High Court of Ireland Decisions

 


[2005] IEHC 136

THE HIGH COURT

DUBLIN

Case No. 2004/19810P

MR. KIERAN MULCAHY

Plaintiff

and

AVOCA CAPITAL HOLDINGS LTD

Defendant

APPROVED JUDGMENT DELIVERED BY MR. JUSTICE CLARKE ON THURSDAY, 14^TH APRIL 2005

This matter has already been before the court on a Number of occasions and, in particular, there are transcripts of judgments delivered by me on both the 26^th January and 11^th March last. It is therefore unnecessary to set out he history of the case as recorded in those judgments. The issue which now requires to be determined is as to the terms upon which the plaintiff's experts are to be given access to certain computer materials which are the property of the defendants.

As is clear from the judgment of 11^th March, the issue before the court on that occasion was the same, in that three principal questions concerning the scope of the entitlement of the plaintiff through his experts to have access to the defendant's computer materials were then litigated and determined. Before going on to set out the issue that is now before the Court, it is perhaps important to emphasise, as I noted in the judgment of he 11^th March, that it was and is somewhat unusual for the court to be asked to rule on the details of matters such as this at an interim stage in a disciplinary matter.

It should also be noted that there has been no formal discovery motion as such before the court and, in one sense, it might be said that the issues which are now before the court arise in two different ways. Firstly, the plaintiff in these proceedings contends, amongst other things, that certain of the accusations against him are not made bona fide, and in that regard relies on a contention to the effect that the general practice within the defendant company was that many persons had access to a variety of computers, even though they might not, strictly speaking, be within their own remit. Clearly, if he were to establish as a matter of fact that the joint managing directors of the defendant had engaged in practices concerning access which were similar to those which he himself may or may not be established to have engaged in, then that would be significant material in the case which he might be able to make in these proceedings to the effect that the suspension under which he now stands was not bona fide made. Therefore, to that end, discovery is potentially relevant.

Also, as a matter of practicality, the plaintiff will be entitled, as a matter of fair procedure in the conduct of the disciplinary process which is currently in being within the defendant company, to be given a reasonable opportunity to make his defence, which would include of course an ability to make a point of the type which I have just indicated.

It is fair to say that in the ordinary course of events under either of those headings it would be somewhat premature to deal with an issue of discovery in that in the ordinary way one would not deal with discovery at this stage in court litigation until the pleadings had closed and, in the ordinary way, as I indicated in the judgment of 11^th March, the court would not give rulings as to the procedures which were to be followed in an internal disciplinary process while that process was in being.

However, as I again pointed out in the judgment of 11^th March, the parties, in effect, invited me to resolve their differences in relation to this matter under wither of the above headings, and I proceeded so to do insofar as it was possible on the information available at that stage.

Finally, by way of background, I should note that when I gave an initial indication when this matter was first before the court, on 21^st December, to the effect that the plaintiff should have access to the relevant computer materials, I did so in the context of fair procedures issue rather than a discovery matter, there being no discovery application before the court at that stage.

Having set out that background, it is necessary to indicate what was determined on 11^th March and to set out the disputes as to the implementation of what was so determined that have now arisen. As is pointed out at page 5 of the judgment of the 11^th March, there were three real issues in contention at that stage. The first was the scope of the computers in respect of which inspection was to be allowed; second was the terms of the confidentiality undertakings to be given by the experts; and third was the circumstances and, in particular, the location in and at which access was to be given. Item 2 is no longer a matter of contention, but in a sense both items 1 and 3 are, in the context of the disputes that have now arisen.

In the course of determining the first question, I indicated that certain computers did not appear to me to be relevant, but that three of the computers, which had already been the subject of investigation by the defendant company, appeared to remain relevant and that access should be given to them. I also ruled that the plaintiff should have access, subject to a signigicant caveat, to the computers of the two joint managing directors, that caveat is as set out at page 8. It was to the effect that such access should only be to the extent where it could be shown to be necessary to explore whether either of the two individuals concerned accessed materials that were properly in the domain of other employees and to which they would not normally have access. As the Judgment notes, there was no evidence before the court as to the practicalities of imposing limitations in the manner suggested and, therefore, I expressly declined to make a definitive ruling but indicated that I felt it appropriate to set out the principle.

In those circumstances it does not seem to me, firstly, that I am necessarily bound by the precise findings set out in that judgment, because clearly on its own terms it is subject to the necessity of clarification in the light of there being evidence as to the practicalities involved. Clearly, it would be inappropriate for me to depart from the general principle which I had set out, and I would not propose doing so in any event, but one should not read the judgment over literally because it was, as it says, based upon a conclusion as to a general principle rather than the precise implementation of that principle. I was, as I indicated, unable to deal with the precise implementation because there was just no evidence from either side before the court as to what might be practical or not.

It is in that context that the first major question that I have to determine arises. It is as to the conditions that should be put in place to enable the caveat to be complied with. The defendants through their solicitors have set out, in the terms of a draft letter which was produced in argument, the terms upon which they believe it would be reasonable to allow Messrs. Grant Thornton, the plaintiff's experts, to have access to the computers of the two joint managing directors.

The difficulty that arises, and it is one which is identified at least in general terms in the judgment of the 11^th March, is as to the extent to which it is practicable or reasonable to make restrictions on the access of the plaintiff's experts for the purposes of protecting the confidentiality or, indeed, the privilege that may attach to materials which are contained within those computers. I think it is important firstly to emphasise the reason in principle why that caveat is necessary.

As a matter of law, the plaintiff is not necessarily entitled in the ordinary way to any of the information present on either of the joint managing directors' computers. He may or may not, in an entirely different sense, be entitled to access to some of that material in his capacity as a director, but it doesn't seem to me that that necessarily advances matters to any great extent in that, firstly there may well be materials which would be private to the joint managing directors in any event and to which a fellow director would not necessarily access; and secondly, there is the potential that there may be material relevant to the company's position in respect of the issues that are now before the courts which would be privileged. It does not seem to me, therefore, that the fact that the plaintiff is a director really advances the matter to any great extent.

Secondly, while in the ordinary way the fact that materials may be confidential does not exclude them from being liable to discovery (the exclusion being only available in respect of documents which are subject to privilege) that nonetheless begs the question as to whether the materials are in fact relevant to the case in the first place. Obviously a party, such as the defendant in these proceedings, is entitled not to have confidential material made available to any party unless there is a reasonable basis for believing that that material is relevant to the proceedings and its discovery is necessary or expedient for the fair resolution of the proceedings.

So the starting position has to be that it is necessary for the plaintiff to establish that he must have access to a particular set of materials in order to further his case or damage the defendant's case. The mere fact that there may be more expedient ways of going about it, does not seem to me to be particularly relevant. The plaintiff cannot have an entitlement to have access to documentation simply because it may be an easier or cheaper way of dealing with matters. He does not have a legal entitlement to look at any more than is necessary for the purposes of the case. In those circumstances, as a general principle. I have come to the view that it is possible for the plaintiff to deal with the matters which he wishes to deal with through the procedures which are set out in the draft letter.

They may well be more cumbersome -- there is a difference between the experts, which quite frankly I can't resolve, as to the extent to which it may be more cumbersome -- than those which might have to be followed had the plaintiff's experts had access to the entirety of the data. But is seems to me that the overriding principle is that it would not be correct to give the plaintiff's experts access to a large volume of information, which the plaintiff is not entitled to, unless it were impossible, or so ruinously expensive as to be impractical to do it any other way. I do not believe that the balance of justice would require that the plaintiff should be given access to documents to which he is not basically entitled. If one takes the analogy with ordinary documentary discovery I am happy to have the authorities referred to me which make it clear that as a matter of court discovery access to electronic records is in fact discovery. Exactly the same principles apply insofar as we may be dealing with the possibility that the plaintiff may, as a matter of pair procedures, be entitled to access. While disclosure is not formally a discovery process nonetheless an analogous process applies. Therefore, in either case, the rules applicable to determining the circumstances in which access should be had would be those which would be applicable in the case of ordinary documentary discovery.

In those circumstances it is frequently the case that confidential materials are involved that parties are given blacked out copies of documentation (where signigicant protions of that which is made available is blanked out) because only a portion of a confidential document may be material to the proceedings and, it has to be said, in the ordinary discovery process, to a very large extent, the party seeking and obtaining discovery has to take the other side's word for it that what is blacked out is not relevant. Unless there is some compelling reason in evidence to suggest that materials have been blacked out which ought not have been blacked out, the court would not in the ordinary way go behind the sworn statement of the party making discovery as to what portion of a document is relevant.

Therefore, which I accept what the plaintiff's expert says, to the effect that he would much prefer unfettered access, it does not seem to me that that is what the plaintiff is legally entitled to.

Therefore, I would propose that access to the relevant computers should be subject to the conditions set out in the draft letter subject to one further qualification. It is clear that if material is relevant the defendants have no discretion in declining to allow Grant Thornton to see that documentation. Equally, I have already ruled that Grant Thornton are entitled to take away that information. That was a matter in contention on the last occasion and I resolved that in favour of the plaintiff, and I don't propose revisiting that. So insofar as relevant material may be discovered in the course of he searches, which will be carried out in accordance with the draft letter, then it is not a matter in the gift and favour of the defendants to allow Grant Thornton both to obtain that information and to take it away for further analysis; that is a matter of entitlement on the part of Grant Thornton, behalf of the plaintiff,

Clearly, there may be a dispute as to whether material is relevant. I obviously cannot resolve any such dispute that might arise at this stage, and that unfortunately raises the prospect that the matter may have to come back to court, but I don't see that there is anything that can be done about that. That leads me to the final point that I wish to make on this topic.

It emerged in the course of the evidence that in one sense there may well to two questions that have to be answered, the first question is: to what materials have the joint managing directors had access? The second question, which might arise in certain cases, is as to whether the fact that they had had access to a particular document might be a matter which would advance the plaintiff's case in the way in which I put that case?

It is conceivable that there may be circumstances where it might be necessary to look at all or a part of such a document to be able to answer that second question. It may well that in many cases the identity of the document as specified in the computer records may be sufficient to determine its nature, but one cannot rule out the possibility that the contents of the underlying document might be relevant for that purpose. Therefore, it seems to me that it is possible, within the meaning of the principle which I identified in the judgment of the 11^th March, that in certain limited cases access to the original document might be relevant. As I indicated in that judgment, the purpose for which access of this type is to be permitted is "to explore whether either of the two individuals concerned access materials that were properly in the domain of other employees, and to which they would not normally have access." If it can be shown that they had access to a document, and if there is a reasonable case to make that it is necessary to look at that document to ascertain whether it is a document of a class that would put it properly in the domain of other employees, and to which they would not normally have access, then it may be necessary to look at such a document, but only in those circumstance.

Therefore, having had the benefit of evidence, it seems to me that the process should be fine-tuned in this way. The initial investigation should be to ascertain by whatever investigative methods Grant Thornton consider appropriate the documents to which the joint managing directors have had access without looking at those underlying documents. If it becomes necessary to look at those documents in order to ascertain whether they are documents in the class that I just identified, then it may be necessary to go to the underlying documents, but that is a matter that should only be addressed after it has been established that access has been had to the document and also that there is some reasonable basis for being concerned that it might be a document of a class to which they should not have had access.

The final point I would like to comment on is the argument put forward in evidence on behalf of Grant Thornton, which amounted to a plea for the protection of their proprietary methods. A court must always, in Circumstances such as this, be concerned not to expose experts to any unnecessary exposure of the benefits of their craft, as it were, but it does have to be said that a person who presents themselves as willing to act as an expert in proceedings necessarily exposes their methods to investigation in court. Just to put it at its mildest, if Grant Thornton and Ritz were to give evidence in a trial which conflicted as to their findings, the only way the court could resolve that conflict would be by investigating their methods and forming a view as to which method is better. So it seems to me, as a matter of principle and a matter of practice in this case, an expert just cannot stand on ceremony in that way; by being available to give forensic evidence in proceedings and expert is potentially exposing his methods to detailed investigation. He cannot say, "I am going to give evidence but I am not going to tell people how I carried out my inquiries." While a court should not make any directions that would unnecessarily expose the skills of an expert, it nonetheless seems to me that there is a limit to the extent to which those methods can be protected and, therefore, on the facts of this case I would not place any significant weight on that concern on their part.

I did place more weight on their concern about the extent to which the processes being proposed by the defendants might be more onerous, both as to time and money, but for the reasons which I have already indicated I think on balance the overriding consideration has to be that the plaintiff is not entitled to access to information which is not relevant to the proceedings, and only then where it is absolutely essential that that should be so.

Therefore, I would propose directing that the plaintiff have access to the computers of the joint managing directors of the defendant on the terms set out in the draft letter, my copy of which I will note and it will be annexed to the order fro the avoidance of doubt. I will further direct, for the avoidance of doubt, that Grant Thornton are entitled to take away any materials that are relevant to the issues which are discovered in the course of the process set out in that letter for such further investigation as they consider appropriate. Finally, I will direct that access to original underlying documentation is only to occur where such access is necessary for the purposes of determining whether a document was one to which the joint managing directors should not have had access in circumstances where it has already been established that they did have such access.

They seem to me to be the directions. There obviously is potential for further dispute, but I don't think that can be avoided until the process

commences. On the basis of my understanding of the matter at this stage, I think that is as far as I can put it.

Approved judgment of Mr. Justice Clarke