Susquehanna International Group Ltd v Needham

• Jurisdiction: Ireland
• Judge: Ms. Justice Baker
• Judgment Date: 24 November 2017
• Neutral Citation: [2017] IEHC 706
• Court: High Court
• Docket Number: [2016 No. 3300 P]
• Date: 24 November 2017

[2017] IEHC 706

THE HIGH COURT

Baker J.

[2016 No. 3300 P]

BETWEEN

SUSQUEHANNA INTERNATIONAL GROUP LIMITED

PLAINTIFF

AND

DANIEL NEEDHAM

DEFENDANT

Employment – Practice & Procedure – Motion for discovery – Relevancy – Necessity – Proportionality – Data Protection Directive (EU Directive 95/46/EC) – Data Protection Act 1998

Facts: The plaintiff sought an order for discovery of certain categories of documents against the defendant. The plaintiff contended that those documents were necessary in support of the plaintiff's claim for breach of contract. The defendant contended that the documents asked to be disclosed were wide ranging. The primary issue between the parties was that the plaintiff wanted the disclosure of the documents that could have been available to the defendant pursuant to a data subject access request.

Ms. Justice Baker granted an order for the discovery of the documents sought by the plaintiff. The Court, however, modified the said request in relation to certain categories. The Court held that it could order the discovery of documents, which was the matter of data subject access request if the person concerned had the legal entitlement to procure or obtain those documents. The Court found that in the present case, the defendant had a legal enforceable right that he could exercise to obtain the relevant documents from the head office of his company.

JUDGMENT of Ms. Justice Baker delivered on the 24th day of November, 2017.

1 This judgment is given in the motion for discovery brought by the plaintiff against the defendant and raises the novel question of whether a court should order a person to make discovery of documents that he or she can obtain on foot of a data subject protection request.

The proceedings

2 The plaintiff, Susquehanna International Group Limited ('SIG'), is a limited liability company with registered offices at the IFSC in the City of Dublin. The defendant is a trader in financial instruments and lives in Dublin. The defendant was employed by the plaintiff from 4th September, 2006, until 29th April, 2016, pursuant to a contract of employment made in writing. The defendant was initially employed as an assistant trader and was promoted to the role of trader in the course of his employment. The defendant was paid a substantial salary and bonus payments in respect of his employment.

3 The defendant gave notice to the plaintiff on 1st April, 2016, that he intended to terminate his employment, and, having worked out his period of notice, left his employment on 29th April, 2016.

4 The plaintiff seeks injunctive relief and damages for breach of contract arising from what it claims are certain breaches of contract by the defendant relating to confidential documents obtained in the course of his employment regarding the business, employees and business relationships of the plaintiff.

5 The plaintiff claims that the defendant has breached the express terms of his contract of employment by which, inter alia, the defendant agreed not to in any manner or capacity hire or solicit for employment or otherwise attempt, directly or indirectly, to provide any information for use in connection with the possible hiring or solicitation of any employee of SIG, (an 'SIG person') within the meaning of Clause 11.4 of the defendant's contract of employment.

6 I will examine more fully below the claims made in the statement of claim relevant to the disputed discovery, but, in essence, the statement of claim pleads that the defendant was in breach of the covenant against the inducement of persons to leave the employment of the plaintiff and his obligation to preserve confidential information, trading strategies and commercial know-how of the plaintiff firm.

7 The defendant was one of a number of employees who tendered notice of termination of their employment to the plaintiff in March and April of 2016. Some or all of those persons have since taken up employment with Citadel LLC ('Citadel'), a company which was, at the material time, registered in London and which has now established a place of business in Dublin. The defendant was for a time subject to a restriction on taking up employment with a firm in the same business as his former employer but has now commenced employment with Citadel.

8 The primary action of the plaintiff is that the defendant has breached the terms of his contract of employment, inter alia, by assisting Citadel with the recruitment of other SIG employees and supplying Citadel with confidential information concerning the business of SIG, including the identity and details of other traders employed by SIG, the types of trades carried on by them, the profits earned by them and details of confidential trading strategies and models used by SIG or in the course of being developed.

9 Citadel operates a business of investment trade in broadly the same field as SIG and was at the material time intending to set up business in Dublin. It is pleaded that the intention of Citadel and its objective was to acquire a readymade business by persuading a group of employees of SIG who would have knowledge and expertise in financial trading to leave SIG and bring with them their knowledge and confidential information, including the know-how and trading strategies of SIG.

10 It is common case that the defendant did discuss taking up employment with Citadel and that he was recruited through a company, Execuzen Ltd., acting on behalf of Citadel.

11 Discovery of three categories of documents is sought, and the defendant has not refused to make discovery, and. rather has sought to limit the categories in the way that will appear in the course of this judgment.

12 I will deal with each category of documents separately.

Category 1:

13 Discovery is sought in respect of the following category of documents:

'All documentation relating to any interactions howsoever described between the defendant and Citadel LLC or its associated or affiliated entities and between the defendant and Execuzen Limited or any individuals employed by or acting on behalf of Execuzen Limited generated during the period between 1st August, 2015 and 29th January, 2017 to include, but strictly without prejudice to the generality of the foregoing, all such documents held by Citadel and Execuzen that the defendant can obtain on foot of data protection requests.'

14 A number of principled objections are made by the defendant to the discovery sought in category 1. I will deal with these in turn and note that some of the arguments relate also to the remaining two categories.

Request is too broad

15 The defendant argues that the discovery sought is broad, vague and impermissibly wide-ranging. He is not prepared to make discovery in regard to documentation relating to the 'associated or affiliated entities' of Citadel, as he argues that those entities are ill-defined and might involve him having to discover documents from entities that he himself cannot identify.

16 In order to deal with this argument, it is necessary to consider the application of the well established principles that discovery should be ordered only in respect of documents which are relevant and necessary.

Discovery: relevance

17 Whether discovery should be ordered in respect of a category of documents is well-established in the authorities. In short, documents are to be discovered if they are relevant for the determination of the issues between the parties.

18 The test of relevance involves an examination of whether the categories of documents sought are relevant to the claim as pleaded and, for that purpose, pleadings include replies to particulars.

19 A disagreement arose in the course of the hearing of the motion regarding the fact that the plaintiff's counsel had produced in the course of argument a 'dossier' obtained by the plaintiff in a data request against Execuzen in which an analysis of the SIG business is shown. In a document headed 'Susquehanna International Group Ltd. breakdown and analysis' there is material titled 'Business Information' which the plaintiff argues identified a conversation had with a person called 'Dan' who was working for SIG and engaged in mathematical modelling. There is an entry that says 'Dan says he knows he could bring an identified SIG employee' to a 'new venture like Citadel'. The identified person is known to have terminated his employment with the plaintiff and to now be either working with or intending to work with Citadel at that point.

20 I accept the argument of the defendant that the dossier which has not been exhibited on affidavit is not evidence on which I can rely and that the determination of an application for discovery is to be made by reference to the pleadings and not by reference to contested allegations of fact in affidavits, as a court hearing an application for discovery might otherwise be compelled to make a determination on the credibility or weight of contested averments on affidavit.

21 Accordingly, I propose considering the application for discovery by testing the relevance of the categories to the pleadings, and not the dossier. However, that approach also means that I must not make a determination on the discovery application by reference to the unsubstantiated submissions of fact made by counsel for the defendant that the person named 'Dan' in the dossier may not in fact be the defendant but rather another person with the same Christian name. I also for that reason cannot determine the application for discovery on the basis that the defendant has denied that he gave any confidential information to Citadel, or accept his assertion that the person identified in the dossier who was later employed by Citadel through Execuzen was directly contacted by Execuzen and that the introduction was not made by the defendant.

22 I note that the defendant has not sworn an affidavit for the purposes...