The Director of Corporate Enforcement v Independent News and Media Plc

• Jurisdiction: Ireland
• Judge: Mr. Justice Kelly
• Judgment Date: 27 June 2019
• Neutral Citation: [2019] IEHC 467
• Court: High Court
• Docket Number: [2018 No. 124 COS]
• Date: 27 June 2019

IN THE MATTER OF INDEPENDENT NEWS AND MEDIA PLC

AND

IN THE MATTER OF THE COMPANIES ACT 2014

BETWEEN

THE DIRECTOR OF CORPORATE ENFORCEMENT

APPLICANT

AND

INDEPENDENT NEWS AND MEDIA PLC

RESPONDENT

[2019] IEHC 467

Kelly P.

[2018 No. 124 COS]

THE HIGH COURT

Breach of privacy – Use of documents – Special circumstances – Applicants seeking permission to use documents furnished to them for the purpose of pursuing litigation against the respondent – Whether the circumstances justified the making of the order

Facts: The applicants, Mr Brophy and Mr O’Reilly, applied to the High Court seeking permission to use documents furnished to them in these proceedings for the purpose of pursuing litigation against the respondent, Independent News and Media plc, and possibly other persons for inter alia breach of privacy and breach of data protection rights. The applicants contended that the circumstances justified the making of the order. They said that the conditions identified in Roussel v Farchepro Ltd [1999] 3 IR 567 had been met. They accepted that those principles applied by analogy to the disclosure which had been made. They pointed to a number of features of this case which amounted to special circumstances: first, the material had been furnished to the applicants with the agreement of the respondent and indeed the Director of Corporate Enforcement; second, the material disclosed demonstrated prima facie evidence of a wrongdoing of a most unusual and marked kind sufficient to warrant the making of the order appointing inspectors; third, the type of wrongdoing which had been demonstrated was very wide involving possible breaches of data protection legislation, privacy and constitutional rights; fourth, the material upon which they sought to rely had already been disclosed to them, therefore any arguments pertinent to the question of accelerated discovery prior to the close of pleadings was simply irrelevant; fifth, the public interest was not advanced by court time being expended on needless discovery applications which would be the case if the respondent’s objections were upheld. The respondent delivered written submissions setting out its objections but raised some additional issues during the course of oral argument. The first objection was to the effect that the principal relief sought in the notice of motion was altogether too wide in that it sought permission to use the relevant material without restriction and for entirely unidentified purposes. Second, it was said that the relief sought on paper was radically different to the case made at the hearing. The third objection was by reference to the provisions of ss. 790 and 791 of the Companies Act 2014. The contention made was that to accede to this application would amount to a breach of those provisions. The fourth objection was that the applicants had insufficiently identified any disadvantage to them by being denied the relief sought on this application. The fifth objection was by reference to a body of case law which restricts the entitlement to discovery prior to the close of pleadings to cases involving very exceptional circumstances. The respondent accepted that there is an inherent jurisdiction to allow a non-party to access documents which have been opened in court but that that jurisdiction fell to be exercised principally by reference to the requirement for the administration of justice in public or what is sometimes called “open justice”. That requirement, it was said, had been fully satisfied in that the applicants were given access to the relevant material but should not be permitted any further use of it at least at this stage of the proceedings. Finally, it was alleged that the applicants were attempting to obtain an improper litigation advantage.

Held by Kelly P that the applicants had demonstrated that there were special circumstances such as were contemplated in his decision in Roussel. He was also satisfied that the making of this order would not occasion injustice to the respondent; on the contrary, the refusal of the order would result in an injustice to the applicants.

Kelly P held that he would exercise his discretion in favour of the applicants and make an order permitting them to use the documents furnished to them pursuant to the order of the court of 24th April, 2018 for the purpose of bringing proceedings against the respondent and other persons, if thought appropriate, for breach of privacy, breach of data protection rights and breach of constitutional rights.

Order granted.

JUDGMENT of Mr. Justice Kelly , President of the High Court delivered on the 27th day of June, 2019

Introduction

1 Messrs. Karl Brophy and Gavin O'Reilly who have brought this application (‘the Applicants’), seek permission to use documents furnished to them in these proceedings for the purpose of pursuing litigation against Independent News and Media plc (‘the Respondent’) and possibly other persons for inter alia breach of privacy and breach of data protection rights.

2 The Director of Corporate Enforcement (‘the Director’) has no objection to the order sought being granted. The Respondent does object. It did not file any affidavit evidence in support of its objection but relied on legal submissions.

Background

3 In 2018 the Director was granted an order by the court pursuant to the provisions of s.748 of the Companies Act 2014 (‘the Act’) appointing inspectors to investigate and report on the affairs of the Respondent. On 4th September, 2018 I appointed Mr. Sean Gillane S.C. and Mr. Richard Fleck CBE to investigate the Respondent in respect of four different matters. This application is concerned with only one of those matters, namely, what was described as the ‘data interrogation issue’.

4 Voluminous affidavit evidence from the Director and the Respondent was filed in advance of the hearing which led to the appointment of the inspectors.

5 I summarised what was involved in the data protection issue in the course of my judgment of 4th September, 2018. Only a short summary of that summary is required in order to understand the background to this application.

The data interrogation issue

6 In 2014 back-up tapes of computer data were removed from the Respondent's premises. They were taken to the premises of a company outside the jurisdiction. There that data was interrogated over a period of months. That operation was allegedly directed by the then chairman of the board of the Respondent, Mr. Leslie Buckley. Other members of the board were allegedly not aware of that operation at the time. It has been alleged that Mr. Buckley expressly instructed the company's head of information technology not to disclose the matter to Mr. Robert Pitt, the then chief executive of the Respondent. During the course of the interrogation, tapes and associated data appear to have been accessible to and accessed by a range of individuals who are external to the company. Those individuals have business links with Mr. Buckley, with each other and appear also to have links with Mr. Denis O'Brien (Mr. O'Brien) who in 2006 acquired an interest in the Respondent and by 2012 had become its largest shareholder. He held 29.9% of the shareholding.

7 This data interrogation exercise was, according to Mr. Buckley, part of a cost reduction exercise in respect of a contract which the Respondent had with a firm of solicitors for the provision of legal services.

8 During the course of the interrogation, data appears to have been searched against the names of 19 individuals. Mr. Brophy, who is the former director of corporate affairs of the Respondent, was one such individual. Mr. Gavin O'Reilly's name did not appear among the 19 names identified at the time of the Director's application. However, he has sworn that he believes that it is clear from the material which has been disclosed that he was ‘personally targeted by the data interrogation’. His personal assistant, Ms. Scott, was among the 19 names identified. He alleges that he has a significant and manifest interest in the outcome of this application and the taking of the intended proceedings. These averments are not controverted by the Respondent.

9 The costs of this data interrogation exercise were not discharged by the Respondent. The bills for it were presented to an entity controlled by Mr. O'Brien and paid for by an Isle of Man company called Blaydon Ltd. Mr. O'Brien is the beneficial owner of that company. Blaydon Ltd. appears to act as a paying agent for Mr. O'Brien and his companies.

10 It is difficult to see what the interrogation of information concerning at least some of the 19 persons had to do with a cost reduction exercise in respect of legal services being provided to the Respondent. For example, two Senior Counsel were amongst those whose data was interrogated. They acted for several years as counsel to the ‘Inquiry into Payments to Politicians and related matters’ presided over by Mr. Justice Moriarty. That tribunal was involved in investigations into allegations relating to the awarding of the second GSM licence to ESAT which is an entity controlled by Mr. O'Brien. In a letter of 30th April, 2018 to Mr. Buckley the Respondent's solicitors described the names of those searched against as persons who may be regarded as having acted adversely to Mr. O'Brien. The rights and entitlements of some or all of the 19 people may have been transgressed in a most serious way by this activity. So also may have been the rights and entitlements of Mr. Gavin O'Reilly.

11 This data interrogation exercise was carried out without the prior knowledge or consent of the Applicants. They believe that they were affected by it in a number of ways. They have sworn (and it is not controverted) that it is likely that the emails which they sent and received during their time as employees of the Respondent were accessed by parties other than the Respondent. They believe that their...