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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> In the Matter for Mount Carmel Medical Group (South Dublin) Ltd (In Liquidation) [2015] IEHC 450 (07 July 2015)
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Cite as: [2015] IEHC 450
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Neutral Citation [2015] IEHC 450 THE HIGH COURT [2014 No. 48 COS] IN THE MATTER OF MOUNT CARMEL MEDICAL GROUP (SOUTH DUBLIN) LIMITED (IN LIQUIDATION) AND IN THE MATTER OF THE COMPANIES ACTS 1963 TO 2012 JUDGMENT of Mr. Justice Keane delivered on the 7th July 2015 Introduction
(i) Granted liberty to the liquidators to enter into an identified Record Transfer and Management Agreement (“the proposed contract”) with St. James’s Hospital (“SJH”). (ii) Granted liberty to the liquidators to pay out of the assets of the company the support and maintenance fees to certain identified service providers in connection with the operation of the contract. (iii) Directed the liquidators, following the execution of the contract, to transfer the medical records (“the records”) currently held by or on behalf of the company to SJH.
(v) A declaration that, in the event of the liquidators requiring access to the records for the purpose of the liquidation of the company, they will be entitled to such access and SJH shall be at liberty to disclose such Records to the liquidators. The liquidation The data 7. Nor is there any doubt that the special provisions of the Data Protection (Access Modification) (Health) Regulations 1989 (“the Regulations”) apply to the data contained in the records in so far as they constitute “health data” under those regulations; that is, data relating to physical or mental health. Regulation 5(1) prohibits a data controller, such as the company, who is not a health professional from supplying or withholding health data in response to a data access request from a data subject without first consulting with the appropriate health professional. 8. As of the 20th November 2014, the liquidators had received 1,202 data access requests. 9. The DPA do not stipulate any period for which data must be retained by a data controller. Quite the contrary, s. 2(1)(c)(iv) of the DPA requires that personal data shall not be kept for longer than is necessary for the specific, explicit and legitimate purpose or purposes for which it was obtained. 10. In identifying the necessary data retention period, the liquidators point to Health Service Executive (“HSE”) Guidelines which, they assert, while not legally binding, recommend that medical records be retained for various periods ranging up to thirty years in some instances and in perpetuity in the case of blood samples. The obligations of the company and of the liquidators 12. The cost of the storage and retrieval of the records; the employment of an appropriate health professional; and the provision of the relevant personal data in response to each request rank as continuing expenses in the liquidation. The liquidators acknowledge that such cost is unavoidable for as long as the relevant records are retained by the company and it remains the data controller of the personal data contained in them. 13. Conscious of those costs, the liquidators have considered, and have described to the Court, two specific options for addressing the company’s record storage and data protection obligations in future. The first, simply stated, is the maintenance of the status quo as just described. The second involves the transfer of the relevant records and - as the liquidators envisage - the transfer of the statutory role of data controller in relation to them to another entity, specifically, SJH, pursuant to the terms of the proposed contract. 14. The liquidators have costed each of the two options they describe for an indicative five year period. The total cost of the first option for that period is €636,500 and that of the second option is €430,100. The liquidators have prepared an “estimated outcome account” as at the 10th October 2014 by reference to the implementation of the second option, suggesting an anticipated distribution of approximately 4% of the value of the debts owed to the preferential creditors, but have confirmed that there are sufficient funds in the liquidation to meet the cost of either option (at least for that period). The preferential creditors are the Revenue Commissioners and the Department of Social Protection. They will be the beneficiaries of the relevant cost saving, if it can be properly effected. The liquidators are officers of the court and are under a duty to the creditors of the company not to incur any unnecessary or unreasonable expense in the conduct of the liquidation. 15. SJH has indicated that it is willing to enter into the proposed contract subject to the approval of the Court. The proposed contract 17. A number of specific provisions of the proposed contract are of particular relevance to the present application. Clause 4.1 provides:
(a) give [the company] and/or [the liquidators] access to, and allow copies to be taken of, the Records as [the company] and/or [the liquidators] may reasonably require; and (b) allow [the company] and/or the liquidator to take possession of any paper originals of the Records that are still in the possession of [SJH], to the extent reasonably required to take action in respect of any costs, claims, damages, losses, expenses and liabilities arising as a result of, or in connection with, the liquidation of [the company].”
11.2 In its capacity as the Data Controller in respect of the Records, [SJH] shall: (a) implement and maintain such technical and organisational measures as are required to comply with the data security obligations under Sections 2(1)(d) and 2C of the [DPA], and as are otherwise required under the Data Protection Law; (b) comply with the Data Protection Law when providing the Services, including without limitation, when dealing with data subject access requests relating to the Records that are made under Sections 3 and/or 4 of the Data Protection Law; and (c) comply with the Freedom of Information Acts 2014 in connection with any access requests which fall to be considered under such legislation.”
… • dealing with obligations as a data controller in accordance with the Data Protection Acts 1988 and 2003, including, but not limited to, dealing with data subject access requests relating to the Records, in accordance with the obligations of Data Protection Law, including without limitation, the obligation to consult with an appropriate health professional to determine whether the release of health information pursuant to a data subject access request would cause serious harm to the physical or mental health of the data subject; … • retaining the Records for such period of time as complies with all Applicable Laws and reflects best medical practice; ….”
(a) any breach of this agreement by [SJH] or its directors, officers, employees, agents or sub-contractors; or (b) any breach of Applicable Laws by the Hospital or its directors, officers, employees, agents or sub-contractors, which relates to or is connected with the obligations of [SJH] under this Agreement.” 22. Under clause 1, “Applicable Laws” are defined to mean:
A third option
27. Presumably by reference to the liquidators’ view that it is impracticable, the option just described has not been costed or, at least, no costing in respect of it has been presented to the Court for the purpose of the present application. However, it does not seem unreasonable to suppose that, while such an arrangement would likely prove more expensive than the liquidators’ preferred option, since some additional cost must almost inevitably be involved in the company’s sharing the role of data controller with SJH, it should still be less expensive than the other option considered by the liquidators, whereby the company would remain sole data controller and would continue to shoulder exclusively the full financial and administative burden of discharging that role and of continuing to retain the records as required under the HSE guidelines. The declaration sought 29. The first such category is the personal data contained in the medical records relevant to certain claims of medical negligence that have been made against the company. For ease of reference, I will refer to that data as “the existing claims personal data.” The company has furnished its insurers, at the latter’s request, with copies of those records, in order to comply with the terms of the relevant insurance cover. 30. The second category of personal data is that contained in the records relating to the two week period after the appointment of the liquidators, during which the company continued to trade for the purpose of its orderly wind down and its existing insurance arrangements were maintained. The liquidators have been advised that the medical records generated during that period form part of the liquidators’ books for the purposes of s. 57 of the Company Law Enforcement Act 2001, such that they must be retained to ensure compliance with that provision. By reference to the company’s obligations to its insurers, copies of the medical records of the patients treated during this period (and, by necessary implication, the personal data contained in those records) have been retained by the company. The same records and the same personal data are being retained by, or on behalf of, the liquidators, by reference to their obligations as they perceive them to be under the 2001 Act, quite separate from any obligation of the company. For ease of reference, I will refer to the personal data concerned as “the wind-down period personal data.” 31. The retention of copy records in the two categories just described (and of the personal data contained in them) has obvious implications for any declaration that the court might otherwise be disposed to make concerning the status of the company as a data controller in respect of the personal data contained in the records transferred to SJH. For clarity and correctness, any such declaration would have to be framed in such a way as to make clear to all persons having notice of the Order in which it is contained, what personal data contained in the records are being retained by the company, despite the proposed transfer of the original records to SJH. As I believe the liquidators now acknowledge, a bare declaration that “[SJH] will become the data controller of the [personal data contained in the] Records with effect from the transfer of the Records” or that “from the time of the transfer of the medical records to [SJH], the Company will no longer act as the data controller of the [personal data contained in the] medical records,” being the alternative modified forms of declaration put forward in the liquidators’ submissions, would, in those unqualified terms, be potentially misleading. 32. In that context, the supplemental affidavit sworn on behalf of the liquidators, to which reference has already been made, contains the following averment:
34. Finally in this context, it is worth noting that the two alternative forms of declaration suggested by the liquidators are not necessarily correlative. That is to say, the proposition that SJH is data controller of the personal data contained in the transferred records does not strictly imply that the company is not, since the definition of data controller under the DPA expressly envisages that the contents and use of personal data may be controlled by a person “either alone or with others.” Data protection 36. Recital (10) of the Preamble to Directive 95/46 states:
38. Article 7 of the Charter guarantees the right to respect for private life, whilst Article 8 of the Charter expressly proclaims the right to the protection of personal data. Article 8(2) and (3) specify that such data must be processed fairly for specified purposes and on the basis of the consent of the person concerned or some other legitimate basis laid down by law, that everyone has the right of access to data which have been collected concerning him or her and the right to have the data rectified, and that compliance with these rules is to be subject to control by an independent authority. Those requirements are implemented, inter alia, by Articles 6, 7, 12, 14 and 28 of Directive 95/46. 39. Privacy rights in our law derive from the Constitution; from statute law, such as the DPA, which must be interpreted or applied, so far as is possible, in a manner compatible with the State’s obligations under the provisions of the European Convention on Human Rights (“ECHR”), pursuant to s. 2 of the European Convention on Human Rights Act 2003; from the common law; and from the applicable provisions of European Union law. Declaratory judgments
44. The first is that of Johnston J. in Blythe & Ors. v. Attorney General (No. 2) [1936] I.R. 549. The plaintiffs in that case were the members of the National Executive of Fine Gael, which had resolved to form a subordinate organisation to be known as ‘The League of Youth.’ They brought their action against the background of Article 2A of the Constitution of the Irish Free State, as inserted by the Constitution (Amendement No. 17) Act 1931, whereby associations that engaged in, or promoted, certain specified unlawful or subversive activities were deemed unlawful associations, and whereby an order made by the Executive Council declaring its opinion to that effect was to be conclusive evidence of that fact. Previous associations formed by the plaintiffs, most notably the Young Ireland Association, had been declared unlawful. The plaintiffs sought four separate, though related, declarations to the following effect: that they had the right to form and maintain the association at issue under the Free State Constitution; that the objects of the association, as set forth, were lawful; that the organisation of the association was lawful; and that the association itself was, therefore, lawful. 45. Having identified the reliefs claimed, Johnston J. continued (at pp. 553-5):
The history of this very modern jurisdiction is interesting but it is sufficient now to say that it originated in sect. 155 of the Chancery (Ireland) Act, 1867, which provided that ‘no suit in the Court shall be open to objection on the ground that a merely declaratory decree or order is sought thereby; and it shall be lawful for the Court to make binding declarations of right without granting consequential relief.’ But the right of a person to come to the Court for a declaration of right is not by any means unlimited. As was pointed out by Lord Macmillan in his recent address, mankind lives in an atmosphere of juristic rights and corresponding duties. Every act that a human being performs in the course of an ordinary day is an exercise of some right or the submission to some duty. But it does not follow that the Rule of Court in question confers jursidiction upon the Court to make declarations of right in regard to every matter that a member of the community chooses to bring before it. No Court has attempted to lay down all the circumstances under which and all the occasions upon which a declaratory order will be made. It has, however, been laid down in many cases that the making of such orders is a matter of discretion - a discretion which, of course, must be exercised judicially - and that the jurisdiction must be exercised cautiously. It is only binding declarations that can be made. That must mean a declaration that is binding upon some one else who can, and who, in the opinion of the Court, ought to be bound. The limitation upon the exercise of the jurisdiction has been referred to in many cases; but I need mention only one or two of these. In the leading case of Dyson v. Attorney General [1911] 1 KB 410, Cozens Hardy M.R. said (at p. 417): ‘But I desire to guard myself against the supposition that I hold that a person who expects to be made defendant, and who prefers to be plaintiff, can, as a matter of right, attain his object by commencing an action to obtain a declaration that his opponent has no good cause of action against him. The Court may well say: “Wait until you are attacked and then raise your defence,” and may dismiss the action with costs.’ This observation was referred to with approval by Swinfen-Eady M.R. in the case of Clay v. Booth [1919] 1 Ch. 66. He said in that case (p. 78) that ‘The petitioners have not been attacked. No claim has been made against them; but they launched these proceedings to have it determined that some one who has not made a claim and who has not asserted any right, has no claim and no right. In my opinion they are not entitled to do that.’ Both Duke L.J. and Eve J. made observations to the same effect. Now, in the present case I may express my own personal opinion that the purpose and objects of the League of Youth as set out in the statement of claim are admirable and no exception could be taken to them by any normal person. But the same can be said about the Ten Commandments or any other rule which regulates human conduct. The plaintiffs on the very day on which the League of Youth was constituted and its formulary framed, proceed to issue a writ to have it declared that the organisation was lawful and its principles unexceptionable. I do not think that under the circumstances I have jurisdiction to make any such declaration; if, however, I am wrong in that view and if I have jursidiction then I think that I ought to exercise the discretion that I undoubtedly have and that I ought to dismiss the action on that ground.” 47. The defendant appealed to the Supreme Court, arguing that, while the jurisdiction of the High Court to grant declaratory relief is clear, as is the discretionary nature of that jurisdiction, there is no precedent for granting a declaration as to rights and obligations deriving from a planning permission since, by enacting s. 5 of the Planning and Development Act 2000, the Oireachtas plainly intended that such issues should be exclusively determined by the planning authorities or the Board. The defendant argued that this intention could be discerned from the terms of s. 5 of that Act, which allows a declaration to be sought from the relevant planning authority - subject to review by An Bord Pleanála - concerning what is, or is not, development or exempted development in a given case and from the abolition by the same statute of the previously existing right of appeal from An Bord Pleanála to the High Court. 48. In a judgment with which Murray and McGuinness JJ concurred, Keane C.J. addressed that argument in the following terms (at pp. 637-8):
30. Henchy J., delivering the judgment of this court in Tormey v. Ireland [1985] I.R. 289, said that where parliament committed certain matters or questions to the jurisdiction of the District Court or the Circuit Court, the function of hearing and determining those matters and questions might, expressly or by necessary implication, be given exclusively to those courts. In Criminal Assets Bureau v. Hunt [2003] 2 IR 168, I made the following observations at p. 183 as to how that principle might be applied to tribunals and bodies other than courts:- ‘There is today in existence a huge range of tribunals and other bodies, of which the appeal commissioners in revenue cases are just one example, which determine matters in controversy between parties and whose functions and powers are properly categorised as “limited functions and powers of a judicial nature” [within the meaning of Article 37.1 of the Constitution]. It is not uncommon for the legislation establishing such tribunals to provide for a limited form of appeal to the High Court from its decisions, usually confined to questions of law. However, in every case, the High Court retains its power under the Constitution to determine whether such bodies have acted in accordance with the Constitution and the law and such a jurisdiction cannot be removed from the High Court by statute. Subject to that qualification, it is clear, as was found in Tormey v. Ireland [1985] I.R. 289, that the Oireachtas may confer on such bodies, expressly or by implication, an exclusive jurisdiciton to determine certain issues.’
(i) Who is a data controller? 49. S. 1(3A) of the DPA provides that “[a] word or expression that is used in this Act and also in the Directive has, unless the context otherwise requires, the same meaning in this Act as it has in [Directive 95/46].” This provision impels a teleological or schematic approach to the construction of the term “data controller” which is common to the DPA and the Directive. 50. Directive 95/46 defines “data controller” to mean:
52. On behalf of the company, the liquidators place strong reliance on the terms of clause 11.1 of the proposed contract between the company and SJH whereby those parties agree that, from the date of transfer, SJH is to act as data controller of the records in place of the company. The liquidators further rely on the terms of Recital B at the commencement of the proposed contract whereby the company and liquidators record their willingness to permit SJH to assume sole and exclusive responsibility for the provision of the services concerned, which services are defined in Schedule 1 to the proposed contract to include that of dealing with the obligations of data controller, subject to the terms of the contract. Of course, one of the terms of the proposed contract, set out in clause 4, is that the company reserves to itself the right to access and retrieve, on reasonable notice, the original or a copy of any record it may reasonably require, to the extent reasonably required to take action in respect of any costs, claims, damages, losses, expenses and liabilities arising as a result of, or in connection with, the liquidation of the company. 53. It seems to me that very limited weight can be given to the provisions of inter-company agreements concerning who is to be designated “data controller”, or to assume sole and exclusive responsibility as such, unless that designation and characterisation are each entirely consistent with the answer to the question whether the relevant entity does indeed exercise sole and exclusive control of the contents and use of the personal data concerned. In other words, it is the position in fact that must prevail over any such contractual designation or characterisation. 54. This point is well made in Kuner European Data Protection Law, Corporate Compliance and Regulation, 2nd ed., Oxford 2007 (at pp. 72-3, paras. 2.26-27):
However, it is not recommended to attempt to ‘fine tune’ the designation of data controllers by the use of intra-company agreements and other mechanisms designed to demonstrate to the outside world that the controller is or is not a particular entity, if these designations do not really fit the facts. In a dispute, the [relevant national data protection authorities] tend to look behind any legal fictions which companies have constructed, and concentrate on the facts of how control is actually exercised. For example, concluding a contract in which one party is designated as data controller and the other as data processor will be an indication of their roles, but will not be determinative.” 56. The liquidators’ submissions are disarmingly candid on this point in observing that, in the absence of a declaration that the company is not a data controller in relation to the records, there is a risk under the proposed contract that the company could continue to be construed as the data controller of the records with SJH construed as a data processor on its behalf. But, of course, if the position in fact requires that the company should be so considered by reference to the proper definition of “data controller” in EU and Irish law, as applied to the arrangement actually operated between the company and SJH, then it would be entirely wrong (indeed, unlawful) to grant a declaration to the contrary merely to save the company from the consequences (primarily, the expense) that would otherwise follow. The Court has no discretion to disapply either Irish or EU law in pursuit of a more cost effective company liquidation process, desirable and all as that object may otherwise be. 57. On this fundamental question of fact, the liquidators went on, by necessary implication, to argue that, once the transfer of the records is complete, the company will no longer “determine the purposes and means of processing” or “control the contents and use” of the personal data contained in the records, despite the fact that, under clause 4 of the proposed contract, the company reserves to itself the right to access and retrieve, on reasonable notice, the original or a copy of any record it may reasonably require (and, by necessary implication, the personal data contained in every such record), to the extent reasonably required to take action in respect of any costs, claims, damages, losses, expenses and liabilities arising as a result of, or in connection with, the liquidation of the company. 58. The liquidators contend that this is so because, as they argue, on a proper construction of clause 4 of the proposed contract, SJH is to be to the sole and exclusive arbiter of the following questions: whether SJH is required to provide the company with access to, and allow it to take a copy of, a given record, as one that the company “may reasonably require”; whether SJH is required to allow the company to take possession of any given original record as one “reasonably required [by the company] to take action in respect of any costs, claims, damages, losses, expenses and liabilities arising as a result of or in connection with the liquidation; and whether SJH has been provided by the company with “reasonable notice” of any such requirement. 59. Despite the fact that the company is to have a contractual entitlement to retrieve the original, or take a copy, of any of the records transferred to SJH at any time, the liquidators submit that the requirement of reasonableness associated with that entitlement is so fundamental a qualification upon it that the company is left with only “a limited right of access” to the records. With commendable frankness, the liquidators then concede that the existence of even this - as they contend, ‘limited’ - right of access to the records on the part of the company, creates a risk, as they put it, that the company remains a data controller. Thus, they submit, a declaration should be made that the company is not a data controller in order to give precedence to the express wording of the contract and the clear intention of the parties to that effect, over the applicable statutory definition, which - the liquidators appear to acknowledge - might otherwise result in a finding that the company is, indeed, a data controller. 60. For reasons I hope will become clear, I do not propose to address in the present judgment of any the following questions: whether the relevant clause properly construed means that SJH - a public hospital - has agreed to determine what records are reasonably required by the company’s liquidators for the purposes of the company’s liquidation; whether, if SJH has so agreed, it is in any position to make that determination; and whether, if both of those things are so, that would make SJH, to the exclusion of the company, the sole entity determining the purpose and means of processing, or the sole entity controlling the contents and uses of, the relevant personal data contained in those records, thus rendering SJH sole data controller of that data. 61. The position adopted by the DPC on this issue is, in my view, a surprising one, in that it seems to entail an acceptance of the proposition that the effect of the proposed contract will be, in the first instance, to render SJH sole data controller of the personal data contained in the records, once the records are transferred. The DPC submits that this is so because “if the personal data has been transferred to SJH, and SJH is effectively controlling the use of the personal data, then so far as the [DPC] is concerned it de facto will be the data controller.” It seems to me that the qualification just quoted deprives the DPC’s support for the liquidators’ application of any real force, since the issue of “effective control” of the contents and use of personal data is at the core of the definition of data controller, both de facto and de jure. Again, for reasons that I will come to later, I do not believe it is appropriate to purport to determine that factual question in the context of the present application. 62. One possible explanation for the stance adopted by the DPC as just described is the suggestion contained in the written submissions furnished on her behalf that the present application presents the stark alternatives that either SJH is to become sole data controller of the personal data contained in the relevant records or that those records (and the personal data contained in them) are to be “simply destroyed as a consequence of the liquidation.” The DPC submits that, for this reason, the Court might consider exercising a jurisdiction to make the declaration sought derived from the protection of “the fundamental rights and freedoms of natural persons and, in particular, their right to privacy with respect to the processing of personal data” identified in Article 1(1) of Directive 95/46 as one of the objects of that directive. 63. There are a number of reasons, by reference to the evidence presently available to the Court, why the characterisation of the situation as presenting a stark choice of that kind appears to me to be incorrect. 64. First, although the proposed contract recites that SJH is to “act as data controller of the records in place of [the company],” there is nothing to suggest that the willingness of SJH to assume the relevant obligation as data controller of the relevant personal data for an indefinite term on receipt of an agreed payment is contingent upon the liquidators’ repudiaton of any role as joint data controller. Certainly, it has never been suggested to the Court that SJH would be unwilling or unable to enter into an agreement similar to that now proposed but which does not express the position of SJH as data controller to be exclusive. 65. Second, the liquidators have informed the Court, through Counsel, that they currently take the view that they will not be able to apply for the dissolution of the company for a period in the region of a further eighteen or twenty years in deference to advice they have received concerning the operation of the Statute of Limitations as it affects potential claims by persons who were born in the hospital but who have not yet attained their majority. 66. Third, the company has acknowledged that it will be a data controller in respect of “the existing claims personal data” and “the wind-down period personal data” contained in the original medical records that it now proposes to retain rather than transfer under the proposed agreement. Obviously, there is no suggestion of the imminent destruction of any of those records or of the personal data they contain. It is therefore difficult to see why the remainder of the records should be treated differently in the event that SJH is not declared to be the sole data controller in respect of them. 67. Fourth, the alternatives presented by the liquidators on behalf of the company are not those of the transfer of the records to SJH as sole data controller, on the one hand, or the destruction of the records, on the other. They are those of incurring the costs associated with the implementation of the proposed contract, on the one hand, or incurring the more significant cost associated with retaining possession of the records and continuing to act as sole data controller of the personal data they contain, on the other. 68. Accordingly, there is no reason to believe that the only alternative to an arrangment whereby SJH is deemed sole data controller of the records is the destruction of the records (and of the personal data they contain) by the company, thereby engaging the fundamental rights and freedoms of the former patients whose personal data is contained in those records and, in particular, the right of such persons to privacy with respect to the processing of personal data. On the contrary, as will be addressed at greater length below, there is, to put it no further, an argument to be made that the invocation of the relevant rights of those former patients as data subjects militates against the grant of a declaration that would, on one view, impermissibly limit those rights by wrongly restricting the range of persons, as data controllers, against whom they may be lawfully exercised. 69. In the circumstances just described, a question arises concerning the whole basis upon which the DPC has concluded that the present application, in the context of the transfer envisaged, represents “a reasonable, practical, proportionate and well thought out solution to a difficult problem,” particularly since, in neither her correspondence nor the written submissions furnished on her behalf does the DPC describe the nature of the problem as she perceives it. 70. In their written submissions, the liquidators identify the primary purpose for which they may require to access or retrieve any record transferred under clause 4 of the proposed contract as that of enabling them (or their insurers) to deal with any claim against the company that may be notified to them in future. The liquidator’s point out in those submissions that, as one might expect, they have an obligation to co-operate with the company’s insurers in the defence of any such claim. They continue by noting that access to the personal data in the transferred records may be required as part of the process of debt collection, before acknowledging that there may also be other circumstances of which they are presently unaware that may require access to those data. 71. Were the liquidators to obtain a declaration to the effect that SJH is the sole data controller of the personal data contained in the records or that the company is not the data controller of those data, then, as both the company and the DPC acknowledge, that would create obvious difficulties under ss. 2, 2A, 2B and 2D of the DPA in respect of the release of that personal data by SJH to the company in that, having escaped all of the obligations of a data controller, the company would also have lost all of the entitlements of one. 72. It is for this reason that the liquidators seek a further declaration in the following terms:
… (e) required …by order of a court.”
76. Before leaving the issue of the identification of the data controller of the personal data contained in the records, consideration must be given to a recent decision of the Chancery Division of the High Court of England and Wales that was helpfully drawn to the Court’s attention by the DPC. In Re Southern Pacific Personal Loans Limited [2013] EWHC 2485 (Ch), Richards J. was asked to consider whether the liquidators of a company should be viewed as data controllers of certain data either jointly or in common with the company in liquidation. 77. Three separate aspects of that case strike me as noteworthy. The first is that the High Court invited the Information Commissioner (the equivalent in that jurisdiction of the DPC) to appear and make representations on the liquidators’ application for the determination by the court of certain questions under s. 112(1) of the Insolvency Act 1986, a procedural step very similar to that which I took in this application by directing that the DPC be joined as a party to it. 78. In order to consider properly the second noteworthy aspect of that case, it is necessary to briefly consider the facts. The company was a member of the Lehman Brothers group of companies and entered creditors’ voluntary liquidation in 2012, resulting in the appointment of the applicants as liquidators. The company’s business comprised the provision of personal loans to individuals resident in Great Britain, although it ceased making loans in 2007. The position concerning the borrower personal data processed by the company was summarised by Richards J. as follows:
7. From 2006 the data in question was stored with a loan servicing company called Acenden Limited (Acenden), which is also a member of the Lehman group. Acenden performed various servicing activities in respect of loans made by the company. They included dealing with customer enquiries, monitoring and collecting loan repayments, initiating legal actions for loans in default, handling complaints, producing annual statements and quarterly arrears statements, retaining records of mortgage files and correspondence and processing data subject acccess requests (DSARs) made under the DPA. It was a ‘data processor’ for the purposes of the DPA and was and remains registered as such.” 80. The third noteworthy aspect of that case relates to the conclusion of Richards J. that the liquidators of the company concerned were not data controllers for the purposes of the relevant legislation in that jurisdiction. While, of course, no such issue arises as between the liquidators and the company in this case, it is interesting to consider that, in reaching that conclusion, Richards J. placed significant emphasis on the company’s ownership of the intellectual property rights in the relevant data, so that, in exercising any such rights in the course of the liquidation, the liquidators would be acting as the agents of the company, rather than exercising control of the data on their own behalf. Whether the position is different where, as in this case, the liquidators have been advised that the medical records containing the ‘wind-down period personal data’ form part of the liquidators’ books for the purposes of s. 57 of the Company Law Enforcement Act 2001 and that, accordingly, they must retain those records to comply with that provision, is another question that need not be addressed, much less resolved, in the context of the present application. (iii) Is there a proper contradictor? 81. As already noted, in the Transport Salaried Staff’s Association case, having qualified the dictum of Lord Denning in Pyx Granite Co. Ltd to the effect that the discretion to make a declaration may be exercised if there is good reason for so doing with the words “provided, of course, that there is a substantial question which one person has a real interest to raise and the other to oppose,” Walsh J. went on to cite, with evident approval, the comment of Viscount Kilmuir L.C. in Vine v. The National Dock Labour Board that an applicant “must be able to secure a proper contradictor, that is to say, some one presently existing who has a true interest to oppose the declaration sought.” 82. The present application has been brought on notice to the company’s preferential creditors, who are the Revenue Commissioners and the Department of Social Protection. It need hardly be pointed out that they have no true interest in opposing it, since any significant limitation of the company’s obligations as data controller holds out the prospect of a significant potential saving in the expense of the liquidation and, in consequence, creates the expectation of a larger distribution to each of those creditors at its conclusion. Neither of those preferential creditors is an affected data subject. 83. SJH has not been made a notice party to the application. That is perfectly understandable because, although one of the alternative forms of declaration sought by the liquidators is that SJH will become the sole data controller of the personal data contained in the records with effect from the date of transfer, SJH has already confirmed its willingness to enter into the proposed contract with that object. It may well have been felt that to make SJH a party to the application in those circumstances would simply have entailed an unnecessary expense in the liquidation. Certainly, SJH would have no true interest in opposing the liquidators’ application in light of the commercial benefits accruing to it under the proposed contract and the fact that it is not an affected data subject. 84. It was in these circumstances that I directed that the DPC be joined as a notice party to the application, in order that there might be a legitimus contradictor in respect of an application plainly capable of impinging upon the data protection rights of any and each person who is a member of that large class whose patient medical records are held by the company. Since the liquidators estimate that the records held by the company relate to approximately 118,000 patients and date back to circa 1946, it is plainly unrealistic to put each of the persons concerned on notice individually. 85. While I am grateful for the assistance provided by the DPC, it must be acknowledged that, as has been pointed out in correspondence sent to the liquidators on her behalf, she has no statutory power to pre-authorise or approve an arrangement such as that represented by the proposed contract that forms the basis for the present application. Nor does she have the level of knowledge of the underlying facts possessed by the liquidators or, indeed, available to the Court, as I believe the preceding paragraphs of this judgment demonstrate. To that extent, I fear that I may have placed the DPC in an invidious position in attempting to assign to her the role of legitimus contradictor in respect of an application concerning a question that, in the words of the submission furnished on her behalf, “is one of fact, i.e. does [the company] control the contents and/or use of the relevant personal data.” (iv) Jurisdiction to make a declaration 86. Having now had an opportunity to consider the relevant law, I do not doubt that I have jurisdiction in principle to make a binding declaration of right in an appropriate case. That jurisdiction is expressly conferred by O. 19, r. 29 of the RSC and is underpinned by Article 34 of the Constitution. 87. Quite separately (and, in view of the breadth of the jurisdiction already identified, perhaps superfluously), the liquidators rely upon the provisions of s. 280 of the Companies Act 1963 whereby:
(2) The court, if satisified that the determination of the question or the required exercise of power will be just and beneficial, may accede wholly or partly to the application on such terms and conditions as it thinks fit or may make such other order on the application as it thinks just.” 88. As the passage from the judgment of Johnston J. in Blythe & Ors. v. Attorney General (No. 2) quoted earlier in this judgment confirms, it is only a binding declaration that can be made, and that means a declaration that is binding upon some one else who can, and who, in the opinion of the Court, ought to be bound. 89. Now, in this case I am quite satisfied that the rights most obviously capable of being affected by the declarations sought are the data protection rights conferred upon data subjects by the DPA. In very general terms, the rights concerned comprise the right of a person to access his or her own personal data held by a data controller, the right to require the rectification of any error in that data, and the right to object to the processing of that data in certain defined circumstances. 90. To declare that a person is not a data controller, as that term is defined under s. 1 of the DPA, in respect of the personal data relating to any data subject, is to make a binding determination that the data subject concerned has no data protection rights as against that person. Both s. 1 of the DPA and Article 2 of Directive 95/46 make it clear that the role of data controller in respect of any given personal data is not a singular one; it is perfectly possible for different persons to control the same personal data jointly. 91. The question of whether a person is a data controller is primarily a question of fact, conditioned by the application of the definition contained in the DPA. There is no scope to substitute a rights balancing test for the application of that definition, such as that whereby necessary processing for the purposes of the legitimate interests of a company is permitted under s. 2A(1)(d) of the DPA, except where it “is unwarranted in any particular case by reason of prejudice to the fundamental rights and freedoms or legitimate interests of the data subject.” 92. For those reasons, I must reject the argument, implicit in the liquidators’ submissions, that the relevant data subjects’ rights will be “fully protected” if the Court makes the various declarations sought, “as at no point will the patients’ medical records be in the hands of an entity which is not a data controller and which has not registered as a data controller with the [DPC] and is regulated as such.” While it is true that, under the terms of the proposed contract, it should be possible to determine which of the parties to it considers itself sole data controller of any given personal data at any given point in time, that does not necessarily amount to full protection of the data protection rights of each of the data subjects concerned. To accept the company’s submission in that regard would be to confuse what it evidently considers either “adequate protection” or “sufficient protection” for data subjects with the full statutory protection to which every data subject is entitled. The rights concerned are statutory in nature and derive from European Union Law. Under the DPA, a data subject can assert data protection rights against any or all data controllers of the same personal data. The Court has no discretion either to artificially delimit the number of persons against whom those rights can be asserted or to nominate only certain persons within that definition for that purpose. 93. On behalf of the DPC it was submitted that the Court might consider making the first declaration sought in the following amended form (with the suggested amendments shown in italics):
94. It seems to me that there are two principal problems with that submission. The first is that the whole conceptual framework of the DPA appears to me to be entirely inconsistent with the proposition that a person can be a data controller of the same personal data relating to the same data subject as against some persons but not as against others. Differently put, the whole legal significance of the term data controller derives from the legal relationship it connotes between such persons and those persons whose personal data they control. The term has no meaningful application to the relationship between a data controller and a third party. 95. The second problem is that it seems to me unlikely that the company would be content with a declaration in the terms sought, i.e. one that is effective against SJH but not against any of the affected data subjects, in circumstances where any such declaration would be devoid of any practical benefit or advantage for the company. After all, were it possible to make such an order binding solely as between the company and SJH (but not as between the company and any data subject), it would merely replicate the enforceable private law obligations between the company and SJH that the proposed contract is designed to establish. 96. For those reasons, I do not think it would be either right or proper to make a declaration in those terms. (vi) Principles governing the discretion to make a declaratory order 97. In Blythe, Johnston J. also acknowledged that the making of a declaratory order is a matter of discretion - albeit one which, of course, must be exercised judicially - and that no court has attempted to lay down all the circumstances under which and all the occasions upon which a declaratory order will, or will not, be made. 98. Even so, it appears to me that some principles relevant to the exercise of the Court’s discretion in the present case do emerge from the jurisprudence. 99. First, as the Transport Salaried Staff’s Association case establishes, the person raising the question upon which the Court is invited to make a binding declaration of right must be able to secure a proper contradictor, being a presently existing person with a true interest in opposing the declaration sought. Despite the participation of the DPC at the Court’s direction, no such proper contradictor has been secured in this case 100. In arguing that the Court should nevertheless be prepared to make a binding declaration, the liquidators point to a particular form of order that has been made by this Court in cases involving the transfer of personal data in the broader context of the transfer of insurance business or credit institution business, which they submit establishes a precedent - in practice, if not in principle - for the orders they now seek. However, while, in relevant part, two such orders produced to me direct the transfer of personal data between legal persons or declare the recipient of such data as “the data controller” of such data for the purposes of the DPA, I could not find in either of them a declaration comparable to that now sought whereby an entity is declared not to be the data controller of particular personal data or another entity is declared to be the sole and exclusive data controller (as opposed to merely “the data controller”) of it. 101. Moreover, without having been apprised in any detail of the underlying facts or circumstances of the cases in which those orders were made, it seems clear to me that each involved a genuine transfer of the control of certain insurance or financial business (and of the personal data relevant to that business) between entities. In this case, no business is being transferred, although it is hoped to transfer the statutory role and administrative responsibility of data controller in respect of certain personal data held by a business in liquidation to another entity through the mechanism of a declaratory order to that effect. 102. A second relevant principle, acknowledged by the Court in Blythe, is what the authors of Hogan and Morgan, Administrative Law in Ireland (4th edn., Dublin, 2010) (at 911) identify as the requirement of ripeness. Although the records containing the personal data at issue here have not yet been transferred because the proposed contract has not yet been executed (pending the outcome of the present application), as in Blythe, in this case the applicants seek a binding declaration that persons who have not yet attempted to exercise a particular right or power can have no entitlement to do so in the future. 103. After the Court drew its concerns in that regard to the attention of the parties, it was submitted on behalf of the DPC that the decision in Blythe was not so much based on lack of ripeness as it was on the principle that the Court should not act in vain. While, as a matter of legal and constitutional history, decisions such as the contemporaneous one of the Supreme Court in State (Ryan) v. Lennon [1935] I.R. 170 serve to illustrate the far reaching ‘special powers’ that were conferred on the Executive Council under Art. 2A of the Free State Constitution, as inserted by the Constitution (Amendment No. 17) Act, 1931, and while one might speculate counterfactually about the legal effect of the declaration sought in that case, had it been made, if met by a conflicting order of the Executive Council, had one subsequently issued, no such analysis or speculation is to be found in the decision of Johnston J. It seems to me that that the kernel of the decision is more correctly formulated, as it is by Hogan and Morgan, in the following terms: “The present case was premature and Johnston J. considered that the case was not a proper one for the exercise of his discretion.” 104. A third relevant principle is one that I distill from the decision of the Supreme Court in Grianán an Aileach Interpretative Centre Company Limited v. Donegal County Council (No. 2) [2004] 2 IR 625. As I have already noted, in that case the Court identified an approach adopted by the courts in recent years to legislation conferring jurisdiction in particular areas on courts and bodies other than the High Court. That approach acknowledges that, in light of the modern proliferation of tribunals and other bodies exercising powers and functions properly categorised as “limited functions and powers of a judicial nature” [within the meaning of Article 37.1 of the Constitution], it is clear that the Oireachtas may confer on such bodies, expressly or by implication, an exclusive jurisdiciton to determine certain issues. 105. Having pointed out that it is not uncommon for the legislation establishing such tribunals to provide for a limited form of appeal to the High Court from its decisions, usually confined to questions of law, Keane C.J. reiterated that, in every case, the High Court retains its power under the Constitution to determine whether such bodies have acted in accordance with the Constitution and the law and such a jurisdiction cannot be removed from the High Court by statute. Subject to that qualification, it is clear that the Oireachtas may confer on such bodies, expressly or by implication, an exclusive jurisdiction to determine certain issues, to the exclusion of the High Court, at least where the allocation of jurisdiction otherwise would be overlapping and unworkable (per Henchy J. in Tormey v. Ireland [1985] I.R. 289 at p. 295. 106. In this case, faced with that authority, the DPC, through her Counsel, disavows any suggestion that the ‘enforcement of data protection’ functions allocated to her by the Oireachtas under s. 9 of the DPA - broadly comprising a power to investigate any alleged contravention of the DPA; a power to render decisions in writing in that regard (subject to a right of appeal to the Circuit Court, and a further right of appeal to this Court on a point of law); and a power to issue enforcement notices - should be viewed as conferring upon her an exclusive jurisdiction to make decisions concerning any alleged contravention of the DPA. In adopting that position, the DPC points to the provisions of s. 7 of the DPA whereby a duty of care owed by a data controller or data processor to a data subject is expressly recognised for the purpose of the law of torts, to the extent that it is not already provided for under the common law. 107. S. 7 removes any doubt that there might otherwise have been that there is a right to claim damages in proceedings before the courts for breach of a duty of care owed to a data subject by a data controller or data processor. To that extent, it is plain that the jurisdiction conferred upon the DPC by the Oireachtas to determine certain issues under the DPA is not an exclusive one. 108. However, the fact that this Court has jurisdiction to deal with actions in tort alleging the breach of a duty of care recognised under the DPA does not mean that it should not be alert to the potential problems that the exercise of its discretion to make declaratory orders might create in that context. There seems to me to be a clear danger of overlapping and unworkable jurisdictions, were I to consider making orders determining the future rights of data subjects in proceedings to which those persons are not party, thereby depriving them of any meaningful right to make a complaint to the DPC concerning the company’s processing of their personal data; to have that complaint investigated by the DPC; to have a decision made upon it, subject to a right of appeal to the Circuit Court and, on a point of law, to this Court; or to have any decision in their favour ultimately enforced by the DPC. Indeed, were I to make the declarations now sought, they would have the further obvious effect of adversely predetermining any claim in tort that might later be brought by any data subject against the company, as data controller, for breach of the duty of care recognised by s. 7. 109. One final authority that was drawn to my attention by Counsel for the DPC is the decision of this Court (per Charleton J.) in the case of EMI Records (Ireland) Ltd & Ors v. Eircom Ltd [2010] 4 IR 349. At first glance, that case appears to offer some support for the stance adopted by both the liquidators and the DPC on the present application, in that the Court there was prepared to rule on a number of questions which, on one view, were capable of determining the future data protection rights of data subjects who were not a party to those proceedings. But there are a number of significant distinctions between that case and the present one. 110. The first distinction is that one of the primary conclusions reached by Charleton J. was that the data at issue in that case was not personal data at all for the purposes of the DPA, such that the relevant provisions of the DPA were simply not engaged. In that context, the issues in that case seem to me to be conceptually closer to those that arose in Pyx Granite Company Ltd.,, which Keane C.J. was careful to distinguish in Grianán an Aileach Interpretative Centre Company Limited v. Donegal County Council (No. 2) [2004] 2 IR 625. The second distinction is that the proceedings did not involve the invocation of the jursidiction to make declaratory orders but, rather, the resolution of a number of questions that arose in respect of the implementation of a settlement agreement in civil proceedings between certain copyright holders and a particular internet service provider in respect of the unauthorised copying and sharing of copyright material. Third, none of the central issues that I have been obliged to consider in the course of the present application appear to have been presented to Charleton J. in the context of those proceedings. As O’Neill J. observed in Coffey v. Tara Mines [2008] 1 IR 436, ‘[i]t is a well settled principle of our system of jurisprudence that what is not argued is not decided.” Conclusion |