The High Court has ruled on HSBC Institutional Trust Services (Ireland) DAC’s application for further answers to interrogatories in a claim by Defender Limited involving about $333 million in funds allegedly lost through Bernie Madoff’s fraud. The court sustained two of Defender’s seven categories of objection and rejected the other five in principle, but did not make a final order setting out which questions must be answered.
The one-day hearing concerned about 650 questions served by HSBC on 2 March 2018. Defender supplied some answers on 13 April, but objected to answering others. HSBC sought an order under Order 31, rule 11 of the Rules of the Superior Courts requiring further and better answers. It also asked to extend pre-trial directions so it could review the answers before preparing witness statements.
Justice Twomey said the action was scheduled for a 12-week trial in October 2018. The judgment describes HSBC’s claim against Defender as alleging negligence and breach of contract concerning HSBC’s alleged role as custodian of funds placed with Bernard L. Madoff Investment Securities LLC. The substantive claims were not determined in this application.
The court upheld Defender’s objection to questions about Reliance Management (BVI) Limited and Reliance International Research LLC where the matters were within Reliance’s knowledge and the questions had also been delivered to those third parties. Reliance had answered them, subject to its own objections. The judge said asking Defender the same questions would add unnecessary costs.
The second upheld objection concerned interrogatories that required answers on matters of law, including whether Madoff’s company had a conflict of interest and what a trading agreement or custodian agreement required. The court said it would hear from the parties about the precise terms of any order addressing these two categories.
The court rejected objections that the questions sought document interpretation or concerned admitted documents, corporate awareness, witness statements, or a disputed term defined within the interrogatories. It said questions could concern a document’s subject matter if they did not ask the respondent to interpret the document. Questions requiring context could still be answered with that context.
On HSBC’s request to vary the witness-statement timetable, the judge accepted that HSBC should have an opportunity to review answers it had been unjustifiably denied. The court agreed to hear the parties on a suitable revised period. The judgment does not specify the final timetable or the exact answers to be ordered.