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1. This Action was commenced by way of a Plenary Summons issued on the 24th June 1998. Following an appearance entered on the 7th July 1998, a Statement of Claim was delivered on the 13th of July 1998. It is pleaded in the Statement of Claim that the first named Defendant was a Director of the Plaintiff Company and was also employed by it as Production Director and the second named Defendant was employed by the Plaintiff as Chief Engineer. Both resigned on the 29th January 1998 and commenced business immediately as National Linen Limited in competition with the Plaintiff. It is pleaded that the first named Defendant and the second named Defendant for the benefit of the third named Defendant had wrongfully used and will continue to use customer lists, price lists, business practices, business plans, tendering processes, product sourceing procedures and production methods all of which are confidential information and trade secrets of the Plaintiff. It is pleaded that the first named Defendant and the second named Defendant used part of their pre resignation working hours establishing the third named Defendant at the expense of the Plaintiff for the purpose of competing with the Plaintiff. Particulars are given of the seeking out and purchase of business premises, plant and equipment by the first named Defendant and the second named Defendant. It is pleaded that following their resignation the first named Defendant and the second named Defendant retained in their possession confidential information, in particular

2. Information to solicit customers of the Plaintiff.

3. A Defence was delivered on the 1st of February 1999 which is a general traverse with a plea that the Plaintiff is not entitled to any relief by reason of delay in instituting and prosecuting the proceedings and a plea that the Plaintiff is not entitled to relief because of a breach of the Competition Act, 1991, (as amended) namely combining with Third Parties (not identified) to share the market and directly or indirectly to fix prices.

4. An Order for the discovery of documents on oath by the Defendants was made by the Master of the High Court on the 4th of November 1999, (hereinafter referred to as the “Varied Order”). That Order was varied on appeal by the Order of Mr. Justice Kelly made on the 13th of December 1999. The Defendants were ordered within 8 weeks of the 13th of December 1999 to make discovery of all documents within their power or procurement relating to the matters hereinafter set out, such documents, as regards paragraphs a, b, f, g, and h to be limited to documents emanating from the Defendants and with liberty to the Defendants to redact from any such document confidential information relating to the business affairs of the third named Defendant, with liberty to the Plaintiff to challenge any such redaction:-

5. A. All steps taken by the first and/or second named Defendants prior to the incorporation of the third named Defendant including instructions to Company formation agents, Solicitors, Accountants and other professional advisors and/or communications between the first and second named Defendants concerning the incorporation of the third named Defendant.

6. B. The premises acquired by the Defendants for the purpose of the business of the third named Defendant at Bluebell Industrial Estate including any documents relating to the obtaining of finance for the purposes of the premises enquiries in relation to the finding of suitable premises and the establishment of the third named Defendants business in the said premises.

7. C. All accounts of the third named Defendant including draft or management or audit accounts for the period of 12 months after the incorporation of National Linen Limited.

8. D. The Statements of Account of the mobile phone accounts of the first and second named Defendants for the period of 6 months prior to the date of their resignation from the Plaintiff company in January 1998.

9. E. The business plan of the Plaintiff company and any communication with Third Parties and internal memoranda by the Defendants relating to the said business plan.

10. F. All documents relating to the obtaining of finance and/or loans for the purpose of funding the working capital and/or other capital requirements or the business of the third named Defendant prior to the resignation of the first and second named Defendants from the Plaintiff.

11. G. The retainer of the Defendants or any of them of Messrs. Deloitte and Touche Chartered Accountants Dublin for the purpose of their new business.

12. H. The retainer by the Defendants or any of them of Messrs. O’Flynn Exhams and Partners Solicitors Dublin in relation to the Defendants new business venture including the business of the third named Defendants.

13. I. All communication by the Defendants or any of them with Micross in the United Kingdom prior to the resignation of the first and second named Defendants from the Plaintiff in relation to the purchase or lease of equipment by the Defendants from Micross.

14. J. All communication by the Defendants or any of them during the period of 6 months prior to the date of the resignation of the first and second named Defendants with any other equipment suppliers and or providers of services in relation to the purchase of goods and/or services by the Defendants from the said suppliers for their new business venture.

15. In compliance with the Varied Order an Affidavit as to documents was sworn on the 4th of February 1999 by the first named Defendant.

16. A Notice of Motion dated the 17th of May 2000, returnable for the 3rd of July 2000 was served by the Plaintiff on the Defendants seeking various relief's by way of further and better discovery. Having heard considerable argument and submissions by Counsel for the Plaintiff and the Defendants I permitted the Plaintiff to amend the Notice of Motion so as to seek:-

17. I. An Order directing the Defendants to make further discovery without redaction or all accounts of the third named Defendant including draft accounts management and audit accounts for the period of 12 months after the incorporation of the third named Defendant.

18. A. All correspondence with South Dublin County Council relating to the pollution control licence or the application for a pollution control licence for the third named Defendant at its premises at Bluebell Avenue.

19. B. All documents relating to and correspondence with any other Third Parties concerning the pollution control licence for the purpose of the Defendants new premises.

20. C. All documents relating to the establishment of a contract water charges account.

21. D. All documents emanating from the advisors and/or agents of the said Defendants prior to the incorporation of the third named Defendant and relating to the incorporation of the said third named Defendant and/or the establishment of its business.

22. E. All documents emanating from the advisors and/or agents of the Defendants concerning the acquisition of premises at Bluebell Industrial Estate for the purposes of the third named Defendants including any documents relating to the obtaining of finances for the purpose of the premises, enquiries in relation to the finding of suitable premises and the establishment of the third named Defendants business in the said premises.

23. F. All documents emanating from the advisors and/or agents of the Defendants relating to the obtaining of finance and/or loans for the purposes of funding the working capital and/or other capital requirements of the business of the third named Defendant prior to the resignation of the first and second named Defendants from the Plaintiffs Company.

24. G. All documents emanating from Messrs. Deloitte and Touche relating to the new business venture of the Defendants prior to the resignation of the first and second named Defendants from the Plaintiff Company.

25. H. All documents emanating from O’Flynn Exhams and Partners relating to the new business venture of the Defendants including the business of the third named Defendant prior to the resignation of the first and second named Defendant from the Plaintiff Company.

26. A Director of a Company owes strict obligations of good faith, fair dealing and honesty to the Company of which he is a Director. Aspects of these obligations commonly referred to as, “Fiduciary duties” , include a duty not to compete with the company, a duty to act in the best interests of the Company and a duty not to use confidential information obtained as such Director otherwise and for the benefit of the Company.

27. Very similar terms are implied into contracts of employment including a duty on the part of the employee not to use or to disclose any confidential information obtained by him as such employee except in the interest of his employer.( See Chitty “On Contracts” Volume 2(1994: 27th Edition) Pages 370 - 375; Robb -v- Greene ( 1895) 2QB315). This implied obligation not to disclose confidential information covers such matters as customer lists, trade secrets and their equivalent for example chemical formulae and secret processes of manufacturer. In the case of Lansing Linde Limited -v- Kerr, (1991) 1WLR 251, a “trade secret” was held to include, “information used in a trade, restricted in its dissemination and the disclosure of which would be liable to cause real or significant harm to the party claiming confidentiality”.

28. This implied obligation of confidentiality continues, subject to the exception of the employees own general skill and knowledge, even after the determination of the contract of employment and applies whether the employee had recorded the information in some tangible form or had merely committed the information to memory. (Robb -v- Greene (above cited); Printers and Finishers Limited -v- Holloway , (1965) RPC 239 at 255).

29. The remedies available in respect of such breaches are injunction, an Order for the delivery up and destruction of any material containing or derived from the misuse of confidential information, an account of profits, and damages in addition to or in lieu of injunction.

30. The Judgment of Brett L.J. in the case of Compagnie Financiere et Commerciale du Pacifique -v the Peruvian Guano Company , LR11 QBD55 at 50 was approved and followed in this jurisdiction by Kenny J in the case of Sterling Winthrop Group Limited -v- Farbenfabriken Bayer A.G . (1967) IR97 at 101/102, and in a number of more recent cases in the High Court and the Supreme Court. It is sometimes overlooked that in this Judgment, Brett L J dealt not only with the question of discovery but also with the question of further discovery, (which was in fact the issue in that case). Because the question of further discovery also arises in the present case I consider it to be of importance that I set out the principles which Brett L.J. expressed as applying both in the matter of discovery and in the matter of further discovery. The learned Lord Justice held as follows:-

31. Mr Justice O'Flaherty had earlier commented that:-

32. At page 2 of Simpson Bailey and Evans, “Discovery and Interrogatories”, (Second Edition 1990), the authors make the following pertinent statement regarding the purpose and use of discovery:-

33. Statutory Instrument number 233 of 1999, which became operative on the 3rd August 1999, substituted the following for the original text of Order 31 Rule 12 of the Rules of the Superior Court 1986, namely:-

34. This new rule was most probably put in place following the observations of Lynch J. (Denham and Barron J.J. concurring), in the case of Brooks Thomas Limited -v- Impac Limited, (1999) 1ILRM 171 at 174.

35. In the report of the case of Brooks Thomas Limited -v- Impac Limited (above cited) the Supreme Court is said in the head note of the Report to have held, approving Hogan -v- Bayer Products Limited (1950) 84 ILTR 145 that the fact that, (documents), were confidential and contained trade secrets was not in itself a reason for refusing discovery but the Court should be slow to Order discovery in such case. As appears at page 175 of the Report this was the submission of Counsel for the Appellants as recorded by Mr. Justice Lynch. However, I do not think that the Supreme Court made any ruling on this submission nor was any such ruling necessary for the conclusions reached by the Supreme Court.

36. In Simpson Bailey and Evans, “Discovery and Interrogatories” (Second Edition: 1990), citing Warner- Lambert Company -v- Glaxo Laboratories Limited (1975) RPC 354 at 358 and Church of Scientology of California -v- Department of Health and Social Security (1979) 1WLR. 723 at 746/7, the authors state the law as follows:-

37. In my judgment the Plaintiff has not been guilty of delay in its conduct of this action. It had in the words of Lynch J in Brooks Thomas Limited -v- Impac Limited, (above cited) at page 174, “moved at quite a reasonable pace”. Just over 25 months have elapsed since the commencement of the proceedings. In my judgment there is no evidence to suggest that the Plaintiffs have not been, “getting on with the case and achieving finality”. It is impossible to suggest that the trial will be unnecessarily and unreasonably delayed by this motion or has been so delayed by any previous requests or applications for discovery of documents. The present application could not by this yardstick be said to be unnecessary or unfair. The facts of the present case and the progress of the litigation are altogether different from those in Brooks Thomas Limited -v- Impac Limited , (above cited). As Lynch J pointed out in that case:-

38. Mr. Justice Lynch in his judgment then went on to demonstrate that most if not all of this delay after the first two years was caused by applications for discovery.

39. The Notice of Motion in the present application is grounded upon an Affidavit sworn on the 16th of May 2000 and on a supplemental Affidavit sworn on the 4th of July 2000, both Affidavits being sworn by John O’Dwyer, Solicitor of Arthur Cox Solicitors who are the Solicitors on the Court Record as acting on behalf of the Plaintiff in the action. The Affidavit sworn on the 16th of May 2000 exhibits a letter dated 4th April 2000 from the Solicitors for the Plaintiff to O’Flynn Exhams and Partners, the Solicitors on Court Record as acting for the Defendants in this action, seeking voluntary further discovery and to a letter in reply dated the 28th of April 2000 from the Solicitors for the Defendants. This letter dated the 28th of April contains the following passage:-

40. In my Judgment the Plaintiff is clearly entitled to discovery upon oath pursuant to paragraph C of the Varied Order of all accounts, and I emphasise 'all', of the third named Defendant of whatsoever nature and howsoever described which cover the period of 12 months after the incorporation of the third named Defendant or any part of it and whether or not these accounts also cover any subsequent period of time. It is clear from the letter of the 28th of April 2000 from the Defendants Solicitors that such accounts exist. The non disclosure of these accounts amounts to a clear non compliance with the Varied Order.

41. Paragraph 1 of the Order of Mr. Justice Kelly is clearly referring to the laudable practice of furnishing copies of documents listed in the “non privileged” schedule of an Affidavit as to documents with that Affidavit. In my Judgment it would be impossible to single out and exclude any part or parts of these accounts so as to leave the remainder either intelligible or useful. Accordingly I direct that the Defendants shall no longer be at liberty to obliterate or exclude any part or parts whatsoever of these accounts. It is a matter for determination by the Defendants and their legal advisors as to whether they will furnish these full and unaltered accounts to the Solicitors for the Plaintiff with the Affidavit as to Documents or await a request for inspection and copies and any further Order of this Court. I direct that access to the duplicate or photocopy accounts furnished by the Defendants shall be confined to the legal advisors of the Plaintiff and to any expert witnesses retained on behalf of the Plaintiff to whose evidence they may be reasonably relevant, unless and until otherwise ordered by this Court.

42. As to the category of documents mentioned at 2 (a), (b) and (c) of the amended Notice of Motion the Plaintiff claims that discovery of such documents is sought for the purpose of indicating the date or dates when the first named Defendant and the second named Defendant or one or other of them was or were acting in breach of their obligations and duties towards the Plaintiff. I am satisfied on the submissions made to the Court by Counsel for the Defendants that something called a Pollution Control Licence was never sought by or on behalf of the third named Defendant from South Dublin County Council. An Effluent Discharge Licence was sought from South Dublin County Council on the 4th of September 1997 and was granted on the 12th of February 1998. A copy of the application for this licence, the licence itself, and a covering letter dated the 12th of February 1998 from South Dublin County Council to National Linen Limited addressed to Bluebell Avenue, Bluebell Industrial Estate, have been furnished by the Defendants to the Plaintiff. It will be remembered that both the first named Defendant and the second named Defendant resigned from the Plaintiff Company on the 29th of January 1998.

43. In my Judgment the Plaintiff is entitled to discovery of all correspondence by or on behalf of the Defendants or any of them with South Dublin County Council and vice versa and any notes records or memoranda of other communications to or from South Dublin County Council in the period prior to the 2nd December 1997 in relation to the Effluent Discharge Licence. Likewise in my Judgment the Plaintiff is entitled to discovery of any correspondence passing between the Defendants and any of them and South Dublin County Council and vice versa, and any other documents or records of other communications to or from South Dublin County Council in the period prior to the 29th January 1998 in relation to the establishment and operation of a contract water charges account the existence of which is referred to in the application for the Effluent Discharge Licence and is not denied by the Defendant.

44. In the absence of any evidence as to the probable existence of the documents or correspondence sought at 2(b) of the Notice of Motion the Plaintiffs application for discovery of this category of documents is refused.

45. In the letter dated the 28th of April 2000 from the Defendants Solicitors to the Solicitors for the Plaintiff it is stated that this plan was initially drafted in 1997, that no copies of the original are held by the Defendants and that the document discovered is the current or latest update of the plan. National Linen Limited was incorporated on the 8th of October 1997.

46. The first named Defendant does not aver at paragraph 4 of his first Affidavit sworn on the 12th of July 1999 or at any part of his Affidavit sworn on the 14th June 2000 that there is no correspondence or no records of any communications from other parties to himself and the second named Defendant or to one or other of them in relation to the incorporation of the third named Defendant. However, he does claim privilege in respect of communications with Solicitors, and further claims that such documents are not relevant to any issue in the case.

47. In my Judgment the Plaintiff is correct in submitting that in these circumstances on the balance of probability this category of document does exist and is relevant to establishing the date or dates, prior to the 29th of January 1998, when the first named Defendant and the second named Defendant or one of them was or were acting in a manner contrary to the interests of the Plaintiff and their duties towards the Plaintiff. In my Judgment the Plaintiff is entitled to discovery of all correspondence to the first named Defendant and the second named Defendant or to either of them and to all records of communications to them or either of them prior to the 8th October 1997 from any agent, advisor or Solicitor or any person whatsoever in relation to the setting up and incorporation of the third named Defendant.

48. It is clear from the “Project Linen Business Plan” and from the application for the Effluent Discharge Licence that the premises at Bluebell Avenue, Bluebell Industrial Estate had been acquired by the Defendants prior to the 8th of October 1997. Section 6 of the plan is headed, “Premises and Location” and contains the following passage:-

49. In my Judgment the Plaintiff is entitled to discovery of this detailed premises specification pursuant to paragraph "B" of the Varied Order.

50. The Plaintiff is also entitled to discovery of all correspondence and documents from auctioneers, architects, engineers, solicitors, financial institutions and any other person or persons whatsoever and all records of communications from any such person or persons to the first named Defendant and the second named Defendant or to one of them in relation to the search for business premises generally, the acquisition of the premises at Bluebell Avenue and the sourceing and obtaining of any acquisition finance.

51. I will not make an Order in respect of documents relating to, “the establishment of the third named Defendants business in the said premises”. No sufficient reason has been advanced as to why such documents are required to be discovered or why such discovery is necessary for disposing fairly of the cause or matter or for saving costs. In my Judgment an Order for discovery in these terms would be oppressive and unduly burdensome on the Defendants.

52. Limited as they are to the period prior to resignation of the first named Defendant and the second named Defendant from the Plaintiff company on the 29th of January 1998, in my Judgment the categories of documents of which discovery is sought at paragraphs (f), (g), and (h), of the amended Notice of Motion are relevant to the issues between the parties in this action as establishing the date or dates and the nature and extent of the activities of the first named Defendant and the second named Defendant in relation to the conception formulation and setting up of the third named Defendant at a time when the first named Defendant and the second named Defendant were still in the employment of the Plaintiff and the first named Defendant was still a Director of the Plaintiff. They may also provide evidence or lead to a train of enquiry that information confidential to the Plaintiff was used by the first named Defendant and the second named Defendant in this process. In my Judgment discovery of these documents and records is necessary for disposing fairly of the cause and for saving costs.

53. It is perfectly clear from the Affidavit evidence before the Court that such Documents and records not only are likely on the balance of probabilities to exist but do in fact exist. Given the very limited time frame in respect of which discovery is sought in relation to these Documents and records in my Judgment such discovery could not reasonably be claimed to be oppressive or unduly burdensome on the Defendants or on any solicitors accountants or financial institutions from whom the Defendants might have to procure some of these documents or records.

54. If the Defendants truly believe and are so advised by their legal advisors that some or all of these Documents are privileged from disclosure they may be listed in the, “Privileged Schedule”, of the Affidavit as to documents and the exact nature of the privilege claimed for each document or group of similar and related Documents set out. However, the documents must be listed in the Affidavit as to documents setting out the date, the parties to and the nature of each document or group of similar and related documents. In my Judgment the Plaintiff is entitled to discovery on oath of the documents and records specified at paragraphs (f), (g) and (h) of the amended Notice of Motion and I so Order.

55. If the Defendants opt to permit inspection and additionally or alternatively to furnish copies of these documents and records without a further Order of the Court, (if such be granted and as to which I express no opinion), such inspection shall be of the original documents or the best copies thereof available if the original documents no longer exist for reasons stated, in their full form and text and no duplicate or photocopy furnished shall be altered whether by obliteration or exclusion in any manner or to any extent. Such inspection and additionally or alternatively the furnishing of any duplicate or photocopy document shall be by and to the following persons only unless and until this Court shall otherwise direct on cause shown, namely the legal advisors of the Plaintiff and any expert witness retained by the Plaintiff in this action to whose evidence they may reasonably be relevant.

56. This costs of this Motion are reserved to be determined as a separate issue by the Court of trial.