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Cite as: [1998] IESC 18, [1999] 1 ILRM 171

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Brooks Thomas Ltd. v. Impac Ltd. [1998] IESC 18; [1999] 1 ILRM 171 (29th July, 1998)

Denham J.

Lynch J.

Barron J.

100/96

THE SUPREME COURT

BETWEEN/

BROOKS THOMAS LIMITED

Plaintiff/Respondent

and

IMPAC LIMITED

Defendant/Appellant

JUDGMENT delivered on the 29th day of July 1998 by LYNCH J. [Nem. Diss.]

1. This is an appeal by the defendant/appellant from an order of the High Court (Geoghegan J.) made on the 6th March 1995 and a

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supplemental order made on the 10th July 1995 directing the appellants to make further discovery on oath of documentation referred to in a letter dated the 29th September 1993 from the plaintiff/respondent’s solicitors to the appellant’s solicitors subject to stringent conditions designed to preserve and protect the appellant’s right to confidentiality and trade secrecy in the said documents.

THE FACTUAL BACKGROUND

2. The respondents carry on business as timber merchants and builders providers. In the mid-1980s the respondent’s business was losing substantial moneys and the respondents were becoming financially straightened. The appellants are international business consultants and in April 1987 the respondents engaged the appellants to advise them how to improve their work practices and efficiency so as to reverse the financial

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problems from which they suffered. The respondents say that the appellants represented and warranted that they had the skill, experience and know-how to achieve the foregoing improvements in the respondents’ work practices and financial standing and on foot of those representations and warranties and following a month’s preliminary investigation and analysis by the appellants of the respondents’ said business the respondents engaged the appellants to carry out the foregoing work, the period of engagement to be thirty-four weeks commencing on the 20th April 1987.

3. The respondents allege that the appellants did not have the skill, experience or know-how to achieve the foregoing improvements and that they thus failed to achieve promised interim improvements. Accordingly, the respondents dispensed with the appellants’ services on the 16 ^th

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4. September 1987 being a period of only 21 weeks after the commencement of the retainer.

THE PROCEEDINGS

5. Having regard to the views which I have formed in this case it is necessary that I set out in some detail the various steps in the action to date.

6. The subject matter of the action is a contract and the performance of it which dates back some eleven years ago. The plenary summons alleging breach of contract, negligence and misrepresentation was issued on the 4th December 1987 that is to say over ten and a half years ago. The statement of claim was delivered on the 7th April 1988 over ten years ago. It is a detailed statement of claim running to six typescript pages. Particulars of alleged breach of contract, breach of warranty and misrepresentation run to two closely typed full pages without any break or

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gap for paragraphs. Detailed particulars of the alleged negligence and the alleged loss and damage are also provided, in the case of loss and damage in precise sums. The appellants delivered their defence and counterclaim on the 2nd March 1989. It runs to five typescript pages with a total of seventeen paragraphs. The respondents delivered their reply and defence to counterclaim on the 12th May 1989 running to four typescript pages and nineteen paragraphs.

7. In addition to the foregoing formal pleadings the appellants served a notice for particulars in February 1989 running to five pages which was replied to by the respondents on the 8th June 1989 running to nine pages. The respondents served a two and a half page notice for particulars dated the 12th May 1989 which was replied to by the appellants on the 6th October 1989 running to eight pages.

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8. Up to this point the litigation had moved at quite a reasonable pace. The pleadings were closed within two years of the issue of the plenary summons. The parties had given and obtained full and detailed particulars of their respective stances and one might reasonably expect that notice of trial would be served by the respondents before the end of 1989 followed by setting down for trial and that thereafter the trial would have taken place before the end of 1990, that is to say within a period of three years from the issuing of the plenary summons. Such an expectation in modern litigation, however, appears to be quite unreal. Although neither party appears to have had any difficulty in formulating detailed pleadings or in giving answers to the detailed queries put in the notices for particulars, what happened next was not the service of notice of trial by the respondents but the service by them of a motion for discovery on the 30th November 1989 to which the appellants consented before the

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9. Master of the High Court on the 12th December 1989 on terms of a cross order being made. So, instead of a trial before the end of 1990 it seems unlikely that a trial will now take place before some time in 1999.

10. The respondents swore their affidavit of discovery on the 9th February 1990 and the appellants swore theirs on the 12th February 1990. Two years then went by with no apparent progress. On the 13th March 1992 the respondents served a notice of intention to proceed. Nothing happened thereafter until the 29th September 1993 some one and a half years later when the respondents wrote to the appellants asking for a supplemental affidavit of discovery to which the appellants replied on the 20th October 1993 pointing out that more than a year had elapsed since the notice of intention to proceed of the 13th February 1992 and that the respondents should therefore serve another notice of intention to proceed before their letter of the 29th September 1993 might be considered. This

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the respondents then did by a notice of intention to proceed dated the 26 ^th October 1993 accompanied by a letter of the same date which reads as follows:

“We have your letter of the 20th October and now enclose notice of intention to proceed herein. As you are aware there was considerable discovery documentation which had to be perused which necessitated the issue of our letter to you of the 29th September. Can you now let us know whether or not you will be complying with the request contained in our letter which will obviate the necessity of having to issue a further motion immediately on the expiry of one month.”

11. If it took as it appears to have taken over three and a half years for the respondents’ solicitors and perhaps also junior counsel to peruse the “considerable discovery documentation” which had been discovered by the appellants I hate to think what that will cost when calculated by a firm of

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costs drawers at an appropriate hourly rate. Rule 12(3) of 0. 31 of the Rules of the Superior Courts relating to discovery of documents provides:

“(3) An order shall not be made under this rule if and so far as the Court shall be of opinion that it is not necessary either for disposing fairly of the cause or matter or for saving costs.”

12. On the basis of the respondents’ letter of the 26th October 1993 discovery in this case certainly does not satisfy the condition as to saving costs.

13. On the 20th June 1994 the respondents served a motion for further discovery of the documents specified in the letter of the 29th September 1993 and that is the matter which gives rise to the appeal now before this Court. On the hearing of the appeal it was agreed that all documents mentioned in the letter of the 29th September 1993 had now been discovered except those specified in paragraph (b) which reads as follows:

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“(b) All documentation relating to the management engineering and consultancy systems and approach of Impac which were or would have been relied upon by the defendants employees in approaching the management consultancy project in this case. All handbooks, guidebooks and standard reference works indicating the Impac approach to management consultancy/engineering should be discovered.”

14. Of these documents, it was also agreed that those mentioned in the first sentence of paragraph (b) had been discovered and that the only documents in issue were those in the second sentence of paragraph (b) namely “all handbooks, guidebooks and standard reference works indicating the Impac approach to management consultancy/engineering should be discovered”.

SUBMISSIONS

15. Mr. Brady, SC, for the appellants submitted:

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(1) The documents in question do not relate to any issue as to whether or not the appellants fulfilled their contract with the respondents. They are for general use of the appellants for all classes of business and not just builders providers.

(2) The manuals, handbooks and guidebooks are confidential and contain trade secrets. We accept that this does not in itself amount to an answer to an application for discovery but the Court should be slow to order discovery in such a case. Hogan v. Bayer Products Ltd. (1950) 84 ILTR 145.

Mr. Brady accepted that it is no answer for the appellants to say that they complied with the terms of their handbooks and guidebooks. In fact the appellants will not be relying on these at all in their defence. The question is did the appellants fulfil the particular duties of their contract. Likewise it is not a valid point for the

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respondents to say that the appellants did not follow their general handbooks or guidebooks: the respondents must show a breach of particular duties of the appellants arising out of the particular contract or relationship between them and the respondents.

(4). All documents relating to the actual contract and the work done pursuant to the contract and all forms generated arising out of that work have been discovered and the documents now in question do not advance either the respondents or the appellants cases one way or the other.

16. Mr. O’Moore, BL, for the respondents submitted:

(1) Everything is in dispute in this case including the question whether or not the appellants employees had the necessary skills, experience and know-how.

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(2) If it appears that the appellants did not follow their own handbooks and guidebooks in carrying out their work pursuant to their contract with the respondents that would tend to advance the respondents’ case against them.

(3) The test of relevance is whether the documents in question might directly or indirectly advance the respondents’ case or defeat the appellant’s case or lead to evidence which might do either or both. These documents fall within that test.

CONCLUSIONS

17. Discovery may be obtained of any document relating to any matter in question in the action. 0rder 31, Rule 12(1). In this connection the meaning of “relating to” has been enlarged to include any document “containing information which may - not which must - either directly or indirectly enable

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the party requiring the discovery either to advance his own case or to damage the case of his adversary, or which may fairly lead to a train of enquiry which may have either of those two consequences.” Compagnie Financiere du Pacifique v. Peruvian Guano Company (1882) 11 QBD 55 at 62 and 63. See also Halsbury (4th edition) Vol. 13 paragraph 38.

18. The first question is whether or not these handbooks, guidebooks or standard reference works fall within the foregoing definition. It is clear that it is no answer for the appellants to point to any of these books and say that they followed what is laid down there. The issue is did the appellants or did they not do what they were obliged to do by the terms of their contract with the respondents. If they did not, then it can be no defence for them to say that they did AB and C as recommended in these books when AB and C do not discharge their obligations to the respondents. In these circumstances it is not surprising that the

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appellants through their counsel have stated that they have no intention of relying in any way on these books at the trial on the basis that they are not relevant to the issues in this case. Secondly, it is not a valid point for the respondents to say that the appellants should have done AB and C because that appears in their own handbooks and that not having done AB or C they are therefore liable to the respondents. The respondents must establish that the appellants did things which they ought not to have done or omitted to do things which they were obliged to do by their contract/relationship with the respondents.

19. Perhaps one could see a tenuous relevance in these books on the issue of negligence if the respondents could first show a failure by the appellants to carry out some aspect of their obligations under their contract and then also show that this failure involved a departure from their own systems as laid down in one or other of these handbooks on the basis that this would

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advance the respondents’ case and damage the appellants’ case. Whether that is likely or not one cannot say, but it hardly seems necessary when it is remembered that the respondents must first and foremost show a breach by the appellants of some obligation or other created by or arising out of the contract/relationship between the appellants and the respondents which in itself would entitle the respondents to succeed.

20. In this case, nothing was done by the appellants behind the backs of the respondents. As was required by the contract between them, the respondents seconded staff, including staff of managerial status, to co-operate with and assist and receive instruction from the appellants. Hence the respondents were at all times fully aware of everything done or omitted to be done by the appellants and were able to formulate their claim in minute detail as to alleged breaches of contract, alleged breaches of warranty and alleged breaches of representations: also as to alleged

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negligence and as to alleged loss and damage. Those members of the respondents’ staff are (or if the case had come on for trial in 1990 as it ought to have done would certainly have been) available as witnesses to be called by the respondents to prove their case.

21. In these circumstances I cannot understand why the respondents in November/December 1989 decided to seek discovery of documents instead of getting on with their case, while memories were still reasonably fresh to prove the matters of which they complain. I am driven to the inference that discovery in this case was no more than a fishing exercise and was quite unnecessary. I do not impute any blame to either party for delay since the time of the judgments of the High Court in March and July 1995. Since that time the delay has been largely due to delays in the superior courts now happily greatly ameliorated. Nevertheless the delay in obtaining a trial from 1990 to not before 1999 all stems from the parties

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seeking discovery of documents, which seems to me to have been quite unnecessary, instead of getting on with the case and achieving finality in the High Court in 1990.

22. In relation to the further discovery the subject matter of this appeal I am satisfied that it is not necessary either for disposing fairly of the action or for saving costs and I would therefore reverse the order of the High Court and dismiss the motion for further discovery.

23. I wish to mention one final point. 0.31, r. 12(1) of the Rules of the Superior Courts provides that “any party may, without filing any affidavit, apply to the Court for an order directing any other party to any cause or matter to make discovery on oath of the documents which are or have been in his possession or power, relating to any matter in question therein.”

24. In view of the trend in modern times to seek discovery in almost every case

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the Superior Courts Rules Committee might consider changing r. 12(1) so as to require an affidavit before discovery is ordered.