Thema Intl. Fund v HSBC Inst. Trust Services (Ireland)

• Jurisdiction: Ireland
• Judgment Date: 04 August 2011
• Date: 04 August 2011
• Docket Number: [2008 No. 10983 P]
• Court: High Court

[2011] IEHC 344,

High Court

[2008 No. 10983 P]

Thema Intl. Fund v. HSBC Inst. Trust Services (Ireland)

Thema International Fund plc

Plaintiff

and

HSBC Institutional Trust Services (Ireland) Limited, Defendant and Thema Asset Management Limited and 2020 Medici AG,Third Parties

Kalix Fund Limited, Unione Di Banche Italiane Societa Cooperativa Per Azioni, trading as UBI Banca and Neville Seymour Davis, Notice Parties

Cases mentioned in this report:-

In re Flightlease (Ireland) Ltd. [2006] IEHC 193, (Unreported, High Court, Clarke J., 15th June, 2006).

Foss v. Harbottle (1843) 2 Hare 461; (1843) 67 E.R. 189.

Kalix Fund Ltd. v. HSBC Institutional Trust Services (Ire) Ltd. [2009] IEHC 457, [2010] 2 I.R. 581.

Practice and procedure - Case management - Settlement - Related proceedings in other jurisdiction - Impact on proceedings - Timing of hearing as to impact -Correspondence with registrar - Registrar copied on argumentative correspondence between parties - Whether sending of such correspondence to court registrar appropriate.

Application for directions

The facts have been summarised in the headnote and are more fully set out in the judgment of Clarke J., nfra.

The proceedings were instituted by way of plenary summons dated the 19th December, 2008. By order of the High Court (Kelly J.) dated the 2nd November, 2009, the matter was entered into the commercial list of the High Court. By notice of motion dated the 1st July, 2011, the plaintiff sought directions from the High Court.

The issue was heard before the High Court (Clarke J.) on the 25th July, 2011.

Following the collapse of an investment service, a number of cases were brought, including the current proceedings which concerned losses sustained by a fund maintained by the plaintiff on behalf of investors. In addition, a class action was taken in the United States Federal Courts by investors in the plaintiff's fund.

It emerged that a settlement was proposed in the United States proceedings and the plaintiff brought a motion seeking to set a date to determine the potential consequences for the current proceedings of the approval of such a settlement.

Held by the High Court (Clarke J.), in directing that the defendant, as soon as possible after the preliminary approval of the settlement in the United States proceedings, file a document setting out the effect which it said such settlement would have on these proceedings in the event that it was given final approval in that form, and further directing that, if such a document was filed, a preliminary hearing would be set to hear the issues raised, 1, that what happened in the United States proceedings was only of relevance to this court if it was possible that orders made in those proceedings could have an effect, as a matter of Irish law (incorporating, where relevant, European Union law), on these proceedings.

2. That, as regards those who either accepted or rejected the settlement in the United States proceedings, there would be no real effect on these proceedings except to the extent that those who accepted the settlement would, under its terms, assign to the defendant their interest in any award granted to the plaintiff in these proceedings.

3. That the potential problem arose in respect of those who expressed no view on the settlement of the United States proceedings. There might be an issue as to whether such persons could have their entitlement to recover through the plaintiff in these proceedings impaired if the settlement was recognised.

Obiter dictum: While it was obviously useful for the court to receive early information as to developments which might affect the court's process, there had, in recent times, grown alongside that practice a tendency for parties to copy argumentative correspondence, about issues which might be due to come before the court, to the registrar. Given that modern case management frequently involved applications being dealt with in an informal way when the case came before the court, it was useful that notification was given of any such applications by correspondence and that an agreed file of correspondence defining the issues was lodged. However, it was not appropriate for one side to simply communicate to the court general complaints, intimations of possible future applications, or other information, in the form of letters passing between the parties being copied to the court. Some of the correspondence copied to the court in this case went close to, if not beyond, the limits of this boundary.

Cur. adv. vult.

Clarke J. 4th August, 2011

Introduction

[1] Curiously, in this judgment, I am not asked to rule on any questions of law or fact but rather to decide when it would be appropriate to rule on issues which may arise in these proceedings.

[2] These proceedings are part of the general Madoff litigation which is being case managed together for the reasons set out in Kalix Fund Ltd. v. HSBC Institutional Trust Services (Ire) Ltd. [2009] IEHC 457, [2010] 2 I.R. 581. To bring matters up to date, it should be recorded that the case management of the proceedings linked as a result of the judgment inKalix Fund Ltd. v. HSBC Institutional Trust Services (Ire) Ltd. [2009] IEHC 457 has proceeded at a pace so that it is now anticipated that the discovery process (which had proved problematic and, not surprisingly, lengthy) is expected to be completed in September. Pre-trial directions concerning the exchange of witness statements, the furnishing of written submissions and decisions concerning the form of trial (particularly whether and, if so, to what extent it should be modular) are expected to be made soon thereafter.

[3] Into that general matrix a possible issue concerning the interaction with these proceedings of a case taken in the United States Federal Courts (Southern District of New York) has arisen. In accordance with United States federal law, those proceedings (Davis v.Benhasset et al 09 Civ. 2558 (RMB)) comprise a class action in respect of which a settlement is proposed. It will be necessary to refer briefly to the process by which the settlement of a class action may be approved in due course. There is at least a possibility that should a final settlement of those proceedings be approved, some practical consequences might lie for the proceedings with which I am concerned in this jurisdiction. It is in that context that the plaintiff has brought a motion before the court seeking to have the potential consequences for these proceedings of the approval of a settlement in the United States class action decided sooner rather than later. Before turning to the plaintiff's application, I wish to record my views on a matter of concern which, while not confined to this case, does arise in the context of these proceedings.

A matter of concern

[4] The probability that an application to the Irish courts in these proceedings might be necessary arising out of relevant United States proceedings first came to my attention when a letter was written by the solicitors acting on behalf of the defendant to the court registrar, which letter was passed on to me. There followed further correspondence between the parties which can, I think, be reasonably characterised as highly argumentative on the issues, which correspondence was also copied to the courts. I eventually requested that that process stop.

[5] It has become a growing practice for solicitors acting for parties in cases before the courts (and, I would venture to suggest, in particular, the commercial court) to copy correspondence to the court. Some lay litigants have adopted the same course. It is important that I here distinguish between two different types of such communications.

[6] First, it is, of course, the case that the papers properly before the court for any application pending are frequently required to be lodged in advance so that the judge can have an opportunity to read them in accordance with modern case progression practices. There is nothing at all, therefore, inappropriate (indeed, it is often required) that there be relevant communications associated with ensuring that all of the documentation properly before the court for any particular application has been filed and is available for reading by the judge. Sometimes that involves late correspondence where relevant documentation (such as replying affidavits or submissions) only arrives after the ain documentation has been filed. Again, in the ordinary way, there is nothing wrong with such communications. I would only add one rider. Difficulties can arise where there is a known dispute between the parties as to whether such late filed documentation is to be properly admissible (for example, where one party proposes to file documents after a time limit imposed by the court). In those circumstances, care should be exercised that documents which may not ultimately be admitted are not brought to the court's attention until such time as there has been a proper decision as to whether the relevant documentation is to be admitted. There is nothing at all wrong (indeed, it is to be commended) in ensuring that all relevant documents are filed in a timely fashion. Where there is no disagreement as to what the boundaries of the relevant documentation may be, then no problem arises. However, parties should exercise care to...