Barry v BDO
| Jurisdiction | Ireland |
| Judge | Ms. Justice Bolger |
| Judgment Date | 08 February 2023 |
| Neutral Citation | [2023] IEHC 61 |
| Court | High Court |
| Docket Number | [Record No. 2011/5069 P] |
[2023] IEHC 61
[Record No. 2011/5069 P]
THE HIGH COURT
Discovery – Implied undertaking – Special circumstances – Plaintiffs seeking an order giving them liberty to use discovery made by the defendant in separate proceedings – Whether the plaintiffs ought to be released from their implied undertaking not to use that discovery
Facts: The defendant, BDO, in 2004, put together a consortium of 65 investors to purchase a shopping centre in the UK, called the Parish Consortium. It decided to sell ten units of the shopping centre and the defendant put together a separate consortium of investors to purchase those ten units comprising of 39 investors, called the Jubilee Consortium. There were a small number of investors who were members of both, including some of the plaintiffs in these proceedings. The investors in both consortia sustained losses of their investments. In 2010 some of the investors in the Parish Consortium instituted proceedings against the same defendant as was defendant in these proceeding. In 2011, these proceedings were instituted in which the plaintiffs sought compensation in respect of the losses they sustained from their investment in the Jubilee Consortium. Seven of the plaintiffs in these proceedings were also plaintiffs in the Jubilee Consortium proceedings and the remaining plaintiffs were only involved in the Parish Consortium. The plaintiffs in the Parish proceedings had sought discovery from the defendant by letter dated 16 June 2014. The defendant agreed to make voluntary discovery by letter dated 3 July 2014 and furnished around 5,000 documents in an affidavit of discovery. These proceedings were compromised in 2017. Some of the plaintiffs in these proceedings applied to the High Court seeking to be released from their implied undertaking not to use the Parish discovery for any purpose other than that litigation and seeking liberty to use the Parish discovery in these proceedings. Both parties acknowledged the existence of a rationale for the implied undertaking as recognised by the Supreme Court in Ambiorix Ltd v Minister for the Environment (No. 1) [1992] 1 IR 277 and acknowledged that a breach of the implied undertaking was a contempt of court. The plaintiffs and defendant differed in the test for securing a release from the undertaking.
Held by Bolger J that the law required the plaintiffs in this application to establish the existence of special circumstances and to satisfy the court that the documentation in question was of obvious relevance to these proceedings, such that the relief they sought was necessary in the interests of justice. Bolger J held that the plaintiffs had not established the existence of special circumstances or the relevance of the documentation such as would render it appropriate for the court to even consider allowing disclosure of the extensive amount of documentation in the Parish discovery or to release the plaintiffs from their undertakings. Bolger J held that there were other matters which the authorities confirmed the court would have to have regard to, including any injustice that would be caused to the person who made discovery, the nature and extent of the discovery in circumstances in which it was made and whether the documentation could be sought by way of a discovery application in the usual way. In relation to all of those matters, Bolger J was of the view that it was inappropriate that disclosure of this documentation would be allowed.
Bolger J refused the plaintiffs’ application for an order giving them liberty to use discovery made by the defendant in separate proceedings and an order releasing them from their implied undertaking not to use that discovery.
Application refused.
Counsel for the plaintiffs: Alan Doherty SC, Ross Gorman BL
Counsel for the defendant: Peggy O'Rourke SC, Eoghan O'Sullivan BL
JUDGMENT of Ms. Justice Bolger delivered on the 8th day of February 2022
The plaintiffs in these proceedings seek an order giving them liberty to use discovery made by the defendant in separate proceedings and an order releasing them from their implied undertaking not to use that discovery. For the reasons set out below, I am refusing this application.
In 2004, the defendant put together a consortium of 65 investors to purchase a shopping centre in the UK, called the Parish Consortium. It decided to sell ten units of the shopping centre and the defendant put together a separate consortium of investors to purchase those ten units comprising of 39 investors, called the Jubilee Consortium. There were a small number of investors who were members of both, including some of the plaintiffs in these proceedings. The investors in both consortia sustained losses of their investments.
In 2010 some of the investors in the Parish Consortium instituted proceedings against the same defendant as is defendant in these proceedings. In 2011, these proceedings were instituted in which the plaintiffs sought compensation in respect of the losses they sustained from their investment in the Jubilee Consortium. Seven of the plaintiffs in these proceedings were also plaintiffs in the Jubilee Consortium proceedings and the remaining plaintiffs were only involved in the Parish Consortium.
The plaintiffs in the Parish proceedings had sought discovery from the defendant by letter dated 16 June 2014. The defendant agreed to make voluntary discovery by letter dated 3 July 2014 and furnished around 5,000 documents in an affidavit of discovery. These proceedings were compromised in 2017. Some of the plaintiffs in these proceedings now seek to be released from their implied undertaking not to use the Parish discovery for any purpose other than that litigation and seek liberty to use the Parish discovery in these proceedings.
Both parties acknowledge the existence of a rationale for the implied undertaking as recognised by the Supreme Court in Ambiorix Ltd v Minister for the Environment (No. 1) [1992] 1 IR 277 and acknowledge that a breach of the implied undertaking is a contempt of court. The plaintiffs and defendant differ in the test for securing a release from the undertaking.
The plaintiffs contend that the principal test is the interests of justice although they concede that establishing relevance of the documentation to the litigation can assist in demonstrating that the interests of justice lies in favour of allowing disclosure of the discovery documentation. They contend that the two consortia were intertwined in that they both involve the defendant using a similar trust structure, the defendant was involved in advising both vendor and purchaser of the ten units, the defendant was a trustee to the plaintiffs who were beneficiaries, and the defendant used the same lending bank and had the same amount of borrowings. They claim that securing the documentation will assist them in dealing firstly with a motion the defendant has brought to dismiss the proceedings for delay and secondly with a motion they intend to bring to have an issue pertaining to the independence of a valuation report dealt with as a preliminary issue, which they say will resolve the entire proceedings. They claim that there are special circumstances as identified in the authorities. They say it is relevant that much of the documentation is now admissible evidence pursuant to the Civil Law and Criminal Law (Miscellaneous Provisions) Act 2020 and, in particular, s. 13 thereof.
The defendant disputes special circumstances or the relevance of the documentation to the pleaded case as the documentation relates to a different investment for which there was a different investment memorandum in respect of different investors. They say that the case the plaintiffs have made in this application, in particular around the alleged lack of independence of a valuation report, has not been pleaded in the Plenary Summons and Statement of Claim. They also say that they will suffer injustice if disclosure is allowed as a lot of confidential information pertaining to the Jubilee plaintiffs is included, that the volume of documentation comprising some 5,000 documents renders disclosure inappropriate and that, because the documentation is not relevant and is their documentation, that it should not be disclosed. They also seek to rely on a claim made by the plaintiffs at an earlier stage in the proceedings in their Replies to Particulars to the effect that they would require additional discovery in any event, but the plaintiff then maintained at the hearing of this application that, if they secured disclosure of this documentation, it was unlikely they would require further discovery. The defendant argued that the plaintiffs should simply seek the documentation relevant to their pleaded case in the usual way and that that will serve the interests of justice. The plaintiffs say they are concerned that this will cause delay.
Insofar as there has been considerable delay already in this case, I did not understand the plaintiffs to suggest that any of this rested particularly with the defendant other than insofar as the defendant did delay in furnishing some of their pleadings which necessitated motions. Some delay was caused by the death of the plaintiffs' solicitor in 2017 and some by the pandemic. The plaintiffs referred in the course of the hearing of this application to their concern that the defendant would drag their heels on making discovery, even though discovery was made expeditiously in the Parish proceedings where the defendant had indicated their...
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A v B(2)
...were the subject of the First Judgment. The law as regards such an application has been succinctly summarised in Barry and ors v. BDO [2023] IEHC 61. I note in particular the factors, stated at §18 of same as required to present for such an application to be successful. I treat with those f......