In First Active plc v Cunningham(1), the epilogue to the Moorview Developments Limited & others v First Active plc & others case(2), (the “Moorview litigation”), it was held that Mr Cunningham who was the beneficial owner, a director and a ‘prime mover’ of the plaintiff companies was personally liable for the costs arising from the Moorview litigation. It was inferred that Mr Cunningham had funded the Moorview litigation, and that he had brought it for his own benefit.
The main factors for exercising this jurisdiction, the court found, are the likelihood of a company meeting costs if litigation fails, the potential benefit of the litigation to the non-party, and whether it was reasonable to bring or defend the action. With regard to the Moorview litigation, the plaintiff companies were insolvent, Mr Cunningham was clearly the moving party behind the litigation, and it was inferred that he was its funder. Further, he would have been the main beneficiary had the litigation been successful. In assessing reasonableness, the court criticised the number of unsuccessful procedural motions brought by the companies, adding to the cost of the Moorview litigation. Finally Mr Cunningham had been put on notice that First Active would seek to make him liable for costs. He was, therefore, made personally liable for the companies’ costs.
The court then considered whether, in respect of orders made personally against him, Mr Cunningham could be made to file a sworn statement of his means before being orally examined. The court held that this could be inherently ordered under Order 42 Rule 36 of the Rules of the Superior Courts.