Comcast International Holdings Incorporated v The Minister for Public Enterprise
| Jurisdiction | Ireland |
| Judge | Ms. Justice Stewart |
| Judgment Date | 31 July 2018 |
| Neutral Citation | [2018] IEHC 457 |
| Date | 31 July 2018 |
| Court | High Court |
| Docket Number | [2001 No. 9288 P.] [2001 No. 15119 P.] |
[2018] IEHC 457
THE HIGH COURT
CHANCERY
Stewart J.
[2001 No. 9288 P.]
[2001 No. 15119 P.]
and
and
Notices of indemnity and contribution – Bound to fail – Abuse of process – Third defendant seeking to have notices of indemnity and contribution issued by the first, fifth and sixth defendants struck out – Whether the claim had no reasonable prospect of success and/or was bound to fail
Facts: The third defendant, Esat Telecommunications Ltd, since re-named BT Communications Ireland Ltd (BTCIL), issued notices of motion dated 24th June, 2016, seeking to have notices of indemnity and contribution (NICs) issued by the first, fifth and sixth defendants, the Minister for Public Enterprise, Ireland and the Attorney General (the State defendants) struck out under O. 19, r. 28 of the Rules of the Superior Courts (ROSC) on grounds that the claim had no reasonable prospect of success and/or was bound to fail. Further or in the alternative, BTCIL sought an order dismissing the NICs under the High Court's inherent jurisdiction on grounds that they were unsustainable, frivolous, vexatious and/or an abuse of process.
Held by Stewart J that, for the State defendants to maintain a valid claim, a specific series of events would have to occur. Evidence of wrongdoing on BTCIL's part would have to emerge and, a conclusion having been reached that the plaintiffs suffered loss on foot of the defendants' wrongdoing, the trial judge would have to find that some measure of liability is attributable to BTCIL. This would engage s. 35(1)(h) of the Civil Liability Act 1961. The plaintiffs would have to make an application asking the Court to exercise its discretion to dis-apply s. 35(1)(h), a discretion that has not been provided for in the legislation. In the alternative, they could seek to challenge the constitutionality of s. 35(1)(h). The trial judge would then have to accede to that application and dis-engage s. 35(1)(h), thereby holding the un-released defendants liable for 100% for the plaintiffs' loss. The State defendants would therefore have a valid claim for indemnity/contribution from BTCIL. That series of events would also presume either that the plaintiffs did not make an application seeking to have the 2014 consent order set aside on grounds of fraud/lack of candour or that such an application was refused. Stewart J held that this possible future scenario moved beyond the realm of possible revelations at trial, out into the field of legal conjecture. While the Court did have concerns as to the fairness of s. 35(1)(h), the provisions were clear in that there was no discretion to dis-apply them. Stewart J noted that s, 35(1)(h) also enjoys the presumption of constitutionality and that it would be inappropriate for the Court to refuse the reliefs sought on grounds that a particular set of facts may arise in the future that may convince some other court that said presumption has been rebutted. While the Court was required to resolve all disputes in the State defendants' favour in an application such as this, Stewart J held that this could not extend so far as to suspend the presumption of constitutionality enjoyed by Acts validly passed by the Oireachtas. Stewart J held that the eventualities outlined above were made all the more remote by the fact that the plaintiffs would have a strong case in seeking to have the consent order set aside on foot of BTCIL's fraudulent or dishonest concealment of their wrongdoing; once that order is set aside, there is no release or accord for the purposes of the 1961 Act and the plaintiffs could recover against BTCIL in the normal way. Stewart J held that it would be an impermissible limitation on the Court's inherent jurisdiction to dismiss claims if the reliefs sought could be refused on grounds of abstract judicial hypothesis. Stewart J was therefore disposed to granting the reliefs sought.
Stewart J held that she would grant the reliefs sought and dismiss the State defendants' NICs under the Court's inherent jurisdiction on grounds that the claims set out therein were bound to fail.
Reliefs granted.
This judgment is delivered in respect of notices of motion dated 24th June, 2016, issued by the third-named defendant (since re-named BT Communications Ireland Ltd and hereafter referred to as 'BTCIL') in both sets of proceedings and seeking to have notices of indemnity and contribution ('NICs') issued by the first, fifth and sixth-named defendants (hereafter referred to as 'the State defendants') struck out under O. 19, r. 28 of the Rules of the Superior Courts (ROSC) on grounds that the claim has no reasonable prospect of success and/or is bound to fail. Further or in the alternative, BTCIL seek an order dismissing the NICs under the Court's inherent jurisdiction on grounds that they are unsustainable, frivolous, vexatious and/or an abuse of process.
This application is but a small scene in the saga of legal proceedings inspired by the tendering process for Ireland's second GSM mobile telephone licence. The plaintiffs were part of a joint enterprise that partook in the bidding process for the licence and was a disappointed bidder to Esat Digifone's successful bid. The first-named defendant was the decision-maker in awarding the licence and the second-named defendant occupied the office of the first-named defendant at the relevant time.
Further relevant background facts are set out in the affidavit of Seamus Walsh, a director of BTCIL, sworn on 23rd June, 2016, to support this application. The two sets of proceedings were issued in 2001, with statements of claim delivered in 2005. The proceedings bearing record number 2001/9288P seek a declaration that the extension of time allowed for the receipt of tenders is null and void. The proceedings bearing record number 2001/ 15119P seek a declaration that the decision dated 16th May, 1996, to grant the licence to BTCIL is also null and void. The narrative of these proceedings is best understood against the backdrop of the Tribunal of Inquiry into Payments to Politicians and Related Matters, chaired by Moriarty J. (hereafter referred to as 'the Tribunal'). The plaintiffs had stayed their hand in progressing their claim while they awaited the publication of the Tribunal's final report, which occurred in March, 2011. These proceedings had been struck out in 2007 on foot of that delay but the Supreme Court overturned that order in a decision delivered on 17th October, 2012. In early 2013, the fourth-named defendant and the State defendants served NICs against each other and all other defendants. The Court has not had sight of the NICs served by the fourth-named defendant.
The plaintiffs sought to amend their statement of claim in December, 2013 with the consent of BTCIL. That consent was not forthcoming and BTCIL instead sought to have the plaintiffs' claim against them struck out in May, 2014 for failure to disclose a reasonable cause of action. On 31st July, 2014, a consent order was made by Gilligan J. dismissing the plaintiffs" claim against BTCIL. On 21st October, 2014, a further order was made, without objection from the other defendants, permitting the plaintiffs to amend their 2005 statement of claim. Since the making of these orders, the fourth-named defendant has withdrawn his NICs against BTCIL. The State defendants made clear in correspondence that they did not intend to follow suit and the notices of motion grounding this application were duly issued.
Mr. Walsh avers that a wrongful act is not alleged against BTCIL at any point in the statement of claim, either pre- and post-amendment, nor at any time over the seventeen years since the proceedings were issued. He also alleges that the plaintiffs have specifically constructed their pleadings in order to conflate the role of BTCIL with that of other actors in the tendering process. In particular, he challenges both the import and existence of the 'holding company' relationship alleged between BTCIL (which was not a member of the Esat Digifone consortium, i.e. the winning bidder for the licence) and Esat Telecom Holdings Ltd (which was a member). It is further stated that s. 17(2) and 35(1)(h) of the Civil Liability Act 1961 provide sufficient protection for the State defendants in these matters. Mr. Walsh concludes by outlining the prejudice that would be visited upon BTCIL if it were required to answer at full hearing a claim of significant vintage that is, in respect of the plaintiffs at least, laterally accepted to be unsubstantiated and un-stateable.
Jim Luby, chartered accountant, swore an affidavit, dated 9th November, 2016, in which he outlines his instructions to report on the treatment of the plaintiffs" claim in BTCIL's accounts and on the question of whether BTCIL profited from the award of the licence in 1996. In respect of the latter, Mr. Luby avers that he has not been provided with sufficient information to reach a conclusion on that issue. In his expert report, he reviews the various disclosures of the proceedings made in BTCIL's financial statements from 2002 – 2014 and concludes that said disclosures are indicative of BTCIL's concern that it could be held liable in these proceedings. He sets out the accounting obligations contained in Financial Reporting Standard 12 ('FRS12') and the requirement outlined therein that a contingent liability must be disclosed unless a transfer in settlement is remote. He concludes that BTCIL's decision to disclose these proceedings as a contingent liability serves as an acknowledgement by BTCIL that...
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