Little v IBRC

JurisdictionIreland
CourtHigh Court
JudgeMr. Justice Tony O’Connor
Judgment Date08 Oct 2019
Neutral Citation[2019] IEHC 656
Docket Number[2014 No. 5126 P.]

[2019] IEHC 656

THE HIGH COURT

Tony O’Connor

[2014 No. 5126 P.]

BETWEEN
SHANE LITTLE

AND

NICOLA LITTLE
PLAINTIFFS
AND
IRISH BANK RESOLUTION CORPORATION LIMITED (IN SPECIAL LIQUIDATION)

AND

LAUNCESTON PROPERTY FINANCE LIMITED
DEFENDANTS

Redaction – Discovery – Guidance – Plaintiffs seeking an order directing the second defendant to make available for inspection in unredacted form a loan sale agreement and a deed of transfer – Whether the detail behind the redactions was relevant to the subject of the proceedings

Facts: The plaintiffs, Mr and Ms Little, sought an order pursuant to Order 31 of the Rules of the Superior Courts (RSC) directing the second defendant, Launceston Property Finance Ltd, to make available for inspection in unredacted form: (i) the loan sale agreement dated 28th March, 2014, between the first defendant, Irish Bank Resolution Corporation Ltd (IBRC), the special liquidator of IBRC and Launceston; and (ii) the deed of transfer dated 23rd May, 2014 between those same parties. The documents were listed in an affidavit of discovery sworn on behalf of Launceston on 29th May, 2017, and were the subject of a notice to produce pursuant to O. 31(16) of the RSC dated March 2018. The redactions undertaken were enormous and rendered an understanding of the documents difficult for those who did not have the benefit of an explanation about the content or information behind the redactions. The defendants asserted in a general way that the detail behind the redactions was not relevant to the subject of these proceedings.

Held by the High Court (O’Connor J) that it would not direct the enumeration or description of each redacted portion like in Bula Ltd (in Receivership) v Crowley [1991] 1 I.R. 220 or order inspection by the Court. The Court gave one last opportunity to the defendants by directing them to categorise on affidavit the redactions with explanations for each category. The Court also directed the defendants to identify in writing those specific redacted portions which they would refuse the solicitor for the plaintiffs to inspect and the reasons for not accepting an undertaking to maintain confidentiality to be given by that solicitor. Liberty was given to the defendants to draft the undertaking which they would accept in relation to those redacted portions to be disclosed. The Court was not satisfied as to the necessity for confidentiality of general provisions when the reasons were not outlined and when an unidentified and increasing group were aware of those provisions. That did not mean that the Court would ignore grounds for protecting commercially sensitive or confidential information provided the constitutional imperative to determine cases in public was not infringed. O’Connor J also directed that the solicitor for the plaintiffs be allowed, on conditions to be specified by the defendants, to inspect (but not necessarily photocopy) the documents which should have a reduced number of redactions as may be chosen and identified by IBRC in the supplemental affidavit for categorising and explanation. O’Connor J would also hear the parties about the terms of an undertaking not to disclose any information relating to the redacted portions of the documents to any other party without seeking an order from the Court on notice to the defendants. O’Connor J held that the burden still rests on an applicant to satisfy the Court about relevance but there is also an initial onus on a party who redacts to categorise and explain by way of more than bald assertions.

O’Connor J held that he would decline to inspect the documents without having the benefit of the categorisation and explanation which the defendants were directed to do as it was about time that the party who redacts extensively carries out the duty to categorise and explain, without burdening the Court or other parties in the proceedings.

Guidance and directions for redacting where documents are heavily redacted.

JUDGMENT of Mr. Justice Tony O’Connor delivered on the 8th day of October, 2019
Introduction
1

The plaintiffs seek an order pursuant to Order 31 of the Rules of the Superior Courts ( “RSC”) directing the second named defendant ( “Launceston”) to make available for inspection in unredacted form:-

(i) The loan sale agreement dated 28th March, 2014, between the first named defendant (“ IBRC”), the special liquidator of IBRC and Launceston ( “loan sale agreement”); and

(ii) The deed of transfer dated 23rd May, 2014 ( “loan sale deed”) between those same parties; ( “the documents”).

2

The documents were listed in an affidavit of discovery sworn on behalf of Launceston on 29th May, 2017, ( “the affidavit of discovery”) and are the subject of a notice to produce pursuant to O. 31(16) of the RSC dated March 2018. The redactions undertaken are enormous and render an understanding of the documents difficult for those who do not have the benefit of an explanation about the content or information behind the redactions. The defendants assert in a general way that the detail behind the redactions are not relevant to the subject of these proceedings.

Background
3

The plaintiffs allege that Irish Nationwide Building Society ( “INBS”), which had its loans transferred to IBRC in 2011, breached a written commitment in 2004 to replace a bridging loan with a long-term loan. This breach allegedly exposed the plaintiffs to excessive interest and obliged them to sell the property to pay off the loan when demanded. Relying upon the representation from INBS, the first named plaintiff borrowed further from INBS in 2004 and 2007. These loans were transferred in 2014 to Launceston after the commencement of these proceedings in June 2014. Launceston has delivered a defence and counterclaim seeking recovery of the 2004 and 2007 loans. It denies that the plaintiffs have a right to set off their claim against the sums which were due to INBS and are now owed to Launceston.

4

The plaintiffs contend that it is fundamental to appreciate the terms and conditions for the transfer of their loans to Launceston and to know whether their loans were taken by Launceston with actual or potential knowledge of their existing claims against INBS.

The redaction

Reason for redactions

5

Solicitors for IBRC had advised the solicitors for Launceston in June 2017 that the redactions which IBRC made to the documents “are confidential and do not relate to the loan facilities previously held by the plaintiffs with IBRC”. Launceston relies on a contractual obligation owed to IBRC to maintain the confidentiality of the redacted provisions.

Original explanation for redactions

6

The explanation in the affidavit of discovery for the redactions was that in general the documents “contain information which is commercially sensitive and confidential information relating to loans that are not the subject matter of the within proceedings”. The deponent also referred to advice, which was neither explained nor exhibited, that the redacted segments are irrelevant to the claims of the plaintiff.

Summary of the furnished copy redacted documents

7

In the redacted loan sale deed copied to the plaintiffs’ solicitors:-

(i) eleven of the eighteen headings in the contents page were covered in black ( “blanked”) immediately opposite the paragraph number;

(ii) the second page only had a blanked rectangular-like paragraph with no other writing;

(iii) a majority of the definitions spread over thirteen pages were completely blanked or had significant portions of the definitions blanked;

(iv) the operative clause 2.1 and subparas. 2.3.6, 2.3.7 and 2.4 were blanked;

(v) the entirety of clause 3 was blanked including the heading;

(vi) all of clause 4 (save for the headings “Actions on the signing date” and “Vendor action on or following the signing date” with a provision that the vendor will deliver an “appropriate notice” to “all relevant borrowers”) was blanked;

(vii) Clauses 5 to 10, including the headings over twelve pages (save for much of subclause 9.6 entitled “Transfer of title to the assets”) had each of its subparagraphs redacted to a large extent;

(viii) the apparent operative part of clause 11 with the heading “Actions required by vendor on purchaser” and further subclauses were heavily redacted in a manner that could arouse suspicions about the potential relevance of one or more of those provisions to the claims of the plaintiffs. An example is subclause 11.12 that refreshingly has a non-redacted heading “Purchaser indemnity” but the subclause is then blanked. The following fourteen pages with the remainder of clause 11 and all of clauses 12 to 18.5, including headings, are blanked save for clause 16.2, which I comment upon immediately after this summary.

(ix) Subclauses 18.5 to 18.15 appear to be boilerplate-type provisions even though four specific subclauses are blanked without any hint as to why they are irrelevant or confidential when the other boilerplate subclauses are not considered irrelevant or commercially sensitive;

(x) the schedules of assets and borrowers which only identify the loans of the first named plaintiff appear to be properly blanked;

(xi) the three pages before the execution page to the loan sale deed have blanked boxes of paragraphs without any indication as to what they may contain.

8

The following two comments by the Court are made to demonstrate the apparent idiosyncratic nature of the redacting. Firstly counsel for the plaintiffs explained a potential relevance of the definition of “Data Room” for information which may have been made available to Launceston about the claims of the plaintiffs. Curiously the definition of “Data Room” is not blanked while no provision which uses that definition is uncovered or explained as to why it is blanked. Secondly, IBRC also chose not to blank clause 16.2 which provides that the parties will pay their own costs for preparing and implementing the terms of the...

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