Susquehanna International Group Ltd v Execuzen Ltd

JurisdictionIreland
CourtHigh Court
JudgeMr. Justice Garrett Simons
Judgment Date19 August 2021
Neutral Citation[2021] IEHC 551
Docket Number2015 No. 9648 P

[2021] IEHC 551

THE HIGH COURT

2015 No. 9648 P

Between
Susquehanna International Group Limited
Plaintiff
and
Execuzen Limited
Daniel Whitfield
Elena Sueppel
Natalie Melnick
Defendants
Citadel LLC
Daniel Needham
Third-Parties
Appearances

Gavin Mooney, SC and Paul Fogarty for the defendants instructed by Miley & Miley

Paul Gardiner, SC and Caren Geoghegan for the first named third-party instructed by Lewis Silken Ireland

Niall Beirne, SC and Shelley Horan for the second named third-party instructed by McInnes Dunne

Third-party notice – Delay – Proportionality – Third-parties seeking to set aside the third-party notices – Whether it would be disproportionate to set aside the third-party notices

Facts: The plaintiff, Susquehanna International Group Ltd, sought to restrain the use or disclosure of confidential information said to have been wrongfully obtained. The plaintiff sought to have the defendants, Execuzen Ltd, Mr Whitfield, Ms Sueppel and Ms Melnick, either furnish the confidential information to the plaintiff or provide satisfactory evidence of its destruction. An order was sought restraining the defendants from soliciting any person who is or was employed or engaged by the plaintiff. An order was also sought compelling the defendants to furnish the names, addresses and contact information of all persons to whom information in relation to the business of the plaintiff had been provided. Damages were sought against the defendants for inducing a breach of contract; for intentional interference with the plaintiff’s economic interests; and for breach of confidence. An account of all profits made by the first defendant arising from the use of the confidential information was also sought. A claim was advanced for some 47 million euro. It was said that the fact that a very large claim was being advanced, for the first time, against the defendants as though they were jointly and severally liable with Citadel LLC and Mr Needham made it necessary to ensure that the latter were joined to the proceedings as third-parties so that any issue in relation to the causation of loss and the apportionment as between the parties could be addressed to completion. An application was made to the High Court pursuant to Order 16, rule 8(3) of the Rules of the Superior Courts to set aside the third-party notices on the grounds of delay.

Held by Simons J that, in all the circumstances, it would be disproportionate to set aside the third-party notices. Simons J held that the only supposed benefit of setting aside the third-party notices would be to penalise the defendants for their delay and this would come at the cost of the risk of a multiplicity of actions. Simons J held that the defendants would, in principle, be entitled to issue separate proceedings against Citadel LLC (and, possibly, against Mr Needham subject to s. 17 of the Civil Liability Act 1961) notwithstanding the setting aside of the third-party notices. Simons J held that there was no countervailing benefit in setting aside the third-party notices which would outweigh that risk. Simons J held that an order setting aside the third-party notices was not necessary to ensure the timely progress of the main proceedings. Simons J held that the majority of the delay was attributable to the failure of the plaintiff to plead its case properly from the outset. Simons J held that the third-party proceedings could still be heard in conjunction with the main proceedings without causing unreasonable delay to the latter.

Simons J held that the applications to set aside the third-party proceedings would be refused. Simons J’s provisional view was that the defendants, having been entirely successful in resisting the application to set aside the third-party notices, were entitled to the costs of the motions as against the third-parties in accordance with the principles prescribed under Part 11 of the Legal Services Regulation Act 2015, such costs to be adjudicated upon by the Office of the Chief Legal Costs Adjudicator in default of agreement. Simons J held that the proposed costs order would be stayed in the event of an appeal.

Applications refused.

JUDGMENT of Mr. Justice Garrett Simons delivered on 19 August 2021

INTRODUCTION
1

This judgment is delivered in respect of an application to set aside a third-party notice on the grounds of delay. The application is made pursuant to Order 16, rule 8(3) of the Rules of the Superior Courts.

PROCEDURAL HISTORY
2

The summary which follows is based solely on the pleadings, and does not entail the making of any findings of fact by this court on the merits of the claim.

3

The Plaintiff describes itself as a “global trading and investment firm”. The proceedings relate to events leading up to the departure, in March/April 2016, of a number of employees of the Plaintiff. The employees had, seemingly, been engaged by the Plaintiff as traders in financial instruments known as “exchange traded funds”. The employees had not yet resigned as of the date the proceedings issued, but had left as of the date the statement of claim was delivered. Certain of the employees subsequently took up employment with Citadel LLC (“ Citadel”).

4

The Plaintiff instituted two sets of legal proceedings arising out of the departure of these employees. The first set of proceedings are the present proceedings (High Court 2015 No. 9648 P). These proceedings are taken against a recruitment firm, Execuzen Ltd, and three of its principals (collectively, “ the Defendants”). The second set of proceedings were taken against one of the departing employees, Mr. Daniel Needham (High Court 2016 No. 3300 P). The second set of proceedings have since been compromised.

5

The present proceedings were instituted by plenary summons on 19 November 2015. Notice of the proceedings was served on the Defendants, who are all resident outside the jurisdiction in London, on 24 November 2015.

6

The statement of claim was delivered on 29 July 2016. The essence of the claim is that the Defendants interviewed employees of the Plaintiff, on the pretext of seeking to recruit them, in order to elicit confidential and proprietary information. In particular, it is alleged that the Defendants induced the employees to disclose information in respect of the Plaintiff's operations, the types of trading desks it operated, the reporting structures in relation to those desks, and what proprietary software was being used by those desks. This information was then provided to Citadel, who had engaged the Defendants, in the form of a report. It is pleaded that the Defendants and Citadel were aware that such information was confidential and could not be lawfully disclosed by the employees.

7

It is further pleaded that Citadel determined to establish a business in Dublin staffed by employees of the Plaintiff, carrying on the same business, using the Plaintiff's confidential and proprietary information and practices (including information provided to it by the Defendants).

8

A related claim is made that the Defendants, acting on behalf of Citadel, unlawfully coordinated what is described in the statement of claim as a “group leave” by key employees. It is pleaded that the Defendants, in conjunction with the employees, coordinated the latter's resignations so that they would leave on the same date or in close proximity to each other, thereby causing maximum damage to the Plaintiff's business.

9

The Defendants are accused of having facilitated and encouraged the employees to breach their contracts of employment, and their duty of loyalty and fidelity. The Defendants are also accused of having induced, directly or indirectly, the employees to misappropriate confidential information. It is pleaded that “but for” the wrongful conduct of the Defendants, Citadel would not have been able to recruit a number of key employees or establish a competing business in Dublin.

10

The reliefs sought in the statement of claim are, in the main, directed to restraining the use or disclosure of the confidential information said to have been wrongfully obtained. It is sought to have the Defendants either furnish the confidential information to the Plaintiff or to provide satisfactory evidence of its destruction. An order is sought restraining the Defendants from soliciting any person who is or was employed or engaged by the Plaintiff.

11

An order is also sought compelling the Defendants to furnish the names, addresses and contact information of all persons to whom information in relation to the business of the Plaintiff had been provided.

12

Damages are sought against the Defendants for inducing a breach of contract; for intentional interference with the Plaintiff's economic interests; and for breach of confidence. An account of all profits made by the first named defendant arising from the use of the confidential information is also sought. No indication whatsoever is provided in the statement of claim as to the quantum of damages being sought. Certainly, there is nothing in the statement of claim which presages the claim which is now advanced for some 47 million euro.

13

The Defendants initially sought details as to the quantum of damages by serving a request for particulars dated 17 October 2016. Particulars were sought, inter alia, of the following.

“12. Please provide full and detailed particulars of the loss and damage alleged to have been suffered or sustained by the Plaintiff, including but not limited to:–

  • (a) The alleged loss of trading gains by virtue of the Plaintiff's perceived wrongdoing on the part of the Defendants.

  • (b) The alleged loss of market share in any particular market.

  • (c) The alleged loss of absolute advantage in any particular market by the alleged unlawful duplication of proprietary intellectual property.

13. In relation to paragraph 17 of the Statement of Claim:

  • (a) Please specify the loss and damage caused to SIGL.

  • ...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT