. Bland SC for the plaintiffs in their oral and

written submissions referred to all of the authorities on delay and it is unnecessary to do more than to sketch the principles that have

to be applied. They are as follows:-

(i) Was the delay inordinate?

In this case it is conceeded by Mr. Bland that the delay considered as a whole is inordinate. In respect, however, of

different specific phases, the position is less clear but it is more relevant to consider the issue under the next heading

taking it as established that the delay or the individual delays taken together amount to an inordinate period. The time

has been grossly excessive by reference to what is normal and acceptable.

(ii) Was the delay inexcusable?

The word sets the bar high but its strict meaning of being quite unforgivable is not the sense in which it is used in this

context. The question is whether any reasonable, credible explanation has been proffered for the delay overall or the

particular periods. In this case, it seems to me that the crucial necessity of discovery for the plaintiffs, firstly in respect

of their own seized documents and also as to the defendants records, seems to me to have justified the extended pursuit

by the solicitors. The fact that another affidavit was sworn on behalf of the defendant as late as 2010 warrants the

conclusion that the search by the plaintiffs was justified. The necessity for this saga of discovery dispute is debated in

the affidavits and it is of course impossible to decide on factual disputes by reference to the affidavits. Having said that,

the case made by the plaintiffs seems to me to be sufficiently made out, albeit on a prima facie basis, to justify the

continued demands for more information about the documentary material.

Following the last formal step in the discovery process, the arrangements that were discussed between the solicitors for

the inspection of the defendants computer records furnished a justification. in my view, for the last period of delay,

between 2010 and 2013.

I am satisfied in these circumstances that the delay is not inexcusable.

(iii) I now look at the balance of justice, which falls to be considered if the plaintiffs’ delays were both inordinate and

inexcusable. This arises if there are features of the case that are in the plaintiff's favour. Clearly, if no such elements are

present, the balance of justice favours the defendant and dismissal of the case. This is where the defendant's conduct of

the litigation is more particularly considered and the issues include the following, bearing in mind that it is impossible to

supply an exhaustive list of considerations for circumstances that are endlessly variable.

• Was the defendant responsible for all or part of the delay?

• Did the defendant condone the delay?

• Did the defendant intentionally or otherwise lead the plaintiff to believe that it was content to go along with the delay?

This is where Clarke J's active and passive delays by the defendant are relevant..

• Prejudice to the defendant weighs heavily but any specific prejudice is absent in this case.

(iv) Would the exercise of discretion in favour of the plaintiff on the balance of justice offend another principle to which

the court must have regard? This will depend on the particular circumstances of the case, just like all the other elements

of the test, but there will be certain actions and occasions on which it will be legitimate to invoke for consideration

another principle such as has been recognised by the courts in reference to the obligation under Article 6 of the European

Convention on Human Rights and the interest of the courts, independent of the parties, in the efficient conduct of

litigation.

On this question, the balance of justice weighs in the plaintiffs’ favour by reason, in particular, of

(a) the defendants delay in making the application;

(b) the fact that the defendant is responsible for a significant part of the delay;

(c) the correspondence of April 2013 that gave the plaintiffs implicit comfort that they would not be exposed on

this front.

42. The defendant’s response to the applications for discovery – as established on a prima facie basis – represent a substantial

reason under this head also for tilting the balance in favour of the plaintiffs.

43. There is no call in the circumstances of these actions for the invocation of an independent obligation on the part of the court to

impose a sanction for delay.

44. I do not think that the presence of a claim for defemation alters the balance of the equation of justice in this case. Taking the

claims made in the main proceedings and in the compensation action together, this is fundamentally an action about the alleged

breach of an agreement and the consequences. Although I do not discount the head of defamation, I think it cannot constitute a

special reason why a different aprocah should be taken to the assessment fo the respective rights of the parties.

45. Therefore the application to strike out fails.

Security for Costs

46. I also hold against the defendant on its application for security for costs. First, the application is made late. The plaintiffs have

gone to substantial costs, as indicated above, and taken many procedural steps in preparation for the case. Whatever criticisms may

be levelled at the pace of the progress of the actions, it is quite obvious that the plaintiffs’ solicitors have been busily corresponding

and debating over all of the period. This is one of the reasons why the courts do not look favourably on a late application for security

for costs. An impecunious plaintiff might have decided, and would have had the opportunity to decide, not to pursue the action if it

was faced with an obligation to put up a substantial sum to meet the opponent’s costs. When the case has proceeded for a long time

without such an application being made, the plaintiff can legitimately complain that it has lost that opportunity and has now incurred

its own substantial costs which it would have avoided. On this ground alone, the application fails.

47. Another ground is the special circumstance where a plaintiff establishes by some credible evidence on a prima facie basis, that its

impoverished condition is attributable to the matters that are in issue in the action in which the security is sought. That is the case

here. The plaintiffs claim that the defendant swooped on their premises in October 1998, took away their records and notified their

customers that they were no longer the defendant’s franchisees. As a result of these actions, which the plaintiffs claim in the

proceedings to have been grossly wrongful and for which they should be rewarded substantial compensation, the plaintiffs allege that

the business was ruined and that that accounts for the condition of the second plaintiff. That claim is obviously one of the issues

that must be determined in the proceedings but it does strike me as having been proposed with a sufficient underpinning of rationality

and credibility to justify refusal on this ground.

48. Finally, the co-plaintiff is a personal litigant and that is also a reason for refusing an order against such a party and, in addition,

for permitting a corporate co-plaintiff to be carried on the back of the personal litigant, so to speak.

49. For these reasons, I hold that the defendant is not entitled to security for costs.