Sports Direct International Plc v Minor and Others

• Jurisdiction: Ireland
• Court: High Court
• Judge: Mr Justice Max Barrett
• Judgment Date: 22 October 2015
• Neutral Citation: [2015] IEHC 650
• Date: 22 October 2015

[2015] IEHC 650

THE HIGH COURT

Record No. 6559P/2014

Sports Direct International Plc v Minor & Ors

Approved Judgment

No Redaction Needed

SPORTS DIRECT INTERNATIONAL PLC

PLAINTIFF

AND

SANDRA MINOR, JOHN O'NEILL, MARK HEATON, HUGH HEATON AND WARRNAMBOOL

DEFENDANTS

Contract – Breach of contract – Specific Performance – O. 31, r. 20 (3) and r. 21 of the Rules of the Superior Courts 1986 – Discovery & Inspection of documents Common interest privilege – Legal advice v legal assistance

Facts: The applicant sought an order for further and better discovery of documents from the defendants. The defendants also sought orders for further and better discovery of documents and inspection of documents from the applicant. The applicant sought an order for specific performance of the relevant Share Subscription and Shareholders Agreement, in particular the pre-emption provision. The defendants objected to the applicant's claim of asserting privilege on the documents that the defendants sought to be discovered. The defendants asserted that those documents were concerned with legal assistance as opposed to legal advice. The applicant claimed common interest privilege over the disputed documents comprising e-mail communication between Mr. X and Mr. Y for the purpose of incorporation of the applicant company.

Mr. Justice Max Barrett refused to grant orders for further and better discovery to the applicant and the defendants as well. The Court granted an order that the applicant would swear a supplemental affidavit of discovery for the defendants as contemplated under the Rules of Superior Courts, which would operate in place of the first affidavit of discovery sworn by the solicitor of the applicant to the effect that there were no documents that could be discovered from the applicant. The Court opined that before granting an order for better discovery, it must be satisfied that the evidence presented was insufficient and there might have been other documents in possession of the party against whom such order was sought. The Court held that the common interest privilege was not a separate form of privilege and it would arise in relation to documentation which would be the subject of legal professional privilege in the hands of one party but the relevant materials were given to the third party sharing a common interest in that legal advice.

TABLE OF CONTENTS

PART I: OVERVIEW	[1]
PART II: GENERAL BACKGROUND	2]
PART III: A QUESTION OF PRIVILEGE	[8]
Overview	[8]
No waiver of privilege	[11]
Common interest; successor in title	[12]
Legal advice versus legal assistance	[13]

PART IV: THE MISSING DEED	[14]
PART V: APPLICABLE LEGAL PRINCIPLES	[18]
A. What is common interest privilege?	[19]
B. Common interest privilege not a separate form of privilege	[20]
C. Test for common interest privilege	[21]
D. No common solicitor test in Ireland	[22]
E. Underlying principles of common interest privilege	[23]
F. Nature of mutual interest required for common interest privilege	[25]
G. Use of common interest privilege as a shield	[27]
H. Use of common interest privilege as a sword	[28]
I. Joint interest versus common interest	[30]
J. Conflicts of interest versus common interest	[34]
K. Common interest privilege between companies	[37]
L. Loss of privilege	[38]
M. Joint retainers and joint privilege	[40]
N. Successor in title	[46]
O. Sifting and editing of documents by court	[59]
P. Waiver of privilege	[60]
Q. Legal advice versus legal assistance	[63]
R. Further and better discovery	[64]
PART VI: APPLICATION OF SPORTS DIRECT FOR FURTHER AND BETTER DISCOVERY	[70]
A. Alleged issues concerning discovery order of 5 th February, 2015	[72]
General allegation as to deficiencies in electronic documentation furnished	[72]
Alleged deficiencies in Category 1 documentation	[73]

Alleged deficiencies in Category 2 documentation	[74]
Alleged deficiencies in Category 3 documentation	[76]
Alleged deficiencies in Category 4 documentation	[78]
Alleged deficiencies in Category 8 documentation	[80]
Alleged deficiencies in Category 9 documentation	[82]
Alleged deficiencies in Category 12 and Category 13 documentation	[83]
Alleged deficiencies in Category 15 documentation	[84]
Alleged deficiencies in Category 16 documentation	[85]
Alleged deficiencies in Category 17 documentation	[86]
Form of first affidavit of discovery	[87]
B. Issues concerning discovery order of 27 th April 2015	[88]
Alleged deficiencies in Category 1 and Category 2 documentation	[88]
PART VII: APPLICATION FOR DISCOVERY OF DOCUMENTS RE. MISSING DEED	[91]
PART VIII: FURTHER APPLICATION OF DEFENDANTS FOR INSPECTION AND FURTHER AND BETTER DISCOVERY	[95]
Overview	[95]
Basis for orders sought	[96]
Application for inspection order	[97]
Application for further and better discovery	[98]
PART IX: CONCLUSION	[99]
APPENDIX A: SOURCES AND AUTHORITIES TO WHICH THE COURT WAS REFERRED	[101]
i. Learned commentary	[101]
ii. Some leading cases	[108]

1) Irish authorities
a. Duncan v. Governor of Portlaoise Prison [1997] 1 I.R. 558	[109]
b. The Irish Haemophilia Society Ltd. v. Judge Lindsay and another [2001] IEHC 240	[110]
c. Redfern Ltd v. O'Mahony [2009] 3 I.R. 583	[111]
d. Moorview Developments Ltd. v. First Active plc [2009] 2 I.R. 788	[112]
e. Hansfield Developments v. Irish Asphalt Ltd [2009] IEHC 420	[113]
f. O'Leary v. Volkswagen Group Ireland Ltd [2015] IESC 420	[119]

(2) Foreign authorities
a. Crescent Farm (Sidcup) Sports Ltd v. Sterling Offices Ltd [1967] Ch. 553	[120]
b. Svenska Handelsbanken v. Sun Alliance and London Insurance plc [1995] 2 Lloyd's L.R. 84	[122]
c. Surface Technology plc v. Young [2008] F.S.R. 25.	[123]
d. Winterthur Swiss Insurance Company and Anor v. AG Manchester Limited (in liq.) [2006] EWHC 839	[124]

PART I: OVERVIEW

1 1. This judgment is concerned with three applications: (1) an application for further and better discovery brought by Sports Direct; (2) an application for further and better discovery brought by the Defendants; and (3) an application for discovery and inspection brought by the Defendants.

PART II: GENERAL BACKGROUND

2 2. In the mainstay of the within proceedings, Sports Direct International plc ("Sports Direct") is seeking an order for specific performance and various other reliefs in respect of a Share Subscription and Shareholders Agreement of 15 ^th December, 1995 (the "1995 SHA") to which it alleges the first to fourth Defendants are bound as shareholders of the fifth Defendant (the "Company"), which is the ultimate parent company of the Heatons Group. In particular, Sports Direct seeks specific performance of the pre-emption provisions contained in the agreement. The dispute in respect of pre-emption rights arises because in April 2014, the second, third and fourth Defendants purported to purchase the first Defendant's shares in the Company in alleged breach of these pre-emption provisions. The Defendants deny that the shareholders of the Company are bound by all of the terms of the 1995 SHA. They plead that the parties have agreed that certain provisions of the 1995 SHA will not apply to their dealings, or that the parties have acted in such a manner as to estop the assertion that those provisions apply. These pleas are denied by Sports Direct.

3 3. Sports Direct also seeks an order for specific performance of agreements dated 3 ^rd December, 2002 (the "December 2002 Agreement") and 1 ^st July, 2007, which Sports Direct alleges to govern the relationship between the parties as shareholders of the Company. In particular. Sports Direct seeks an order of specific performance of cl. 9 of the December 2002 Agreement. Clause 9 provides, inter alia, that the shareholders of the Company shall procure that the Company shall not, without the prior written consent of 60 per cent of the shareholders engage in various property transactions/developments. It is admitted by the Defendants that the parties have operated on the basis that the provisions of cl. 9 are applicable; however, it is pleaded that numerous transactions were entered into by Heatons and the Company without the consent of Sports Direct, or any other shareholders, being sought, whether pursuant to cl. 9 or otherwise.

4 4. There is, therefore, a dispute between the parties in relation to the applicability of the preemption provisions of the 1995 SHA and the manner in respect of which the shareholders have acted, in respect of cl. 9 of the December 2002 Agreement. The Defendants have also alleged that Sports Direct is conducting itself in a manner calculated to damage the Company and that it is seeking to block transactions that are in the best interests of the Company; this is denied by Sports Direct.

5 5. The dispute concerning the December 2002 Agreement only arose after the plenary summons in the within proceedings issued, when Sports Direct was informed that the board of the Company had decided to proceed with the acquisition of two properties, in ostensible breach of the 60 per cent requirement contained in cl. 9. This led to an application for injunctive relief which was heard before the court (Costello J.) last October and resulted in an interlocutory injunction restraining the Defendants or any of them from procuring the Company to enter into certain property transactions...