The Commercial Court recently considered the applicable test in relation to discovery in related cases which were proceeding before it. Judge McGovern, in considering the applications before him, addressed the relevant test for determining whether particular categories of discovery should be ordered by the court. In doing so, he also had to consider whether to order discovery of confidential and commercially sensitive documents.
Background
In Flogas Ireland Limited v Tru Gas and Flogas
Ireland Limited v Langan Fuels Limited 1 the
Commercial Court was dealing with claims, among other things, for
injunctions, damages and other forms of relief against the
defendants, arising out of their alleged use of the plaintiff's
gas cylinders, constituting infringement of the plaintiff's
registered trademarks and passing off. The defendants in each case
sought broad categories of discovery, not all of which were agreed
by the plaintiff.
While some objections with regard to discovery were specific to
the matters in dispute, and related to whether the requests were
grounded on the pleadings, the plaintiff made a general complaint
that the nature of the discovery sought required it to provide
sensitive market information in circumstances where the parties
were competitors. Therefore, the court had to consider whether to
order discovery of the categories sought and, if that test was met,
how to deal with the confidential or commercially sensitive
documentation.
The law
In determining whether to direct discovery of the categories
sought, the court cited at length from the decision inHartside
Ltd v Heineken Ireland Ltd.2 In the course of that
judgment, Judge Clarke cited other authority to the effect that the
principles to which a court should have regard are as
follows:
"(1) The court must decide as a matter of probability as
to whether any particular document is relevant to the issues to be
tried. It is not for the court to order discovery simply because
there is a possibility that documents may be relevant.
(2) Relevance must be determined in relation to the pleadings in
this specific case. Relevance is not to be determined by reason of
submissions as to alleged facts put forward in affidavits in
relation to the application for further and better discovery unless
such submissions relate back to the pleadings or to already
discovered documents. It should be noted that O. 31, r. 12 of the
Rules of the Superior Courts 1986 specifically relates to discovery
of documents 'relating to any matter in question
therein'.
(3) It follows from the first two principles that a party may not
seek discovery of a document in order to find out whether the
document may be relevant. A general trawl through the other
party's documentation is not permitted under the Rules.
(4) The court is entitled to take into account the extent to which
discovery of documents might become oppressive, and should be
astute to ensure that the procedure of discovery is not used as a
tactic in the war between the parties."
Importantly, he noted that competing considerations, which could
include information which is highly confidential, may need to be
considered on the facts of a particular case.
In this case, on the sensitive documents, the court also referred
toIndependent Newspapers v Murphy 3 where the
treatment of discovery of confidential documents was considered
more specifically. The court cited from that judgment as
follows:
"I am satisfied that the court should only order
discovery of confidential documents (particularly where the
documents involve the confidence of a person or body who is not a
party to the proceedings) in circumstances where it becomes clear
that the interests of justice in bringing about a fair result of
the proceedings require such an order to be made.
It is clear that confidential information (which is not
privileged) must be revealed if not to reveal same would produce a
risk of an unfair result of proceedings. The requirements of the
interests of justice would, in those circumstances, undoubtedly
outweigh any duty of confidence. There is ample authority for that
proposition which now may be taken to be well settled. Where,
therefore, it is clear that the materials sought will be relevant,
then discovery must be made notwithstanding any
confidentiality.
However, it seems to me that the balancing of the rights involved
also requires the application of the doctrine of proportionality.
To that extent, it seems to me to be appropriate to interfere with
the right of confidence to the minimum extent necessary consistent
with securing that there be no risk of impairment of a fair
hearing."
The court noted that, in seeking confidential information, the
authorities indicate that a party may need to specify legitimate
bases for seeking such information, since it is undesirable that
mere allegation might entitle a party to access such information.
It opined that:
"Where contested documentation is confidential, then the
courts should exercise special care to ensure that a party is not
given free access to such information without having satisfied the
court that there is some basis on which the documentation is likely
to be relevant and necessary."
Ultimately, the court allowed certain categories but refused
others on the bases, among other things, that the documentation
sought was commercially sensitive and that insufficient reason had
been furnished to require their discovery.
Comment
The case represents a welcome restatement of the principles applicable to discovery. However, the decision is perhaps more important because it identifies that for confidential – or at least commercially sensitive – documents, a party seeking them should take particular care to explain why those documents are relevant and necessary to matters in dispute. The danger is that if a party fails to do so, depending on the documentation involved, the court may determine that the balancing of rights mandates not ordering discovery.
Footnotes
1 [2012] IEHC 259.
2 [2010] IEHC 3.
3 [2006] IEHC 276.
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