Persona Digital Telephony Ltd v Minister for Public Enterprise

• Jurisdiction: Ireland
• Judge: Ms. Justice Donnelly
• Judgment Date: 16 December 2019
• Neutral Citation: [2019] IECA 360
• Court: Court of Appeal (Ireland)
• Docket Number: Record Nos. 2019/269 & 2019/264
• Date: 16 December 2019

BETWEEN

PERSONA DIGITAL TELEPHONY LIMITED

AND

SIGMA WIRELESS NETWORKS LIMITED

PLAINTIFFS/RESPONDENTS

AND

MINISTER FOR PUBLIC ENTERPRISE, IRELAND, THE ATTORNEY GENERAL

AND

DENIS O'BRIEN

DEFENDANTS/APPELLANT

AND

MICHAEL LOWRY

THIRD PARTY

[2019] IECA 360

Baker J.

Costello J.

Donnelly J.

Record Nos. 2019/269 & 2019/264

THE COURT OF APPEAL

STATEMENT OF CLAIM WITH AMENDMENTS

PERMITTED BY THE COURT OF APPEAL

THE HIGH COURT

Statement of claim – Amendments – Corruption – Defendants seeking to appeal against the High Court decision to allow all the amendments to the statement of claim sought by the plaintiffs – Whether the trial judge was correct to permit the proposed amendments to proceed

Facts: The Supreme Court rejected the State defendants’ application to have the proceedings dismissed for delay: Comcast International Holdings Incorporated v Minster for Public Enterprise [2012] IESC 50. In February 2018, the plaintiffs, Persona Digital Telephony Ltd and Sigma Wireless Networks Ltd, sought to serve an amended statement of claim. That motion resulted in a second Supreme Court judgment: Persona Digital Telephony Limited v The Minister for Public Enterprise [2017] IESC 27. Despite the refusal to grant the declaration sought by the plaintiffs in that motion, they were in a position to proceed with the case. It was a feature of the litigation that the fourth defendant, Mr O’Brien, applied to be joined as a defendant to the proceedings. Despite objection, he was joined as a co-defendant by order of the High Court following a judgment of Ryan J on the 21st February, 2014. It was accepted by the fourth defendant that his joinder as a defendant would necessitate an amended statement of claim. His complaint in relation to the amended statement of claim was that it had been delayed without reasonable excuse and that it contained claims against him that go beyond the initial claims. The State defendants and the fourth defendant appealed to the Court of Appeal against the High Court decision to allow all the amendments to the statement of claim sought by the plaintiffs. A written judgment was delivered by Pilkington J: Persona Digital Telephony Limited v Minister for Public Enterprise [2019] IEHC 295.

Held by Donnelly J that the trial judge was in principle correct to permit the proposed amendments to proceed but she disagreed with her in respect of the breadth of all the amendments. Part of the difference in Donnelly J’s findings was due to a submission by the State defendants that was not pursued with clarity at the hearing in the High Court despite having been identified by the trial judge herself. This submission was that the new amendments, if permitted, would turn this case into one resembling an ordinary challenge to public procurement and therefore completely change the unique nature of the claim, namely that of corruption at high level; it was that unique feature which lead the Supreme Court to permit the case to proceed despite what was an inordinate delay by the time the appeal on the application to dismiss for want of prosecution reached the Court in 2012. Despite the further passage of time, Donnelly J considered that the amendments must be permitted to proceed provided there was greater clarity that it was a claim firmly anchored in corruption that was being pursued; mere errors in the process that were not driven by corruption or reflective of corruption were not permitted. In relation to the fourth defendant, he made particular criticism of the claim against him for unjust enrichment. Donnelly J held that she would permit this claim to be made. She held that she would also permit the claim in relation to the taking of an account of profits to proceed.

Donnelly J held that the appeals would be allowed in part and that the order of the High Court would be varied in part.

Appeals allowed in part.

JUDGMENT of Ms. Justice Donnelly delivered on the 16th day of December, 2019

Introduction

1 To keen followers of Supreme Court jurisprudence, the claims made by the plaintiffs in this case will be very familiar. Twice now, these proceedings have generated extensive judgments from the Supreme Court. In the first such judgment, reported under Comcast International Holdings Incorporated v. Minster for Public Enterprise [2012] IESC 50, (those “Comcast proceedings” being separate but similar), the Supreme Court rejected the State defendants' application to have the proceedings dismissed for delay.

2 It may therefore appear as something of a surprise that it was only in February 2018 that the plaintiffs in the proceedings sought to serve an amended statement of claim. The explanation for that delay according to the plaintiffs, is because of their necessity to bring a motion regarding the legality of third-party funding. That motion resulted in the second Supreme Court judgment Persona Digital Telephony Limited v. The Minister for Public Enterprise [2017] IESC 27. Despite the refusal to grant the declaration sought by the plaintiffs in that motion, they are now in a position to proceed with the case. The absence of explanation as to how they are able to proceed in light of their submissions in the second case that the litigation could not proceed without such funding, has been the subject matter of criticism by the fourth defendant in particular during the course of this appeal.

3 It is a feature of this litigation that the fourth defendant applied to be joined as a defendant to these proceedings. Despite objection, he was joined as a co-defendant by Order of the High Court following a judgment of Ryan J. on the 21st February, 2014. It is accepted by the fourth defendant that his joinder as a defendant would necessitate an amended statement of claim. His complaint now in relation to the amended statement of claim is that it has been delayed without reasonable excuse and that it contains claims against him that go beyond the initial claims.

4 These appeals, brought by the State defendants and the fourth defendant, are against the High Court decision to allow all the amendments to the statement of claim sought by the plaintiffs. A written judgment was delivered by Pilkington J. (see Persona Digital Telephony Limited v Minister for Public Enterprise [2019] IEHC 295).

5 In ease of comprehension, it is proposed to continue to use the terminology “plaintiffs” and “defendants” in this judgment. The third party played no part in these appeals.

The substantive case

6 The substantive case concerns the award of the second pan-European cellular digital land based mobile communications system (GSM) licence in 1995. The first named plaintiff was a consortium, which, along with five other companies, was an applicant for the licence. The second named plaintiff was one of a number of companies within the first named plaintiff's consortium. It was announced on the 25th October, 1995 that the Esat Digifone Consortium (hereinafter “Esat Digifone”) (of which the fourth named defendant was the chairperson) had won the competition. Esat Digifone was subsequently awarded the licence on the 16th May, 1996. The award of that licence generated significant controversy leading to the establishment in 1997 of a Tribunal of Inquiry under the Tribunal of Inquiry (Evidence) Act, 1921 as amended, known as The Tribunal of Inquiry into Certain Payments to Politicians and Related Matters (“the Moriarty Tribunal”). The plaintiffs issued the plenary summons on the 15th June, 2001 which was well before the Moriarty Tribunal issued its report in 2011. In the original statement of claim the plaintiffs seek damages, including exemplary damages for breach of duty (including statutory duty), breach of contract, misfeasance in public office, breach of legitimate expectation, breach of constitutional rights, deceit, conspiracy, misrepresentation (including fraudulent misrepresentation), dishonest assistance, breach of the rights of the plaintiffs together with other reliefs arising out of the awarding of the licence to Esat Digifone.

The Motion to Amend the Statement of Claim

7 At the hearing of this motion in the High Court, the State defendants based their objection to the amendment of the statement of claim on the ground of delay and related issues such as prejudice and whether the statute of limitations applied. The fourth named defendant also relied upon delay but made particular complaint about two reliefs set out in the amended statement of claim relating specifically to him. These are reliefs of restitution for unjust enrichment and for an account of profits.

8 It was highly surprising that the main point argued by the State defendants on appeal, namely that the amendments represented new causes of action and an impermissible expansion of the original action, had not featured in the judgment of the High Court. It appears that this issue was raised before the High Court in a tangential way, and only in answer to a question asked by the trial judge. It was not a point raised in any of the letters written by the State defendants or indeed in their written submissions to the High Court. It is also striking that the plaintiffs have not raised any objection to this point being raised on appeal. They accept that it was a point raised, albeit in the tangential manner described, in the court below. No blame lies on the trial judge in this regard as it was quite fairly conceded by State counsel that inspiration had only struck late in the day in this regard and it had not really been in focus during the hearing in the High Court.

9 The plaintiffs submit that they have utilised the 2011 report of the Moriarty Tribunal to particularise their claim. The plaintiffs submit that their basic claim remains the same (although as will be seen below the extent of this submission was at issue). They submit that many of the matters set out in the report were not known to the plaintiffs and could not have been...