The High Court has refused Independent News and Media plc’s application to pause proceedings brought by Karl Brophy and Gavin O’Reilly until court-appointed inspectors complete an investigation into the company’s affairs.
Mr Justice Garrett Simons ruled on 1 December 2021 that the investigation under Part 13 of the Companies Act 2014 was not a substitute for the civil proceedings. The inspectors’ findings and opinions would not bind the parties or determine the issues for the court, he said.
The plaintiffs’ claims arise from an alleged 2014 “data interrogation” of company computer data. The judgment describes allegations that backup tapes were removed from INM’s premises and searched over several months, and that the operation was directed by former INM chairman Leslie Buckley. These are allegations described in an earlier judgment; Justice Simons did not decide the merits of the plaintiffs’ claims in this application.
Brophy, who had worked as INM’s director of corporate affairs from January 2011 to October 2012, was among 19 people whose names were reportedly searched. O’Reilly, a former group chief executive, was not among the 19, but his former personal assistant Mandy Scott was. The inspectors’ terms of reference include examining the circumstances, purpose, knowledge of directors, results and payment for the data interrogation.
INM argued that the inspectors’ report could help determine the factual issues, narrow the pleadings and discovery, and reduce costs. It also said parallel proceedings risked inconsistent conclusions. The plaintiffs responded that the inspectors were fact finders reporting to the High Court, not a tribunal deciding the parties’ legal rights.
Justice Simons held that section 881 of the Companies Act 2014 makes an inspector’s report admissible as evidence of facts stated in it, unless the contrary is shown, but does not give those facts special weight. The trial judge would apply ordinary evidential rules and reach independent conclusions. Different findings by the inspectors and a court would reflect their distinct roles, he said.
The judge also found no proportionate basis to delay the claims. INM had not shown specific prejudice to its ability to defend the case, and its application was supported by an external solicitor without direct knowledge. The claims concern alleged events in 2014; the plaintiffs said they learned of the alleged wrongdoing in 2018 and filed proceedings in August 2019.
The stay was refused. The plaintiffs’ separate motion for judgment in default of defence remained outstanding. Justice Simons gave a provisional view that INM should have 42 days to file a defence, failing which judgment would be entered for the plaintiffs without another High Court application. He also provisionally considered that the plaintiffs should recover the costs of both motions from INM, with enforcement stayed until the proceedings are determined. Either party could seek a relisting within seven days to contest the proposed order.