Victoria Hall Management Ltd, Palm Tree Ltd, Grey Willow Ltd, Albert Project Management Ltd, O'Flynn Capital Partners and O'Flynn Construction (Cork) v Patrick Cox, Rockford Advisors Ltd, Liam Foley, Foley Propject Management Ltd, Eoghan Kearney, Carrowmore Property Ltd, Carrowmore Property Gardiner Ltd and Carrowmore Property Gloucester Ltd

• Jurisdiction: Ireland
• Judge: Mr. Justice Quinn
• Judgment Date: 13 January 2021
• Neutral Citation: [2021] IEHC 37
• Docket Number: 2016/5037 P
• Court: High Court
• Date: 13 January 2021

Between

Victoria Hall Management Limited, Palm Tree Limited, Grey Willow Limited, Albert Project Management Limited, O'Flynn Capital Partners and O'Flynn Construction (Cork)

Plaintiffs

and

Patrick Cox, Rockford Advisors Limited, Liam Foley, Foley Propject Management Limited, Eoghan Kearney, Carrowmore Property Limited, Carrowmore Property Gardiner Limited and Carrowmore Property Gloucester Limited

Defendants

[2021] IEHC 37

2016/5037 P

THE HIGH COURT

COMMERCIAL

JUDGMENT ofMr. Justice Quinndelivered on the 13th day of January, 2021 (Second Amendment to Statement of Claim)

1 This judgment relates to an application by the plaintiffs pursuant to Order 28, Rule 1 of the Rules of the Superior Courts (“RSC”), for leave to make a second amendment to the Statement of Claim. I have concluded that the application should be dismissed.

Background

2 The plaintiffs allege that the first named defendant, Patrick Cox, being a former employee of the plaintiffs and/or other entities within the O'Flynn Group of companies, competed with the plaintiffs, concealed and diverted certain investment opportunities for his own benefit or the benefit of the other defendants and appropriated and/or failed to return and used a substantial amount of confidential documentation relating to the business of the O'Flynn Group.

3 They allege that the third and fifth defendants, Liam Foley and Eoghan Kearney, also being former employees, appropriated and/or failed to return, and may have used, confidential information relating to the business of the O'Flynn Group.

4 The plaintiffs claim certain declarations and accounts, and damages for breach of contract, breach of duty, breach of confidentiality, breach of trust, breach of fiduciary duty, conspiracy, inducement of breach of contract, intentional interference with the plaintiffs' contractual and commercial relations and interference with the plaintiffs' economic and commercial interests.

5 As against Mr. Cox, the plaintiffs rely, inter alia, on a contract of employment entered into on 24 March, 2010, between Mr Cox and an entity known as Tiger Developments Limited, (“the Cox Contract of Employment”), and this contract is pleaded in the Statement of Claim.

6 On 24 April, 2015, ownership of Tiger Developments was acquired by Carbon Holdings One SARL. Its name was subsequently changed to Carbon Developments Limited (“Carbon”).

7 Carbon is not a plaintiff in these proceedings.

8 In the Defence delivered in October, 2016, it is pleaded that there is not and never was any privity of contract between any of the plaintiffs and Mr. Cox.

9 By a “Deed of Assignment” (“the Assignment”) entered into on 15 May, 2017, the plaintiffs took an Assignment of the Cox Contract of Employment from Carbon. The validity and effect of this Deed is disputed by the defendants.

10 On 14 November, 2018, the plaintiffs gave to Mr. Cox notice of the Assignment. No copy of the Assignment was enclosed with that notice. Nor does the notice state that a copy is attached.

11 On 21 November, 2018, the plaintiffs issued a motion to amend the Statement of Claim to plead the Assignment. The application was opposed and on 6 February, 2019, McDonald J. granted leave to the plaintiffs to amend the Statement of Claim. On 7 February, 2019, the plaintiffs delivered an amended Statement of Claim pleading the Assignment. Paragraph 23A of the amended Statement of Claim reads as follows:-

“By an Assignment dated 15th May 2017, Tiger Developments, now known as Carbon Developments Limited, assigned to the plaintiffs all of its rights, benefit, interest and title to and in the Cox Contract of Employment, together with all the benefit of the obligations owing to Tiger Developments under the Cox Contract of Employment and all the rights and remedies and claims and demands in respect of any breach of such obligations.”

12 On 21 March, 2019, the defendants delivered an amended Defence in which they denied the validity and effect of the Assignment. Without prejudice to the generality of that denial, the defendants pleaded that the Cox Contract of Employment was a personal right of Carbon which could not be transferred to a third party without the consent of the first defendant which consent had not been granted.

13 The plaintiffs' claims against Mr. Cox are not wholly reliant on the Cox Contract of Employment. They plead that in the alternative, insofar as the relationship between the plaintiffs and Mr. Cox is characterised as a consultancy or other arrangement, he assumed duties and obligations to the plaintiffs “ arising from his senior and trusted role within theO'Flynn Group, his agreement to provide services to the plaintiffs and/or the payments made by the plaintiffs”.

The hearing of this action

14 The trial of the action commenced on 14 January, 2020. In the period leading up to the opening of the trial, correspondence was exchanged between the parties in which the plaintiffs' solicitors sought confirmation from the defendants that documents discovered by the parties or appended to witness statements would be admitted into evidence without the need for formal proof, the so-called “Bula/Fyffes” model. A formal letter to this effect was written by the plaintiffs' solicitors, BHK, on 11 December, 2019. This correspondence continued up to the commencement of the trial and immediately before the opening of the trial, no agreement of the Bula/Fyffes type had been made. The plaintiffs have from time to time and continue to protest at the defendants' unwillingness to admit without formal proof certain documents, including the Assignment.

15 Reference was made to the Assignment in the course of the opening and Mr. Sreenan, on behalf of the plaintiffs, informed the court that a Bula/Fyffes agreement had now been made “ but not necessarily in respect to all of the documents”. He noted that the defendants have a concern about proof of the Assignment. He stated that the plaintiffs would revert to that point if necessary in the course of the evidence.

16 On the third day of the trial, Mr. Michael O'Flynn was giving evidence for the plaintiffs. He referred to the Assignment. A copy of a version of the Assignment was handed into court and the defendants' counsel, Mr. Gardiner, requested also a copy of the document. It was said by the plaintiffs that the version shown to the court was the original Assignment, and that a copy was in the core book of documents before the court.

17 Mr. Gardiner informed the court that there would, in due course, be argument as to the admissibility of the Assignment and the inability of Mr. O'Flynn, then giving evidence, to prove its execution. He also said that no signed copy of the Assignment had been discovered. Mr. Cush for the plaintiffs stated that insofar as there was an objection to the admissibility of the document, he would undertake to formally prove it in due course.

18 Mr. Cush said:-

“So it's a Carbon witness to formally prove this document and we will ensure that, Judge. That's helpful. That's the document and there'll be debate about its legal effect in the case.”

19 While the case was at hearing, further correspondence was exchanged between the parties on this subject. On 23 January, 2020, the defendants' solicitors, Crowley Millar, requested that the plaintiffs make formal discovery of the original Deed of Assignment.

20 The plaintiffs' solicitors, BHK, replied pointing out that the Deed of Assignment did not fall within the scope of orders for discovery previously made, being outside the temporal limitation of the order for discovery. They continued:-

“Notwithstanding the fact that the Assignment was not subject to any order for discovery, a copy of the Assignment was furnished on 14th November 2018 and the original has been furnished to you and actually inspected by your Mr. Millar as well as counsel for the Defence.

Having regard to all of the foregoing, please explain why you are now requesting discovery of the Assignment.

The requirement for formal proof of the Assignment has already been confirmed by counsel for the Defence and counsel for the Plaintiffs has confirmed to the Court that a witness from the Assignor will attend Court to provide such formal proof.”

21 The Notice of the Assignment given on 14 November, 2018, did not, contrary to what is quoted above, include a copy of the Assignment.

22 On day 13 of the trial, a witness on behalf of Carbon, Mr. Robert Dix, was in court but he was not called to give evidence.

23 On day 14 of the trial, (5 February, 2020), counsel for the plaintiffs informed the court that Mr. Dix, who had been in court on the previous day, was not available today. He had informed the defendants' counsel that a problem had been identified in terms of the documentation which it was intended would be proved by Mr. Dix, namely that the version of the Assignment that the plaintiffs intended to prove did not have the execution page with the seal of Carbon affixed to it. He continued:-

“So there is a matter that we need to just tidy up in that respect.”

24 Mr. Gardiner for the defendants protested that it had been said on Day 3 of the trial that the document handed into court was the original of the Assignment and the court was now being told that there is a problem with the signature page and the seal.

25 The plaintiffs' counsel then informed the court that it was the plaintiffs' intention to investigate this matter further and Mr. Cush stated:-

“I tried to explain to Mr. Gardiner yesterday that the page that we have on which the signatures are to be seen does not have the seal of Carbon. Now, to the extent that that's an issue – and frankly we don't believe it is a significant issue – we want to see if we can find the page that does have the seal on it and we have gone looking for it and we haven't as yet found it.”

26 Mr. Cush submitted that a sensible approach...