Hoechst Marion Roussel (plaintiff) v Farchepro Limited and Others (defendants).

Practice and Procedure - Discovery - Application for leave to use documents discovered in litigation in this jurisdiction in proceedings in other jurisdictions - Whether court had jurisdiction to entertain application - Test to be applied in determining application.

The High Court (before Mr Justice Peter Kelly); judgment delivered (ex tempore) 14 January 1999.

The courts have a discretion to grant a release from or modify the implied undertaking by a solicitor in relation to discovered documents, viz., that they would not be used nor allowed to be used for any purpose other than the proper conduct of the action in which they were discovered. In the exercise of this discretion, first, there had to be a demonstration of special circumstances and, secondly, it had to be shown that the making of an order of this type would not occasion injustice to the person giving discovery. The court would also look at all of the circumstances of the application.

Mr Justice Kelly so held in granting the application of the plaintiff to use discovered documents in proceedings pending in Spain, but refusing the application to use the documents in proceedings pending in Switzerland.

Rory Brady SC, Michael Fysh SC, QC, and John Gleeson BL for the plaintiff; John Gordon SC and Brian O'Moore BL for the seventh defendant.

Mr Justice Kelly said that there were before the court two applications, brought by the plaintiff, for leave to use documents discovered by the seventh defendant, Madex Pharmaceuticals Limited, in proceedings pending before the courts of Spain and of Switzerland. It was common case that these documents, having been disclosed on foot of discovery orders, were subject to an implied undertaking on the part of the solicitors to the court that they would not be used nor allowed to be used for any purpose other than the proper conduct of the action in which they were discovered: Ambiorix Limited v Minister for the Environment (No 1) [1992] 1 IR 277; Home Office v Harman [1983] 1 AC 280, 284; Crest Homes plc v Marks [1987] 2 All ER 1074, 1083. The plaintiff sought to have that implied undertaking modified so as to permit the use of a small number of the documents already discovered in litigation pending in Spain and Switzerland.

Mr Justice Kelly said that the first matter for determination was whether he had jurisdiction to entertain the application at all. Counsel for the seventh defendant had submitted that there was no such jurisdiction and that the undertaking could not be released or modified in any way. Mr Justice Kelly said that while such an absolute prohibition was rare, he would give effect to such a prohibition if (a) he was obliged to do so on foot of a binding decision of the Supreme Court, or (b) he was persuaded that a persuasive decision to that effect from other courts represented the law in this State, or (c) that, in the absence of such persuasive authority, such a prohibition is itself sound in law.

The contention that the court was bound by a decision of the Supreme Court was based on dicta of the then Chief Justice, Mr Justice Finlay, in Ambiorix Limited v Minister for the Environment (No 1) [1992] 1 IR 277 and of Mr Justice O'Flaherty in Megaleasing (UK) Limited and Others v Vincent Barrett and Others [1993] ILRM 497. However, both of these statements were obiter. Mr Justice Kelly said that there was therefore no binding authority which compelled him to hold that he was devoid of jurisdiction to modify or vary the implied undertaking concerning the documents.

As for the persuasive authorities, these all supported the existence such a jurisdiction. It was abundantly clear from the decision of the House of Lords in Crest Homes plc v Marks [1987] AC 829 and from subsequent case law that there was such a jurisdiction in England and Wales. In the Irish jurisdiction, orders had been made in this very litigation by Mr Justice McCracken, and had been made in proceedings entitled Yske Bank (Gibralter) Limited v Jan Henning and Others by Mr Justice Costello in July 1995.

Mr Justice Kelly said that the seventh defendant had not convinced him to ignore this persuasive authority. There was no justification in an absolutist approach, which was likely to give rise to injustice and was not necessary for the protection of the rights of parties to litigation. Those rights were already addressed by the implied undertaking. In fact, without a jurisdiction to modify the undertaking in an appropriate case, the court's hand would be unduly and unnecessarily tied, and would frustrate the constitutional obligation which is imposed upon the court to administer justice.

Mr Justice Kelly concluded that he had a discretion to release from or modify the implied undertaking which affects solicitors to litigation of this sort concerning discovered documents.

The circumstances in which the court would make such an order would vary from case to case.

They might also vary depending on the type of order which threw up the documents which were the subject of the application. It was arguable that documents disclosed on foot of either an Anton Piller order or on foot of a Norwich Pharmacal or Megaleasing type order might fall to be approached differently from documents disclosed as part of the ordinary process of discovery in inter partes litigation. However, it was not necessary to deal with this aspect of the matter since counsel for the plaintiff had indicated that he was content to have the documents in suit in this case dealt with as though they had been disclosed in ordinary discovery. The rationale for that approach, which Mr Justice Kelly said appeared to him to be sound, was to be found in the judgment of Mr Justice Jacob in Jade Engineering (Coven- try) Ltd v Antiference Window Systems Ltd and Others [1996] FSR 461, 466, where he indicated that in a case concerning intellectual property rights, the same test is to be applied as though the documents were thrown up in ordinary discovery.

Mr Justice Kelly said that the next question for determination was as to the principles which ought to apply in considering an application of this sort. He referred to Crest Homes plc v Marks [1987] 2 All ER 1074, 1083, where Lord Oliver said that the court would not release or modify the implied undertaking given on discovery save in special circumstances and where the release or modification will not occasion injustice to the person giving discovery. In that case, it had been purely adventitious that there happened to be two actions.

Mr Justice Kelly said that in the exercise of this discretion, first, there had to be a demonstration of special circumstances and secondly, it had to be shown that the making of an order of this type would not occasion injustice to the person giving discovery. However, the exercise of the discretion did not stop there.

In deciding whether or not to grant leave, the appropriate approach for the court was to look at all of the circumstances, including, if necessary, the circumstances of the original disclosure, the nature and strength of the evidence, the type of wrongdoing which is alleged to be involved and the interests of both the applicant and the party providing discovery as well as any public interest which may be involved.

Applying those principles, Mr Justice Kelly said that there were special circumstances which would warrant making an order of the type sought. Among the matters which were germane were the fact that the court was dealing with an infringement or an alleged infringement of the same or similar patents, the product which was the subject matter of the litigation was the same. The court was dealing with both trans-national and indeed international alleged infringements and the product appeared to emanate from the same source.

The next question to be addressed was the general exercise of the discretion. Bearing in mind the factors already set out and the obligation to avoid injustice as between the parties as much as possible, Mr Justice Kelly said he would consider each of the two species of documents in respect of which disclosure was sought.

As regards the Swiss litigation, Mr Justice Kelly said that he would refuse relief to the plaintiffs. He was not satisfied that any injustice would be caused to the plaintiff at this stage by this refusal and it was without prejudice to their entitlement to revive that application at the conclusion of the litigation. There was a danger of an injustice being caused to the party disclosing the information by virtue of the fact that it appeared that the confidentiality which they would wish to afford to the document might be lost by that document being placed into the domain of the Lugano court. That was a risk which the court ought not to take.

Over and above that, Mr Justice Kelly said that he was quite satisfied that, as far as the plaintiff's claim in Switzerland was concerned, it was admitted that there was no urgency involved in obtaining the documents the subject matter of the application. There was therefore no injustice caused to the plaintiff by having to wait until such time as there was a fuller exposition of the issues as between the plaintiff and the seventh defendant at trial. Mr Justice Kelly said that in this regard he was bearing in mind the approach expressed by the seventh defendant, namely, that if they were unsuccessful in this action, then there would be no objection to the disclosure of the documents, and even if they were successful, they might well take the same attitude although there was no watertight warranty being given by them in that regard.

Different considerations applied in the Spanish proceedings. There was an element of urgency. Those proceedings had moved very slowly, but they were now effectively over and an application would have to be made to admit these documents. There was no danger of loss of confidentiality in those proceedings. Firstly, the documents were going to be delivered into the custody of the Spanish court. The first matter to be dealt with in Spain was a determination by the trial judge as to whether the documents were admissible and whether they were relevant. If he decides against the plaintiff, then the documents would be returned forthwith and there was an undertaking to that effect. If, on the other hand, the documents were to be disclosed, they would be dealt with by court experts. They would not be put in the public domain. There was therefore a risk of injustice to the plaintiff if those documents were not disclosed and there was no risk of injustice to the defendant. The apprehension of the defendant was adequately protected by the way in which the documents would be dealt with by the Spanish court.

Mr Justice Kelly made an order permitting the use of the documents which were sought for the Spanish courts but refusing the use of the documents for the Swiss court. The determination concerning Switzerland was without prejudice to the entitlement of the plaintiff to renew this application at the conclusion of the trial. In that regard, Mr Justice Kelly said that he might have come to a different conclusion if he were satisfied that the trial here was going to be unduly delayed. It was his intention to ensure that the action as between the plaintiff and the seventh defendant, at least, would commence not later than the beginning of the Trinity term of this legal year.

On the application of the seventh defendant, he granted a stay on the order pending appeal to the Supreme Court.

Solicitors: Orpen Franks (Dublin) for the plaintiff; William Fry (Dublin) for the seventh defendant.

[This decision is under appeal to the Supreme Court.]