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THE HIGH COURT

COMMERCIAL

[2019] IEHC 639

[2016 No. 5037 P.]

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 PROJECT

MANAGEMENT LIMITED, EOGHAN KEARNEY, CARROWMORE PROPERTY LIMITED,

CARROWMORE PROPERTY GARDINER LIMITED and CARROWMORE PROPETY

GLOUCESTER LIMITED

DEFENDANTS

JUDGMENT of Mr. Justice David Barniville delivered on the 11th day of September,

2019

Introduction

This is my judgment on a number of motions in relation to discovery issued as between

the plaintiffs and the defendants in this long running and fiercely contested case. Although the

proceedings were commenced in June, 2016 and entered in the commercial list shortly

thereafter, and although discovery orders were initially made in February, 2017, the parties are

still in dispute in relation to various aspects of the discovery made by each other. Those motions

came on for hearing before me on 19th July, 2019. The case itself is listed for hearing on 14th

January, 2020.

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There are three motions concerning discovery which are dealt with in this judgment.

The first two have been brought by the plaintiffs as against the defendants. The third has been

brought by the defendants.

In the first motion the plaintiffs seek an order directing the defendants to make further

and better discovery of certain documents. That motion was issued on 20th February, 2019 and

was initially returnable for 25th February, 2019. It was adjourned from time to time to enable

affidavits to be exchanged and was ultimately compromised by means of a settlement

agreement made on 11th April, 2019 on foot of which the court (Haughton J.) made certain

agreed directions. The plaintiffs contend that the defendants have failed to comply with those

directions and have re-entered the motion.

The second motion was issued by the plaintiffs on 25th June, 2019 and was initially

made returnable for 1st July, 2019. That motion seeks additional discovery arising from the

joinder of the seventh and eighth defendants (Carrowmore Property Gardiner Limited and

Carrowmore Property Gloucester Limited) on foot of an order made by the High Court

(McDonald J.) on 6th February, 2019 which also permitted the plaintiffs to amend their

statement of claim to include certain additional matters. On the day after that motion was

issued by the plaintiffs, the defendants’ solicitors, Crowley Millar, agreed that the defendants

would make the further discovery sought by the plaintiffs in the second motion and would

furnish an affidavit of discovery to be sworn by Patrick Cox, the first defendant, by 9th August,

2019. An outstanding issue does arise in relation to the second motion in that the plaintiffs also

seek an order directing the seventh and eighth defendants to explain on affidavit the

methodology adopted by them in making the discovery which they have now agreed to make in

circumstances where Mr. Cox, the first defendant, swore an affidavit on 30th May, 2019

confirming that the seventh and eighth defendants had no documentation to discover on foot of

the plaintiffs’ request save for the documents which had already been discovered by the other

defendants in the proceedings.

The third motion is a motion brought by the defendants in which the defendants seek

an order for further and better discovery against the plaintiffs in respect of two categories of

documents which the defendants contend ought to have been discovered by the plaintiffs on

foot of an order made by the court (McGovern J.) on 11th July, 2017. The circumstances in

which that order was made and in which the defendants now seek further and better discovery

from the plaintiffs are somewhat complicated and will require to be addressed in some detail

when I come to considering the third motion in the course of this judgment.

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Before considering each of the motions, in the order in which I have just indicated, it is

appropriate that I first sketch out the substantive case being advanced by the plaintiffs and the

basis on which it is being defended by the defendants. I will then briefly outline the relevant

legal principles applicable to applications for further and better discovery which arise, in

particular, in relation to the first and third motions. In addition to those legal principles (on

which there was little, if any, difference between the parties), certain other legal issues arise in

respect of the various motions which I will consider separately when dealing with the motions

themselves. Having set out those general legal principles applicable to applications for further

and better discovery, I will then consider each of the motions in turn. Having done so, I will set

out in my conclusions the orders I propose to make in relation to each of the motions.

The proceedings

The plaintiffs, property development companies variously registered in Ireland, England,

Wales and Jersey, claim that three former employees of the plaintiffs or other entities within the

O’Flynn Group of companies, namely, the first, third and fifth defendants, Patrick Cox, Liam

Foley and Eoghan Kearney (the “personal defendants”) have acted in breach of their respective

contracts of employment and in breach of other duties in various respects. In very brief

summary, it is alleged that Mr. Cox actively competed with the plaintiffs and concealed and

diverted significant investment opportunities for his own benefit or for the benefit of the other

defendants and appropriated or failed to return and used a substantial amount of confidential

documentation relating to the business of the O’Flynn Group. It is further alleged that Mr. Foley

and Mr. Kearney appropriated or failed to return and may have used such confidential

documentation themselves for the benefit of companies of which they are directors and ultimate

beneficial owners, namely, the sixth, seventh and eighth defendants, Carrowmore Property

Limited, Carrowmore Property Gardiner Limited and Carrowmore Property Gloucester Limited.

It is alleged that Mr. Cox acted in breach of contract and in breach of duty by failing to

disclose certain commercial opportunities to the plaintiffs and diverted those opportunities for

the benefit of the defendants and appropriated and retained certain confidential information.

One such alleged commercial opportunity was a student accommodation project at Gardiner

Street in Dublin (the “Gardiner Street Project”). The plaintiffs make various claims against Mr.

Cox in relation to that project. The plaintiffs claim that Mr. Foley and Mr. Kearney, whom it

alleged are former employees of the O’Flynn Group, acted in breach of contract and in breach of

duty by appropriating and retaining certain confidential documentation, the property of the

plaintiffs, although at the time of the original statement of claim, it was stated that the plaintiffs

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were unaware as to the use to which the documentation was put by those defendants. The

plaintiffs also allege that the defendants conspired to injure the plaintiffs as a result of which it

is alleged the plaintiffs suffered loss and damage. In addition to declarations and damages, the

plaintiffs also seek an account of profits allegedly made by the defendants on foot of the

commercial opportunities allegedly concealed from the plaintiffs and diverted to the defendants.

The defendants delivered a very full and comprehensive defence in October, 2016. That

defence raised a series of preliminary objections and a detailed denial of the plaintiffs’ claims. Of

significant relevance to the third motion the subject of this judgement, the defendants advanced

as one of their preliminary objections, at para. 4(ii) of the defence, the following:-

“In the premises and/or insofar as any of the claims herein related to any acts,

omissions and/or decisions which were prohibited by NAMA and/or any

relevant legislative provisions and/or which were not disclosed to NAMA in

accordance with statutory obligations in that regard and/or in respect of

which the consent of NAMA was not obtained and/or such acts, omissions

and/or decisions were not in accordance with the restrictions imposed by

NAMA and/or the provisions of any relevant legislative provisions:-

(a) The plaintiffs are not entitled to the reliefs claimed or to any

relief; and/or

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

claimed or any reliefs to the plaintiffs or any of them against

the defendants or any of them; and/or

(d) In the exercise of its discretion, the court should refuse to grant

the reliefs claimed or any relief;”

10. At para. 4(iii), it was pleaded that the defendants reserved the right to provide further

particulars in support of that objection following discovery including discovery concerning the

establishment of the plaintiff companies and the “totality of the information disclosed to NAMA

by the O’Flynn Group and/or the directors of the O’Flynn Group…”.

11. In supplemental replies to particulars dated 21st December, 2016, the defendants’ then

solicitors, McCann Fitzgerald, gave further particulars in relation to the matters pleaded at para.

4(ii) of the defence. They asserted that Victoria Hall Limited (an O’Flynn Group entity) disposed

of two valuable sites in Birmingham and Coventry by agreement with NAMA in 2012. It was

alleged that the O’Flynn Group informed NAMA (inter alia) that the first plaintiff (Victoria Hall

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Management Limited) or Victoria Hall Management (UK) Limited (both of whom were alleged to

be non-O’Flynn Group entities) may be involved in a management capacity with the sites

following their sale. It was asserted that Victoria Hall Limited sold the sites for approximately £1

million and that in advance of that sale Victoria Hall Management (UK) Limited and Grey Willow

Limited (the third plaintiff) attributed a value to the sites of more than £5 million. It was

asserted that subsequent to the sale, the sites were sold to a joint venture involving the third

plaintiff, in a transaction arranged by Michael O’Flynn and John Nesbitt. The defendants

contended that the joint venture acquired the sites for over £5 million which it was asserted

facilitated the third plaintiff realising capital from its joint venture partner and gaining a 10%

carried equity interest in, and the right to benefit from, a further profit share from the joint

venture. It was contended that the third plaintiff earned more than £10 million from the

subsequent sale of the developed sites in or about September – November, 2013. The

defendants asserted that Mr. Cox, the first defendant, assisted in structuring the joint venture in

question and that he sought and obtained reassurance from Mr. Nesbitt at the time that the

third plaintiff was not part of the O’Flynn Group or related to or associated with the O’Flynn

Group. The defendants contended that Mr. Nesbitt informed Mr. Cox in or about that time that

the entities developing the Birmingham and Coventry student accommodation projects (which

Mr. Cox understood to mean the first, third and fourth plaintiffs) were not part of or associated

with the O’Flynn Group and that he was requested not to disclose any information relating to

the business of those entities to the group finance director of the O’Flynn Group. It was further

asserted that Mr. Nesbitt informed Mr. Foley, the third defendant, in or about that time that the

Birmingham and Coventry student accommodation projects and the entities developing those

projects were not associated with the O’Flynn Group and also requested him not to discuss or

disclose any information related to those projects to the group finance director of that group.

The supplemental replies to particulars then went on to refer to various matters pleaded by the

plaintiffs in the pleadings concerning the ownership and control of a number of the plaintiff

companies by Mr. Nesbitt and Michael O’Flynn and to the plea that each of the plaintiffs is a

company associated with the O’Flynn Group.

12. As noted earlier, the defendants’ defence denies all of the allegations of breach of

contract and other wrongful conduct made against them in the statement of claim. The defence

contains detailed pleas in relation to the plaintiffs’ documentation and denies any wrongful

behaviour in relation to those documents (see, for example, paras. 18, 19 and 20 of the

defence). At para. 37 of the defence, the defendants make reference to a letter from Mr. Nesbitt

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dated 14th July, 2014 which it is contended, acknowledged and approved the entitlement of Mr.

Cox in his own right or through the second defendant, Rockford Advisors Limited, or any other

associated companies to engage in real estate or real estate activities in Dublin including the

acquisition, development and sale of land and the acquisition, redevelopment and sale of

residential or commercial investment properties and further that should any single project

related investment exceed expenditure of more than €500,000.00 by Mr. Cox or the other

entities referred to, Mr. Cox would inform Tiger Developments (the division of the O’Flynn Group

with whom Mr. Cox had his contract of employment) and seek approval which was not to be

unreasonably withheld. The defendants place reliance upon that letter and contend that the

opportunities pursued by Mr. Cox were in accordance with the terms of that letter.

13. The plaintiffs sought to join two additional defendants, the seventh and eighth

defendants and to amend their claim in a number of respects. The High Court (McDonald J.)

made an order on 6th February, 2019, allowing the amendments and joining the two additional

defendants. The joinder of the seventh and eighth defendants was sought by the plaintiffs on

the basis that it was contended that the proceeds of some or all of the commercial opportunities

allegedly concealed by and diverted to the defendants and, in particular, the proceeds of the

Gardiner Street Project have been or will be diverted to the seventh defendant. In the case of

the eighth defendant, it is contended that the proceeds of Phase 2 of the Gardiner Street Project

have been or will be paid to that defendant. Phase 2 of the Gardiner Street Project is

particularly relevant to the first motion addressed in this judgment. Among the most significant

amendments made to the statement of claim on foot of the order made on 6th February, 2019

were the following: First, the plaintiffs were permitted to refer to an assignment dated 15th May,

2017 under which Tiger Developments (now known as Carbon Developments Limited) assigned

to the plaintiffs all of its rights and benefits in the contract of employment with Mr. Cox (para.

23A of the amended statement of claim). Second, the amended statement of claim contained

detailed pleas in relation to the letter of 14th July, 2014 (the “July, 2014 letter”) (paras. 25A to

25I of the amended statement of claim). Essentially, it is pleaded by the plaintiffs that the letter

was sought by Mr. Cox for the purpose of permitting him to build a house without breaching his

contract of employment and that Mr. Nesbitt agreed to provide a letter for that purpose. The

plaintiffs contend that Mr. Cox misrepresented the purpose of the letter and failed to disclose

that he was seeking to acquire a development site and developing it for student accommodation

in Dublin. It is alleged, therefore, that the July 2014 letter was procured by misrepresentation

on the part of Mr. Cox. In the alternative, the plaintiffs claim that the Gardiner Street Project

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breached the terms of the letter in that the project related investment exceeded or will exceed

€500,000.00.

14. In their amended defence delivered on 21st March, 2019, the defendants dispute the

validity of the purported assignment of Mr. Cox’s contract of employment to the plaintiffs on

various grounds (paras. 33A and 33B of the amended defence). As regards the July 2014 letter,

the defendants deny the allegations made by the plaintiffs in relation to that letter. The

defendants plead that the letter did not relate to the building of a private dwelling house by Mr.

Cox but rather related to commercial investment and development opportunities and that the

opportunities pursued were in accordance with the terms of the letter.

15. The parties have been engaged in the discovery process since late 2016/early 2017 with

the initial orders for discovery in the proceedings being made in February, 2017. The discovery

process has been particularly contentious and has given rise to endless correspondence and

numerous applications to court culminating in the three motions which have now to be dealt

with it in this judgment. The case is listed for hearing on 14th January, 2020, more than three

and a half years after it was first entered in the commercial list and almost three years after

discovery was first ordered in the case. It is imperative that the discovery issues are brought to

a conclusion as soon as possible so that the parties can proceed to trial on the scheduled trial

date without further delay.

General legal principles on further and better discovery

16. There was no real difference between the parties as to the legal principles applicable to

applications for further and better discovery. Those principles were confirmed by the Supreme

Court in O’Leary v. Volkswagen Group Ireland Limited [2015] IESC 35 (“O’Leary”).

17. In her judgment for the Supreme Court in O’Leary, Laffoy J. approved of the following

summary of the circumstances in which it is appropriate to make an order for further and better

discovery set out by Kenny J. in Sterling Winthrop Group Limited v. Farbenfabriken Bayer AG

[1967] IR 97. Kenny J. summarised those circumstances as follows:-

“Such an order will not be made when the application is based solely on an affidavit

alleging that the other party has documents in his possession relevant to the action

which have not been disclosed by the first affidavit. The Court will, however, order a

further affidavit of documents when it is satisfied (a) from the pleadings, (b) from the

affidavit of discovery already filed, (c) from the documents referred to in the affidavit of

discovery, or (d) from an admission by the party who has made the affidavit of

discovery that the party against whom the order is sought has other documents in his

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possession relating to the issues in the action which have not been disclosed by the first

affidavit. The Court will also order a further affidavit when there are grounds, derived

from the documents discovered, for suspecting that there are other relevant documents

in the possession of the party who has made the affidavit or where there are reasonable

grounds for believing that the person making the affidavit of discovery has

misunderstood the issues in the case and has, in consequence, omitted documents from

it” (per Kenny J. at 100)

Kenny J. further summarised the position as follows:-

“The authorities which I have mentioned establish that the Court should not order a

further affidavit of documents unless it has been shown that there are other relevant

documents in the possession of the defendants or that the person making the affidavits

has misunderstood the issues in the action or that his view that the documents are not

relevant is wrong…” (per Kenny J. at 105)

18. That summary was approved by the Supreme Court in Phelan v. Goodman [2000] 2 IR 577

(“Phelan”) (as well as by that court in O’Leary). In Phelan, Murphy J. in the Supreme Court

considered two situations which frequently arise on applications for further and better discovery.

The first is where the deponent of the affidavit of discovery avers that the party ordered to

make discovery has documents but that they do not require to be discovered as they are

irrelevant. The second is where the deponent avers that the party required to make discovery

has no documents. Both those situations arise in the present case (and particularly in the first

and second motions).

19. As regards the first situation, Murphy J. quoted with approval the following passage

from the judgment of Finlay C.J. in Bula Limited (In Receivership) v. Crowley [1991] 1 IR 220

(“Bula”) where he stated:-

“I accept that a court should be satisfied, as a matter of probability, that an error has

occurred in an omission from an affidavit of discovery of documents on the basis of

irrelevancy before making any order for further discovery and that it should not, in

particular, permit the opposing party to indulge in an exploratory or fishing operation.”

(per Finlay C.J. at 223)

The Supreme Court in Bula rejected the proposition that an averment by the deponent of an

affidavit of discovery that documents were irrelevant was effectively conclusive. Rather, the

Supreme Court held that on the question of relevance, the court must be satisfied on the

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balance of probabilities that an error (to the effect that the documents were irrelevant) had

occurred.

20. Turning to the second situation (where the deponent avers that there are no

documents), Murphy J. stated in Phelan:-

“Difficulties obviously arise in directing the discovery of documents or a particular range

or class of document which the deponent denies are in his possession. To order the first

defendant to swear a further affidavit of discovery presumably would result in his

repeating the statements made and sworn by him on several occasions, namely, that he

has not and never had any documents in addition to those already discovered in his

power or possession relating to the matters in issue in the present proceedings. In those

circumstances the court would have to be satisfied on the evidence before it that it was

making a meaningful order.” (per Murphy J. at 584)

21. As noted by Laffoy J. in O’Leary, the test for the court is:-

“…whether the evidence presented to the High Court was insufficient to satisfy the court

that relevant documents are or have been in the possession of the defendant which

should have, but have not, been discovered in its original affidavit of discovery or its

supplemental affidavit of discovery.” (per Laffoy J. at para. 56, p. 26)

22. Abrahamson, Dwyer and Fitzpatrick in “Discovery and Disclosure” (3rd Edition) helpfully

summarised the relevant authorities concerning further and better discovery and set out the

following principles on the basis of those authorities:-

“12 – 09

Generally, the court will only look behind an affidavit of discovery only in

limited circumstances. This may occur when the court has a reasonable suspicion that

relevant documents exist which may have been omitted from the affidavit of discovery.

The usual test of relevance and necessity applies in deciding whether such documents

are to be discovered. In determining whether such documents exist, the court may have

regard only to the following sources to determine the existence of additional

documentation:-

(a) the affidavit of discovery itself;

(b) the documents referred to in that affidavit;

(d) an admission by the party making discovery.

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12-10 The court may also order further and better discovery where it is satisfied that

the party making discovery has wrongly determined that documents in his or her

possession are not relevant, for example because he or she has misunderstood the

issues in the case.” (Abrahamson, Dwyer and Fitzpatrick: “Discovery and Disclosure”

(3rd Edition) at paras. 12-09 – 12-10)

23. I will apply these principles in determining the three motions before me. As noted

earlier, certain other discrete legal issues arise in relation to a number of the motions before

me. I will consider them separately by reference to the relevant motion.

(A) First Motion: Plaintiffs’ Re-entered Motion for further and better discovery dated

20th February, 2019

Introduction

24. The first motion is the plaintiffs’ re-entered motion for further and better discovery

which was issued on 20th February, 2019 and made returnable for 25th February, 2019. The

motion was compromised by the parties on 11th April, 2019 on certain terms. The plaintiffs

contend that those terms have not been complied with and have re-entered the motion in

accordance with the agreed directions made by the court (Haughton J.) on 11th April, 2019. The

defendants contend that they have complied with the terms on which the motion was settled

and dispute the plaintiffs’ entitlement to any further relief on foot of that motion.

25. It is necessary first to say something about the background to this motion before

turning to the two issues which remain in dispute between the parties.

Discovery Order 20th February, 2017

26. Orders for discovery were made as between the plaintiffs and the defendants by the

High Court (McGovern J.) on 20th February, 2017. The first motion is concerned with the order

for discovery made against the defendants. The order directed the defendants to make

discovery of several categories of documents. There was substantial agreement between the

parties on the terms of the discovery to be made by the defendants. The court resolved the

issues in dispute and made an order directing the defendants to make certain discovery. It

appears that there is no perfected copy of the order made on that date and the parties have

agreed to work from an agreed draft of the order which it is accepted was made.

27. The first motion concerns a number of the categories of documents which were ordered

to be discovered by the defendants. They can be divided into two groups. The first concerns the

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discovery ordered in respect of Categories 1 and 2. Under Category 1, the defendants were

required to make discovery of:-

“All documentation/materials taken by, or at the request or direction of, the defendants

(or any of them) from the plaintiffs (or any of them) or from any company within the

O’Flynn Group of companies, including for the avoidance of doubt any materials sent by

email or copied to a USB key, disk or other portable device or any other form of

extraction by electronic means of such material.”

Under Category 2, the defendants were required to make discovery of:-

“All documents which record and/or refer to and/or evidence the use by the defendants

or any of them of materials taken by, or at the request or direction, of the defendants

(or any of them) from the plaintiffs (or any of them) or from any company within the

O’Flynn Group of companies, including for the avoidance of doubt all documents created

out of or using such material.”

It can be seen, therefore, that Category 1 covered documents or materials allegedly taken by

the defendants from the plaintiffs or from other companies within the O’Flynn Group and that

Category 2 was directed to documents recording, referring to or evidencing the alleged use by

the defendants of those documents or materials.

28. The second group of documents the subject of the first motion are the documents

directed to be discovered under Categories 4 and 6. The defendants were required to make

discovery under Category 4 of the following documents:-

“(1) All documents created during the period from 1st January, 2014 to 31st July,

2015 which record and/or refer to and/or evidence commercial opportunities

pursued by the first, second and/or sixth defendants while the first defendant

was working for Tiger Developments or providing consultancy services to the

plaintiffs or any of them, including, without limitation, the development of

student accommodation and the following projects in particular:

(i)

The Gardiner Street Projects; and/or

(ii) The Smithfield Projects; and/or

(sic)

(2) All documents created during the period from 1st August, 2015 to 8th June, 2016

which record and/or refer to and/or evidence:

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(a) Commercial opportunities pursued by the first, second and/or

sixth defendants while the first defendant was working was

working for Tiger Developments or providing consultancy

services to the plaintiffs or any of them, including, without

limitation, the development of student accommodation and the

following projects in particular:

(i)

The Gardiner Street Projects; and/or

(ii) The Smithfield Projects; and/or

(b) The use by the first, second and/or sixth defendants or any of

them of materials taken by, or at the request or direction of the

defendants (or any of them) from the plaintiffs (or any of them)

or from any company within the O’Flynn Group of companies,

including for the avoidance of doubt all documents created out

of or using such materials.”

Under Category 6, the defendants were required to make discovery of:-

“All documents referring to or relating to or evidencing the interests of the defendants

or any of them in relation to the Gardiner Street Project (as defined at para. 25 of the

statement of claim) including a full account of all profits, fees or income made or to be

made or derived from the said project.”

It can be seen, therefore, that the documents sought in Category 4 were time limited and

concerned the commercial opportunities allegedly pursued by a number of the defendants and,

in particular, the Gardiner Street Project and a project in Smithfield (which it is pleaded was not

actually pursued by the relevant defendants) as well as documents relating to other commercial

opportunities during a further time limited period and the use of materials allegedly taken by

the plaintiffs or from companies within the O’Flynn Group of companies. Category 6 was

directed to the interests of the defendants or any of them in the Gardiner Street Project and the

profits, fees or income made or to be made from that project.

Defendants’ Discovery

29. The defendants were directed to make discovery by 25th May, 2017. For various reasons

that was not done. Mr. Cox swore an affidavit of discovery on behalf of the first to sixth

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defendants (this was prior to the joinder of the seventh and eighth defendants) on 27th October,

2017. At paras. 5 to 16 of his affidavit, Mr. Cox explained the methodology adopted by the

relevant defendants in making discovery with the benefit of advice from the defendants’ then

solicitors, McCann Fitzgerald, and support from Reveal, an eDiscovery expert. An issue has been

raised by the plaintiffs in relation to the methodology adopted by the defendants in making that

discovery. A supplemental affidavit of discovery was sworn by Mr. Cox on behalf of the then

defendants on 11th December, 2018 as a result of certain deficiencies in the discovery originally

made, as explained at para. 21 of the supplemental affidavit.

Complaints Regarding Defendants’ Discovery

30. The plaintiffs’ solicitors, BHK Solicitors, raised issues in relation to the defendants’

discovery in a detailed letter dated 23rd January, 2019. The plaintiff contended that there were

deficiencies in the defendants’ discovery with particular reference to the two groups of

categories of documents referred to earlier, Categories 1 and 2, and Categories 4 and 6.

31. With regard to Categories 4 and 6, the plaintiffs sought discovery of further documents

within those categories and an extension of the categories themselves. This further discovery

was sought on the basis that, having considered the discovery made by the defendants, it was

contended that the plaintiffs had ascertained that Mr. Cox had engaged in and worked on a

second phase of the Gardiner Street Project (ie “Phase 2”) while he was employed or engaged

by the plaintiffs and that Phase 2 of the Gardiner Street Project was a natural follow on project

in respect of which the developer of the first phase (or Phase 1) of the Gardiner Street Project

had a natural advantage. The parties had, during the course of 2018, exchanged

correspondence in relation to Phase 2 in the course of which it was acknowledged by the

defendants that documents relating to Phase 2 were considered relevant by the defendants for

the purposes of Category 4. In addition to seeking an extension of Category 4 in terms of the

time period covered by that category and express reference to Phase 2 of the Gardiner Street

Project, the plaintiffs also sought to extend Category 4 by making express reference to

documents concerning any use of residential development appraisal templates owned by the

plaintiffs which it is alleged were taken by Mr. Cox and emailed to Mr. Kearney on 21st October,

2015 relating to Bolton Hall, Rathfarnham and Beech Park, Cabinteely (the “residential appraisal

templates”) or any adaptation of those templates or any other appraisal or other templates

allegedly taken or obtained from the plaintiffs or any of them whether used in original or

adapted form. It was asserted that the discovery made by the defendants included an email

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from Mr. Cox to Mr. Foley and Mr. Kearney dated October, 2015 which attached a residential

template and a financial model for a residential template in respect of Bolton Hall and Beech

Park which had been developed by and for the plaintiffs in respect of their own residential

developments. The plaintiffs found it difficult to accept that there were no documents relating to

or evidencing the use by the defendants of the residential appraisal templates.

32. Deficiencies in the defendants’ discovery were also alleged by the plaintiffs in respect of

the other relevant group of categories of documents, namely documents covered by Categories

1 and 2. The alleged deficiencies concerned the failure by the plaintiffs to make discovery of

certain notes of emails made by Mr. Cox and sent to himself which it was alleged were covered

by Categories 1 and 2 and ought to have been discovered. The plaintiffs were concerned that

there may have been other notes relating to other emails made by Mr. Cox which had not been

discovered. The plaintiffs also alleged that further and better discovery was required arising

from an alleged inappropriate and incorrect interpretation by the defendants of Category 1. The

plaintiffs’ concerns arose as a result of the failure by the defendants to make discovery under

Category 1 of an email sent by Mr. Cox from his O’Flynn Capital Partners email address to the

private email address of his wife (the “Project Achill email”). There was correspondence between

the parties during the course of 2018 and a dispute arose as to whether that document was

covered by Category 1. The plaintiffs maintained that it was and that the approach taken by the

defendants in relation to that email suggested that the defendants’ review of documents for the

purpose of Category 1 was conducted on the basis of a misinterpretation of Category 1 and that

there could be other documents falling within Category 1 but which were reviewed (and

excluded) on the basis of such alleged incorrect interpretation. The plaintiffs also referred to

three further documents which were discovered by the defendants in respect of which a further

explanation as to the source of the documents was required.

First Motion Issued

33. Having raised these issues in the letter of 23rd January, 2019, the plaintiffs issued a

motion on 20th February, 2019 (the first motion) seeking further and better discovery of

documents on the basis of an expanded or extended version of Categories 4 and 6 and in

respect of Categories 1 and 2. That motion was grounded on an affidavit sworn by Patricia

O’Brien of the BHK Solicitors, the plaintiffs’ solicitors, on 19th February, 2019. The motion was

returnable for 25th February, 2019. A replying affidavit was sworn by Mr. Cox on 4th March,

2019. With respect to the further discovery sought in respect of extended Categories 4 and 6,

Page 15 ⇓

Mr. Cox’s position was that the defendants had already made discovery of documents in relation

to Phase 2 of the Gardiner Street Project but that the defendants accepted that the plaintiffs

were entitled to further information in relation to “the profits, fees, income or financial benefits

already obtained or yet to be obtained” in relation to Phase 2. However, the defendants believed

that this should be done by affording access to the relevant material to expert forensic

accountants engaged by the plaintiffs with engagement with the defendants’ experts and that

this process was preferable to making discovery for various reasons. As regards the outstanding

issue in relation to residential developments under Categories 4 and 6, the defendants’ position

was that the reason why no documents were discovered in relation to the use of the template

and model referred to by the plaintiffs was that no use was made of those documents. As

regards the further discovery sought in relation to Categories 1 and 2, the defendants’ position

was as follows. With regard to the issue in relation to notes, the defendants did not agree that

notes written by Mr. Cox fell within the categories of documents required to be discovered and

the defendants were advised to that effect by their then solicitors. However, to avoid

“unnecessary controversy”, Mr. Cox carried out a search for any other notes made by him. He

located other notes and exhibited them at Exhibit “PC2” to his affidavit. As regards the alleged

inappropriate and incorrect interpretation of Category 1, Mr. Cox stated that the defendants’

position was that all documents falling within Categories 1 and 2 had been discovered. Mr. Cox

did not agree that the email sent by him to his spouse fell within those categories. As regards

the other three documents referred to by the plaintiffs, Mr. Cox stated that he “must have

accessed these on the hard drive” and sent them by email to Mr. Kearney. Mr. Cox stated that

Mr. Kearney informed him that he retained the documents on his computer but never used

them.

34. There then followed a lengthy replying affidavit sworn by Mr. Nesbitt on behalf of the

plaintiffs on 18th March, 2019 in which issue was taken with the position adopted by the

defendants in Mr. Cox’s affidavit. For reasons explained in his affidavit, the plaintiffs did not

accept the suggested approach in relation to the further documents concerning Phase 2 of the

Gardiner Street Project. However, as an alternative to full discovery, the plaintiffs suggested an

alternative approach. As regards Categories 1 and 2, the plaintiffs were critical of the failure by

the defendants to discover the notes exhibited to Mr. Cox’s affidavit (only one of which had

been previously discovered) and the absence of a proper explanation by Mr. Cox for the failure

to discover the notes. The plaintiffs were critical of the searches apparently carried out by the

defendants when making their discovery and contended that the defendants had not complied

Page 16 ⇓

with the “Good Practice Discovery Guide” prepared by the Commercial Litigation Association of

Ireland (CLAI). The plaintiffs required the defendants to swear a supplemental affidavit of

discovery making discovery of the notes referred to by Mr. Cox and any other relevant notes or

materials not discovered and also required the defendants in a supplemental affidavit of

discovery to explain the steps taken by them to ensure that full and proper discovery of all

relevant electronic documentation had been made. As regards the alleged inappropriate and

incorrect interpretation of Categories 1 and 2 (concerning the alleged use by the defendants of

documents), the plaintiffs maintained that there were a significant number of examples of

documents discovered by the defendants which fell within Category 1 and/or Category 2 but

which were not discovered by the defendants under those categories which suggested that an

incorrect interpretation of those categories had been taken by the defendants. Reference was

again made to the Project Achill email and to various other documents including the three

documents referred to by Mr. Cox in his replying affidavit which he said must have been

accessed by him on the hard drive and sent by email to Mr. Kearney but not used by Mr.

Kearney. Various other alleged deficiencies were noted by Mr. Nesbitt.

Settlement Agreement

35. The first motion was ultimately compromised by the parties on 11th April, 2019. The

terms of that compromise were set out in a settlement agreement (the “settlement agreement”)

on foot of which certain agreed directions were made by the court (Haughton J.) on that date

(the “agreed directions”).

36. Under the settlement agreement, it was noted that the parties had agreed to

compromise the plaintiffs’ motion for further and better discovery on certain terms and on the

basis that the court would make the agreed directions. At para. 1 of the settlement agreement,

it was agreed as follows:-

“Each of the personal defendants to swear separate affidavits, supplemental to the

affidavits of discovery sworn by Mr. Cox on behalf of the defendants confirming that

appropriate searches and/or review has been done of all documents within the power,

possession or procurement of the defendants or any of them for any documents falling

within the following category:

Page 17 ⇓

(a) All documents sourced from the plaintiffs which were accessed, emailed

to any party (including any of the defendants) to include the emails to

which those documents were attached or copied to any device.

One of the defendants to explain in these affidavits the methodology adopted in the

review for documents. The affidavits to be provided to the plaintiffs by 3rd May, 2019.”

37. It was agreed at para. 2 of the settlement agreement that a direction would be made in

the following terms:-

“…To the extent that any further documents not previously discovered by the

defendants are identified from the exercise referred to para. 1, and which fall within that

category or the categories of discovery already listed in the discovery order of McGovern

J. dated 27th (sic) February, 2017, a supplemental affidavit of discovery will be sworn

discovering the said additional documents.”

38. Paragraph 3 provided that a direction would be made that Mr. Kearney would swear an

affidavit on behalf of the defendants by 3rd May, 2019 containing:-

“Full details of and vouching (by way of exhibited documents) all profits, fees, income

and financial benefits relating to the development at Phase Two Gardiner Street which

have been received or which may at any time be received by the defendants or any of

them or any entity controlled by the defendants or any of them or any member of the

families of the three personal defendants.”

39. It was agreed at para. 4 that the defendants would allow an expert, appointed by the

plaintiffs, access to such other documents as the expert required in relation to Phase 2 of the

Gardiner Street project “for the purpose of verifying the profits, fees, income and financial

benefits of the development at Phase Two Gardiner Street”. At para. 5, it was agreed that the

plaintiffs’ right to seek “such further and better discovery in relation to Phase Two Gardiner

Street as necessary” remained fully reserved including the right to bring any further motion

before the court. At para. 6, the defendants agreed to furnish to the plaintiffs in native format

the notes exhibited at “PC2” to Mr. Cox’s affidavit of 4th March, 2019 by 3rd May, 2019. It was

agreed that the plaintiff would have liberty to apply to re-enter the motion in the event that it

was necessary to do so and costs were to be costs in the cause (paras. 7 and 8). Agreed

directions were made in those terms.

Purported Compliance with Settlement Agreement

Page 18 ⇓

40. The defendants endeavoured to comply with the terms of the settlement agreement and

the agreed directions by swearing a number of affidavits. The plaintiffs maintain that those

affidavits do not comply with the terms of the settlement agreement or the agreed directions

and have therefore re-entered the first motion. It is necessary to examine what the defendants

did in order to comply with the settlement agreement and the agreed directions in order to

determine whether it is appropriate to grant any relief to the plaintiffs under the first motion.

41. In purported compliance with para. 1 of the settlement agreement, affidavits in identical

terms were sworn by each of the personal defendants. In each of those affidavits the personal

defendants referred to the previous affidavits of discovery sworn by Mr. Cox on behalf of the

defendants. Each of them then stated (at para. 5 of their respective affidavits):-

“I confirm that all appropriate searches and/or review has been done of all the

documents within the power, possession or procurement of the defendants or any of

them for any documents falling within the following category.

‘All documents sourced from the plaintiffs which were accessed, emailed to any

party (including any of the defendants) to include the emails to which those

documents were attached or copied to any device.’

The methodology adopted is set forth in Patrick Cox’s affidavit of the 27th of October,

2017 and in particular I refer to paragraphs 5-16 inclusive thereof. Furthermore, since

the settlement agreement the personal defendants have considered the documentation

which has been discovered by and on behalf of the defendants in these proceedings and

I am satisfied that any documents falling within the above category have already been

discovered in these proceedings.”

42. In purported compliance with para. 3 of the settlement agreement, Mr. Kearney swore a

separate affidavit on 2nd May, 2019. At para. 3 of that affidavit, Mr. Kearney stated that the

property the subject of phase two of the Gardiner Street Project (the “property”) was acquired

from Dublin City Council for a total figure of €762,720.00 (including VAT) which was payable in

four tranches which included two payments to be made on practical completion which has not

yet occurred. Mr. Kearney exhibited a copy of an extract from the contract for sale between the

Council (as vendor) and the sixth defendant, Carrowmore Property Limited (as purchaser) dated

23rd February, 2017. All that was exhibited, however, was a front cover page. At para. 4 of his

affidavit, Mr. Kearney stated that the defendants have incurred certain expenses with respect to

the property. He then set out a list of four invoices. As noted at para. 5 of his affidavit, the total

Page 19 ⇓

of the invoices was €38,984.55 (including VAT). Mr. Kearney exhibited a copy of the invoices at

Exhibit “EK3” to his affidavit. At para. 6 of his affidavit, Mr. Kearney stated that by a contract

dated 23rd November, 2018 between the sixth defendant, Carrowmore Property Limited, and the

eight defendant, Carrowmore Property Gloucester Limited (as vendors) and TSAF 2 IDA GP

Limited (as purchaser) and the Student Accommodation Fund ICAV, the vendors agreed to

dispose of their entire interest in the property for the sum of €3,274,000.00 (including VAT). An

extract of that contract was exhibited at Exhibit “EK4” to Mr. Kearney’s affidavit. Again all that

was exhibited was the front cover page.

43. At para. 7 of his affidavit, Mr. Kearney stated that the pre-tax profit on the disposal of

the property amounted to €2,180,886.50 which was subject to a corporation tax charge

estimated at €545,221.62 leaving a post-tax profit in or about €1,625,664.87. Mr. Kearney

stated that if the personal defendants wished to access those funds they would incur further tax

charge at the rate of 33%, which would reduce the sum to €1,089,194.00.

44. Mr. Kearney then averred at para. 8 of his affidavit as follows: -

“The defendants have earned no other fees, income or financial benefits whatsoever and

will not do so. Similarly, no entity controlled by the defendants or any of them or any

member of the families of any of the three personal defendants will earn any other

profit, fees, income or financial benefits relating to the property.”

45. The plaintiffs’ solicitors raised issues in relation to the manner in which the defendants

had sought to comply with the terms of the settlement agreement and the agreed directions.

Three further affidavits were then sworn on behalf of the defendants on 12th June, 2019.

Supplemental affidavits were sworn by Mr. Kearney and by Mr. Cox and an affidavit was sworn

by Hugh J. Millar, a partner in Crowley Miller, the solicitors now acting for the defendants.

46. In his supplemental affidavit, Mr. Cox referred to para. 1 of the settlement agreement

and stated that the description of documents contained in that paragraph was agreed having

regard to the fact that there was a dispute between the parties as to whether the sending of an

email by Mr. Cox to his spouse while he was employed by Tiger Developments amounted to the

“use” of a document. The plaintiffs asserted that it did while the defendants did not accept that

that was the case. Mr. Cox explained that the reason the email was not discovered in his

original affidavit of discovery was that it was sent by him to his spouse from an old work email

address to which he did not have access when he made discovery. He had completely forgotten

about it. When it was drawn to his attention by the plaintiffs, Mr. Cox stated that the defendants

“caused checks to be carried out on the email accounts of their spouses” and that any relevant

Page 20 ⇓

emails and documents were discovered to the plaintiffs. Mr. Cox explained that in order to

resolve the dispute concerning the term “use”, the parties agreed that the defendants would

furnish affidavits confirming that the defendants had discovered all documents sourced from the

plaintiffs which were sent to any party. He explained that he and the other personal defendants

had reviewed the existing discovery and had regard to their recollection of the events. He stated

that based on that exercise they swore the affidavits (on 3rd May, 2019) confirming that any

documents sourced from the plaintiffs sent by them to any party had already been discovered.

In response to the suggestion by the plaintiffs that it was not clear whether any additional

exercise had been carried out, Mr. Cox stated that the personal defendants reviewed the

methodology used in the original discovery exercise to ensure that it captured any documents

falling within the category of documents set out in para. 1 of the settlement agreement and that

“no documents were excluded on the basis of any distinction being made that the documents

were sent but not used” (para. 6). Mr. Cox also dealt in his supplemental affidavit with the

outstanding issues in relation to Phase 2 of the Gardiner Street Project. He referred to redacted

versions of the agreements exhibited by Mr. Kearney to his supplemental affidavit. Mr. Cox

stated that the redacted portions of the documents referred to the “precise structure of the

deal” which he asserted is “commercially sensitive” and not relevant to matters at issue in the

proceedings. He then confirmed that the payments referred to in the unredacted portions of the

documents are the only payments that will be received by the defendants or any of them or any

connected or related entities in connection with Phase 2. Mr. Cox further stated that there are

no “profit share agreements” or “promote agreements” or “development management

agreements” as speculated by the plaintiff’s solicitors in their letter of 31st May, 2019. Mr. Cox

then stated (at para. 7):-

“Such other agreements as there are in relation to the transaction do not include any

provisions providing for any payments to the defendants or for the conferring of any

financial benefits at all on the defendants or anyone connected with them.”

At para. 8 of his affidavit, Mr. Cox contended that Mr. Kearney had dealt comprehensively with

the outstanding issue in relation to Phase 2 of the Gardiner Street Project and had provided (as

required under the settlement agreement) full details of all profits relating to the development

of Phase 2. He contended that the plaintiffs were seeking to rewrite the settlement agreement

so as to require the defendants to provide “full details” relating to the development of Phase 2

and that had not been agreed between the parties.

Page 21 ⇓

47. In his supplemental affidavit, Mr. Kearney exhibited more extensive extracts from the

two contracts for sale in respect of Phase 2 of the Gardiner Street Project. Redacted versions of

those extracts were exhibited at Exhibit “EK2”. Mr. Kearney explained (at para. 4) that the

redacted portions of the documents refer to the “precise structure of the deal” which he

asserted was “commercially sensitive” and not relevant to issues in the proceedings. He

confirmed that the payments referred to the unredacted portions of the documents and in his

affidavit of 2nd May, 2019 are the only payments that will be received by the defendants or any

of them or any connected or related entities in connection with Phase 2. He also confirmed that

there are no “profit share agreements”, “promote agreements” or “development management

agreement” as speculated by the plaintiff’s solicitors. He then stated (as Mr. Cox did in his

supplemental affidavit): -

“Such other agreements as there are in relation to the transaction do not include any

provisions providing for any payments to the defendants or for the conferring of any

financial benefits at all on the defendants or anyone connected with them”.

48. In his affidavit, Mr. Millar noted that he had considered the unredacted versions of the

two contracts for sale exhibited by Mr. Kearney. He repeated the assertion made by Mr. Kearney

and Mr. Cox that the redacted portions referred to the “precise structure of the deal” which he

asserted was “commercially sensitive” and not relevant. He also confirmed (at para. 4) that the

payments referred to in the unredacted portions of the documents are the only payments to the

defendants or any persons or entities connected with them referred to in the contracts and that

that there are no “profit share agreements”, “promote agreements” or “development

management agreements” as speculated by the plaintiffs. Mr. Millar confirmed that he had

considered “other agreements relating to the development and financing” of Phase 2 and that

“none of these refer to any payments to or financial benefits accruing to the defendants or any

persons or entities connected with them” (para. 4). He asserted that Mr. Kearney’s affidavit of

2nd May, 2019 fully complied with the terms of the settlement agreement.

Re-entry of First Motion

49. The plaintiffs were dissatisfied with the purported compliance by the defendants with

the terms of the settlement agreement and the agreed directions and sought to re-enter the

first motion. The basis upon which the plaintiffs contended that the defendants had not

complied with the settlement agreement and the agreed directions and, consequently, the basis

on which it was contended that the plaintiffs were entitled to re-enter the first motion and to

Page 22 ⇓

seek the reliefs sought in that motion was set out in detail in an affidavit sworn by Mr. Nesbitt

on 20th June, 2019. Mr. Nesbitt’s affidavit sets out the two general areas of complaint made by

the plaintiffs in relation to the defendants’ compliance with the settlement agreement. The first

set of complaints concerns the defendants’ purported compliance with the provisions of para. 1

of the settlement agreement (which paragraph was intended to cover and address the dispute

between the parties in relation to the approach taken by the defendants to categories 1 and 2 of

the discovery originally ordered). The second set of complaints set out in Mr. Nesbitt’s affidavit

concerns the manner in which the defendants sought to comply with the provisions of para. 3 of

the settlement agreement in relation to the documents detailing and vouching the profits, fees,

income and financial benefits relating to the development of Phase 2. Very briefly stated, the

plaintiffs’ positon in relation to those two sets of complaints was as follows.

50. In relation to the defendants’ purported compliance with para. 1 of the settlement

agreement, Mr. Nesbitt reiterated the concerns previously addressed in his affidavit of 18th

March, 2019 and in Ms. O’Brien’s affidavit of 19th February, 2019 concerning the failure to

discover as being relevant to Category 2, documents evidencing the use of the plaintiffs’

documents including documents accessed by the personal defendants and emailed to other

parties (including any of the defendants) and documents copied to any device to which the

defendants had access. While noting the methodology adopted by the defendants and their

solicitors at the time the original discovery was made (as explained in the original affidavit of

discovery sworn by Mr. Cox on 27th October, 2017), the plaintiffs pointed out that that

methodology resulted in documents relevant to Category 2 not being discovered as such. Mr.

Nesbitt asserted that the settlement agreement required more than a mere repetition of the

description of the methodology previously explained by Mr. Cox and that the plaintiffs had

anticipated that the defendants would, in one of the supplemental affidavits required to be

sworn under para. 1 of the settlement agreement, explain how each of the documents relevant

to Category 2, but not discovered as such by the defendants, was excluded by virtue of the

original methodology applied and would explain the steps taken to review the original discovery

and to carry out further searches so that documents described in para. 1 of the settlement

agreement and not discovered in the original discovery as relevant to Category 2, or not

discovered at all, would be discovered. The plaintiffs maintained that the supplemental affidavits

sworn by the personal defendants for the purposes of para. 1 of the settlement agreement did

not provide any adequate explanation as to the methodology applied to ensure that the

discovery referred to at para. 1 of the settlement agreement had been made. Mr. Nesbitt noted

Page 23 ⇓

that the supplemental affidavits did not explain why documents relevant to Category 2 were not

discovered in the original discovery. He gave examples of documents falling within Category 2

but not discovered by the defendants under that category at paras. 10(a) to (e) of his affidavit.

Mr. Nesbitt contended that the defendants’ failure to identify those documents as relevant to

Category 2 suggested that the methodology adopted by the defendants in making the original

discovery was flawed and that while the documents were discovered by the defendants under

other categories, the plaintiffs’ concern was that, arising from an incorrect methodology applied

in relation to Category 2, there may well be other documents relevant to Category 2 but not

relevant to other categories which were not discovered. The plaintiffs expected the defendants

to address that concern in the affidavits required to sworn by the personal defendants under

para. 1 of the settlement agreement but that was not done. In the absence of a satisfactory

explanation by the defendants addressing these concerns, the plaintiffs sought further and

better discovery of documents falling under Category 2 applying a correct interpretation of “use”

as set out in para. 1 of the settlement agreement as well as an order directing the defendants

to set out in their supplemental affidavits of discovery a full and detailed explanation of the

methodology applied to ensure that all relevant documents are discovered.

51. The second set of complaints made in Mr. Nesbitt’s affidavit concerned the manner in

which the defendants purported to comply with para. 3 of the settlement agreement in respect

of documents concerning the profits and other benefits relating to Phase 2 of the Gardiner

Street Project. The plaintiffs were critical of the affidavits sworn by Mr. Kearney, Mr. Cox and

Mr. Millar on this issue and complained, in particular, about the limited extracts of the contracts

exhibited to Mr. Kearney’s affidavits. The plaintiffs were also critical of the extent of the

redaction of the documents and the basis for the redactions made. Mr. Nesbitt asserted that, in

the absence of an understanding as to the precise structure of the deal, it would not be possible

for the plaintiffs or their experts to properly review and examine the defendants’ books and

records (as provided for at para. 4 of the settlement agreement) to verify the profit figures

disclosed by the defendants. Mr. Nesbitt was also critical of the manner in which the defendants

purported to provide details of the profits, fees, income and financial benefits and asserted that

the defendants had failed to provide full details and had failed properly to vouch those benefits.

The plaintiffs required discovery of all of the overarching legal agreements governing the

acquisition, development and disposal of the property. As regards Mr. Millar’s affidavit, Mr.

Nesbitt observed that Mr. Millar was not the solicitor who acted for the defendants in relation to

the purchase, sale or development of the property comprised in Phase 2 and did not explain

Page 24 ⇓

what enquiries or confirmations he sought or received from the solicitors who did act in that

transaction nor did Mr. Millar set out in any detail the “other agreements” which he considered

for the purpose of swearing his affidavit. While noting that Mr. Millar referred to such other

agreements, Mr. Nesbitt stated that Mr. Millar did not say whether the defendants are parties to

the other agreements or to whom the payments due under those agreements are to be made

and did not say whether the documents reviewed are all of the other agreements relating to

development of the particular site. Mr. Nesbitt observed that it was a mystery as to why the

defendants would forego the profit associated with the development management of Phase 2 in

circumstances where the relevant defendants made a profit of approximately €6 million from

the management of the development of Phase 1 and disposed of Phase 2 to the same purchaser

as the purchaser of Phase 1. Under those circumstances, the plaintiffs sought full unredacted

copies of the contract for the purchase of the site and the sale of the site and the documents

relating to the development of the site as well as the legal documents governing the structure of

the purchase, development and sale of Phase 2 to enable the plaintiffs to understand the

structure of Phase 2, the profits made, the entities by whom the profits were made and in order

that the plaintiffs may brief their expert as envisaged under the settlement agreement.

52. On that basis, the plaintiffs sought an order for further and better discovery of

documents falling under Categories 4 and 6 in respect of Phase 2 of the Gardiner Street Project

and an order directing the defendants to carry out a further review of documents falling under

Categories 1 and 2.

Defendants’ Response to Re-entered First Motion

53. Mr. Kearney swore a supplemental affidavit on 11th July, 2019 in response to Mr.

Nesbitt’s affidavit. Mr. Kearney contended on behalf of the defendants that the explanation

provided, in particular, by Mr. Cox as to the methodology adopted (as described at para. 6 of

Mr. Cox’s affidavit of 12th June, 2019) was adequate. Mr. Kearney further stated that the

personal defendants were heavily involved in the original discovery process and collectively

reviewed well in excess of ten thousand documents. He further stated that during the course of

the original discovery process, the personal defendants discussed with their former solicitors the

issue as to whether the sending of certain documents could be said to amount to “use” within

the meaning of the relevant category of documents (Category 2). He stated that the approach

adopted in preparing the original affidavits of discovery was that any emails enclosing

documents were discovered even if the sending of those documents did not amount to the “use”

Page 25 ⇓

of the documents and that, therefore, each of the personal defendants was in a position to

confirm that all documents falling within para. 1 of the settlement agreement had already been

discovered. Mr. Kearney further stated that he confirmed with McCann Fitzgerald that the

explanation given by him was correct.

54. Neither Mr. Kearney nor any of the other personal defendants engaged with or

responded to the detailed criticisms made in Mr. Nesbitt’s affidavit of 20th June, 2019 in relation

to para. 1 of the terms of settlement. Nor was there any response by Mr. Kearney or by any of

the other personal defendants to the complaints made by Mr. Nesbitt concerning the purported

compliance by the defendants with para. 3 of the settlement agreement in relation to the Phase

2 documents.

Outstanding Issues regarding First Motion

55. There are two outstanding issues between the parties in relation to the first motion. The

first issue is whether the defendants ought to be required to make further and better discovery

in relation to Phase 2 of the Gardiner Street Project. The second issue is whether the defendants

ought to be required to make further and better discovery of documents relating to the “use” by

the defendants of the plaintiffs’ documents (as provided for in Categories 1 and 2 of the original

discovery which the defendants were ordered to make as clarified in para. 1 of the settlement

agreement). I deal with each of these issues in turn applying, as I am required to do, the

general principles applicable to applications for further and better discovery set out earlier in

this judgment.

(1) Further and better discovery in relation to Phase 2 Gardiner Street Project

56. In short, the plaintiffs contend that they are entitled to further and better discovery of

the documents falling under Categories 4 and 6 in respect of Phase 2 of the Gardiner Street

Project. The plaintiffs claim that the defendants have not complied with the terms at para. 3 of

the settlement agreement both in terms of the extracts of the documents referred to and

exhibited by Mr. Kearney in his affidavits of 2nd May, 2019 and 12th June, 2019 and in terms of

the redactions made to the documents. The plaintiffs contend that a significant part of their

claim in the proceedings involves their case that the defendants diverted commercial

opportunities which ought to have been brought to the attention of the plaintiffs and profited

from those and that the main complaint in that regard concerned the Gardiner Street Project.

The defendants maintain that they have fully complied with the provisions of para. 3 of the

settlement agreement which was designed to avoid the need for extensive discovery and that

Page 26 ⇓

there is no basis for going behind the averments made by the personal defendants for the

purposes of para. 3 of the settlement agreement. As a fall-back position, it was indicated on

behalf of the defendants that they would not object to the court looking at the unredacted

documents to satisfy itself that they were properly redacted. As a further alternative, it was

suggested that the plaintiffs’ lawyers could look at the documents subject to appropriate

undertakings as to confidentiality in light of the commercially sensitive nature of the documents.

57. I have reviewed the extensive affidavits sworn for the purposes of this motion and the

written and oral submissions advanced by the parties in relation to it. Having done so, I am

satisfied, notwithstanding my strong desire to bring the discovery issues between the parties to

a conclusion, that it is necessary to make certain further orders of discovery concerning the

defendants’ documents falling under Categories 4 and 6 in relation to Phase 2 of the Gardiner

Street Project. However, I am not going to make a general and wide-ranging order for further

and better discovery but will attempt to refine the order to be made to the minimum necessary

to ensure that justice is done between the parties. I have reached that conclusion for the

following reasons.

58. I am satisfied that the documents which I am disposed to direct the defendants to

discover by way of further and better discovery concerning Phase 2 of the Gardiner Street

Project are clearly relevant in the sense that that term is used in Compagnie Financiere et

Commerciale du Pacifique v. Peruvian Guano (1882) 11 Q.B.D. 55 (“Peruvian Guano”) as

recently discussed and applied the Supreme Court in Tobin v. Minister for Defence [2019] IESC 57

(“Tobin”). The alleged profit, fees, income and financial benefits which have been obtained or

which may be obtained by the defendants or persons or entities connected with them arising

from Phase 2 of the Gardiner Street Project are clearly relevant to the claims made in the

proceedings and would fall within Category 4 of the discovery originally ordered were it not for

the temporal limitation and would also fall within Category 6. However, in circumstances where

the parties reached an agreement at para. 3 of the settlement agreement as to how this issue

would be dealt with, I am loathe to make a wide ranging order for discovery of documents

falling under Categories 4 and 6 in respect of Phase 2 of the Gardiner Street Project.

Nonetheless, I am not satisfied that the defendants have complied fully with the obligations

contained in para. 3 of the settlement agreement.

59. The defendants initially provided wholly incomplete extracts from the two contracts of

sale in respect of Phase Two. When this was pointed out to the defendants, more complete

extracts of those two contracts were provided but there were extensive redactions to those

Page 27 ⇓

contracts. The redactions were made on the stated basis that the redacted portions refer to the

“precise structure of the deal” and that this is commercially sensitive and not relevant.

However, it is impossible to tell from that very general description whether it was appropriate to

redact the documents in the manner actually done by the defendants. I do not accept,

therefore, that there was an adequate explanation for the redactions made. It is clear from the

supplemental affidavits sworn by Mr. Kearney and by Mr. Cox on 12th June, 2019 and from the

affidavit sworn by Mr. Millar on the same date that there are other agreements in existence in

relation to the transaction (which I take to mean the purchase and sale of the property

comprised in Phase 2) and relating to the development and financing of Phase 2. While each of

the deponents state that those other agreements do not include provisions relating to any

payments to the defendants or for the conferring of any financial benefits on the defendants or

anyone connected with them, it seems to me that the history between the parties in relation to

discovery and, in particular, the deficiencies identified by the plaintiffs with the defendants’

discovery (such as in relation to the notes made by Mr. Cox) have an understandable and

reasonable level of distrust and suspicion as regards the averments made by the personal

defendants in relation to those other agreements in relation to Phase 2.

60. As regards the averment made by Mr. Millar, it is not contested by the defendants that

Mr. Millar was not the solicitor acting for the relevant parties to any of the transactions

concerning Phase 2 of the Gardiner Street Project but is the solicitor acting for the defendants in

these proceedings. Without in any way casting doubt over the veracity of the averment made by

Mr. Millar, or the genuineness of his belief, in my view, it is reasonable for the plaintiffs to be

afforded the opportunity of satisfying themselves that there is nothing in those other

agreements which are relevant to the question of profits, fees, income or financial benefits

relating to Phase 2 which may have been received or may be received by the defendants or any

of them or anyone connected with them. Further, it is to be noted that Mr. Millar does not

actually identify the particular agreements which he considered prior to making the averments

which he made at para. 4 of his affidavit.

61. While it is undoubtedly the case that the court will only look behind an affidavit such as

those sworn by Mr. Kearney, Mr. Cox and Mr. Millar in limited circumstances, I am satisfied that

the circumstances of this case are such that it is necessary in the interests of justice that the

plaintiffs be permitted to obtain access to the other agreements referred to, subject to properly

explained and justified redactions, if appropriate.

Page 28 ⇓

62. I am also satisfied that it is necessary in the interests of justice that the plaintiffs are

provided with a more detailed explanation on oath by one of the personal defendants on behalf

of all of the defendants for all of the redactions made in the two contracts for sale exhibited by

Mr. Kearney in redacted form at Exhibit “EK2” to his affidavit of 12th June, 2019. I am not

satisfied that a sufficiently detailed and persuasive explanation for the redactions made has

been provided to date by the defendants on whom the onus of establishing the appropriateness

of the redactions rests. The judgment of Haughton J. in Courtney v OCM Emru Debtco DAC

[2019] IEHC 160 (“Courtney”) discusses very comprehensively the relevant principles and case-

law on the redactions of documents. I adopt and approve the principles set out in that

judgment.

63. I have considered whether it would be appropriate in lieu of directing further discovery

in respect of this issue, I should at this stage adopt one of the alternatives suggested on behalf

of the defendants, namely, that I would review the two contracts for sale and determine

whether the redactions were properly made or whether access to the unredacted contracts

would be afforded to the plaintiffs’ lawyers only. I do not believe that either alternative would be

appropriate or workable at this stage without a proper explanation for the redactions made.

Furthermore, it is generally undesirable, unless absolutely necessary, to restrict access to one

party’s documents to the lawyers for the other party without having the opportunity or facility to

take instructions from the client. Further it would place the court in an invidious position if it

were required to review the appropriateness of the redactions without a detailed explanation as

to what those redactions relate to.

64. In my view, it is appropriate to direct the defendants to provide a detailed explanation

on oath of the redactions to the contracts for sale. If necessary, I will then consider the further

explanation and, if I am not satisfied with it, I will direct the provision of the unredacted

contracts. I will also consider whether certain express undertakings should be given by the

plaintiffs not to use the documents or the information in them other than for the purposes of the

action (as was recently required by the High Court (Haughton J.) in Courtney and by the High

Court (Quinn J.) in Promontoria (Aran) Limited v. Sheehy [2019] IEHC 613 (at para. 64).

65. I will, therefore, direct the defendants to:-

(1) Provide a detailed explanation on oath of all of the redactions made to

the contracts for sale dated 23rd February, 2017 and 23rd November,

2018 (redacted versions of which were exhibited at Exhibit “EK2” to

the supplemental affidavit of Eoghan Kearney sworn on 12th June

Page 29 ⇓

2019) by affidavit to be sworn by one of the personal defendants on

behalf of all of the defendants within 21 days of the date of the

delivery of this judgment or within such other period as may be agreed

between the parties or ordered by the Court (subject to further

discussion with counsel).

(2) Make further and better discovery of all agreements in relation to the

purchase, sale, development and financing of Phase 2 of the Gardiner

Street Project within the possession, power or procurement of the

defendants or any of them referred to in the affidavits sworn by Patrick

Cox, Eoghan Kearney and Hugh J. Millar on 12th June 2019. Such

discovery to be made within the same period at (1) above.

66. I will discuss with counsel the precise terms of the order to be made and any

undertakings which may require to be given by the plaintiffs having regard to the approach

taken by Haughton J. in Courtney and by Quinn J. in Sheehy.

(2) Further and better discovery re para. 1 of settlement agreement/Categories 1 and 2 of

original discovery

67. In brief, the plaintiffs contend that the defendants did not comply with paras. 1 and 2 of

the settlement agreement. Paragraph 1 required that each of the personal defendants swear

separate affidavits confirming that appropriate searches and/or reviews had been done in

relation to documents sourced from the plaintiffs which were accessed, emailed to any party

(including any of the defendants) to include the emails to which the documents were attached

or copied to any device and that one of the personal defendants was to explain on affidavit the

methodology adopted in the review of those documents.

68. Paragraph 2 of the settlement agreement provided that in the event that further

documents emerged following the exercise referred to in para. 1, a supplemental affidavit of

discovery would be sworn discovering those documents.

69. The plaintiffs claim that the affidavits sworn by the personal defendants were deficient

for the reasons discussed above. They say that the affidavits sworn by the personal defendants

on 2nd May, 2019 and the supplemental affidavit sworn by Mr. Kearney on 11th July, 2019 in

response to Mr. Nesbitt’s affidavit of 20th June, 2019 are all deficient and do not explain what

methodology was adopted in carrying out the review which the defendants agreed to carry out

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at para. 1 of the settlement agreement. The plaintiffs further contend that none of those

affidavits provides any explanation of the issues identified by the plaintiffs (in the various

affidavits sworn by Mr. Nesbitt and Ms. O’Brien) concerning the apparent misunderstanding by

the defendants of the requirement to discover documents concerning the “use” of the plaintiffs’

documents (Category 2 of the original discovery) and how that misunderstanding has been

addressed. The plaintiffs contend that there has been no explanation of how the anomalies

identified by them have been addressed. They draw attention to the CLAI’s “Good Practice

Discovery Guide” which recommended that the affidavit of discovery contain an explanation of

the methodology adopted. They also rely on the approach suggested by Abrahamson, Dywer

and Fitzpatrick that the affidavit of discovery should outline:

“(i) the document custodians whose documents were searched;

(ii) the data sources search;

(iii) the process that was followed to retrieve and uphold potentially relevant

documents;

(iv) whether duplicates of documents have been omitted; and

(v) the review process that was undertaken following retrieval of the document

universe to identify the discovered documents.” ((3rd Edition) (2019) para –

20 - 51, pp. 288 – 289).

70. The plaintiffs contend that an order for further and better discovery of documents in

Category 2 should be made applying a correct interpretation of “use” as set out at para. 1 of

the settlement agreement and that a direction should be made that any supplemental

affidavit of discovery should provide a full explanation of the methodology adopted.

71. The defendants contend that the affidavits sworn by the personal defendants on 2nd

May, 2015 together with the supplemental affidavits sworn by Mr. Cox on 12th June, 2019

and by Mr. Kearney on 11th July, 2019 comply with para. 1 of the settlement agreement

and provide explanations as to the methodology adopted in the review of documents.

72. Having considered all the affidavits and the written and oral submissions of the

parties, I am not satisfied that it would be appropriate to make a wide ranging order for

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further and better discovery in respect of documents falling under Category 2 applying a

correct interpretation of “use” as set out at para. 1 of the settlement agreement. I do not

believe that an order in those terms is necessary in the interests of justice. I am also

conscious of the fact that it is not possible to achieve “perfect” justice in the context of

discovery (as noted recently by the Supreme Court in Tobin and previously by Fennelly J.

in the Supreme Court in Ryanair Plc. v. Aer Rianta Cpt [2003] 4 IR 264). However, I

accept the criticism made by the plaintiffs that none of the affidavits sworn by the

defendants in purported compliance with para. 1 of the settlement agreement provides an

explanation as to how, applying the methodology outlined by Mr. Cox in the original

affidavit of discovery sworn on 27th October, 2017, documents falling under Category 2

were not discovered by the defendants under or by reference to that category. I accept the

plaintiffs’ submission that something more was required by the defendants under that

paragraph of the settlement agreement than merely repeating and adopting what was said

in relation to the methodology adopted by Mr. Cox in his original affidavit of discovery. I

am satisfied that something more was required of the personal defendants than the pro

forma confirmation contained at para. 5 of the affidavit sworn by each of the personal

defendants on 2nd May, 2019 and something more is required than merely referring to the

methodology originally adopted by the defendants in making their discovery as described

in the affidavit of discovery sworn by Mr. Cox on 27th October, 2017. In my view, para. 1

of the settlement agreement required the defendants to explain how it was that the

documents referred to by the plaintiffs which fell under Category 2 but were not

discovered under that category by the defendants (or not discovered at all) was excluded in

accordance with the original methodology and also to explain in considerably more detail

than was done in the affidavits sworn by the personal defendants on 2nd May, 2019 the

steps taken to review the original discovery and to address the problem of documents

falling under Category 2 but not discovered by reference to that category in the original

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discovery or not discovered at all. How else could the plaintiffs have been satisfied that the

appropriate review had been followed and the proper methodology applied? While Mr.

Cox does state in his affidavit of 12th June 2019 that the personal defendants reviewed the

existing discovery following the settlement agreement and also with regard to their

recollection of events and based on that exercise swore their affidavits on 2nd May, 2019,

and that they reviewed the methodology used in the original discovery exercise to ensure

that it captured documents falling within Category 2 as formulated in para. 1 of the

settlement agreement, it is not clear from that affidavit (or from Mr. Kearney’s

supplemental affidavit of 11th July, 2019) how the defendants could have satisfied

themselves on this further review that the deficiencies identified by the plaintiffs in some

detail did not persist and did not continue to give rise to a situation where documents

falling under Category 2 but not under other categories were not being discovered by the

defendants. It seems to me that that was something the defendants were obliged to do by

virtue of para. 1 of the settlement agreement.

73. I have given consideration as to whether I should simply make an order for further

and better discovery of documents falling under Category 2 and give a specific direction

that the guidance provided by the CLAI in the “Good Practice Discovery Guide” should be

followed but I have decided that I should not make an order in such extensive terms. While

the Guide has been referred to with approval and complimented in several decisions of the

High Court including Ryanair v. Impact [2017] IEHC 425, Gallagher v. RTE [2017] IEHC 237

and Ryanair Limited v. Channel 4 Television Corporation (No. 2) [2017] IEHC 743

and is undoubtedly an invaluable guide for the approach to discovery of the electronically

stored information and one which the courts fully support, it is not a binding legal

instrument. It makes perfect sense that the Guide should be followed but I do not believe

that I can compel parties to do so. It seems to me, however, that what the plaintiffs are

entitled to is a proper explanation as to the methodology used when the discovery was

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originally made in October, 2017 and the methodology used on the further review required

to be carried out by the personal defendants under para. 1 of the settlement agreement so

that the plaintiffs can receive a reasonable degree of reassurance that all documents falling

under Category 2 have been discovered. That explanation should be provided on affidavit

to be sworn by one of the personal defendants on behalf of all of the defendants within 21

days from the date of this judgment or within such other period as may be agreed or

ordered by the court subject to discussion with counsel. There should be an explanation as

to how the methodology originally applied resulted in documents falling under Category 2

being missed, an explanation of the further review of that methodology carried out by the

defendants under para. 1 of the settlement agreement, and an explanation as to how the

defendants can be satisfied that all documents falling under Category 2 but not under any

other categories have now been discovered. The precise terms of the order can be further

discussed but will be along the lines which I have outlined.

74. Finally, in the event that the defendants have not made discovery of the notes exhibited

at Exhibit “PC2” to Mr. Cox’s affidavit of 4th March, 2019 in native form as required by para. 6 of

the settlement agreement (see the correspondence exhibited Exhibit “JN4” to Mr. Nesbitt’s

affidavit of 20th June, 2019), this should also be done. This was required by para. 6 of the

settlement agreement to be done by 3rd May 2019. However, the correspondence exhibited at

Exhibit “JN4” to Mr. Nesbitt’s affidavit indicates that it was not done by that date and indeed the

plaintiffs were still corresponding with the defendants’ solicitors on 31st May, 2019 requesting

compliance with para. 6 of the settlement agreement by close of business on 7th June, 2019. It

is not clear from the papers whether this was in fact done. If it was not, then obviously it should

be done forthwith.

(B) The second motion: plaintiffs’ motion for discovery against defendants re

additional defendants and amended pleas

75. The second motion the subject of this judgment is a motion issued by the plaintiffs on

25th June, 2019. That motion sought certain discovery against the seventh and eighth named

defendants who were joined by order of McDonald J. on 6th February, 2019 and also discovery

of two categories of documents against all of the defendants arising from certain of the

Page 34 ⇓

amendments made to the statement of claim on foot of that order of McDonald J. In addition,

the motion sought an order directing the seventh and eighth defendants to explain on affidavit

the methodology adopted by them in making their discovery.

76. The seventh and eighth defendants having been joined to the proceedings and an

amended statement of claim and amended defence having been delivered, the parties then

agreed directions in relation to further discovery which might be required. Those agreed

directions were made by Haughton J. on 11th April, 2019. On foot of those directions, the

plaintiffs sought discovery from the seventh and eighth defendants and further discovery from

all of the defendants in relation to the amended claims by letter dated 7th May, 2019.

77. There was then an exchange of correspondence between the parties’ respective

solicitors. It is unnecessary to consider that correspondence in any detail at this stage in light of

subsequent developments. However, in a letter dated 20th June 2019, the defendants’ solicitors

provided to the plaintiffs’ solicitors an affidavit sworn by Mr. Cox on 30th May, 2019. That

affidavit was sworn by Mr. Cox on behalf of the seventh and eighth defendants. He referred to

the plaintiffs’ request for voluntary discovery from those defendants and to the affidavits of

discovery sworn up to that date in the proceedings on behalf of the defendants. Mr. Cox then

stated at para. 4 of the affidavit:

“The companies have no documentation in their power possession or procurement

falling within the categories of document set out in [the] plaintiffs’ said letter seeking

voluntary discovery of the 7th May, 2019 save the documents which have already been

discovered in the affidavits of discovery sworn in these proceedings here to for on behalf

of the defendants.”

78. The defendants’ solicitors maintained in that correspondence that further discovery

ought not to be made by the defendants on foot of the request made on 7th May, 2019 as it was

suggested that the documents requested were already captured by other categories of

documents contained in the original order for discovery made on 20th February, 2017. That

position was not accepted by the plaintiffs and the motion was then issued on 25th June, 2019

grounded on an affidavit sworn by Ms. O’Brien of BHK Solicitors on that date.

79. However, on the following day, 26th June, 2019, the plaintiffs’ solicitors wrote to the

defendants’ solicitors noting that the plaintiffs intended issuing a further motion (in fact the

motion had been issued the previous day) and reiterating the defendants’ contention that the

additional discovery sought was unnecessary in light of the affidavit sworn by Mr. Cox on behalf

of the seventh and eighth defendants on 30th May, 2019 and in light of the defendants’

Page 35 ⇓

contention that the other discovery requested was encompassed by the discovery already made

on foot of the original order for discovery. However, the letter concluded in the following terms:

“In order to avoid further waste of court time by endless wrangling about discovery, the

defendants will agree to make voluntary discovery of categories 1, 2 and 4 [in the

plaintiffs’ solicitors’ letter on 7th May, 2019 and in the schedule to the notice of motion

issued on 25th June, 2019] and will swear an affidavit of discovery dealing with those

categories. The defendants will furnish the affidavit by 9th August, 2019. The deponent

will be Mr. Cox.”

80. The plaintiffs’ solicitors replied on 28th June, 2019 noting the position and observing

that the plaintiffs had been prepared not to insist on full discovery in respect of those categories

if the defendants had been prepared to make reasonable enquiries and to provide an

explanation in relation to the methodology adopted. While the plaintiffs had no issue with the

defendants’ agreement to make full discovery in relation to the three categories of documents,

it was indicated that the plaintiffs did not wish the position to be delayed further because of a

dispute in relation to the methodology adopted. The letter then went on to make certain further

observations in relation to the methodology to be adopted. The plaintiffs’ solicitors contended

that in order properly to address the question of methodology, it would be necessary for the

defendants either to make enquiries of the defendants’ former solicitors, McCann Fitzgerald, as

to the methodology adopted when making the original discovery or for a completely new search

of the defendants’ universe of documents to be conducted and a fresh review of the documents

now which are potentially relevant to be carried out. Clarification was sought as to the

methodology proposed to be adopted in making the further discovery. It was indicated that if

the plaintiffs could be confident as to the reliability of the methodology proposed to be adopted

by the defendants, it might be possible to strike out the second motion on terms.

81. In the event there was no replying affidavit on behalf of the defendants in response to

the second motion and it was agreed that the defendants would proceed to make the further

discovery by 9th August, 2019. It was accepted by the parties that my ruling in relation to the

methodology question on the first motion would have a bearing on how the defendants made

their additional discovery on 9th August, 2019. However, it was not possible for me to give that

ruling before the end of term on 31st July, 2019. This motion and the other motions were listed

for mention before me on 31st July, 2019. On that occasion, I indicated that it would be safe for

the defendants to proceed on that basis that there should be an explanation of the methodology

adopted in the discovery to be made by them 9th August, 2019. In the absence of any further

Page 36 ⇓

information prior to preparing this judgment, I am assuming that the further agreed discovery

was made by the defendants by the agreed date.

82. In my view, the same conclusions I reached in relation to the first motion on the

requirement by the defendants to provide an explanation as to the methodology adopted taking

account of the deficiencies or problems identified by the plaintiffs in relation to the defendants’

prior discovery applies equally to the further discovery which was to be made by the defendants

by 9th August, 2019 and which was the subject of the second motion. When I am updated as to

the position in relation to that discovery, I will discuss with counsel what orders (if any) should

be made in respect to the second motion in light of my conclusion that there should be (or

should have been) an explanation as to the methodology adopted which should address the

deficiencies or problems identified in the defendants’ prior discovery and discussed earlier in this

judgment in relation to the first motion.

plaintiffs

Introduction

83. The third motion is the defendants’ motion for further and better discovery from the

plaintiffs in respect of documents which it is contended ought to have been discovered by

the plaintiffs on foot of the order of the High Court (McGovern J.) made on 11th July,

2017. The motion, which was issued on 26th June, 2019, made reference to two categories

of documents. The first category referred to documents relevant to an agreement or

arrangement under which it is alleged that a Tony Gallagher or entities connected to him

were interposed or to be interposed between the O’Flynn Group and certain of the

plaintiffs in relation to the acquisition and disposal of sites at Coventry and Birmingham,

including all or any payments made to Mr. Gallagher or connected entity or any repayment

or request for repayment of those payments by Mr. Gallagher or any connected entity. The

second category referred to documents relevant to debt applications and any associated

communications made to Royal Bank of Scotland (RBS) and Co-op Bank in relation to the

development of the sites at Coventry and Birmingham. During the hearing of the motion, it

was indicated on behalf of the defendants that a lengthier list of the documents that were

Page 37 ⇓

actually being sought by the defendants in this motion had been prepared. A copy of the

list had not been provided to the plaintiffs or to the court. It was agreed that I should first

deal with issues of principle arising in relation to the motion and, if I were minded to direct

the plaintiffs to make further and better discovery on foot of the order of McGovern J. of

11th July, 2017, that I would allow the parties some further time to consider the list

prepared by the defendants. I accepted that that was a pragmatic way of dealing with the

motion.

84. Before turning to the evidence put forward by the defendants in support of their

contention that the plaintiffs ought to have discovered the further documents referred to in

the motion in relation to the Coventry and Birmingham sites, it is necessary to refer briefly

to the somewhat complicated history which has preceded this motion.

Discovery Order 20th February, 2017

85. Following correspondence, the defendants brought their initial motion for discovery

against the plaintiffs on 18th January, 2017. That motion came before McGovern J. on 20th

February, 2017. The defendants sought discovery of 20 categories of documents. The

parties were in agreement in relation to certain of the categories which the plaintiffs were

prepared to discover. There was a dispute between the parties in relation to the other

categories. McGovern J. resolved that dispute on 20th February, 2017 and made an order

for discovery on that date. The schedule to the order of 20th February, 2017 indicated the

categories which were agreed between the parties and those which were not agreed and

which had to be adjudicated upon by the court.

86. The motion now brought by the defendants concerns Category 8(f). The plaintiffs

initially agreed to make discovery of the following documents under Category 8(f):-

“All documents which refer to and/or record and/or evidence:-

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(i) Any assets or sites in Birmingham or Coventry acquired by the

plaintiffs or any of them directly or indirectly from the O’Flynn

Group; and/or

(ii) Any assets or sites in Birmingham or Coventry disposed of by the

O’Flynn Group out of which any of the plaintiffs made a financial

gain.”

In addition to agreeing to make discovery under Category 8(f), the plaintiffs also agreed to

make discovery of certain other documents concerning the plaintiffs’ interactions with

NAMA in relation to the Coventry and Birmingham sites under Category 8(a) to (e) and

under Category 9.

Discovery Recast by Order 11th July, 2017

87. Having initially agreed to make discovery in respect of the documents in Category

8(f) and having agreed to an order in the terms just mentioned on 20th February, 2017, the

plaintiffs then became concerned as to the extent and ambit of Category 8(f) and brought a

motion seeking to “clarify” the terms of Category 8(f) and, if necessary, to vary the terms

of the discovery ordered under that category. That motion was heard and determined by

McGovern J. on 11th July, 2017. Having heard submissions and having considered (inter

alia) an affidavit sworn by Ms. Karen Harty of McCann Fitzgerald, the defendants’ former

solicitors, and in particular, para. 34 of that affidavit which set out the documents which

the defendants were contending were covered by Category 8, McGovern J. gave a ruling

and ordered that his previous order of 20th February, 2017 be “recast”. McGovern J.

ordered that the discovery to be made by the plaintiffs in respect of Category 8(f) would be

in the following terms (in lieu of terms originally ordered):-

“1. All documents which evidence:-

Page 39 ⇓

(a) The consent and any terms thereof issued by NAMA in relation to

the sale by Victoria Hall Limited of the property at Alma Road,

Coventry and the property at Selly Oak, Birmingham.

(b) The contract and any terms thereof relating to the sale of the lands

at Alma Road, Coventry and Selly Oak, Birmingham by Victoria

Hall Limited to JJ Gallagher Limited.

in the O’Flynn Group and (ii) any of the plaintiff companies or any

directors of the plaintiff companies in relation to the transfer or sale

by Victoria Hall Limited of the properties at Alma Road, Coventry

and Selly Oak, Birmingham.

(d) The contract(s) or agreement(s) under which the plaintiff companies

or any of them acquired an interest in the lands at Alma Road,

Coventry and/or Milton Grove, Selly Oak, Birmingham.

2. Correspondence between the O’Flynn Group and/or any of the plaintiffs

and NAMA in respect of the Birmingham and Coventry sites sold by

Victoria Hall Limited, including correspondence in respect of the site to the

north of Dale Road on which Victoria Hall Limited applied for planning

permission on 22nd September, 2011, disclosures to NAMA relating to the

above and requests for consents including form A’s and consents given by

NAMA;

3. Documents relating to planning applications made by Victoria Hall Limited

and/or Victoria Hall Management Limited in Coventry on 22nd June, 2011

and Birmingham on 22nd September, 2011, including disclosures made to

NAMA in respect of the applications and the subsequent grants of planning

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permission and the request and consents of NAMA relating to expenditures

on said planning applications.”

88. Paragraph 1 of Category 8(f) represented what the plaintiffs contended were the

appropriate documents to be discovered under Category 8(f). Paragraphs 2 and 3 came

from para. 34 of Ms. Harty’s affidavit (paras. 34(a) and 34(b) of that affidavit). The

plaintiffs accepted before McGovern J. that it was appropriate for them to make discovery

of those two further categories of documents under Category 8(f). As appears from the

transcript of the hearing and of the ruling made by McGovern J. on 11th July, 2017, the

court accepted that those were the documents which should be discovered under Category

8(f) as “recast” by the court that day on the basis that such discovery was fair, reasonable

and proportionate in light of the issues in the case.

89. I note that one of the categories of documents referred to in para. 34 of Ms. Harty’s

affidavit (at para. 34(f)) were:-

“Communications between the O’Flynn Group and/or the plaintiffs and the

purchaser (JJ Gallagher) or any associated or related companies prior to or post

the sale by Victoria Hall Limited of the sites in Coventry and Birmingham;”

McGovern J. did not order discovery of that category of documents under Category 8(f).

Defendants’ Motion for Further and Better Discovery

90. The defendants now contend that plaintiffs should be required to make further and

better discovery of the documents listed in the notice of motion issued in respect of the

third motion (concerning the Coventry and Birmingham sites). In the first place, they

contend that those documents ought to have been discovered under the terms of the order

made by McGovern J. on 11th July, 2017. Consequently, they seek further and better

discovery of those documents on foot of that order. The defendants rely on a submission

advanced by the plaintiffs’ counsel to McGovern J. in relation to the discovery being

offered by the plaintiffs under Category 8(f) in support of their contention that the order

Page 41 ⇓

made covered the documents sought by the defendants in the third motion. Alternatively,

my understanding of the defendants’ position is that even if the documents now sought

were not covered by the terms of the order of 11th July, 2017, the plaintiffs ought

nonetheless to be directed to make discovery of those documents (which they contend are

relevant and necessary for the purpose of discovery) in the interests of justice.

91. The plaintiffs oppose the defendants’ motion on a number of grounds. First, they

object to the circumstances in which the defendants have brought the motion and object to

some of the material relied on by the defendants in support of the motion. In particular, the

plaintiffs object to the admissibility of a witness statement signed by Tony Barry on the

basis that it amounts to impermissible hearsay evidence. Second, the plaintiffs contend

that the documents sought by the defendants in this motion do not fall within the terms of

Category 8(f) as ordered by McGovern J. on 11th July, 2017. The plaintiffs contend that the

documents now sought by the defendants on this motion were amongst the categories of

documents which the defendants sought before McGovern J. but that he refused to direct

the plaintiffs to make discovery of such documents. The plaintiffs observe that the

defendants did not appeal the order of McGovern J. and are, in effect, seeking to go behind

the order in their motion before the court. Finally, the plaintiffs contend that the discovery

sought is not necessary for the fair disposal of the proceedings or in the interests of justice

having regard to the material which the defendants already have by way of discovery and

the evidence and other material they were in a position to put before the court for the

purposes of their motion.

(1) Procedural objection: Admissibility of witness statement

92. The plaintiffs have taken issue with the admissibility in evidence on this motion of

a witness statement signed by Tony Barry, who worked for the O’Flynn Group between

2004 and 2014. Although it was directed by the court (Haughton J.) at the call over of the

motion in the week preceding the hearing that Mr. Barry’s witness statement should not be

Page 42 ⇓

included in the papers furnished to me, inadvertently the defendants’ solicitors included a

copy of that witness statement. The defendants apologised through their counsel for this

inadvertence and that apology was accepted. I did not read the witness statement in

advance of the hearing. However, I have done so for the purpose of giving judgment on the

defendants’ motion.

93. Before considering the plaintiffs’ objection to the admissibility of Mr. Barry’s

witness statement, I should identify the material put before the court for the purpose of the

defendants’ motion. The motion was grounded on an affidavit sworn by Mr. Cox on 26th

June, 2019. In that affidavit, Mr. Cox relied on what was said by the plaintiffs’ counsel at

the hearing before McGovern J. on 11th July, 2017. Mr. Cox asserted that it had been

represented to the court that the recast categories together with admissions made by the

plaintiffs would give the “full picture of what was and was not disclosed to NAMA”. He

asserted that discovery made by the plaintiffs did not give that “full picture” and that the

plaintiffs had not made discovery of any documents relating to an alleged agreement under

which Mr. Gallagher was “interposed as a middleman” between the O’Flynn Group and

certain of the plaintiffs in order allegedly to “disguise the true market value of the site from

NAMA”. Mr. Cox then referred to Mr. Barry’s witness statement and to matters of which it

is alleged he was personally aware in terms of dealings between Mr. Gallagher and

representatives of the plaintiffs.

94. Mr. Millar swore an affidavit on the same date in which he exhibited a witness

statement signed by Mr. Barry. Mr. Millar introduced the witness statement by stating (at

para. 3 of his affidavit):-

“In the course of the preparation for the trial of the action, I sought and received a

witness statement from Mr. Tony Barry…”

Mr. Millar did not say anything else about the witness statement. In particular, he did not

indicate when the witness statement was taken (I note it was signed on 11th June, 2019).

Page 43 ⇓

Nor did Mr. Millar indicate that there was any particular difficulty in Mr. Barry swearing

an affidavit for the purposes of the defendants’ motion in the terms of his witness

statement.

95. A replying affidavit was sworn on behalf of the plaintiffs by Mr. Nesbitt on 9th

July, 2019. Mr. Nesbitt’s affidavit set out in detail the grounds on which the plaintiffs were

objecting to the defendants’ motion which I have summarised earlier. Mr. Nesbitt disputed

certain of the allegations contained in Mr. Cox’s affidavit and contested the defendants’

entitlement to any relief on foot of their motion. A couple of days before the hearing of the

motion, the defendants furnished to the plaintiffs three further affidavits in support of their

motion. I understand that no mention was made of the intention to put these affidavits in at

the call over the previous week.

96. The first of the three additional affidavits was an affidavit sworn by Simon Fox on

16th July, 2019. Mr. Fox is a former employee of Tiger Developments Limited (which was

part of the O’Flynn Group) and worked with Mr. Cox. He is a development manager of

Carrowmore Property UK Limited. His affidavit contains certain allegations against the

plaintiffs and refers to alleged dealings between representatives of the plaintiffs and Mr.

Gallagher in relation to the purchase and onwards sale of the two sites in Coventry and

Birmingham. The second additional affidavit was an affidavit sworn by Mr. Millar on 16th

July, 2019. The purpose of Mr. Millar’s affidavit was to exhibit a report by Sean Murray

FCA which bears the date 16th July, 2019. Mr. Murray is an accountant and a partner in

Conlan Crotty Murray (although the plaintiffs point to material suggesting that that firm

was the subject of a merger and has been known by a different name since 23rd May,

2019). In any event, Mr. Murray’s report analyses the documents discovered by the

plaintiffs in relation to the Coventry and Birmingham sites and sets out certain conclusions

made by Mr. Murray adverse to the plaintiffs from the discovered documents in relation to

the sale of the Coventry and Birmingham sites and the information and material disclosed

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to NAMA. The third additional affidavit provided was a second affidavit sworn by Mr.

Cox on 16th July, 2019 which responded to Mr. Nesbitt’s replying affidavit and made

certain further allegations against the plaintiffs in relation to the Coventry and Birmingham

sites. Finally, Mr. Nesbitt swore a replying affidavit on behalf of the plaintiffs on 18th July,

2019 which commented on the affidavits provided by the defendants and Mr. Murray’s

report and denied allegations contained in those affidavits and in that report.

97. It is in that context that I must first consider the objection made by the plaintiffs to

the admissibility of Mr. Barry’s witness statement. Both parties accept that a witness

statement is not evidence (unless and until the witness gets into the box and confirms its

contents or it is otherwise agreed as evidence between the parties). In my view, were it not

for the fact that the defendants did, albeit very belatedly, put in further affidavits in support

of their motion in the days immediately prior to the hearing, I would most likely have ruled

that Mr. Barry’s witness statement was inadmissible as amounting to impermissible

hearsay. I agree with the approach taken by Murphy J. in F & C Reit Property Asset

Management plc v. Friends First Managed Pension Funds Limited [2017] IEHC 383 (“F

& C Reit”) and by Noonan J. in Joint Stock Company Togliattiazot v. Eurotoaz Limited

[2019] IEHC 342 (“Eurotoaz”) as to the circumstances in which hearsay may be

admissible on an interlocutory application. In particular, I agree with the conclusion

expressed by Noonan J. in Eurotoaz that, notwithstanding that hearsay evidence may be

admitted on an interlocutory application in light of O. 40, r. 4 RSC, it “should not be

admitted as of course but only where it is unavoidable for genuine reasons of urgency or

difficulty in procuring direct evidence.” (per Noonan J. at para. 16, p. 8).

98. Proceeding on the assumption that an application for further and better discovery is

an interlocutory application (but making no definitive finding on that point), and accepting

that there may be circumstances in which hearsay evidence may be admitted, I agree that

this should only arise where it is “unavoidable for genuine reasons of urgency or difficulty

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in procuring direct evidence”, as noted by Noonan J. There was no explanation from the

defendants as to why an affidavit could not have been obtained from Mr. Barry in the

terms of the witness statement which he signed on 11th June, 2019. The defendants issued

their motion just over two weeks later. There is no indication in any of the affidavits sworn

on behalf of the defendants of any difficulty in procuring direct evidence in the form of an

affidavit from Mr. Barry. Nor is there any assertion of urgency by the defendants or

suggestion that it might have been difficult to obtain an affidavit from Mr. Barry for the

purposes of the motion. Whatever about obtaining such an affidavit prior to the issuing of

the motion (and there is no indication that there was any difficulty in doing so), there is

certainly no suggestion that, in the four weeks or so between the date the motion was

issued and the date of the hearing on 19th July, 2019, an affidavit could not have been

obtained from Mr. Barry.

99. While the defendants submitted that just as the court can look at documents

discovered in order to point to the likelihood that other documents exist which have not

been discovered, and since documents discovered are not evidence unless proved in the

proper way or admitted, so to should it be possible to rely on a witness statement provided

for under O. 63A RSC in commercial proceedings in support of an application such as this.

However, I do not accept that submission. An application for further and better discovery

based on the assertion that documents discovered disclose the likelihood of further

documents which have not been discovered must be brought in a procedurally correct

manner and, on the assumption that such an application is an interlocutory one, any

affidavit sworn in connection with the application must comply with the provisions of O.

40, r. 4 as interpreted and applied by Murphy J. in F & C Reit and by Noonan J. in

Eurotoaz. If such an affidavit refers to and exhibits documents discovered in order to

demonstrate that there are other documents which have not been discovered, there can be

no objection to that. That is quite different to what has happened here where the defendants

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have sought to rely on Mr. Barry’s witness statement as if it were evidence in order to

make certain allegations against the plaintiffs and as if it were an affidavit. In my view,

that is not appropriate.

100. If the plaintiffs had adduced nothing further in support of their application than Mr.

Barry’s witness statement (as exhibited by Mr. Millar), I would more than likely have

refused the defendants’ application as being grounded on inadmissible hearsay evidence.

However, as I have explained, the defendants have relied on other affidavit evidence in

support of their application. Therefore, I do not find it necessary to make any formal order

declaring Mr. Barry’s witness statement inadmissible (notwithstanding the views I have

expressed in relation to it). I will proceed to consider the defendants’ motion on the basis

that there is admissible evidence before the court to ground the motion, in the form of the

other affidavits to which I have referred.

(2) Whether documents sought are within terms of Order of 11th July, 2017

101. As noted earlier, the defendants contend that the further discovery sought in this

application is covered by the terms of Category 8(f) as “recast” by McGovern J. in the

order of 11th July, 2017. The relief sought by the defendants on the motion is an order for

further and better discovery on the basis that the documents sought were required to be

discovered by the plaintiffs on foot of the order of 11th July, 2017. In support of their

application, the defendants rely on what was said by the plaintiffs’ counsel during the

course of the hearing before McGovern J. on 11th July, 2017. The plaintiffs’ response to

this is threefold. First, the plaintiffs contend that as a matter of principle, the order made by

McGovern J. on 11th July, 2017 cannot be interpreted or conditioned by what counsel said

during the course of the hearing preceding the making of the order. Second, they say that

even if counsel’s submissions could be used as an aid to the interpretation of an order, the

submission actually made by the plaintiffs’ counsel is consistent with the order made by

McGovern J. Third, the plaintiffs make the point that wider discovery was sought by the

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defendants (as set out in para. 34 of Ms. Harty’s affidavit) and was refused by McGovern

J. The plaintiffs contend that if the defendants were unhappy with the order made, then the

appropriate course was to appeal the order and that it is not appropriate to seek to go

behind that order by means of the motion now brought by the defendants.

102. In my view, the plaintiffs are correct in submitting that as a matter of principle, an

order made by a court should be interpreted on its terms and not by reference to a

submission made by counsel in the course of the hearing that preceded the making of the

order. In other words, it is not appropriate to change or alter the terms of an order by

reference to submissions made by counsel unless the terms of the order themselves can

reasonably bear the meaning contended for. However, in my view, this debate is academic

on the facts of this case. The defendants rely, in particular, on what the plaintiffs’ counsel

stated at page 46 of the transcript of the hearing before McGovern J. on 11th July, 2017.

Having outlined what the plaintiffs were arguing were the appropriate documents for the

purpose of Category 8(f), the plaintiffs’ counsel then stated:-

“So now you get a total picture of our interaction with NAMA in relation to

Birmingham and Coventry. You can see what was disclosed. You can see what

wasn’t disclosed. You can see what was consented to and what wasn’t. That’s

everything sufficient for the plaintiff…”

103. The order made by McGovern J. on 11th July, 2017 recast Category 8(f) in the

manner set out earlier in this judgment. Category 8(f) as recast in the order of 11th July,

2017 (comprising the documents described at paras. 1, 2 and 3) required the plaintiffs to

make discovery of documents evidencing what was disclosed by the relevant plaintiffs to

NAMA in relation to the Birmingham and Coventry sites (see, for example, para.2 of

Category 8(f)). Category 8(f) as recast by that order did not direct the defendants to make

discovery of what was not disclosed to NAMA. However, once it can be ascertained what

was disclosed to NAMA, what was not disclosed can then be discerned. That is entirely

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consistent with what the plaintiffs’ counsel said in his submission to McGovern J. on 11th

July, 2017. Neither Category 8(f), as recast by the order of 11th July, 2017, nor the

submission by the plaintiffs’ counsel at the hearing can be interpreted as requiring the

plaintiffs to make discovery of what was not disclosed to NAMA in relation to the

Birmingham and Coventry sites or as indicating the plaintiffs’ agreement to do so.

104. In my view, therefore, the documents which the defendants now seek by way of

further and better discovery in order to substantiate the defendants’ allegations concerning

the alleged interposition of Mr. Gallagher as a middle man in the disposal of the two sites,

which it is alleged was not disclosed to NAMA, are not covered by the terms of Category

8(f) as recast by McGovern J. in the order of 11th July, 2017.

105. I am fortified in my conclusion on that issue by the fact that one of the categories of

documents which was being sought by the defendants at para. 34 of Ms. Harty’s affidavit

was the category referred to at para. 34(f) concerning communications between the

O’Flynn Group and/or the plaintiffs and Mr. Gallagher’s company prior to or post the sale

of the sites. The defendants’ contention that those documents were covered by the order

was expressly drawn to the attention of McGovern J. by the plaintiffs’ counsel (see p. 10 of

the transcript). Although the transcript does not fully reproduce the terms of para. 34(f) of

Ms. Harty’s affidavit, it is clear that counsel was reading from para. 34 of Ms. Harty’s

affidavit. In his ruling on the application (at pp. 50 to 54), McGovern J. was fully

conscious of the categories sought in Ms. Harty’s affidavit and was satisfied, on the

grounds of proportionality and necessity, to recast the order in the terms outlined by him

(at pp. 53 and 54 of the transcript). Those terms did not include the documents sought at

para. 34(f) of Ms. Harty’s affidavit in relation to Mr. Gallagher’s company. I am satisfied,

therefore, that the additional discovery now sought by the defendants does not fall within

the terms of the order made by McGovern J. on 11th July, 2017. Not only that, the

additional discovery being sought would have been encompassed by the discovery in sub-

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para. (a) of the defendants’ motion which was sought and not granted by McGovern J.

when he recast the order on 11th July, 2017. The discovery sought in sub-para. (b),

concerning RBS and the CoOp Bank, was not expressly sought before McGovern J. but

may well have been encompassed by the very wide issues originally agreed which were

then cut down or recast by McGovern J. They were not ordered to be discovered by

McGovern J. The appropriate remedy for the defendants if they were unhappy with the

order made was to appeal the order. They did not do so. The appropriate course was not to

seek further and better discovery. I will, therefore, refuse to direct the plaintiffs to make

further and better discovery of the documents referred to in the notice of motion (or any

expanded list of those documents which may now be put forward by the defendants) on

foot of the Order of 11th July 2017.

(3) Whether nonetheless an order for discovery should be made of the documents sought

106. Although I have concluded that the documents sought in the motion do not fall

within Category 8(f) of the order made by McGovern J. on 11th July, 2017, I must

nonetheless consider whether I should make an order that the plaintiffs make discovery of

those documents not by way of further and better discovery but by way of additional or

supplementary discovery. This was a fall-back position adopted by the defendants on the

application in the event that they were unsuccessful in establishing that the documents fell

within the category ordered by McGovern J. The defendants contend that the documents

sought are relevant and that it is necessary that they obtain them by way of discovery for

the fair disposal of the proceedings. They rely on the recent judgment of the Supreme

Court in Tobin in support of their argument that the ultimate objective of discovery is to

ensure that there is a fair trial.

107. The plaintiffs oppose the making of any additional order for discovery over and

above the order already made. They accept that if this were a fresh application for

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discovery, without the complex procedural history in respect of this application, the

additional documents sought would probably be relevant in the Peruvian Guano sense.

However, the plaintiffs contend that it is not necessary that the defendants obtain discovery

of these additional documents for the fair disposal of the proceedings. The plaintiffs

advance that objection on a number of grounds. First, they argue that having sought

discovery of documents in similar terms and having failed to obtain such discovery from

McGovern J., it would be inappropriate to make the order sought on this further

application. Second, they contend that the defendants do not need the documents sought in

circumstances where Mr. Murray has been in a position to prepare his report and to draw

the conclusions which he has sought to draw without at any stage suggesting that he was

hampered in doing so by the absence of the discovery now sought by the defendants.

Third, the plaintiffs refer also to other affidavits put forward by the defendants in support

of their application and to the submissions made by the defendants’ counsel as to the case

which they seek to make against the plaintiffs in relation to the alleged nondisclosure to

NAMA of significant facts concerning the disposal and onwards sale of the Coventry and

Birmingham sites and the subsequent development and operation of those sites.

108. I am satisfied that in the very particular circumstances of this case, I should not

direct the plaintiffs to make the additional discovery sought by the defendants. It is, to my

mind, very significant that discovery similar to that now sought by the defendants (in sub-

para (a) of their motion) was in fact raised and sought in the course of the application

before McGovern J. (as set out at para. 34 of Ms. Harty’s affidavit). McGovern J. refused

to order that discovery as explained in his ruling. He was satisfied that it was not necessary

or proportionate to recast the order in the wider terms proposed by the defendants and was

satisfied that the appropriate order to make was that suggested by the plaintiffs. While

McGovern J. did not have before him the additional evidence put forward by the

defendants in support of the motion now before the court, I am not persuaded that it is

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necessary for the defendants to obtain the additional discovery sought in order to advance

the case which they wish to advance as set out in the various additional affidavits relied

upon by them in support of their motion. Nor am I satisfied that the defendants have put

forward any stateable basis for obtaining discovery in respect of the documents in sub-

para. (b) concerning RBS and CoOp Bank. So far as I can ascertain from the papers, the

only mentions of RBS or CoOp Bank are a brief reference at para. 6.2 of Mr. Barry’s

witness statement and an explanation, at para. 32 of Mr. Nesbitt’s affidavit, averring that

they were the two banks that offered loan facilities to the two companies that ultimately

purchased the sites from Mr. Gallagher’s companies. Nothing is said about them in either

of Mr. Cox’s affidavits or Mr. Murray’s report.

109. On the contrary, I am satisfied that the plaintiffs have demonstrated that it is not

necessary for the fair disposal of the proceedings that the defendants obtain the additional

discovery. Mr. Murray was in a position to draw the conclusions which he drew on the

basis of the discovery documents provided to him and did not suggest that he was

hampered in drawing those conclusions by the absence of any documents. The defendants

have also been in the position to obtain an affidavit from Mr. Fox as well as being in a

position to rely on the affidavits sworn by Mr. Cox in relation to his personal knowledge.

In addition, of course, the defendants have obtained a witness statement from Mr. Barry. If

this were an entirely fresh application without the procedural history to which I have

referred, and if I were satisfied that an injustice would be done to the defendants if they did

not obtain the discovery sought on this application, I would have directed the plaintiffs to

make the additional discovery sought. However, I cannot ignore the procedural history and

the need to ensure that there is at some point finality in the discovery process. Proceedings

would become intolerably delayed and disrupted if it were possible, notwithstanding a

previous refusal of discovery, to return to seek discovery in similar terms at a later stage in

the process. That said, if I were satisfied that an injustice would be done to the defendants

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if they did not obtain this additional discovery, even with that procedural history, I would

have directed the plaintiffs to make the additional discovery. However, I am not satisfied

that any injustice would be done to the defendants for the reasons I have mentioned.

110. In those circumstances, I have concluded that I should refuse the defendants’

application.

Summary of orders to be made on the three motions

(1) The first motion: Plaintiffs’ motion for further and better discovery

(a) Further and better discovery in relation to Phase 2 Gardiner Street Project.

111. I will direct the defendants to:-

(1) Provide a detailed explanation on oath of all the redactions

made to the contracts for sale dated 23rd February, 2017 and

23rd November, 2018 (redacted versions of which were

exhibited at Exhibit “EK2” to the supplemental affidavit of

Eoghan Kearney sworn on 12th June, 2019) by affidavit to be

sworn by one of the personal defendants on behalf of all of

the defendants within 21 days of the date of the delivery of

this judgment or within such other period as may be agreed

between the parties or ordered by the court (time period

subject to further discussion with counsel).

(2) Make further and better discovery of all agreements in

relation to the purchase, sale, development and finance of

Phase 2 of the Gardiner Street Project within the possession,

power or procurement of the defendants or any of them as

referred to in the affidavits sworn by Patrick Cox, Eoghan

Kearney and Hugh J. Millar on 12th June, 2019. Such

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discovery to be made within the same period as at (1) above

(time period subject to further discussion with counsel).

(b)Further and better discovery re para. 1 of settlement agreement/Categories 1 and 2

of original discovery

112. I will direct the defendants to furnish a further explanation as to the methodology

used when the defendants’ discovery was originally made in October, 2017 and as to the

methodology used on the further review required to be carried out by the personal

defendants under para. 1 of the settlement agreement. That explanation should address how

the methodology originally applied resulted in documents falling under Category 2 being

missed, should explain how the further review of that methodology was carried out by the

defendants under para. 1 of the settlement agreement and should further explain how the

defendants can be satisfied that all documents falling under Category 2 have now been

discovered.

113. The terms of the orders to be made in respect of the first motion can be further

discussed with counsel including the question as to whether express undertakings should

be given by the plaintiffs in relation to the use of any documents to be provided on foot of

the orders made as considered by Haughton J. in Courtney and by Quinn J. in Sheehy.

(2) Second motion: Plaintiffs’ motion for discovery on amended pleas

114. I will discuss with counsel what orders (if any) need to be made in respect of the

second motion in circumstances where the defendants agreed to make further discovery by

9th August, 2019. As explained in the judgment, I am satisfied that the same conclusions I

reached in relation to the first motion on the requirement by the defendants to provide an

explanation as to the methodology adopted applies equally to the further discovery which

was required to be made by the defendants by 9th August, 2019.

(3) Third motion: Defendants’ motion for further and better discovery

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115. For the reasons set out earlier in the judgment , I refuse the defendants’ application

for further and better discovery of the documents sought in this motion.

116. I will hear counsel in relation to the precise terms of the orders to be made and in

relation to any other issues arising from the judgment on these three motions.