By Aisling Byrne
The High Court has rejected claims of litigation privilege over most communications between four developers and HomeBond in proceedings concerning alleged pyrite damage to 681 houses across three North Dublin estates.
Irish Asphalt Ltd, the first named defendant, sought inspection of documents withheld by Hansfield Developments, Viking Construction, Menolly Properties and Menolly Homes. The houses were built from 2002, and the developers allege that infill or quarry material supplied by the defendants contained high levels of pyrite which expanded and caused cracking to floor slabs and other defects.
The disputed documents were communications between the developers and the National House Building Guarantee Company Ltd, known as HomeBond. The developers were registered with HomeBond, whose scheme provided structural defect cover for registered new homes.
By the time of the application, the developers had already waived privilege over 84 of 316 documents created by HomeBond and 32 of 209 documents received by it.
The remaining dispute centred on litigation privilege. That protection applies where a document is created for the dominant purpose of preparing for litigation that is reasonably anticipated or under way.
The developers argued that they and HomeBond shared a common interest because both could be affected by claims arising from the alleged defects. Irish Asphalt disputed that there was a legally sufficient common interest.
Mr Justice Brian McGovern held that the developers and HomeBond did not have the necessary common interest. More importantly, after reading the documents, he found they were mainly concerned with investigating the pyrite problem and deciding how defects should be addressed.
Although the communications could be relevant to anticipated claims, the judge was not satisfied that preparing for litigation was their dominant purpose. He therefore held that privilege did not attach to them.
One document was treated differently: a letter dated August 27, 2007 marked “strictly without prejudice”, concerning confidential settlement terms in another dispute. The court upheld privilege over that letter.
The judge said he would hear counsel on the precise form of the resulting order.