The High Court has refused an application by six Quinn family plaintiffs to strike out the defence of Irish Bank Resolution Corporation Limited (in special liquidation) over alleged failures to comply with a discovery order.
In a judgment delivered on 27 November 2014, Ms Justice Costello also refused the plaintiffs’ request for further and better discovery. She said the bank had made a conscientious attempt to comply with the order and that errors and omissions had been corrected when identified. The court found no basis to conclude that the bank had tried to avoid discovery or wilfully refused to provide information.
The plaintiffs’ 2011 proceedings seek declarations that share pledges, guarantees and indemnities they gave to IBRC are invalid and unenforceable, and that the appointment of a receiver over shares is invalid. They allege that lending to Quinn companies was used to meet contracts-for-difference margin calls in breach of company law and the Market Abuse Directive. Those claims were not decided in this judgment.
The discovery order, made in July 2012, covered lending files, documents about loans, the bank’s knowledge of Quinn shareholdings and contracts-for-difference positions, personal guarantees, share pledges and board materials about the bank’s financial difficulties. IBRC’s solicitor said the bank had searched about 10 million electronic documents, hard-copy files and audio recordings, and had delivered supplementary affidavits as further documents were identified.
The plaintiffs raised complaints including missing documents, appendices, email attachments and bank statements, as well as the scope of audio searches. The judge accepted that some documents had been omitted from earlier affidavits, but found the omissions had been rectified and caused no prejudice in the examples considered. She directed that relevant bank statement information be provided, either in readable electronic form or as generated statements.
The court declined to require a review of all recorded calls. It noted that 278 recordings had been disclosed and that a wider search would involve very large numbers of calls, substantial cost and delay, with no objective evidence identified that further relevant material would be found. The judge concluded the proposed exercise would be grossly disproportionate.
The plaintiffs also sought inspection of original documents. About 670 items had been made available by agreement after the motion was issued, while around 300 originals remained to be located or retrieved. The judge ruled that an order compelling inspection was premature because the bank was still taking steps to gather the documents and the April 2015 trial date was fixed. The plaintiffs could renew the application nearer trial if the documents remained unavailable.
The court refused the requests to strike out the defence, order further discovery and compel inspection at that stage. The judgment did not determine the underlying claims.