Thema International Fund Plc v HSBC Institutional Trust Service (Ireland) Ltd
| Jurisdiction | Ireland |
| Judge | Mr Justice Charleton |
| Judgment Date | 27 July 2012 |
| Neutral Citation | [2012] IEHC 298 |
| Court | High Court |
| Date | 27 July 2012 |
[2012] IEHC 298
The High Court
Between
and
and
RSC O.31
HANSFIELD DEVELOPMENT LTD & ORS v IRISH ASPHALT & ORS UNREP SUPREME 23.1.2009 2009/25/6168 2009 IESC 4
RULES OF THE SUPERIOR COURTS (DISCOVERY) SI 93/2009
RSC O.31 r12
ABRAHAMSON DISCOVERY & DISCLOSURE 2007
RSC O.46A r3
JC SAVAGE SUPERMARKET LTD & BECTON v BORD PLEANALA & ORS UNREP CHARLETON 22.11.2011 2011 IEHC 488 2011/28/7548
IARNRÓD ÉIREANN v HALLBROOKE 2001 1 IR 237
TRADE UNION ACT 1941
TRADE UNION ACT 1942
CORK CO COUNCIL v WHILLOCK 1993 1 IR 231
DODD STATUTORY INTERPRETATION OF IRELAND 2008 PARA 1.18
DODD STATUTORY INTERPRETATION OF IRELAND 2008 PARA 13.07
NORTHERN BANK FINANCE v CHARLTON 1979 IR 149
YATES v CIBA GEIGY AGRO LTD UNREP HIGH 29.4.1986 1986/8/1947
RAFIDAIN BANK v AGOM UNIVERSAL SUGAR TRADING CO LTD 1987 1 WLR 1606
JOHNSON v CHURCH OF SCIENTOLOGY 2001 1 IR 682
BULA LTD (IN RECEIVERSHIP) v TARA MINES LTD & ORS 1994 1 ILRM 111
INSPECTOR OF TAXES v KIERNAN 1981 IR 117
HEALTH SERVICE EXECUTIVE (HSE) v BROOKSHORE LTD UNREP CHARLETON 19.5.2010 2010/21/5293 2010 IEHC 165
FRAMUS v CRH 2004 IR 20
PRACTICE AND PROCEDURE
Discovery
Procurement - Related company - Proportionality - Meaning of "possession", "power", "custody" and "procurement" - Statutory interpretation - Whether defendant had documents in its procurement - Whether entitled to documents from related company - Whether power to make order sought - Whether proportionate - Whether relevant and necessary - Whether within power of High Court - Whether burdensome or oppressive - Hansfield Development Ltd v Irish Asphalt [2009] IESC 4, (Unrep, SC, 23/1/2009); Compagnie Financiere du Pacifique v Peruvian Guano Company [1882] 11 QBD 55; Brooks Thomas Ltd v Impac Ltd [1999] ILRM 171; Ryanair Plc v Aer Rianta [2003] 4 IR 264; Taylor v Anderton [1995] 1 WLR 447; JC Savage Supermarket Ltd v An Bord Pleanála [2011] IEHC 488, (Unrep, Charleton J, 22/11/2011); Iarnrod Eireann v Hallbrooke [2001] 1 IR 237; Cork County Council v Whillock [1993] 1 IR 231; Northern Bank Finance Corporation Ltd v Charlton (Unrep, Finlay P, 26/5/1977); Yates v Ciba Geigy Agro Ltd (Unrep, HC, Barron J, 29/4/1986); B v B [1979] 1 All ER 801; Rafidain Bank v Agom Universal Sugar Trading Co Ltd [1987] 1 WLR 1606; Johnson v Church of Scientology [2001] 1 IR 682; Bula Ltd (in receivership) v Tara Mines Ltd [1994] 1 ILRM 111; Inspector of Taxes v Kiernan [1981] IR 117; Health Service Executive v Brookshore Ltd [2010] IEHC 165; Framus Ltd v CRH Plc [2004] IESC 25, [2004] 2 IR 20; Brooks Thomas Ltd v Impac Ltd [1999] 1 ILRM 171; Irish Nationwide Building Society v Charlton (Unrep, SC, 5/3/1997); Swords v Western Proteins Ltd [2001] 1 IR 324 and Murphy v J Donohue Ltd [1996] 1 IR 123 considered - Rules of the Superior Courts 1986 (SI 15/1986), O 31 - Rules of the Superior Courts (Discovery) 2009 (SI 93/2009) - Discovery ordered (2008/10983P - Charleton J - 27/7/2012) [2012] IEHC 298
Thema International Fund Plc v HSBC Institutional Trust Services (Ireland) Ltd
Facts: The plaintiff sued the defendant in the wake of the collapse of the financial empire run by Bernie Madoff. The parties had agreed a schedule of relevant documentation for the purposes of Order 31 of the Rules of the Superior Court, 1986. Pivotal to the litigation was any concern about placing investments with Madoff. Two categories of document were in issue, as to documents, manuals, directives used by the defendant to prepare the selection appointment monitoring of a prospective sub-custodian and all documents relation to the selection, appointment and monitoring of the Madoff entities as sub-custodian of the Thema and Landmark funds. The plaintiff sought an order that the defendant made discovery of documents including but not limited to documents in the possession of HSBC entities in New York and Hong Kong.
Held by Charleton J. that the Court would make an order in terms of the notice of motion ordering discovery on the understanding that it was limited to HSBC entities and personnel in New York and Hong Kong and was limited to categories 1 and 2 set out above. The order sought was not oppressive and was properly identified.
Mr Justice Charleton delivered on the 27th day of July 2012
1. Pursuant to a motion on notice, dated 18 July 2012, the plaintiff Thema International Fund PLC seeks:
An order that the Defendant made the discovery on oath of documents responsive to categories of documents ordered by [the High Court] on 11 November 2010 within the Defendant's power, possession or procurement, including but not limited to the documents in the possession of the HSBC entities and personnel in New York and Hong Kong.
2. Thousands of documents have already been discovered in this litigation and in three other related cases. The latest estimate is that these number about one million pages. After the exchange of letters seeking discovery at an earlier stage of these proceedings, which commenced in December 2008, a previous motion before the High Court was compromised on 11 November 2010 by the apparent agreement of the parties. Subsequent correspondence indicates that a disagreement has arisen as to the scope of discovery arsing out of that compromise: hence this new motion has been issued. In addition, since then the Rules of the Superior Courts as to discovery of documents have changed.
3. The plaintiff has sued the defendant arising out of the collapse of the financial empire run from New York in United States of America by Bernard Madoff. The plaintiff claims, inter alia, that certain investments, which by agreement were to held by the defendant as custodian, have been lost. This defendant also meets the case of another plaintiff in similar terms in a trial listed for 6 November 2012. The target date set for the commencement of the trial of these proceedings is February 2013.
4. In settling the 2010 motion, the parties agreed to a schedule of relevant documents that were categorised in accordance with Order 31 of the Rules of the Superior Courts 1986, as amended. This schedule was appended to the order of the High Court dated 11 November 2010. Pivotal to this litigation is the issue of any cause for concern which the defendant had in placing those investments with Bernard Madoff as sub-custodian, either directly or through his corporate entities, and any assurance that would displace such concern. These have been referred to in the litigation as the issue of the red flags and the white flags. Together with the construction of the relevant applicable legislation and the contract between the plaintiff and defendant, these red and white flags are central to any fair adjudication of the case. It is therefore clear to the Court that, apart from limiting discovery to the HSBC entities and personnel in New York and Hong Kong, as set out in the motion, at this stage only two categories of relevant documents can reasonably be regarded as being at issue. As set out in the schedule to the previous order of the High Court, they are the following:]
Category 1
All protocols, instruction manuals, directives, guidance notes, handbooks, procedure lists, due diligence questionnaires or requests for proposals utilised by the Defendant in preparing for the selection appointment and monitoring of a prospective sub-custodian by the Defendant.
Category 2
All documents relating to the selection, appointment and monitoring of [the Bernard Madoff entities] as sub-custodian of the Thema and Landmark funds including:
(a) all documents formulated or used by the Defendant which were specific to [those entities] or were put in place by reason of the fact that [those entities were] allegedly acting as broker and/or sub-custodian and/or investment manager or adviser.
5. It is clear what the plaintiff is looking for. Nothing like another one million pages are being sought. Rather, in accordance with the traditional view of discovery, only those documents relevant to either causes for concern with or causes for a lack of concern about the Madoff entities are sought together with whatever analysis prompted those entities being selected as sub-custodian or being kept on as sub-custodian. It is in that way that any order that may be made on this motion should be construed. The issue with which these documents are concerned is of key concern to the defendants as well as to the plaintiff.
6. On behalf of the defendant, it has been powerfully argued that documents have already been sourced and discovered from Ireland, the United Kingdom, Luxembourg and Bermuda; that only the entities from those jurisdictions are those relevant in the context of the HSBC operation which extends to 1300 companies and 8000 offices operating in 87 nations; that under the Rules of the Superior Courts there is no power to make the order sought; that proportionality would be exceeded by any order that goes beyond the discovery already made by the HSBC operations, which extends to all corporate entities providing any delegated function; and that as a matter of policy caution ought to be exercised in issuing discovery orders since a failure to comply can result in a pleading being struck out or even the making of an order for contempt of court. The plaintiff, in response, seeks to argue that the discovery sought is both relevant and necessary; is within the power of the High Court to order; is proportionate; and is not burdensome or oppressive.
7. It is clear that in order to come to a just result in this...
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Thema International Fund Plc v HSBC Institutional Trust Services (Ireland) Ltd
...certain categories of documents to be provided by the defendant, limited to documents held by two entities related to the defendant (see [2012] IEHC 298). The defendant appealed to the Supreme Court. Held by the Supreme Court (Denham C.J., Fennelly and Clarke JJ.), in allowing the appeal, 1......