Comcast International Holdings Incorporated, Declan Ganley, Ganley International Ltd and GCI Ltd v The Minister for Public Enterprise

JurisdictionIreland
JudgeMr. Justice Robert Haughton
Judgment Date01 December 2021
Neutral Citation[2021] IECA 325
Docket NumberHigh Court Record Number: 2001/15119P & 2001/9288P
Year2021
CourtCourt of Appeal (Ireland)
Between/
Comcast International Holdings Incorporated, Declan Ganley, Ganley International Limited and GCI Limited
Plaintiffs
and
The Minister for Public Enterprise,
Defendant/Appellant
Michael Lowry,
Defendant
ESAT Telecommunications Limited,
Defendant/Respondent
Denis O'Brien,
Defendant
Ireland and The Attorney General
Defendant/Appellant

[2021] IECA 325

Costello J.

Haughton J.

Binchy J.

High Court Record Number: 2001/15119P & 2001/9288P

Court of Appeal Record Number: 2019/46

THE COURT OF APPEAL

Notices of indemnity and contribution – Struck out – Bound to fail – Appellants appealing order striking out notices of indemnity and contribution – Whether the appellants’ claims against the respondent were bound to fail

Facts: The third defendant/respondent, ESAT Telecommunications Ltd, renamed BT Communications Ireland Ltd (BTCIL), issued notices of motion dated 24 June 2016 seeking to strike out two notices of indemnity and contribution (NICs) issued by the first, fifth and sixth defendants/appellants, the Minister for Public Enterprise, Ireland and the Attorney General (the State parties) and served on BTCIL. BTCIL’s motions sought to have the NICs struck out under O. 19 r. 28 of the Rules of the Superior Courts on the ground that the claims for indemnity and/or contribution made therein had no reasonable prospect of success or were bound to fail, and further/in the alternative on the basis of the inherent jurisdiction of the court on the basis that the said claims “are unsustainable, are frivolous and vexatious and/or they constitute an abuse of the process”. In a reserved judgment delivered on 31 July 2018 Stewart J determined that the NICs be struck out, not under O. 19 r. 28 but under the inherent jurisdiction of the court, on the basis that the claims therein were bound to fail. Costs were awarded against the State parties, with a stay. The High Court order was perfected on 25 January 2019. The State parties appealed that order to the Court of Appeal, and central to the appeal was whether, having regard to the provisions of the Civil Liability Act 1961 (CLA) related to contribution and indemnity, the State parties’ claims against BTCIL were bound to fail.

Held by Haughton J that he agreed with the trial judge’s conclusion – reached by her on consideration of the case law that preceded the decision in Defender v HSBC France [2020] IESC 37 – on the CLA issues, namely that the State parties could not seek indemnity/contribution from BTCIL as an alleged concurrent wrongdoer following the release and accord arising from agreement between the plaintiffs and BTCIL and the ensuing consent order of Gilligan J, and that as s. 35(1)(h) of the CLA was engaged, s. 35(4) applied such that the State parties’ claims for indemnity/contribution from BTCIL could not succeed. Haughton J therefore dismissed the NICs under O. 19 r. 28 on the basis that they did not disclose any reasonable cause of action, and varied the order of the High Court accordingly.

Haughton J held that as BTCIL had been successful on the appeal it was his provisional view that BTCIL was entitled to its costs of the appeal, to be adjudicated by a legal costs adjudicator in default of agreement.

Appeal allowed.

Judgment of Mr. Justice Robert Haughton delivered on the 1st day of December 2021

Introduction
1

These are appeals in respect of Notices of Motion dated 24 June 2016 issued by the third named defendant/respondent ESAT Telecommunications Limited, since renamed BT Communications Ireland Ltd (hereinafter called “BTCIL” or “respondent”) seeking to strike out two Notices of Indemnity and Contribution (“NIC”s) issued by the first and fifth named defendants (“the State parties” or “the appellant”) and served on BTCIL.

2

BTCIL's motions sought to have the NICs struck out under O.19 r.28 of the Rules of the Superior Courts on the ground that the claims for indemnity and/or contribution made therein had no reasonable prospect of success or were bound to fail, and further/in the alternative on the basis of the inherent jurisdiction of the court on the basis that the said claims “are unsustainable, are frivolous and vexatious and/or they constitute an abuse of the process.”

3

In a reserved judgment delivered on 31 July 2018 Stewart J. determined that the NICs be struck out, not under O.19 r.28 but under the inherent jurisdiction of the court, on the basis that the claims therein were bound to fail. Costs were awarded against the State parties, with a stay. The High Court order was perfected on 25 January 2019.

4

The State parties have appealed that order, and central to the appeal is whether, having regard to the provisions of the Civil Liability Act, 1961 (“CLA”) related to contribution and indemnity, the State parties' claims against BTCIL are bound to fail.

Background
5

In June and October 2001 respectively the plaintiff issued two sets of proceedings in the High Court claiming damages for breach of statutory duty, misfeasance in public office, fraud, deceit, breach of duty and breach of contract against various defendants, including the State parties and BTCIL, arising out of the processes leading up to the grant of the second GSM Mobile Phone licence by the then Minister for Transport, Energy and Communication, Michael Lowry, to ESAT Telecommunications Ltd, now BTCIL, on 16 May 1996. The plaintiff was fifth in rankings at the end of the tender process.

6

The first set of proceedings is concerned with extension of the original deadline for receipt of tenders, and the second set of proceedings is concerned with the decision, announced on 22 October 1995, to award the licence to ESAT Telecommunications Ltd, now BTCIL (together referred to in this judgment as “the proceedings”).

7

Statements of Claim were delivered in each of the proceedings in June of 2005. It is pleaded that through a company, Communicorp Group Limited, Mr. Denis O'Brien held an interest of between 37.5% and 40% in –

“Esat Digifone, a consortium formed for the purpose of submitting a bid for the licence and consisting of ESAT Telecom Holdings Ltd, Telenor Invest AS and IIU Nominees Limited. For the purpose of this Statement of Claim, Esat Telecommunications Limited, Esat Telecom Holdings Ltd and Esat Digifone will be referred to as ‘Esat’” (para.8).

The essence of the pleaded claims is that the integrity of the process to award the licence was compromised by ministerial interference in the provision of information and in the evaluation of tenders, and that the Minister received corrupt payments or benefits from Denis O'Brien and/or “Esat” resulting in the award of the licence to “Esat”.

8

So far as the reliefs claimed are concerned, they are substantially identical in each proceeding. In addition to claiming a declaration as to the unlawfulness of the grant of the licence, the plaintiffs seek damages for breach of duty, misfeasance in public office, breach of the Prevention of Corruption Act, 1906, fraud, deceit, and conspiracy, including damages arising by reason of loss of opportunity to have been awarded the licence, loss of profits in respect of the operation of the licence, and tender costs.

9

There were substantial delays in progressing the proceedings, which are for the most part explained by reference to the statutory tribunal of inquiry established by government to investigate payment to politicians, and constituted by its sole member Mr. Justice Moriarty (“the Tribunal”). This delay led to an application by the State parties in July 2007 – BTCIL was not a party to that application — to strike out the proceedings on grounds of inexcusable and inordinate delay, which application ultimately found its way to the Supreme Court.

10

In July 2012 the Supreme Court in judgments reported at [2012] IESC 50 determined that the matters raised by the proceedings were of such profound public interest and concern that they should not be dismissed on grounds of delay. The public interest in the matters raised required that they should be determined following a substantive hearing, and was such as to outweigh factors that would, in the ordinary course of events, lead to the dismissal of the proceedings. In the course of her judgment Denham C.J. found the delay excusable, and that the proceedings should not be “struck out on a technicality” and stated (para. 44):

“There is a public interest in determining such a claim of corruption in high office. It is a matter of public interest as to whether a Minister of Government corrupted a State process.”

In his concurring judgment Hardiman J. also found the delay excusable, and he comments at para. 85 that the litigation “ is truly exceptional”.

At the hearing of this appeal, the appellant placed considerable weight on these judgments to support the argument that the State parties' claims for contribution/indemnity against BTCIL should be allowed to proceed.

11

The Tribunal's report in respect of the award of the licence was published in March, 2011.

12

In December 2013, in their first communication with BTCIL since 2005, the plaintiffs delivered proposed amended Statements of Claim in both proceedings, and requested BTCIL consent to such amendments. BTCIL refused to agree to the proposed amendments, and in 2014, the plaintiffs applied to amend the Statements of Claim in both proceedings. By order made on 21 October 2014 (Keane J.) leave to amend was granted, and amended Statements of Claim were delivered on 28 October, 2014.

13

Before leave was granted for such amendment, in May 2014, BTCIL brought its own applications against the plaintiffs, seeking to have each of the proceedings dismissed pursuant either to O. 19, r.28, of the Rules of the Superior Courts, or alternatively pursuant to the inherent jurisdiction of the High Court. BCTIL's primary grounds for such applications were that BTCIL's role in the 1996 tendering process was limited to preparatory work,...

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