Mostafa Chatabbou and Adelkabir Touigir v The Minister for Social Protection

• Jurisdiction: Ireland
• Judge: MR. JUSTICE MICHAEL PEART
• Judgment Date: 05 December 2018
• Neutral Citation: [2018] IECA 386
• Court: Court of Appeal (Ireland)
• Docket Number: Record Number: 2017 No. 211
• Date: 05 December 2018

BETWEEN:

MOSTAFA CHATABBOU

AND

ADELKABIR TOUIGIR

PLAINTIFFS/APPELLANTS

- AND -

IRELAND, THE ATTORNEY GENERAL

AND

THE MINISTER FOR SOCIAL PROTECTION

DEFENDANTS/RESPONDENTS

[2018] IECA 386

Record Number: 2017 No. 211

THE COURT OF APPEAL

Discovery – Categories of documents – Directive 2008/94/EC – Appellant seeking discovery – Whether the categories of documents sought were relevant and necessary for the proper determination of the proceedings

Facts: The plaintiffs/appellants, Mr Chatabbou and Mr Touigir, contended that the provisions of s. 1(3)(c) of the Protection of Employees (Employer’s Insolvency) Acts 1984 failed to properly transpose Article 2.1 of Directive 2008/94/EC into Irish law, and therefore that they were entitled to certain declaratory orders, and damages, including aggravated damages, in accordance with the legal principles relating to state liability for damages, as stated in Joined Cases C-6/90 and C-9/90 Francovich and others [1991] ECR 1-5357. Such damages were claimed in respect of losses alleged to have been suffered following their failure to recover amounts awarded to them under the Organisation of Working Time Act 1997 and the National Minimum Wage Act 2000. The plaintiffs appealed to the Court of Appeal against an order of the High Court (Heneghan J) dated the 24th April 2017 refusing an application for discovery of four categories of documents which the plaintiffs considered were both relevant and necessary for the proper determination of the proceedings: “A. All documents drawn up or otherwise generated relating to and/or concerning the implementation into national law of Directive 2008/94/EC and, in particular, the requirement in the Directive concerning the establishment of a state [of] insolvency on the part of a corporate employer; B. All documents comprising advice received concerning the implementation into national law Directive 2008/94/EC and, in particular, the requirement in the Directive concerning the establishment of a state of insolvency on the part of a corporate employer; C. All documents comprising notification to the State or its agencies that Directive 2008/94/EC has not been fully and properly implemented; D. All documents received from the Commission or any other agencies in the European Union concerning the implementation into national law Directive 2008/94/EC and, in particular, the requirement in that Directive concerning the establishment of a state of insolvency on the part of a corporate employer.”

Held by Peart J that the question of whether or not the Directive had been correctly transposed into Irish law was a relatively straightforward issue to resolve, which did not require an examination of the types of materials sought to be obtained by discovery of the categories of documents sought by the plaintiffs. Peart J held that the only possible category of documents identified in the request for discovery which could be relevant to the damages claim was category C. Peart J held that seeking category C by way of discovery amounted to “fishing” in the hope rather than any expectation that something might turn up; that was impermissible.

Peart J held that the appeal would be dismissed.

Appeal dismissed.

JUDGMENT OF MR. JUSTICE MICHAEL PEART DELIVERED ON THE 5 ^TH DAY OF DECEMBER 2018

1 This is an appeal against an order of the High Court (Heneghan J.) dated the 24 ^th April 2017 refusing an application for discovery of four categories of documents which the plaintiffs consider are both relevant and necessary for the proper determination of these proceedings.

2 In their proceedings the plaintiffs contend that the provisions of s. 1(3)(c) of the Protection of Employees (Employer's Insolvency) Acts, 1984 (“the 1984 Act”) fail to properly transpose Article 2.1 of Directive 2008/94/EC (“the Directive”) into Irish law, and therefore that they are entitled to certain declaratory orders, and damages, including aggravated damages, in accordance with the legal principles relating to state liability for damages, as stated in Joined Cases C-6/90 and C-9/90 Francovich and others [1991] ECR 1-5357 (“ Francovich damages”). Such damages are claimed in respect of losses alleged to have been suffered following their failure to recover amounts awarded to them under the Organisation of Working Time Act, 1997 and the National Minimum Wage Act, 2000.

3 The four categories of documents of which the plaintiffs seek discovery are as follows:

“A. All documents drawn up or otherwise generated relating to and/or concerning the implementation into national law of Directive 2008/94/EC and, in particular, the requirement in the Directive concerning the establishment of a state [of] insolvency on the part of a corporate employer;

B. All documents comprising advice received concerning the implementation into national law of Directive 2008/94/EC and, in particular, the requirement in the Directive concerning the establishment of a state of insolvency on the part of a corporate employer;

C. All documents comprising notification to the State or its agencies that Directive 2008/94/EC has not been fully and properly implemented;

D. All documents received from the Commission or any other agencies in the European Union concerning the implementation into national law of Directive 2008/94/EC and, in particular, the requirement in that Directive concerning the establishment of a state of insolvency on the part of a corporate employer.

4 Article 2.1 of the Directive provides:

“For the purposes of this Directive, an employer shall be deemed to be in a state of insolvency where a request has been made for the opening of collective proceedings based on insolvency of employer, as provided for under the laws, regulations and administrative provisions of a Member State and involving the partial or total divestment of the employer's assets and the appointment of a liquidator or a person performing a similar task, and the authority which is competent pursuant to the said provisions has:

(a) either decided to open proceedings; or

(b) established that the employer's undertaking or business has been definitively closed down and that the available assets are insufficient to warrant the opening of the proceedings.”

5 Section 1(3)(c) of the 1984 Act, which purports to implement Article 2.1 into national law, provides that where the employer is a corporate entity it shall be considered to be insolvent if:

“a winding up order is made or a resolution for voluntary winding up is passed with respect to it, or a receiver or manager of its undertaking is duly appointed, or possession is taken, by or on behalf of the holders of any debentures secured by any floating charge, of any property of the company comprising or subject to the charge”.

6 The plaintiffs’ complaint essentially is that they are unable to afford the legal and other costs involved in having the company with which they had been employed wound up by the court and a liquidator appointed. They go on to contend that while the 1984 Act makes provision in relation to a company being deemed to be insolvent when a liquidation occurs and a liquidator is appointed, it fails to make provision for the less formal way of deeming a company to be insolvent which is provided for as an alternative by Article 2.1, namely (b) where it is “established that the employer's undertaking or business has been definitively closed down and that the available assets are insufficient to warrant the opening of the proceedings”.

7 In order to recover Francovich damages on the basis of a failure by the State to properly transpose the Directive, the plaintiffs will have to satisfy the test for recovery of such damages, which was stated in Joined Cases Brasserie du Pecheur and Factortame III [1996] ECR I-1029, as follows:

“Community law confers a right to reparation where three conditions are met: the rule of law infringed must be intended to confer rights on individuals; the breach must be sufficiently serious; and there must be a direct causal link between the breach of the obligation resting on the State and the damage sustained by the parties.”

8 In order to satisfy the second condition, namely that the breach must be sufficiently serious, the plaintiffs will have to establish that the State has “manifestly and gravely disregarded the limits on its discretion”. This...