Persona Digital Telephony Ltd Sigma Wireless Networks Ltd v Minister for Public Enterprise

JurisdictionIreland
CourtHigh Court
JudgeMs. Justice Donnelly
Judgment Date30 Jun 2015
Neutral Citation[2015] IEHC 457
Docket Number[2001 No. 9223P]

[2015] IEHC 457

THE HIGH COURT

[No. 9223 P/2001]
Persona Digital Telephony Ltd & Sigma Wireless Networks Ltd v Minister for Public Enterprise & Ors
Approved Judgment
No Redaction Needed

BETWEEN

PERSONA DIGITAL TELEPHONY LTD. AND SIGMA WIRELESS NETWORKS LTD.
PLAINTIFFS

AND

THE MINISTER FOR PUBLIC ENTERPRISE, IRELAND, AND THE ATTORNEY GENERAL
DEFENDANTS
AND BY ORDER DENIS O'BRIEN
DEFENDANT
AND MICHAEL LOWRY
THIRD PARTY

Damages & Restitution – Practice & Procedures – O. 31, r. 15 of the Rules of the Superior Courts – Litigation funding arrangement – Maintenance and Champerty – Partial disclosure of information

Facts: Following the award of a GSM mobile telephone license to the competitor of the plaintiffs by the first named defendant and the institution of the claim of damages by the plaintiffs, who after becoming impecunious now sought a declaration that by entering into the litigation funding arrangement with a third party, the plaintiffs were not in contravention of rules of maintenance and champerty, the defendants sought an order for disclosure of litigation- funding agreement.

Ms. Justice Donnelly granted an order for the disclosure of the litigation-funding agreement to the defendants subject to the redaction of details of the funding budget, timeline, terms and circumstances that governed the release of funds, details of the funder's remuneration and termination of funding. The Court held that the present case presented a novel issue, which had been dealt in Thema International Fund Plc v the HSBC Institutional Trust Services Ireland Ltd. [2011] 3 I.R. 654 that it would be unlawful in Ireland for a party without an interest or legitimate concern to fund the litigation of another. The Court after considering the various judgments of the Supreme Court of various countries, specifically in consonance with the decision of the Supreme Court of New Zealand in Waterhouse v. Contractors Bonding Limited [2013] NZSC 89, opined that disclosure of the funding agreement might be ordered subject to redactions relating to confidentiality, litigation-sensitive and privileged matters. The Court observed that o. 31, r. 15 of the Rules of the Superior Courts did not apply as it related to the interlocutory stages of proceedings and the funding applications would not be an interlocutory stage as full disclosure would not be needed for the fair disposal of the funding application

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JUDGMENT of Ms. Justice Donnelly delivered on the 30th day of June, 2015

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1. This judgment concerns a preliminary matter raised by the above named defendants arising from a notice of motion issued by the plaintiffs. In their motion, the plaintiffs seek, inter alia, an order, by declaration or otherwise, that the plaintiffs, in entering into a litigation funding arrangement with Harbour Fund III Limited Partnership ("HF III"), are not engaged in an abuse of process and/or are not contravening rules on maintenance and champerty ("the funding application"). In this preliminary matter, the defendants seek disclosure of the litigation funding agreement.

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2. The main proceedings concern the decision by the Minister for Public Enterprise to award the second GSM mobile telephone licence to ESAT Telecommunications Ltd. following a competition process. The plaintiffs were unsuccessful applicants in that process. The plaintiffs claim damages (including exemplary damages) for misfeasance in public office, breach of duty, including statutory duty, breach of contract, breach of legitimate expectations, breach of constitutional rights, breach of rights under EU Law, and a declaration that the European Communities (Mobiles and Personal Communications) Regulations, 1996, contravene EU Law.

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3. James A. Boyle, who is a director of each of the plaintiff companies, swore an affidavit to ground the plaintiffs' motion. He sets out the long history of the proceedings and confirms that it is the intention of the plaintiffs to continue the prosecution of the proceedings. The plaintiffs are impecunious and he blames this on the wrongdoing of the defendants. He says that the plaintiffs do not have the ability to continue the prosecution of the proceedings. To date, the continuation of the proceedings has only been possible because of funds provided by the shareholders of the plaintiffs.

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4. Mr. Boyle outlines how he researched litigation funding and identified Harbour Litigation Funding Ltd. ("HLF") as a leading litigation funder. A funding agreement was negotiated and entered into on the 24 th March, 2015, between the plaintiffs, Persona and Sigma, on the one hand, and HF III on the other.

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5. Susan Dunn, head of Litigation Funding at HLF, swore an affidavit saying that HLF was an investment sub-advisor to HF III. She calls HF III and HLF together by the name of "Harbour". HF III was incorporated in 2015 as a limited partnership under the laws of the Cayman Islands and has £230 million sterling available to invest in commercial litigation and arbitrations worldwide. HLF's headquarters are in London. Ms. Dunn outlines that Harbour was a founding member of the Association of Litigation Funders of England and Wales, the regulatory body formed in 2011 and responsible for litigation funding in England and Wales. She exhibits the Code of Conduct for Litigation Funders under which Harbour, as a member of the Association of Litigation Funders of England and Wales, operates.

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6. That code of the Association of Litigation Funders of England and Wales was established by the Civil Justice Council of England and Wales. That is an independent public body under the UK Ministry of Justice. The code is exhibited and it includes provisions that ensure:

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(1) Non-interference by funders in litigation

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(2) Confidentiality

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(3) Capital adequacy of litigation funders

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7. Mr. Boyle avers that he believes and is advised that the funding agreement entered into between the plaintiffs and HF III is confidential and privileged and as a result it has not been disclosed. Mr. Boyle says that were the funding agreement to be disclosed to the defendants, it would provide them with an unnecessary, unfair and disproportionate litigation advantage in these proceedings. In his affidavit, he confirms that the plaintiffs and their solicitors and counsel will have full control of the litigation at all times and Harbour's role is limited to that of a funder. Both he and Ms. Dunn indicate a number of terms provided for in the agreement:

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· Harbour will act in accordance with the Code of Conduct for Litigation Funders.

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· Harbour is entitled to information but cannot interfere with the litigation.

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· Harbour cannot withhold consent to change in the plaintiffs' counsel.

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· The decisions whether to prosecute, compromise, continue or discontinue the proceedings are at all times within the exclusive control of the plaintiffs.

The Legal Submissions
The submissions on behalf of the State
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8. Although this is the preliminary issue, the State defendants referred to the legal and public policy background applicable in this jurisdiction. By reference to the Statute Law Revision Act, 2007, counsel submitted that maintenance and champerty remain prohibited in Ireland. Maintenance was described by Hogan J. at para. 10 in Greenclean Waste Management Ltd. v. Leahy (No. 2) [2014] IEHC 314"as the improper provision of support to litigation in which the supporter has no direct or legitimate interest." Champerty is "a particular kind of maintenance, namely maintenance of an action in consideration of a promise to give the maintainer a share in the proceeds or subject matter of the action." The State relied on the decision of Clarke J. in Thema International Fund Plc. v. the HSBC Institutional Trust Services Ireland Ltd. [2011] 3 I.R. 654. Clarke J. at para. 22 stated "in Ireland it is unlawful for a party without an interest (or some other legitimate concern including charity) to fund the litigation of another at all and, in particular, it is unlawful to fund litigation in return for a share of the proceeds."

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9. Counsel relied in particular upon the following passage from Clarke J. at para. 26 in Thema: "[g]etting precise details as to the identity of the funder and the terms of the funding (provided the funding came from within the group of parties who already have an interest in the matter) is not, in my view, necessary or proportionate to allow the defendant understand who its true adversary is. Its true adversary is the plaintiff backed up by parties who have a legitimate interest in the plaintiffs well being." (emphasis added). This, it was submitted, leads to the conclusion that the defendant in proceedings is entitled to "precise details … of the terms of the funding" where, as in the instant case, the funder is unconnected with the plaintiff. Counsel rejected the view that the plaintiffs can self-select the information to be given to the State.

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10. Counsel for the State also relied on Greenclean (No. 2) in which Hogan J. came to the view that After The Event ("ATE") insurance was not champertous. In that case, counsel noted, Hogan J. had the contract of insurance before him.

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11. In an earlier decision in the Greenclean litigation entitled Greenclean Waste Management Ltd. v. Leahy [2013] IEHC 74, Hogan J. ruled that the existence of the ATE insurance meant that security for costs did not have to be provided. That decision was appealed and in a judgment delivered on the 8 th May, 2015, in Greenclean Waste Management Ltd. v. Leahy [2015] IECA 97, the Court of Appeal examined the insurance policy in some detail. Counsel for the State pointed out that the judgment showed that a single page had been initially exhibited by the plaintiff, instead of the policy. Kelly J. noted "it was hardly surprising" that a protest was...

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4 cases
  • Persona Digital Telephony Ltd v Minister for Public Enterprise
    • Ireland
    • High Court
    • 20 April 2016
    ...are set out in detail in a previous judgment of this Court, Persona Digital Telephony Ltd. v. Minister for Public Enterprise (No. 1) [2015] IEHC 457, on a preliminary issue to this motion, which resulted in the defendants being granted disclosure of the litigation funding agreement between ......
  • Dunne v Grunenthal GMBH
    • Ireland
    • High Court
    • 6 December 2018
    ...document in question is deployed. Thus in Persona Digital Telephony Ltd & Anor v. Minister for Public Enterprise & Ors [2015] 1 I.R. 124, this court (Donnelly J.) noted (at p. 147 – 148): ‘[71] Furthermore, insofar as the defendants rely upon Cooper Flynn v. Radio Telefís Éireann [2......
  • Maye v Adams
    • Ireland
    • High Court
    • 31 July 2015
    ...and disproportionate litigation advantage on the other party. 27 In Persona Digital Telephony Ltd. v Minister for Public Enterprise [2015] IEHC 457, the defendants sought disclosure of the litigation funding arrangement. The plaintiff objected on the grounds that the documents were confiden......
  • Promontoria (Aran) Ltd v Sheehy
    • Ireland
    • Court of Appeal (Ireland)
    • 16 April 2020
    ...litigious advantage” (per Donnelly J in Persona Digital Telephony Ltd Sigma Wireless Networks Ltd v Minister for Public Enterprise [2015] 1 IR 124). Respondent's Submissions 27 Counsel for the Respondent emphasised that discovery can be ordered notwithstanding confidentiality. It was submit......
1 firm's commentaries
  • Irish High Court's First Engagement With Litigation Funding
    • Ireland
    • Mondaq Ireland
    • 29 October 2015
    ...Defendants in the ongoing Persona litigation (Persona Digital Telephony Ltd & Anor v Minister for Public Enterprise, & Ors [2015] IEHC 457) were successful in their recent application to the High Court seeking disclosure of the litigation funding agreement (the "Funding Agreeme......

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