The Gazette 1993

GAZETTE

MAY 1993

which had been paid by the companies. Payment of the invoices had been author- ised by certain of the defendants, who were employees of the companies, but the com- panies alleged that they had received no consideration or value for the payments made. The purpose of the discovery orders was stated by the companies to be to facili- tate them in bringing proceedings against other parties whose tortious acts the compa- nies claimed had caused them to suffer loss. In the High Court, Costello J granted the plaintiffs the relief sought, and refused to grant a stay of execution upon the order. On appeal by the defendants against the refusal of the stay, the Supreme Court granted the stay: Megaleasing UK Ltd and Ors v Barrett and Ors [ 1992] 11R 219. On the substantive appeal HELD by the Supreme Court (Finlay CJ, Hederman, McCarthy, O'Flaherty and Egan JJ) allowing the appeal: (1) it was well established that the courts had jurisdiction to order discovery as a substantive remedy, in circumstances where a person who inad- vertently became involved in tortious activ- ity was in possession of information which would assist the victim to obtain justice. Orr v Diaper (1 876) 4 Ch D 92; (2) the jurisdic- tion of the court in such cases should be exercised sparingly and should be confined to cases where very clear proof of wrongdo- ing has been established, and to seeking the names and identities of wrongdoers rather than factual information concerning the commission of the wrong. Norwich Pharmacal Co and Ors v Customs and Ex- cise Commissioners [197 4] AC 133 referred to; (3) in the instant case, the companies had already established the names of the officers in their companies who were responsible for the issuing of the invoices in question and, through the settlement of a number of claims with them, had obtained statements from them that they were unaware of the eventual beneficiaries; and in the circum- stances, the further claim by the companies that they required discovery for the pur- poses of obtaining a satisfactory explana- tion for the payments fell far short of estab- lishing a wrongdoing which would justify making an order for discovery as a substan- tive remedy. Allied Irish Banks pic and Anor v Ernst & Whinney (Minister for Industry and Com- merce, Notice Party) High Court 22 Janu- ary 1992; Supreme Court 17 July 1992 PRACTICE - DISCOVERY - THIRD PARTY DISCOVERY - COMPLEX ACTION - SUPERVISION OF INSURANCE INDUSTRY - VIRTUAL COLLAPSE OF MAJOR INSUR- ANCECOMPANY - NEGLIGENCE ACTION - WHETHER SUPERVISING GOVERNMENT DEPARTMENT RE- QUIRED TO MAKE DISCOVERY Rules of the Superior Courts 1986, 0.31, rr.12, 21 The plaintiffs had instituted proceedings in negligence against the defendant, a firm of accountants. The defendant had acted as statutory auditors for an insurance com- pany, the Insurance Corporation of Ireland pic. The second plaintiff, a subsidiary of Allied Irish Banks pic, had purchased the entire equity in the Insurance Corporation. Subsequently, the Insurance Corporation suffered virtual financial collapse, and an administrator was appointed to the com- pany under the Insurance (No.2) Act 1983. The second plaintiff claimed that it invested 4

in the Insurance Corporation in reliance on information provided by the defendant firm, that the defendant had been negligent in the putting up of that information, that it acted in breach of its duty of care to the plaintiffs, and that consequently the plaintiff suffered financial loss. The defendant firm denied all these claims. In the course of the proceed- ings, the defendant firm sought discovery of certain documents from the Department of Industry and Commerce (the government department responsible for the overseeing of insurance companies) in particular docu- mentation concerning the acquisition by the second plaintiff of its equity in the Insur- ance Corporation and of the events leading up to the appointment of the administrator to the Insurance Corporation. HELD by Costello J refusing the order for discovery: the defendant had established that the docu- ments sought existed but had not estab- lished that they must all be relevant to the proceedings between the parties, and the Court had no jurisdiction to make an order which might uncover certain documents of relevance to proceedings. On appeal by the defendant to the Supreme Court, a list was prepared of the issues in the case and of categories of documents relevant to those issues. HELD by the Supreme Court (Finlay CJ, Hederman, McCarthy, O'Flaherty and Egan JJ) allowing the appeal and ordering discovery : (1) the jurisdiction of the Court to order discovery in respect of persons who were not party to proceedings under 0.31, r.21 of the 1986 Rules differed in certain respects from that where discovery was directed at a party to proceedings under 0.31, r.12, but the essential purpose was the same, namely that justice be done on the basis of a full consideration of the evidence; (2) the differences in an application under 0.31, r.21 is that the Court must be satisfied from evidence adduced by the application: (i) that the notice party is likely to have documents in its possession and that these documents are relevant to the issues in the case; (ii) that discovery will not be unduly oppressive to the notice party, although the applicant need not establish that specific documents are in the hands of the notice party; and (i ii) that any order for discovery to the notice party should indicate in simple form the relevance to the case of the docu- ments being sought by the applicant; (3) the High Court had taken the correct general approach except in relation to the onus on the defendant to establish the relevant of documents to the instant case, though the Supreme Court had been in a better position to assess the relevance of the documents sought to the issues in the proceedings hav- ing regard to the list prepared by the defend- ant for the appeal hearing. Per curiam: a similar list or schedule linking the issues in proceed i ngs to the documents sought wou Id appear an essential proof in an action in- volving multiple issues; (4) although com- pliance with an order for discovery would involve the expenditure of considerable time by officials of the Department of Industry and Commerce, this could not be regarded as being oppressive having regard to the contribution towards the administration of justice which discovery of documents made.

for judicial review clearly made trenchant criticism of the Minister to which he was entitled to reply in careful and moderate terms; and while the Minister was ill-ad- vised to give a response on a live radio broadcast, the matter was of ongoing public interest and in these exceptional circum- stances having regard to the provisions pro- tecting freedom of expression in Article 40.3 of the Constitution, contempt had not been made out under this heading. Attorney General v Times Newspapers Ltd\ 1974] AC 273 and Times Newspapers Ltd v United Kingdom (1979) 2 EHRR 245 discussed. Per O'Hanlon J: the court should assume that Irish law on contempt was consistent with Article 10 of the European Convention on Human Rights and Fundamental Freedoms. Dicta in The State(DPP) v Walsh |19811 IR 412 applied. The plaintiff was a company engaged in the meat trade. The plaintiff claimed declara- tory relief and damages in relation to the failure by the defendants to grant the plain- tiff an import quota for 1990 under the terms of EC Council Regulation 4024/89, which concerns imports of meat from non-EC States coming within the terms of the GATT. In the High Court, Costello ) granted the relief sought: Emerald Meats Ltd v Minister for Agriculture and Ors (High Court, 9 July 1991). The decree for damages was for 385,922 with interest. Without objection from the plaintiff, the defendants were granted in July 1991 a stay on the damages award pending appeal. In July 1992, the plaintiff sought to have the stay removed. HELD by the Supreme Court (Hederman, McCarthy and Egan JJ) removing the stay: although the plaintiff had not objected to the stay in 1991, circumstances had changed considerably since then, and it appeared thatthe plaintiff was in immediate danger of going out of business; having regard to the issues raised in the appeal, it was possible that a reference to the Court of Justice under Article 177 of the Treaty of the European Economic Community might result,- thus postponing final judgment for a further two years; and in the light of the trial judge's findings, the prospects of success for the defendants seemed slight; and in those cir- cumstances, although the damages might become dissipated in the company's debts, the justice of the case lay in removing the stay on the award. Redmond v Ireland 119921 ILRM 291 applied. Megaleasing UK Ltd and Ors v Barrett and Ors (No.2) Supreme Court 20 July 1992 PRACTICE - DISCOVERY - DISCOVERY AS SUBSTAN- TIVE RELIEF - HIGH COURT GRANTING SUCH ORDER FOR DISCOVERY - WHETHER JUSTIFIED IN CIRCUM- STANCES The plaintiffs (the companies) instituted ple- nary proceedings against the defendants in which the substantive relief was for orders of discovery concerning certain invoices Emerald Meats Ltd v Minister for Agricul- ture and Ors (No.2) Supreme Court 16 July 1992 PRACTICE - APPEAL - STAY ON AWARD OF DAMAGES PENDING APPEAL - APPEAL LIKELY TO INVOLVE DELAY OF OVER TWO YEARS - WHETHER STAY SHOULD BE LIFTED - LIKELIHOOD OF SUCCESS OF APPEAL