The High Court has refused Magnet Networks Limited’s second application to dismiss a claim brought by Declan Murphy and Darren O’Donohoe over payments under a 2008 agreement concerning their interests in Webtalk.
Mr Justice MacGrath found that the plaintiffs’ delay after discovery was completed in May 2016 was inordinate and inexcusable. But he ruled that the balance of justice did not warrant ending the proceedings, and refused the relief sought. The underlying contractual claim and the defendant’s counterclaim remain unresolved.
The dispute concerns how “customer” should be understood in the agreement. The plaintiffs say business and non-business customers should count when calculating a “Milestone 2 payment” and an “Earn Out one payment”. Magnet Networks says only business customers are relevant. Its counterclaim seeks rectification of the agreement in certain circumstances.
The defendant’s motion, issued in April 2018, followed an earlier dismissal order by the High Court in 2015, which the Court of Appeal overturned. The appeal allowed the case to proceed on conditions, including payment of €15,000 towards the expense of retaining a former company employee to assist with trial preparation. The plaintiffs transferred the money on 29 March 2018, after a prolonged disagreement between solicitors over when it was due and whether it was linked to discovery.
The defendant argued that the plaintiffs had failed to progress the case despite the Court of Appeal’s warning and that the accumulated delay created prejudice. The plaintiffs’ solicitor accepted that the €15,000 should have been paid earlier, describing the delay as a bona fide error caused by confusion with discovery. The plaintiffs also pointed to discovery, legal advice and work by forensic accountants on a report. They said the case was principally documentary and that no specific prejudice to the defence had been shown.
The judge accepted there was no effective delay between the Court of Appeal’s July 2015 decision and completion of discovery in May 2016. He found that no outward step to advance the substantive proceedings followed until after the second dismissal motion was issued. Although work had been happening behind the scenes, he considered the post-discovery delay inordinate, particularly in light of earlier delays and court directions. He was not satisfied that the explanation excused it.
However, the judge found no particular prejudice had been established. He considered that oral evidence would likely be needed, but that the trial would focus substantially on the contractual documents. There was no suggestion that the former employee who led negotiations for the defendant would be unavailable. Weighing the potential prejudice, the nature of the dispute and the circumstances in which the application arose, he concluded the balance of justice did not favour dismissal.
The ruling decides only the defendant’s application to dismiss for want of prosecution. It does not determine the parties’ claims about the agreement or the counterclaim for rectification.