Victoria Hall Management Ltd v Patrick Cox

• Jurisdiction: Ireland
• Judge: Ms Justice Ní Raifeartaigh
• Judgment Date: 02 April 2020
• Neutral Citation: [2020] IECA 79
• Docket Number: Appeal Record No.: 2019/441
• Court: Court of Appeal (Ireland)
• Date: 02 April 2020

BETWEEN/

VICTORIA HALL MANAGEMENT LIMITED. PALM TREE LIMITED, GREY WILOW LIMITED, ALBERT PROJECT MANAGEMENT LIMITED, O'FLYNN CAPITAL PARTNERS

AND

O'FLYNN CONSTRUCTION (CORK)

RESPONDENTS/PLAINTIFFS

- AND-

PATRICK COX, ROCKFORD ADVISORS LIMITED, LIAM FOLEY, FOLEY PROJECT MANAGEMENT LIMITED, EOGHAN KEARNEY, CARROWMORE PROPERTY LIMITED

AND

CARROWMORE PROPERTY GARDINER LIMITED

AND

CARROWMORE PROPERTY GLOUCESTER LIMITED

APPELLANTS/DEFENDANTS

[2020] IECA 79

Costello J.

Ní Raifeartaigh J.

Power J.

Appeal Record No.: 2019/441

THE COURT OF APPEAL

Discovery – Discretion – Procedure – Appellants seeking to appeal from a decision of the High Court on a discovery motion – Whether the High Court judge stayed within the appropriate parameters of his discretion

Facts: The defendants/appellants, Mr Cox, Rockford Advisors Ltd, Mr Foley, Foley Project Management Ltd, Mr Kearney, Carrowmore Property Ltd, Carrowmore Property Gardiner Ltd and Carrowmore Property Gloucester Ltd, appealed to the Court of Appeal from a decision of the High Court (Barniville J) on a discovery motion by the appellants. The appeal came on for hearing on a date after the trial of the substantive proceedings had commenced, during a hiatus in that trial. What was before the Court of Appeal was whether or not Barniville J stayed within the appropriate parameters of his discretion in relation to what was simply a late application for discovery.

Held by Ní Raifeartaigh J that, having noted that Barniville J, in rejecting the appellants’ “alternative submission” (a simple and late application for discovery), laid emphasis upon the procedural history of the care, the lateness of the application, the fact that a similar category of documents had previously been refused by McGovern J in 2017 (a decision in respect of which there was no appeal), and the alternative sources of evidence available to the appellants, and having applied the test for appellate review as described in Lawless v Aer Lingus [2016] IECA 235 and Tobin v Minister for Defence [2019] IESC 57, he was of the view that Barniville J made no legal error and was well within the parameters of his discretion when he refused the discovery sought and for the reasons given by him.

Ní Raifeartaigh J held that the application for discovery would be refused and that the appeal would be dismissed.

Appeal dismissed.

JUDGMENT of Ms Justice Ní Raifeartaigh delivered on the 2 ^nd day of April, 2020

1 This is an appeal from a decision of the High Court (Barniville J.) on a discovery motion by the defendants/appellants in the case. The most unusual feature of the appeal is that it came on for hearing on a date after the trial of the substantive proceedings had commenced (but during a hiatus in that trial). This arose in circumstances which will be described below.

2 The hearing of the application for discovery before the High Court took place in July 2019. Barniville J. delivered judgment on 11 ^th September, 2019. The order of the High Court was dated 24 ^th September, 2019 and it was perfected on 4 ^th October, 2019. Notice of Appeal was filed on 25 ^th October, 2019 and a directions hearing was held before this Court on 29 ^th November, 2019. The trial commenced on 14 ^th January, 2020 and adjourned on 5 ^th February, 2020. It has been provisionally listed for 16 ^th June, 2020 for resumption of the trial. The appeal in respect of the discovery issue was heard on 3 ^rd March, 2020. The unusual chronology suggested by this brief description will be examined in some detail below but it is first necessary to explain the background to the motion.

The dispute in the substantive proceedings

3 The nature of the dispute between the parties is succinctly summarised by Barniville J. in his judgment and I will adopt most of his summary here. For the purposes of this section, I intend to refer to the parties as they were in the High Court – plaintiffs and defendants. The plaintiffs are property development companies variously registered in Ireland, England, Wales and Jersey. Part of their business involves the development of student accommodation. They claim that three former employees of the plaintiffs or other entities within the O' Flynn group of companies (“OFG”) have acted in breach of their respective contracts of employment and in breach of other duties in various respects. These three former employees are Patrick Cox, Liam Foley and Eoghan Kearney, the first, third and fifth defendants. It is alleged that Mr Cox actively competed with the plaintiffs and concealed and diverted significant investment opportunities for his own benefit or for the benefit of the other defendants and appropriated or failed to return and used a substantial amount of confidential documentation relating to the business of OFG. It is also alleged that Mr Foley and Mr Kearney appropriated or failed to return and may have used such confidential documentation themselves for the benefit of companies of which they are directors and ultimate beneficial owners, namely the sixth, seventh and eighth defendants (“the Carrowmore companies”). It is alleged that Mr Cox acted in breach of contract and in breach of duty by failing to disclose certain commercial opportunities to the plaintiffs and that he diverted those opportunities for the benefit of the defendants and appropriated and retained certain confidential information. One such alleged commercial opportunity was a student accommodation project at Gardiner Street in Dublin. The plaintiffs make various claims against Mr Cox in relation to that project. The plaintiffs also allege that the defendants conspired to injure the plaintiffs as a result of which, it is alleged, the plaintiffs suffered loss and damage. In addition to declarations and damages, the plaintiffs seek an account of profits allegedly made by the defendants on foot of the commercial opportunities allegedly concealed from the plaintiffs and diverted to the defendants.

4 The defendants delivered a comprehensive defence in which they raised a series of preliminary objections and set out a detailed denial of the plaintiffs' claims. One of their preliminary objections was to the effect that the plaintiffs had engaged in acts, omissions and/or decisions which were prohibited by National Asset Management Agency (“NAMA”). The plea went on to say that insofar as any of the claims related to any acts, omissions and/or decisions which were prohibited by NAMA and/or any relevant legislative provisions and/or were not disclosed to NAMA in accordance with statutory obligation in that regard and/or in respect of which the consent of NAMA was not obtained and/or such acts, omissions and/or decisions were not in accordance with the restrictions imposed by NAMA and/or the provisions of any relevant legislative provisions:-

(a) the plaintiffs are not entitled to the reliefs claimed or to any relief; and/or

(b) the plaintiffs are estopped from claiming such reliefs; and/or

(c) it would be contrary to public policy to grant the reliefs claimed or any reliefs to the plaintiffs or any of them against the defendants or any of them; and/or

(d) in the exercise of its discretion, the Court should refuse to grant the reliefs claimed or any relief.

5 In supplemental replies to particulars dated 21 ^st December, 2016, the defendants' then solicitor, McCann Fitzgerald, gave further particulars in relation to the matters pleaded above. They asserted that an OFG entity named Victoria Hall Limited disposed of two valuable sites in Birmingham and Coventry by agreement with NAMA in 2012. It was alleged that OFG informed NAMA that the first plaintiff (Victoria Hall Limited) or (Victoria Hall Management UK Limited) may be involved in a management capacity with the sites following their sale but that both of them were non-OFG entities. It was asserted that subsequent to the sale, the sites were sold to a joint venture involving the third plaintiff in a transaction arranged by the second plaintiff and the first plaintiff. It was contended that the third plaintiff earned more that €10m from the subsequent sale of the developed site in or about September-November 2013. The defendants asserted that Mr Cox, the first defendant, assisted in structuring the joint venture in question and that he sought and obtained reassurance from Mr Nesbitt (director of a number of the plaintiff companies), at that time, that the third plaintiff was not part of OFG or related to or associated with OFG. The defendants contended that Mr Nesbitt reassured him that the entities developing the Birmingham and Coventry projects were not part of or associated with OFG and that Mr Cox was requested not to disclose any information relating to the business of those entities to the group finance director of OFG. The supplemental replies went on to refer to various matters relating to ownership and control of a number of the plaintiff companies. It was asserted that the two sites in question (Birmingham and Coventry) were sold for approximately £lm sterling but that in advance of the sale, a value of more than £5m sterling had been attributed to the sites by Victoria Hall Management UK Limited and Grey Willow Limited (the third plaintiff).

6 I pause to note that it was, therefore, clear from the time of delivery of those particulars in December 2016 that allegations were being made by the defendants about the Coventry-Birmingham projects. In essence, these were allegations that NAMA had been misled by the plaintiffs and that arrangements had been made behind NAMA's back which resulted in large amounts of money being made on a deal by some of the individuals involved in the plaintiff entities unbeknownst to NAMA.

7 The defence also denied all allegations of breach of contract and other wrongful conduct and pleaded in particular that there was a letter from Mr Nesbitt dated 14 ^th July, 2014 which approved the entitlement of Mr Cox in his own...