IBB Internet Services Ltd and Others v Motorola Ltd

• Jurisdiction: Ireland
• Judge: Mr. Justice Barrett
• Judgment Date: 03 February 2015
• Neutral Citation: [2015] IEHC 54
• Court: High Court
• Date: 03 February 2015

[2015] IEHC 54

THE HIGH COURT

11862 P/2010

IBB Internet Services Ltd & Ors v Motorola Ltd

BETWEEN:

IBB INTERNET SERVICES LIMITED AND IRISH BROADBAND INTERNET SERVICES LIMITED (TRADING AS IMAGINE NETWORKS) AND IMAGINE COMMUNICATIONS GROUP LIMITED

Plaintiffs

AND

MOTOROLA LIMITED

Defendant

Order of Discovery – Practice and Procedures – Agreements – Broadband Internet Networks – Damages – Breach of Contract – Negligence – Misrepresentation – Delay

Facts: This case concerned applications for discovery brought by: (a) the plaintiffs against the defendant and (b) by the defendant against the first and second-named plaintiffs, and in a slightly different form against the third-named plaintiff. The plaintiffs whilst separate legal entities, claimed to be a single economic entity and asserted the right to be treated as such in law and in fact. They claimed damages for breach of contract and in negligence and in misrepresentation against the defendant due to alleged delay in the rollout of a broadband Internet network and in the dysfunction of such portion of that network as was provided.

Held by Justice Barrett in light of the available evidence and submissions presented that the Court would order discovery: (a) by the defendant to the plaintiffs on the basis identified in Appendix A, (b) by the first and second-named plaintiffs to the defendant on the basis identified in Appendix B, Part I, and (c) by the third-named plaintiff to the defendant on the basis identified in Appendix B, Part II.

1 Judgment of Mr. Justice Barrett delivered on 3rd February, 2015

Key issue arising

2 1. This judgment concerns applications for discovery brought (a) by the plaintiffs against the defendant and (b) by the defendant against the first and second-named plaintiffs, and in a slightly different form against the third-named plaintiff. Any views expressed herein are tentative in terms of the strength or weakness of any case that might be made by either side at plenary hearing.

Background facts

3 2. The parties to these proceedings have now been before the courts so often in one procedural application or another, all of which have been brought in the context of the within proceedings but without any resolution of the central issues arising, that this Court has no need to describe the background facts in its own words. Instead it can transplant into this judgment the relevant section of Charleton J.'s judgment in IBB Internet Services Limited & Ors v. Motorola Limited [2013] IEHC 541, at paras. 1 and 2, and supplement what he had to say with a few sentences of its own. Per Charleton J:

4 2 "1. This action was commenced by plenary summons on 23 December 2010. While the plaintiffs are separate legal entities, they claim to be a single economic entity and assert the right to he treated as such in law and in fact. They claim damages for breach of contract and in negligence and in misrepresentation against (he defendant due to alleged delay in the rollout of a broadband Internet network and in the dysfunction of such portion of that network as was provided. The relevant contract was negotiated between March and October 2009 and was to become operational in December of that year. The parties agree that on 13 October 2009 a written contract, called a master services agreement, was signed between the second named plaintiff and the defendant and that this was later novated to the first named plaintiff on 10 November 2009. In addition, the plaintiffs allege that the third named plaintiff entered into a collateral agreement, apparently oral, with the defendant. Representations and warranties seem crucial to the case made by the plaintiffs as to the suitability and functioning of the network. The main contract of 13 October 2009 contains clauses limiting liability and confining the relationship between the parties to contract in the terms as therein set out. The series of sites over which this network was to operate was to be supplied by the defendant to the plaintiffs in groups of 15, amounting eventually to 120 sites actually supplied, and there were 5 others included in a test module. In all, 402 sites were projected ultimately. Provisional acceptance of the sites under a term of the written contract is alleged by the defendant to be a warranty of satisfaction. Of these there are said to be 51 signed acceptances, on behalf of which plaintiff or on behalf of all plaintiffs, together with 74 deemed acceptances by virtue of the elapse of time. In addition, the contract provided for a final acceptance of which 31 were signed, in the same context, and 94 are deemed. The terms of the contract seem to be such that unless a batch of 15 sites is ordered, by whichever of the plaintiffs is responsible, there is no obligation on the defendant to supply anything or on the plaintiff to order anything. Because of dissatisfaction. whether for good reason or not, no sites have been ordered since July 2010.

5 2. It is more than unusual for a case entered into the commercial list to be three years old and not to have been tried. This case has not even proceeded to the stage of discovery. The plaintiffs claim to have been bombarded by procedural motions, of which they say this is the latest. The defendant claims that by reason of pleading alternate facts, there has been a necessity for the plaintiffs to recast the statement of claim on three occasions, the current version being the fourth. There are three prior written judgements of the High Court on this claim about this very lengthy statement of claim: of Kelly J on 6 July 2011, of Clarke J on 9 November 2011 and of McGovern J of 12 October 2012. In addition, the High Court has refused the defendant security for costs, which ruling has been appealed to the Supreme Court and is awaiting judgement. It is impossible to feel satisfaction with the progress of this case even since that date of the last version of the statement of claim; the fourth. The Court is entitled to emphasise that, whatever the rights and wrongs of this series of pre-trial manoeuvrings, about which no comment is made, the parties are under a duty to the court to prepare a case for hearing through cooperating with each other in aid of the fundamental obligation of identifying the issues to be tried and making the case ready for hearing."

6 3. The last-mentioned appeal to the Supreme Court was unsuccessful. It is now over four years since the issuance of the plenary summons and the core dispute arising between the parties continues to remain un-tried. However, with the present applications for discovery, the date of the ultimate trial at least draws closer, though the scale of discovery sought before, and granted by, this Court hereafter means that in reality the date of trial is still some way off. Perhaps the only other matter to mention in addition to Charleton J.'s summary of the background facts is the financing arrangements that were agreed between the parties. Thus, although the master services agreement was executed on 13 ^th October, 2009, it did not become operative on that date. Instead it was subject to a provision that it would become operative only in the event that an equipment financing agreement was executed between the second-named plaintiff and Motorola Credit Corporation. This last-named agreement was eventually executed on 3 ^rd December, 2009. Mention is made of the financing arrangements because some of the discovery requests considered by the court hereafter relate and/or refer to same.

Legal background

7 4. There is no significant dispute between the parties in these proceedings as to the applicable law, or that the applicable criteria for ordering discovery are the relevance of the documentation and the necessity of its discovery to the fair disposal of the matter arising or for the saving of costs, subject to the observation of Murray J. in Framus v. CRH plc [2004] 2 I.R. 20 at p.38 that once relevance is established, a finding of necessity will generally follow. Reference was made in the course of the hearings to this Court's judgment in Re Astrazeneca AB & Patents Acts [2014] IEHC 189, and to the court's unsurprising endorsement therein of the principles originally propounded by Brett L.J. in Compagnie Financiere du Pacifique v. Peruvian Guano Co. (1882) 11 Q.B.D. 55, an endorsement which was both required and informed by, inter alia, the decision of the Supreme Court in Ryanair p.l.c. v. Aer Riant a c.p.t. [2003] 4 I.R. 264, in which Fennelly J., at p.275, refers to the decision of Brett L.J. in Peruvian Guano as "the universally accepted test of what is the primary requirement for discovery, namely the relevance of the documents sought". The possible gloss which this Court added in its judgment in Astrazeneca was its determination, by reference to applicable case-law, that compliance with the requirements in the Rules of the Superior Courts as to discovery requires an applicant to show, inter alia, that requested documentation 'may, not must' be relevant. Any decision as to discovery must also be framed within the caveat as to proportionality to which Murray J. refers in Framus, at p.38, and to which Fennelly J. makes reference in Ryanair v. Aer Rianta.

8 5. Counsel for Motorola observed during the hearings that "The court's experience will no doubt be that there is a vast amount of discovery made and very little ever referred to at trial". Certainly, sitting in a Victorian-age courtroom, Brett L.J. could never have envisioned the scale of work that his judgment in Peruvian Guano would engender in our data and documentation-rich Information Age when discovery costs so much in money, time and resources, typically unleashes a sea of documentation which contains only a limited number of documents that are of central focus at the later trial, rarely if ever...