Europa Holdings Ltd v Circle Industries (UK) Ltd

Citation: 64 BLR 21; 33 Con LR 34 (Court of Appeal)

Nature of case:
Europa Holdings was a sub-sub-contractor carrying out fibrous gypsum works for sub-contractor, Circle, on the Canary Wharf development.  Europa sued for payment due on Circle’s valuation of work done.  Circle applied for an order against Europa for security for costs in the sum of £100,000. The application was dismissed and Circle appealed to the Court of Appeal.

The Court of Appeal held that the court had jurisdiction to make an order for security because there was reason to believe that Europa would be unable to pay Circle’s costs if the claim failed. However, in exercising its discretion, consideration should be given to the fact that Europa was a well-run company seeking to operate profitably and had a genuine claim based on Circle’s own valuation.  Not only would security for costs of £100,000 not be ordered, but no order would be made at all. The appeal by Circle was dismissed.

Counsel

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