Supreme Court of Ireland Decisions

1. This is an appeal from the order and judgment of Mr Justice Smyth whereby he refused the application of the plaintiff/appellant, Paschal Phelan (Mr Phelan), for further and better discovery.

2. The proceedings herein were instituted by Plenary Summons dated the 12th June, 1989. The Statement of Claim was delivered on the 13th June, 1989, and the Defence of the first named defendant/respondent, Laurence Goodman (Mr Goodman), was delivered on the 8th January 1990. The reply to that Defence was delivered on the 27th March, 1990. An Order for Discovery was made against Mr Goodman on the 4th May, 1990. In pursuance of that and

3. In the following four years no significant step appears to have been taken by either party to process the litigation. It does appear that both Mr Phelan and Mr Goodman either directly or through companies in which they were involved experienced severe financial problems and a public investigation of the meat industry took place which no doubt required the time and attention of all of those, including Mr Phelan and Mr Goodman, who were involved in that industry. It is nonetheless surprising that proceedings involving substantial sums of money and allegations of the most serious nature were allowed by both parties to remain in limbo for such a lengthy period.

4. Before resuming the history of the matter it is appropriate to identify the cause of action as alleged in the Statement of Claim.

5. In the Statement of Claim it is stated that Mr Phelan avers that he and the secondly named defendant/respondent Zacharia El Taher (Mr Taher) became approximately equal shareholders in each of the ten companies in the Master Meat Packers Group (the Group) by virtue of a series of agreements made between Mr Phelan and Mr Taher on the 10th October, 1986. It is contended that Mr Taher held his shares in the Group through a Liechtenstein anstalt known as Master Meat Anstalt. The Statement of Claim goes on to contend that Master Meat Anstalt held Mr Taher’s share holding in the group companies as nominee for Mr Taher and subject to the terms of an agreement entitled “the Side Agreement” made on the 10th October, 1986, between Mr Phelan of the one part and Mr Taher of the other part. It

6. In paragraph 18 of the Statement of Claim it is alleged that as a result of the wrongdoing of the defendant a state of deadlock in the group was brought about as a result of which Mr

7. Phelan was compelled to invoke the “deadlock provisions” contained in the 1986 Agreements. It is alleged that negotiations then took place in the following circumstances:-

8. Mr Phelan ultimately sold his shares in the Group in circumstances which he described in paragraph 19 of the Statement of Claim in the following terms:-

9. Mr Phelan claimed damages under a number of headings but estimated the loss suffered by him in the sum of £13,200,000.

10. In a defence comprising some 50 paragraphs Mr Goodman denies each and every of the allegation of wrongdoing by him or any agent of his.

11. The far reaching complaints of fraud, conspiracy and abuse against Mr Goodman were repeated in affidavits subsequently sworn by Mr Phelan and indeed were emphasised in the written submissions to this Court summarising the Plaintiffs claim in the following terms:-

12. Having regard to the case being made by Mr Phelan it is not surprising that he views the conduct by Mr Goodman of these proceedings with suspicion and invites the Court to treat the sworn statements of Mr Goodman as at best misleading and more probably dishonest. For

13. Of this argument Mr Goodman and his solicitor Mr Smyth say first, that the report itself was produced and provided to Mr Phelan notwithstanding the belief of Mr Goodman that it was not relevant and further as Mr Noel Smyth swore in the affidavit dated the 18th July 1996:-

14. An other example of alleged non discovery to which the Appellant drew attention was the much discussed bank draft in the sum of US $9,750,000. Counsel for Mr Phelan drew attention to the copy of the draft drawn on the Caisse National de Credit Agricole in London in that sum and a further document dated the 14th of April 1987 requesting a draft in that amount which was signed for and on behalf of Goodman International Limited by Mr Goodman. Having regard to the sum which it is alleged in the Statement of Claim was paid on or about the 15th April 1987 for the 80% share holding in Master Meat Anstalt the relevance of any further communications between Mr Goodman and the Caisse National de Credit Agricole could not be disputed nor has it been. Counsel on behalf of Mr Phelan asks the Court to infer that such documentation must exist or must have existed and argues that a financial transaction of that magnitude could not take place without generating further documentation the originals or copies of which would come to the possession of Mr Goodman.

15. The response of Mr Goodman to that contention is contained in paragraphs 21 and 44 of the affidavit sworn by him herein on the 9th July 1996. In those paragraphs he deposes as follows:-

16. These two examples fairly illustrate the issue between the parties in relation to the allegation of non discovery of material documents. Obviously Mr Phelan cannot say with certainty whether any particular document is or has been in the possession Mr Goodman. What he can do and has done is to refer to the very limited banking documentation discovered by Mr Goodman and contend that there is a very high degree of probability that other relevant documentation exists and is available to Mr Goodman. However attractive this argument may appear it is met with a firm and unequivocal denial sworn by Mr Goodman and supported, so far as his knowledge extends, by the affidavit of his solicitor. In this context the issue is not whether particular documents are relevant or privileged but whether a document or range of documents is or has been in the power or possession of the deponent. Should the Court draw the inference suggested by the Mr Phelan or prefer the sworn statement of Mr Goodman? In Sterling-Winthrop Group Limited .v. Farbenfabriken Bayer AG [1967] IR 97 Kenny J considered the issue as to how far the sworn statement of a deponent making an affidavit of discovery was conclusive. At page 103 of the report he summarised the position as follows:-

17. These principles were applied by the Supreme Court in the unreported decision of Kreglinger and Fernau v. The Irish National Insurance Company (2nd July 1954) in which the Court reversed a decision of the High Court which ordered a further affidavit of discovery”

18. In the final paragraph of his judgment (at page 105) Kenny J concluded as follows:-

19. In addition to confirming the principle identified by Kenny J the case of Kreglinger & Fernau v. The Irish National Insurance Company provided a helpful illustration of the circumstances in which the Court would not go behind the sworn statement of the deponent by whom an

20. In that case it was conceded that the deponent did have certain documents in his possession and the issue was whether his sworn statement that those documents were irrelevant was effectively conclusive. This Court rejected that proposition but held in relation to the question of relevance that the court must be satisfied on the balance of probabilities that an error has occurred. Where a deponent accepts that he does have documents in his power or possession an effective order can be made to compel their discovery. Difficulties obviously

21. The other ground of appeal is that the learned Judge of the High Court erred in accepting the correctness and accuracy of the affidavits sworn by Mr Goodman insofar as they related to the claim of privilege made by him.

22. Mr Phelan was entitled to point out that the first affidavit of discovery sworn by Mr Goodman was manifestly defective insofar as it failed to identify the particular grounds of privilege claimed in respect of documents identified in that affidavit. It also emerged that bundles of documents in respect of which privilege had been claimed included documents to which no privilege extended. Adding those factors to the pre-existing bitterness and distrust made it unlikely that negotiations between the parties’ legal advisors would provide an acceptable solution. Nevertheless correspondence and meetings did take place between the legal advisors and various explanations were provided for the deficiencies which had existed

23. In my view the learned trial judge would have been justified on the evidence before him in dismissing the claim for further and better discovery in relation to documents in respect of which privilege was claimed. In addition, however, the learned trial judge undertook the burden of reading the numerous documents in this case and satisfied himself that privilege was properly claimed in respect of the documents. In my view that disposes conclusively of the issue in relation to discovery.

24. In the circumstances I would dismiss the appeal.