The High Court has ordered Covestro B.V. to produce for inspection emails it had withheld from discovery in a building-defects dispute, finding it had not proved that their dominant purpose was preparing for litigation.
Mr Justice Quinn’s ruling concerns a discovery application by Ballytherm Limited under Order 31, rule 18 of the Rules of the Superior Courts. Ballytherm challenged Covestro’s claim of litigation privilege over eight listed emails. The judgment says some were duplicates, leaving at most seven distinct documents in issue.
The underlying action was brought by Kelland Homes Limited, developer of the Elder Heath residential development in Kiltipper, Tallaght. Kelland Homes claims that ground-floor slabs in some houses sank and that defects in Ballytherm insulation caused the problem. It says a remediation scheme cost about €2.2 million and that its losses continued to rise. Ballytherm alleges that a chemical supplied by Covestro caused or contributed to the insulation failure. Covestro denies liability and says any loss was caused by Ballytherm. Those claims remain allegations in the underlying action.
The emails were exchanged in August 2017 between Covestro employees and an expert appointed by its insurer, HDI Global. Ballytherm argued that litigation had not been in contemplation when they were created, pointing to Covestro’s litigation hold, which was not implemented until December 2017. The court accepted that litigation was reasonably apprehended by the time the emails were sent, given earlier notices and communications threatening claims.
But the court said that was not enough to establish privilege. It had to be satisfied that preparing for litigation was the dominant purpose for creating the documents. The evidence showed that a 31 July 2017 request from Covestro’s corporate insurance expert sought background for HDI about an earlier €500,000 goodwill offer. The court found that the disputed emails formed part of that enquiry, while no direct evidence from their authors established that litigation preparation was their dominant purpose.
Mr Justice Quinn therefore found Covestro had not discharged the burden of proving litigation privilege and ordered disclosure in the terms sought in Ballytherm’s notice of motion. He did not decide Ballytherm’s separate argument that privilege had been waived by disclosure of other emails in the same correspondence sequence, although he said there was force in it.
The ruling addresses inspection of the disputed emails only. It does not decide the underlying liability claims, which the judgment said were listed for hearing on 21 May 2018.