Defender Ltd v HSBC Institutional Trust Services (Ireland) Ltd

• Jurisdiction: Ireland
• Judge: Mr. Justice Twomey
• Judgment Date: 31 July 2018
• Neutral Citation: [2018] IEHC 543
• Docket Number: [2013 No. 12439P]
• Court: High Court
• Date: 31 July 2018

[2018] IEHC 543

THE HIGH COURT

COMMERCIAL COURT

Twomey J.

[2013 No. 12439P]

BETWEEN:

DEFENDER LIMITED

PLAINTIFF

-AND-

HSBC INSTITUTIONAL TRUST SERVICES (IRELAND) LIMITED

DEFENDANT

-AND-

RELIANCE MANAGEMENT (BVI) LIMITED RELIANCE INTERNALTIONAL RESEARCH LLC, FIMAN LIMITED

AND

DAVID WHITEHEAD

THIRD PARTIES

Preliminary application – Expert reports – Negligence – Plaintiff seeking liberty to deliver expert reports from three additional experts – Whether the interests of justice justified additional expert reports being delivered

Facts: The plaintiff, Defender, claimed some $333 million against the defendant, HSBC, for, inter alia, negligence and breach of contract regarding HSBC’s alleged role as a custodian of funds which were lost as a result of the fraud of its alleged sub-custodian, Bernie L. Madoff Securities LLC. This preliminary application was a motion seeking liberty from the High Court for Defender to deliver expert reports from three additional experts in addition to the expert reports previously delivered by Defender to HSBC. The stated purpose of these additional reports was to rebut the contents of the 11 expert reports delivered by HSBC in response to the initial three expert reports delivered by Defender.

Held by Twomey J that the interests of justice justified an additional expert report being delivered by Mr Denci on Depository Trust Company (DTC) on behalf of Defender, since unlike Defender’s other expert, Mr Vinella, Mr Denci worked in DTC and therefore could provide a similar opinion, based on factual evidence and expert opinion, on the procedures in DTC, as HSBC’s expert, Mr Wiener, had given.

Twomey J held that in order to achieve justice between the parties, the court should permit Defender to deliver expert reports by Mr Shore, who was an expert in US law, and Mr Lundelius on the broker dealer issue.

Application granted.

EX TEMPORE JUDGMENT of Mr. Justice Twomey delivered on the 31st day of July, 2018.

1 This is a preliminary application in a case which involves a claim for some $333 million by the plaintiff (‘Defender’) against the defendant (‘HSBC’) for, inter alia, negligence and breach of contract regarding HSBC's alleged role as a custodian of funds which were lost as a result of the fraud of its alleged sub-custodian, Bernie L. Madoff Securities LLC (‘BLMIS’), whose principal, Mr. Madoff was involved in a €65 billion Ponzi scheme in the United States. The hearing of the action is expected to last 20 weeks.

2 This preliminary application is a motion seeking liberty from the Court for Defender to deliver expert reports from three additional experts in addition to the expert reports previously delivered by Defender to HSBC. The stated purpose of these additional reports is to rebut the contents of the 11 expert reports delivered by HSBC in response to the initial three expert reports delivered by Defender.

3 As this application was only heard on the last day of term today the 31st July, 2018 and as the parties require an answer before the resumption of the legal term on the 1st October, 2018, this Court will give its ex temp judgment today and in doing so set out briefly the reasons for this decision.

4 The background to the motion is that a timetable for this trial was agreed between the parties and approved by the Commercial Court on the 6th November, 2017, with the trial date set for the 30th October, 2018.

5 Defender provided its three expert reports (from Mr. Vinella, Mr. Valentine and Mr. Chidgey) to HSBC on the 2nd February, 2018 as required by the agreed timetable approved by the Court. HSBC responded to Defender's expert reports by providing its 11 expert reports to Defender on the 22nd June, 2018.

6 Defender seeks liberty to issue three...