Re Dynaspan (UK) Ltd ; Dynaspan (UK) Ltd v H Katzenberger Baukonstruktionen GmbH & Company KG and another
| Jurisdiction | England & Wales |
| Judgment Date | 14 February 1995 |
| Date | 14 February 1995 |
| Court | Chancery Division |
Chancery Division
Before Mr Justice Robert Walker
Costs - security - scope of order
An order for security for costs could be made, under the court's inherent jurisdiction, against a plaintiff company which was incorporated and resident in Northern Ireland.
Mr Justice Robert Walker so held in the Chancery Division in allowing an appeal by the plaintiff, Dynaspan (UK) Ltd, a company incorporated and resident in Northern Ireland, from an order of Deputy Master Bragge that the plaintiff give to the second defendant, Marianne Katzenberger, security for costs in the sum of £21,788.25. The first defendant was dissolved on its deletion from the commercial register in Austria in January 1991.
By the Judgments Extension Act 1868, judgments enforceable in England were made enforceable in any part of the United Kingdom; and by section 726 of the Companies Act 1985, where a court had reason to believe that a limited company plaintiff or pursuer would be unable to pay the defendant's costs or expenses if it failed, the court could require it to give security for costs and stay proceedings until it did. That provision and that Act, however, only applied to companies registered in Great Britain.
Mr James Guthrie, QC for the plaintiff; Mr David Sears for the second defendant.
MR JUSTICE ROBERT WALKER said the judgments of the Divisional Court inRaeburn v AndrewsELR ((1874) LR 9 QB 118) clearly proceeded on the footing that the court's inherent jurisdiction to order security for costs was based, not on the plaintiff's lack of means, but on his being beyond the reach of its power to enforce its judgments. Hence, by reason of the 1868 Act, the reason for its previous practice, of making orders for security for costs against plaintiffs resident in Ireland, had ceased.
The court's power to order security for costs against a company incorporated under the Companies Acts 1929-85, on the other hand, was based on a quite different principle: that the privilege of limited liability should not, without control by the court, subject a defendant to the risk of incurring irrecoverable costs: see Trident International v Manchester Ship CanalUNK ((1990) BCLC 263, 268-9) per Lord Justice Nourse.
In Wilson Vehicles Distributions Ltd v Colt Car Company LtdUNK ((1984) BCLC 93) Mr Justice Bingham had applied what he held to be the ratio of Raeburn v Andrews in order to...
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