Supreme Court of Ireland Decisions

1. This is an appeal by the Church of Scientology, Mission of Dublin, Limited, John Keane, Tom Cunningham and Gerard Ryan, the defendants and appellants, hereinafter referred to as the defendants, from a reserved judgment of the High Court (Unreported, High Court, Geoghegan J., 30th April, 1999) and order dated 4th June, 1999. Mary Johnson, the plaintiff and respondent, hereinafter referred to as the plaintiff, instituted an action against the defendants in 1995 in which she seeks, inter alia , (a) Damages for conspiracy, misrepresentation and breach of her constitutional rights; (b) Damages for libel; (c) A declaration that the payments made by the plaintiff to the first named defendant, its servants or agents, in the sum of £1,915.45 ought to be set aside as having been procured by the undue influence of the first named defendant, its servants or agents; and, (d) An order directing the first named defendant, its servants or agents, to repay to the plaintiff the sum of £1,648.06 being the balance of the said sum of £1,915.45 due and owing to the plaintiff. The plaintiff brought a motion for further and better discovery against the defendants. On the hearing of the motion before the High Court the main issue raised was that of sacerdotal privilege in relation to counselling notes. The defendants claimed that there should not be disclosure of the documents on the basis of sacerdotal privilege. The High Court rejected this claim. The issue of sacerdotal privilege has not been appealed and is not an issue before this Court. There were other issues before the High Court relating to the nondisclosure of documents. It was submitted that the documents were in the procurement of the defendants. It is the issue of the possession, custody or power of documents which is at the kernel of this appeal.

2. The High Court (Geoghegan J.) ordered that certain documents must be procured by the first named defendant. He stated:

3. This clearly re-enforces my view that those documents are within the procurement of the Defendants.”

4. The Order of the High Court dated 4th June, 1999 stated:

5. Against that judgment and order, in an amended notice of appeal, the defendants have appealed on the following grounds:

6. The issue on this appeal is the disclosure of specific documents. The documents are those set out in the affidavit of Dympna Murphy, dated 2nd July, 1998, at paragraph 10. The documents referred to in paragraph 10A and 10B have been discovered. At issue are the documents mentioned in paragraphs 10C, D, E and F, of which it is deposed:

7. In the affidavit of Gerard Ryan, made on behalf of the defendants, on 19th October, 1998 in relation to the said paragraphs 10, C, D, E and F, he deposed as follows:

8. Mr. James Connolly, SC, counsel for the defendants, submitted that: (a) a party must disclose all relevant documents that either are or have been in his physical possession whether he has, or has previously had, a proprietary interest in them or not, or; (b) although they are not at present in his physical possession, are, or formerly were, under his control, either by his having, or having had, some, though not necessarily the entire, proprietary interest in them, or by his having, or having had, absolute control over them. Despite the reference by the learned trial judge to “procurement” he submitted that there is no such provision in the Rules of the Superior Courts.

9. Counsel referred to Bula Ltd. v. Tara Mines Ltd .[1994] 1 I.L.R.M. 111 at p. 113 wherein it was stated that there were three distinct concepts: possession, custody and power; that the three concepts are to be considered disjunctively, that is any document to which any one of them applies must be listed. He submitted that a party is not obliged to take steps which would place documents in his power or possession at some stage in the future, but which are not in his power at present; Lonrho Ltd. v. Shell Petroleum [1980] Q.B. 358 at pp. 375-376. He submitted that usually documents in a party’s power are those which are his property but which are not in his physical possession. Even where documents are not a party’s property, and are not in his physical possession, they may still be liable to disclosure and production if he has absolute control over them. The only established category of documents liable to disclosure on this ground is documents belonging to a company which is under the unfettered control of and therefore the alter ego of a director who is a party to the proceedings; Yates v. Ciba Geigy Agro Ltd. (Unreported, High Court, Barron J., 29th April, 1986), Horgan v. Murray [1999] 1 ILRM 257 at pp. 259-260. He submitted that documents in the possession or custody of a subsidiary company are not necessarily in the power of its parent company; Lonrho Ltd. v. Shell Petroleum [1980] Q.B. 358. He submitted that otherwise documents that are not a party’s property are not in his power. Mere rights of inspection

10. Counsel submitted that the two cases that appear to recognise a separate concept of procurement are Northern Bank Finance v. Charlton (Unreported, High Court, Finlay, P., 26th May, 1977) and Yates v. Ciba Geigy Agro Ltd. (Unreported, High Court, Barron J., 29th April, 1986). He submitted that if the sole basis of the decision in Northern Bank Finance v. Charlton was that the directors of the non-party company from whom the documents were to be procured were agents of the plaintiff, the decision was incorrect and that documents of one company are not within the power of another, wholly unrelated company, merely because they share a director who has a right to inspect documents belonging to the first company in his capacity as its director; the decision may, however, be justified on the ground that in that case the non-party company appears to have been largely controlled by the plaintiff and, in such circumstances, its documents might be considered to have been in the power of the plaintiff. He referred to Yates v. Ciba Geigy Agro Ltd. and to Barron J., at pp. 3-4 of his judgment, where he held that documents in the possession of the defendant’s parent company were within its “procurement” in that if the defendant sought them it would probably be supplied with them, and it was admitted that the documents would be made available to the defendant for the purpose of the trial. He argued that Barron J. appeared to think that “procurement” was a distinct head of control for the purpose of the rules, additional to “possession or power”. However, no authority was cited other than Northern Bank Finance v. Charlton and it was submitted there is no authority for it in the rules.

11. Counsel submitted that there were a number of High Court decisions inconsistent with Northern Bank Finance v. Charlton and Yates v. Ciba Geigy Agro Ltd. He referred to Bula Ltd. (in Receivership) v. Tara Mines Ltd . (Unreported High Court, Murphy J., 11th January, 1991); and Murphy v. J. Donohoe Ltd. [1996] 1 I.R. 123, at pp.130-131 cited with approval a passage from Halsbury’s Laws of England (4th edition), Volume 13, paragraph 39. Counsel submitted that the decisions Northern Bank Finance v. Charlton and Yates v. Ciba Geigy Agro Ltd. appear to be inconsistent with the subsequent decision of the Supreme Court in Bula Ltd. v. Tara Mines Ltd. [1994] 1 I.L.R.M. 111 where the Court, referring to the terms used in the rules, held that a party was only obliged to disclose documents in his “possession, custody or power”. He referred to Quinlivan v. Conroy [1999] 1 IR 271 where Kinlen J. at p. 275, referring to Bula Ltd. v. Tara Mines Ltd. specifically noted that there was no such concept as “procurement” in the rules. Counsel referred to the observation in the Supreme Court of O’Flaherty J., in the same case at p. 281, that even if the Assistant Commissioner who endorsed an extradition warrant was in some sense the “agent” of the British authorities, this “agency” did not confer on the Commissioner an enforceable legal right to obtain the documents from those parties, consequently they were not within his power.

12. Counsel also referred to the judgment of this court in Irish Nationwide Building Society v. Charlton (Unreported, Supreme Court, 5th March, 1997) where Murphy J. referred to the plaintiffs having obtained copies of correspondence between their solicitors and solicitors for a non-party from the latter solicitors and added at p.7 of his judgment that “The plaintiffs clearly were not bound to obtain such documentation...”

13. In relation to the issue of agency, counsel submitted that a document held by the agent of a party is normally the party’s property if it was created in the course of the agency and for the purpose thereof. He submitted that to this there are exceptions. For example, a contract of agency may confer the proprietary interest on the agent.

14. Counsel submitted that in this case there is no corporate relationship at all between any of the English church corporations and any of the defendants. None of the English church corporations has any legal interest in the first-named defendant, their only link is that they are obliged to propagate the same belief system. Even if they had a corporate link, which they do not, only if the controller is the party does it have the documents of the entity controlled in its power, it can have no power over documents that have never been in its physical possession and that belong to the controller. A subsidiary’s documents may be in the power of its parent, but the parent’s documents cannot be in the power of the subsidiary. He submitted that the English church corporation are not agents of the defendants generally. They were not, specifically, agents of the appellants for the purpose of the creation or holding of any undisclosed document in this case and no such documents were created in the course or for the purpose of such an agency. There were documents created in the course of the relationship between the second, third and fourth named defendants, on the one hand, and the plaintiff on the other, which are in the custody of the English church corporations, but no objection on the ground of this custody was ever taken to the disclosure or production of these documents, and they have now all been disclosed.

15. Counsel submitted that a court may not go behind the oath of a party that he does not have certain documents in his possession, custody or power merely because, for whatever reason, it concludes that it is probable that the parties have more documents. The court must be satisfied by specific evidence that the party’s statement is incorrect, and he referred to Phelan v. Goodman [2000] 2 ILRM 378.

16. Counsel pointed out that the document sought as being in the procurement of the defendants in that they or copies of them allegedly would be supplied by the English church corporation on request are an I.Q. test; an OCA test; an aptitude test, allegedly completed by the plaintiff in or about 1st April, 1994 at East Grinstead; a success story allegedly completed by her in or about the same time; a security check-list allegedly prepared by her in or about the same time; a project to prepare sheet allegedly completed by the plaintiff at East Grinstead on or about 4th April, 1994 pursuant to her intention to join the CSEA Organisation and an alleged agreement dated 4th April, 1994 between the plaintiff and the CSEA Organisation. Counsel submitted that, contrary to the learned trial judge’s findings in his judgment, none of these documents was ever in the possession of the defendants or was ever their property or indeed would such documents or copies of them be furnished to the defendants on request nor, if they exist, were they in any sense created in any capacity as agents of the defendants or any of them. Nor can the defendants state whether they ever existed, or control, or authorise, a search for them in England, or give an account of their whereabouts.

17. Counsel submitted to the court that it was important that the scope of disclosure be limited. He argued that the main reason for such limitation is that, if a party fails to comply with an order for discovery, he or she may, if a defendant, have his or her defence struck out and be placed in the same position as if he or she had not defended. This may be acceptable so far as the documents are in his or her physical possession so he or she has direct control over them or has a proprietary interest which, if need be, the court can require him or her to enforce. However, it is not satisfactory for parties here, including the three personal defendants, who can have their defence struck out because they are in no position to comply directly with the order. He submitted that to preclude a defendant from defending proceedings because of the alleged default of some person over whom he has no control would be a denial of a defendant’s constitutional right to fair procedure. He submitted that this is the reason why the fact that documents, or copies thereof, which are in the possession of a foreign entity of a similar description to a party resident within the jurisdiction which might be supplied in the ordinary course by the foreign entity to the resident party cannot place the resident party under an obligation to obtain the documents. If a foreign organ is under the control of the resident party the documents may well be within the party’s power but otherwise it would be unfair and unconstitutional to make the party’s right to defend an action depend on its ability to obtain documents from a person outside the jurisdiction whom he could in no way control.

18. Counsel submitted that the point at issue is of great importance over and above the facts of this case. A rule that limits discovery to documents that are or have been the property of a party, or are or have been in his or her physical custody, or are under his absolute dominion where no other person has a legal right to interfere with disclosure, sets clear limits to the duty to disclose. A rule that requires a party to “procure” documents that are not within these categories on the other hand is potentially boundless. It requires searches to be undertaken by people who are not under the control of the party for documents that the party has never seen and has no right to obtain. He referred to Lonrho Ltd. v. Shell Petroleum [1980] 1 W.L.R. 627 at p. 636, per Lord Diplock.

19. Counsel submitted that the learned trial judge appears to have believed that it was argued for the defendants that there were relevant but undisclosed documents that were no longer in the possession of the defendants in that they had been sent to branches of the church in the United Kingdom. However, he submitted, no such argument was ever made and there are no such documents and there was no evidence before the court supporting the learned trial judge’s conclusion that there were such documents. Further, he said, the English church bodies are not branches but separate corporate entities.

20. Counsel submitted that the learned trial judge appears to have believed that documents were being shifted out of the jurisdiction to avoid discovery. He said there was no evidence before the court for this conclusion. He submitted that that is not so and that the existence of any documents, including in particular those included in the counselling folder, which had been transferred abroad, have been disclosed.

21. Mr. John Hennessy, BL, counsel for the plaintiff, submitted that the defendants had made lengthy submissions on the subject of “possession, custody or power” much of which, he submitted, was irrelevant to the matters under appeal. He argued that the net issue is whether the learned trial judge was correct in law in ordering the defendants to make discovery of certain specific documents which are mentioned in paragraph 10 of the affidavit of Dympna Murphy recited above and which refer to the plaintiff, originals or copies which would routinely be procurable at the request of the defendants and which are not fully and adequately discovered already. He distinguished Bula Ltd. v. Tara Mines Ltd. [1994] 1 I.L.R.M. 111 and said that the issue of interpretation is still open. He pointed out that the statement of law by O’Flaherty J. in Quinlivan v. Conroy [1999] 1 IR 271 is obiter dicta. He submitted that to make an enforceable legal right an absolute prerequisite for documents to fall within the power of a party under Order 31 Rule 12 of the Rules of the Superior Courts would be too restrictive. In particular it would risk permitting organisations with operations outside the State to evade discovery of relevant documents otherwise obtainable by ensuring that they originated and remained with the foreign operation. He submitted that this was the thinking behind the order of the learned High Court judge and that it was correct. He submitted that the learned trial judge recognised in his judgment that, notwithstanding the formal corporate structures adopted by the Church of Scientology in various jurisdictions, “two branches of the same institution are involved”. He referred to references in affidavits to the first-named defendant and its sister organisation operating as a single organisation. He referred to statements in documents relating to original documents being sent to England, to original documentation being requisitioned from England, and contact being made about documentation with England. And, finally, he referred to the affidavit by the fourth defendant, quoted by the learned High Court Judge at page 9 of his judgment, where it was said:

22. The Court was informed that there was no dispute as to the obligation to produce counselling notes.

23. Counsel submitted that the nature of the relationship between the Irish and the English branches of the Church of Scientology is akin to a parent/subsidiary relationship between corporations. He argued that the relevant case law is set out in the judgment of Barron J. in Yates v. Ciba Geigy Agro Ltd. (Unreported, High Court, Barron J., 29th April, 1986). In that case the learned trial judge found that discovery could be ordered in respect of documents in respect of the parent company of the defendant on the grounds that “Possession alone is not the test. Documents may be in the power or procurement of a party even though they are not in his possession” and “In the present case, there is no reason to suppose that a request for such documents by the defendant would be refused.”

24. Counsel pointed out that the Rules of the Superior Courts make no reference to the concept of procurement. He pointed out, however, that one of the defendants used the term “procurement” in one of the affidavits.

25. Counsel referred to the argument in relation to agency. The fact that it was submitted that even if the documents in question are at present outside the control and possession of the defendants, the English branch of the Church of Scientology was acting as agent for the first named defendant when the relevant documents were created. He referred to the finding of agency by the learned trial judge.

26. Counsel submitted that the documents which the plaintiff believes to be in the possession or power of a United Kingdom branch of the Church of Scientology were, in fact, created as a result of the plaintiff’s attendance at courses delivered to her by the United Kingdom branch acting as agent for the first named defendant. Counsel submitted that the agency is demonstrated by a number of facts, not least of which being the fact that one of the activities

27. Counsel submitted that documents held by an agent and created in the course of the agency and for the purpose thereof are the property of the principal. He submitted that this places the documents in question in the ownership of the first named defendant, giving it a legally enforceable right to obtain them and thereby rendering them discoverable under Order 31 Rule 12 and the decision of this honourable Court in Bula Ltd. v. Tara Mines Ltd. [1994] 1 I.L.R.M. 111. Counsel submitted that there is no merit in the defendant’s submissions relating to the position in which they find themselves if they fail to comply with the order of the High Court. The order limits the discovery obligation to those documents which would be routinely procurable by the defendants. At the hearing held to clarify the scope of the order the learned trial judge made it clear that he would be very sceptical of any assertion by the defendants that any of the documents covered by his order had been bona fide destroyed. It is clear that documents routinely procurable can, by definition, be obtained and produced and that therefore the defendants must be prepared to face the full consequence of non-compliance with the order of the High Court if they fail to produce the documents.

28. Order 31, Rule 12(1) of the Rules of the Superior Courts states:

29. In the said Rules Appendix C, No. 10, paragraph 7 sets out the form of affidavit provided;

30. The averment is:

31. In relation to the discovery of documents the law evokes three concepts, possession, custody and power; see Order 31, Rule 12(1) Rules of the Superior Courts and Appendix C, No. 10, paragraph 7. In Bula Ltd. v. Tara Mines Ltd. [1994] 1 I.L.R.M. 111 at p. 113, O’Flaherty J. stated:

32. This statement was reinforced in Quinlivan v. Conroy [1999] 1 IR 271, at p. 281, when O’Flaherty J., in a judgment agreed to by the four other members of the Court, referred to the fact that an enforceable legal right to obtain the documents is necessary, stating:

33. Thus a document to be discovered must be in the possession, custody or power (in accordance with the enforceable legal right test) of a party.

34. In this case the learned High Court Judge in his judgment directed that the documents now in issue be procured by the first named defendant and be produced for inspection to the plaintiff. That direction was based on the premise that the documents in question were in the possession of the English Church of Scientology Corporation as agents of the first named defendant. In effect the learned High Court Judge was holding that the documents were within the power of the first named defendant because of an agency relationship with the English Church of Scientology and for that reason could be procured by them.

35. As to the matter of agency, the first named defendant is sued in its capacity as a corporation. On the basis of the facts adduced in this application the first named defendant is a separate corporate body to the English Church of Scientology corporation. While it has been shown that both corporations work towards the same goal and that they have co-operated in matters of mutual interest, it has not been established that, on the facts of this case, the English corporation acted as the agent for the first named defendant in relation to the documents at issue. This is not to say that the first named defendant and the English Church of Scientology must be treated in all circumstances as if they were wholly separate and distinct corporate entities operating at arms length. The Court is not concerned with the general relationship between those two entities but only with their relationship so far as it is relevant to the documents in issue in this discovery application. The documents now in issue between the parties originated in England, were created by the English Church of Scientology and have never been in Ireland. It has not been established by the plaintiff that the English corporation created or has custody of those documents as the agent for the first named defendant. Indeed, in this case the evidence is that the English corporation acted independently and not as agent for the other in respect of those documents. Accordingly, the plaintiff has not established that the first named defendant had an enforceable legal right to obtain the documents in question from the English corporation. The fact that the English corporation may have acted as the agent of the first named defendant in other specific situations does not confer on the first named defendant an enforceable right to obtain the documents in question and they therefore are not within its power.

36. A party is only obliged to disclose documents in his possession, custody or power. To this rule there may be rare exceptions. However, these rare exceptions are examples of the judge, in his or her discretion in the circumstances of a particular case, making a determination on the facts. Such exceptions may be seen in the cases of Northern Bank Finance v. Charlton

37. The decision of Finlay P. in Northern Bank Finance v. Charlton (Unreported, High Court, Finlay P., 26th May, 1977) may be seen as a practical solution to a special problem rather than a novel interpretation of the relevant rules. What the learned President said at page 19 of the transcript of the judgment was as follows:-

38. It will be appreciated that the learned President was dealing with a particular document which he believed - having regard to the relationship between the plaintiff company and the company is whose possession it was - could be obtained for the asking. But he made no concluded finding to that effect and, in the terms quoted, effectively reserved the right to the plaintiffs to return to the Court to explain whether the document was forthcoming.

39. It may therefore have been an exception in practice rather than an exception in principle. Certainly the facts are readily distinguishable from the present case. Non-party discovery will resolve any such problems in the future where it relates to documents within the jurisdiction.

40. Thus this too may be regarded as a practical solution to a particular set of circumstances rather than an exception in principle. I am satisfied that the relevant legal principles were correctly set out by O’Flaherty J. in Bula Ltd. v. Tara Mines Ltd. [1994] 1 I.L.R.M. 111 and Quinlivan v. Conroy [1999] 1 IR 271.

41. Documents which are in the possession, custody or power of a party must be discovered. A document is in the power of a party when that party has an enforceable legal right to obtain the document.

42. The documents in issue in this case are not in the possession, custody or power of the defendants and the defendants have no enforceable legal right to obtain them. Accordingly, the plaintiff is not entitled to the discovery sought. I would allow the appeal.