A plant hire firm must put up a sum of money to ensure it can meet legal costs if it loses a case against a local authority over its public tendering system, the High Court has ruled.
Co Meath-based P Shiels Plant Hire is suing Meath County Council alleging breach of contract and unlawful interference with its economic interests arising out of the operation of an online quotation/tendering system in which the local authority participated.
The council denies the claims.
The council asked the court to order the firm to provide security of costs in the case because, it was argued, should it lose, it does not have sufficient resources to meet those costs.
Mr Justice Max Barrett was satisfied to grant the council its security of costs order.
The evidence before the court indicated there was good reason to believe the company will be unable to pay costs should it lose.
The firm was incorporated in 1996 but had filed no annual returns or accounts since the end of 2007, the judge said.
It maintained this was because a fraud had been perpetrated on it. The court had some difficulty in accepting this line of argument.
It was a sorry reality that “practically all financial institutions in this country have likely suffered some level of financial fraud at some stage in their respective histories — yet they still manage always to produce and file annual accounts,” he said.
It defied belief that a company could function properly without ever preparing some accounts. None of this information was available publicly or offered privately to the county council.
The company also had a somewhat chequered history in terms of compliance with its legal obligations, he said.
In 2003, it appeared on the tax defaulter’s list.
In 2004, it was fined for failing to keep proper books of accounts.
It had a judgment registered against it by an ESB Group company.
And, somewhat unusually, the judge said it has been a defendant in multiple lawsuits, including one brought by a financial institution.
While these may, in combination, be venial rather than mortal transgressions, they suggest the company is not entirely averse to straying from what is required of it, he said.
There was no reason to believe this would also not be true in relation to an order for costs, he said.
While the entire issue of the “frightening” level of legal costs requires a restructuring of the system, so that inherent unfairness does not exist, that was a matter for another day, he said.
The correct decision in this case was to grant the council its order for security of costs.
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