Megaleasing UK Ltd v Barrett (No. 2)

• Jurisdiction: Ireland
• Judge: FINLAY C.J.,O'FLAHERTY J.,McCarthy J.
• Judgment Date: 20 July 1992
• Neutral Citation: 1992 WJSC-SC 2494
• Court: Supreme Court
• Date: 20 July 1992

MEGALEASING v. BARRETT

BETWEEN

MEGALEASING U.K. LIMITED MEGALEASING HOLDINGS LIMITED andQUANTUM DATA DATA S.A.

Plaintiffs

and

(1) VINCENT BARRETT (2) V. F. J. BARRETT & ASSOCIATES (3)MOSETTA (4) JACQUES TOULORGE (5) BEAT CORPATAUX (6) MAURICE CLIFFORD (7)MICHAEL BEHAN (8) BERRUTI LIMITED (9) REXCO LIMITED (10) ANSBACHER ANDCOMPANY LIMITED

Defendants

1992 WJSC-SC 2494

Finlay C.J.

Hederman J.

McCarthy J.

O'Flaherty J.

Egan J.

160/91

THE SUPREME COURT

Synopsis:

ACTION

Cause

Discovery - Information - Disclosure - Obligation - Wrong - Commission - Allegation - Defendant's invoice paid by plaintiff - Relevant transaction not traced by plaintiff - Whether defendant involved innocently in tortious act - Whether defendant obliged to give plaintiff information concerning money paid - (160/91 - Supreme Court - 20/7/92) - [1993] ILRM 497

|Megaleasing U.K. Ltd. v. Barrett|

DISCOVERY

Action

Cause - Proofs - Limitations - Wrong - Commission - Identity of wrongdoer - Knowledge - Obligation to assist injured party - (160/91 - Supreme Court - 20/7/92) - [1993] ILRM 497

|Megaleasing U.K. Ltd. v. Barrett|

Citations:

NORWICH PHARMACAL CO & ORS V CUSTOMS & EXCISE COMMISSIONERS 1974 AC 133

BANKERS TRUST CO V SHAPIRO 1980 3 AER 353

UPMANN V ELKAN 1871 LR 12 EQ 140

ORR V DIAPER 4 CH 92 25 WR 23

JUDICATURE ACT (IRL) 1877 SCHED R24

RULES OF THE SUPREME COURT 1905 O.20 r6

1 JUDGMENT delivered on the 20th day of July 1992by FINLAY C.J. [HEDERMAN, EGAN CONC]

2 This is an appeal brought by the first, second, third, sixth, seventh, eighth, and ninth named Defendants against an order made by Costello J. in theHigh Court on the 8th May 1991, and by consent amended under the slip-rule which by way of interlocutory relief granted to the Plaintiffs an order for discovery by the Defendants concerning certain transactions, discovery being the sole cause of action in the proceedings instituted against the Defendants.

The facts

3 The Plaintiffs are a number of interrelated companies which were, at the time of the happening of the events out of which this claim arises, carrying on a multinational trade in computer equipment andaccessories.

4 In the affidavit supporting this application it is alleged that in the years 1989 and 1990 four invoices were raised by some of the Defendants against Megaleasing U.K. Limited and were by servants or agents of Megaleasing U.K. Limited authorised for payment and were paid. It is alleged that no satisfactory explanation of any value or goods or services providedby the Defendants to whom these payments were made can be found on investigation in the affairs of Megaleasing U.K. Limited. In those circumstances, it is alleged that the Defendants, including those actually raising the invoices and others who are concerned with the transactions involved "have either wittingly or unwittingly become involved in the tortious acts of others so as to facilitate the wrongdoing of wrongdoers and are, therefore, under a duty to assist the Plaintiffs as the entities who have been wronged by giving the Plaintiffs full information in relation to the events surrounding the wrongdoing, so as to enable the Plaintiffs to proceed against the wrongdoers. Without the information the Plaintiffs will be prevented from pursuing the causes of action and other rights arising in consequence of the matters to which I depose below." (Affidavit of Robert F. Price, paragraph 2).

5 The learned trial judge in the course of an ex temporejudgment, having reviewed the affidavits whichhad been filed, and having reviewed the decision of the House of Lords in the case of Norwich Pharmacal Company & Others v. Customs and Excise Commissioners 1974 AC 133, came to the followingconclusion:

"It seems to me that this new principle is to be welcomed. It aids in the administration of justice. Persons come under a duty to assist one injured if they have information or documents available. That is the situation in this case. The Plaintiff has made on its own testimony a prima facie clear case of evidence of wrongdoing on the part of four former employees of associated companies of the Plaintiff. It is unnecessary for the Plaintiff to do more than to establish a prima facie case. The Court does not have to be satisfied beyond a reasonable doubt. The Defendants in this case appear to approach this matter based on a serious misunderstanding of this principle. Once it has been established that third parties have information, a duty arises on them in the way that arose in the Norwich Pharmacal case. The third parties are not required to decide if the alleged case of wrongdoing is correct or not. The third party does not have to investigate the Plaintiffs"case. Once a prima facie case of wrongdoing exists theduty arises. It is perfectly clear that a duty on the part of all the Defendants exists in this case. Accordingly, they should be required to assist this Court or other Courts by making available documents in their power or procurement, confidentially, on the part of the Bank. This is because it can be used as a means of getting justice done. I am satisfied once again that an order should be made in this case.

In relation to the form of the order, it is clear from the Banker'sTrust case 1980 3 AER, 353, that the Court should in proper circumstances make such an order as would be effective in the case. I don't think that I am limited only to make an order for the production of documents. On the evidence, there appears to have been very gross wrongdoing, although I am not required to decide on this, but if the Defendants have information to assist the injured party, then the duty established in the Norwich Pharmacal case arises in the detailed way set out in that case. I think that a strong case exists for the costs being borne by the Plaintiff seeking the information, and I reserve the question of costs. If the order involves costs in taking evidence and getting documents, then the Plaintiffs seeking the relief might well be obliged to make payment of those costs."

6 The form of the order made by the learned trial judge in relation to the four identified invoices was as follows, as originally made (the Appellant Defendants then being the first to seventh namedDefendants):

"AND IT IS FURTHER ORDERED THAT"

7 1. The first to seventh named Defendants (Rexco Limited) and each of them do disclose to the Plaintiffs" Solicitors A. & L. Goodbody, forthwith upon service of such Order full details of all facts and matters or information within their knowledge concerning the following invoices:

8 (1) from the seventh Defendant (Rexco Limited) to Megaleasing U.K. Limited the first-named Plaintiff dated 28th February, 1990 for FF3.6million

9 (2) From the sixth-named Defendant (Berutti Limited) to Megaleasing U.K. Limited the first-named Plaintiff dated 28th March, 1989 forFF475,000

10 (3) From the sixth-named Defendant (Berruti Limited) to the first-named Plaintiff Megaleasing U.K. Limited dated 26th September, 1989 for DM92,400

11 (4) From the sixth-named Defendant (Berruti Limited) to the first-named PlaintiffMegaleasing U.K. Limited dated 7th December, 1989 for FF275,000 and

12 including without prejudice to the generality of the foregoing:

13 (a) on whose instructions each of the said invoices was prepared;

14 (b) the transaction to which each of the said invoices related;

15 (c) when and in what manner payment was received in respect of each of the said invoices;

16 (d) the whereabouts of and what has become of sums paid pursuant to each of the said invoices;

17 (e) on whose instructions sums paid pursuant to each of the said invoices were disbursed and for what purpose;

18 (f) any involvement of any of the Shelagh Elkins, Andrew Nelson, Kenneth Hogan, Bernard Fleurose, and Etienne Robert in any of the said facts or matters;

19 (g) any communications had with the persons named in (f) or any of them relating to any of the payments in (1) to (4) supra;

20 (h) any contract involving the first to seventh Defendants or any of them and any third party in any way relating to the issue of the said invoices, the transactions to which each of them relate and the payments made in respect of each of them.

21 2. The first to seventh Defendants and each of them do make and serve on the Plaintiffs" Solicitors within seven days after service of such Order an Affidavit verifying the information disclosed by such Defendants to the Plaintiff's Solicitors pursuant to paragraph 1 hereof and exhibiting thereto true copies of all documents within the possession, custody or power of such Defendant relating to any of the facts and matters or information described in paragraph 1hereof."

22 Subsequent to the making of that order, it appears that the Plaintiffs entered into agreements in May and June of 1991 with the four persons formerly employed by them, who appeared to be involved in the authorising of payments on foot of the invoices referred to, and whom they had dismissed from their employment, providing for them compensation in discharge of arrangements concerning share options and, in one case, in consideration of the transfer of shares and, provided that payments which were substantial and were approximately in a sum of£450,000 in total, should be in full satisfaction of all claims, and absolving these four persons from any claims otherthan, in the case three of them, a claim based upon proof of fraud and, in the case of the fourth one, a claim based on proof of theft.

23 The first issue which arose for consideration on this appeal was a submission made on behalf of the Appellants that, in effect, the issue which had originally been before the Court was now a moot in that there could be no reality in the Plaintiffs wishing or seeking to make claims against persons for whom they had after discovery of the alleged wrongdoing provided substantial sums of compensation in settlement ofclaims.

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