The Court of Appeal has set aside a High Court order requiring Dengrove Designated Activity Company to disclose records relating to alleged compromises with the partners of Pat Ryan and changes to interest rates secured on City Quay properties. It refused discovery in both categories, while noting Dengrove’s offer to disclose any compromise agreements themselves.
The appeal arose in proceedings over loans taken out by two partnerships to acquire property at City Quay and Moss Street. Ryan argued that only the partnership loans were secured on the property. Dengrove maintained that the security covered other debts owed by partners. The Court of Appeal’s judgment recounts that the parties agreed a redemption amount of €17,379,125.09 in a settlement, but the settlement later broke down. The property was sold in July 2021.
Ryan’s amended claim included allegations that Dengrove had compromised debts owed by other partners, and that it had coordinated with some partners to inflate secured debt through interest charges. Those allegations were disputed by Dengrove. They were not findings by the court.
The High Court ordered discovery in two disputed categories. Category D covered records relating to compromise agreements between Dengrove and Ryan’s co-partners. Category F, as narrowed by the High Court, covered records referring to changes or proposed changes to interest rates charged or secured on the properties. Dengrove appealed those parts of the order.
The Court of Appeal held that Ryan’s pleaded case treated compromise agreements separately from cooperation agreements. Dengrove had offered to disclose any compromise agreements, which the court said would show whether debts had been reduced and allow Ryan to assess any financial benefit he might claim. The court found no demonstrated need for the additional records sought under Category D. It described their relevance as tenuous and set aside the broader discovery order.
On Category F, the court noted that Ryan had already received detailed information about interest on the partnership loans, and that the parties’ financial experts had resolved issues about its calculation before settlement. The court said the dispute over whether other partners’ loans were secured on the property depended on interpreting the security instruments, not on records of interest-rate changes. It found no adequate basis to conclude that the additional records were relevant and necessary.
The court concluded that both High Court discovery orders fell outside the range of decisions reasonably open to the judge. Dengrove therefore succeeded on the appeal. The court said Dengrove appeared entitled to the appeal costs and to the costs of the High Court discovery application, but described those views as provisional. Ryan had 14 days to notify the court and Dengrove if he wished to argue for different costs orders; a further brief hearing would then be arranged.