Primafacio Limited v Tres Canopia Limited & Anor

Similar fact evidence is admissible where potentially probative, subject to case-management exclusion. The court balances probative value against additional time, cost, unfairness and distraction. The trial judge retains the final decision.

For security for costs, there must be reason to believe that a corporate party will be unable to pay within the usual payment period. Security will generally be just if that threshold is met unless countervailing circumstances exist. A third-party undertaking is relevant only if its provider is shown to be a good mark for the costs.

This was the first case management conference in a claim by Primafacio Limited against Tres Canopia Limited and EuroEnergy Investments Corporation. Primafacio claimed unpaid consideration under a share purchase agreement and sought security for its costs of responding to Tres Canopia’s counterclaim.

The defendants relied on allegedly dishonest conduct in other transactions as similar fact evidence. Primafacio applied to strike out that part of its reply. It also sought security because Tres Canopia might be unable to meet an adverse costs order. EuroEnergy offered to undertake payment.

The court had to decide whether the similar fact evidence should be admitted and whether security was just in all the circumstances.

1. The application to strike out was dismissed. The court applied a two-stage approach to similar fact evidence: first, whether it was potentially probative; secondly, whether it should nevertheless be excluded under case-management powers.
2. At the second stage, the court weighed probative value against additional time and cost, fairness and the risk of distracting from the primary evidence. Admission was justified because the evidence might assist a correct and just decision, and the additional burden was not disproportionate. The trial judge retained the final say, and the application could be renewed at or before trial.
3. The application for security for costs was granted. There had to be reason to believe that Tres Canopia would be unable to pay an adverse costs order; proof on the balance of probabilities was unnecessary. The relevant ability was payment within the ordered period, usually 14 or 28 days.
4. Tres Canopia had no liquid assets and depended on consent from a loan administrator. EuroEnergy’s undertaking was insufficient because the evidence of its financial position and access to funds was unaudited, incomplete and insufficiently transparent. EuroEnergy was not shown to be a good mark for the costs.
5. Security was to be provided in stages by payment into court or a first-class London bank guarantee. There was no order as to the costs of the two applications.

First-instance decision. No prior appellate decision is stated in the judgment.