High Court of Ireland Decisions

Introduction

1.                  This is my judgment on an application by the plaintiff, Microsoft Ireland Operations Ltd, for an order pursuant to O. 28, r. 1 and/or O. 28, r. 12 RSC permitting the plaintiff to deliver an amended statement of claim and for an order varying the directions made by the court on 13^th November, 2020.

2.                  The defendants, Arabic Computer Systems (“ACS”) and National Technology Group (“NTG”), opposed the application on two related grounds. First, they contended that to permit the amendments would be to deprive the defendants of an opportunity to rely on a defence they would have under the Statute of Limitations, 1957 (as amended) (the “Statute”) and that they would, therefore, be unfairly prejudiced if the amendments were allowed. Second, they contended that the court should refuse to permit the proposed amendments on the grounds that it would be unjust to the defendants to do so as it would deprive the defendants of the opportunity they would have had on an application by the plaintiff under O. 11 RSC for leave to issue and serve the proceedings containing the matters the subject of the proposed amendment of contending that the plaintiff had not demonstrated the existence of a good cause of action under O 11, r. 5 RSC, as the claim the subject of the proposed amendments would be statute barred. It can readily be seen, therefore, that both objections are related and involve a consideration of the defendants’ contention that they would be unfairly prejudiced if the amendments were permitted as they would be deprived of the opportunity of relying on a defence which they say they have, or at least might have, under the Statute.

Summary of Decision

3.                  For reasons which I explain in this judgment, I have concluded that the plaintiff is entitled to the orders sought permitting it to deliver an amended statement of claim in the terms of the draft exhibited to the plaintiff’s grounding affidavit. I am satisfied that having considered the case as originally pleaded by the plaintiff, the nature of the amendments sought to be made, the relevant legal principles applicable to amending pleadings, including those applicable where a defendant contends that the relevant amendment will deprive it of a defence which it has or might have under the Statute, and the application of those principles to the undisputed facts, the plaintiff has clearly established its entitlement to the orders sought. I am satisfied that it would be an appropriate exercise of the court’s discretion under O. 28, r. 1 RSC and would be consistent with the applicable legal principles to make the orders sought by the plaintiff.

The Plaintiff’s Claim

Relevant Procedural History and Evidence

23.              Following service of the notice of the summary summons on the defendants in the Kingdom of Saudi Arabia on foot of the order of the High Court on 21^st August, 2018, a conditional appearance was entered on behalf of both defendants on 12^th October, 2018 for the purpose of contesting jurisdiction. The defendants then brought their motion challenging jurisdiction on 11^th January, 2019. Several affidavits were exchanged for the purposes of that application.

24.              In addition, a further affidavit was sworn on behalf of the plaintiff for the purpose of grounding its application to enter the proceedings in the Commercial List and for summary judgment. That affidavit was sworn by Jesus Del Pozo Moran on 5^th December, 2018. At para. 55 of that affidavit, in that part of the application which grounded the plaintiff’s application for summary judgment, Mr. Moran stated that ACS had ordered and was provided with “licensed offerings” pursuant to the Microsoft Channel Partner Agreements (which were defined earlier in that affidavit as being the first and second such agreements) during 2015, 2016 and 2017 and that, subsequently, invoices demanding payment in respect of those “licensed offerings” were issued on various dates between 31^st December, 2015 and 22^nd August, 2017. Mr. Moran exhibited a schedule listing the invoices together with copies of the invoices themselves (at tab 23 of exhibit booklet “JDPM1” to that affidavit). While it has subsequently emerged that Mr. Moran was mistaken in referring to the fact that ACS placed orders in respect of the ten invoices in question during the currency of or pursuant to the terms of the First and Second Microsoft Channel Partner Agreements, he was correct in stating that the invoices were issued between 31^st December, 2015 and 22^nd August, 2017. The schedule of invoices, and the copy invoices exhibited by Mr. Moran, included the ten invoices relevant to the amendment application. Mr. Moran then stated (at para. 56 of that affidavit) that ACS failed to pay the sums due to the plaintiff pursuant to the invoices which totalled more than US$31.5 million (and which total included the total of the ten invoices at issue in this application).

25.              Mr. Moran also swore a number of affidavits in response to the affidavit sworn on behalf of the defendants for the purposes of the defendants’ jurisdictional challenge. In the first of those affidavits, which he swore on 1^st February, 2019, Mr. Moran referred to the history of the relationship between the plaintiff and ACS, to the orders placed by ACS in respect of “licensed offerings” and to the invoices sent by the plaintiff in respect of those offerings the subject of the proceedings. At para. 12 of that affidavit, Mr. Moran stated that since ACS commenced operations as a Microsoft reseller in or about 2000 it had contracted with the plaintiff and purchased “licensed offerings” from it only (save in certain exceptional circumstances). Mr. Moran referred to the contracts which governed the relationship between the plaintiff and ACS in the period from 1^st October, 2007 to August, 2014 and exhibited copies of those contracts (tab 2 of exhibit “JDPM1” to that affidavit). Included within that exhibit was the 2013 Agreement.

26.              At para. 13 of that affidavit, Mr. Moran explained that as an authorised reseller of Microsoft products in Saudi Arabia, ACS ordered “licensed offerings” from the plaintiff under the Microsoft Channel Partner Agreements (which term was not defined in the affidavit as referring solely to the first and the second such agreements). Mr. Moran went on to assert that ACS had failed to pay the plaintiff for “licensed offerings” supplied which had a contractual invoiced value of more than US$31.5 million. He then referred to a schedule listing the invoices together with copies of the invoices which he exhibited at tab 3 of exhibit booklet “JDPM1” to that affidavit (para. 13). The schedule listing the invoices and the copy invoices exhibited by Mr. Moran again included the ten invoices relevant to the amendment application.

27.              At paras. 14 and 15 of that affidavit, Mr. Moran explained the ordering and invoicing process operated by the plaintiff and ACS. Each of the relevant “licensing offerings” the subject of the plaintiff’s claim was, Mr. Moran explained, ordered by ACS from the plaintiff. He further outlined that each one of the invoices corresponded to an order submitted by ACS to the plaintiff and that each order placed was subject to review by the plaintiff. If the order was approved by the plaintiff, the plaintiff executed the order and issued an invoice accordingly (para. 14). Mr. Moran explained (at para. 15) that the ordering process for “licensed offerings” was always between the plaintiff and ACS for the purpose of procuring and reselling such offerings pursuant to the Microsoft Channel Partner Agreements. More detail in relation to the ordering and invoicing procedure was provided in the course of the affidavit evidence on the amendment application to which I will turn shortly. However, it is significant that in the various affidavits which were sworn on its behalf for the purpose of its application for entry of the proceedings and for summary judgment and in its affidavit in response to the jurisdictional challenge, the plaintiff expressly listed the ten invoices at issue in the amendment application as being proof of its claim and exhibited copies of those invoices.

28.              In the course of the jurisdiction judgment, I made express reference to Mr. Moran’s evidence concerning the historical contractual relationship between the plaintiff and ACS in the period from 2000 (para. 26 of the judgment). I drew attention to the fact that Mr. Moran had exhibited copies of Microsoft Channel Partner Agreements between the plaintiff and ACS for the period from October, 2007 to August, 2014, which was prior to the commencement of the period the subject of the First Microsoft Channel Partner Agreement. That was a reference to the evidence given by Mr. Moran at para. 12 of his affidavit of 1^st February, 2019 in which he exhibited the agreements predating the First Microsoft Channel Partner Agreement, including the 2013 Agreement.

29.              I also referred in the course of the jurisdiction judgment to the invoices received by ACS from the plaintiff in the period between 2007 and 2017 in respect of “licensed offerings” and noted that some 4,671 invoices with a combined value of US$696.2 million were sent during that period (para. 196 of the judgment). It is significant, therefore, that I acknowledged in that judgment not only that the plaintiff and ACS were parties to earlier agreements in respect of “licensed offerings” (which included the 2013 Agreement), but also the fact that invoices were sent by the plaintiff to ACS from the period between 2007 and 2017 in respect of the “licensed offerings” provided.

30.              Following the delivery of the jurisdiction judgment, in which I refused the defendants’ application, I gave further directions in the proceedings on 13^th November, 2020. The plaintiff indicated its intention to proceed to a plenary hearing rather than seeking summary judgment. The directions provided for the delivery of a statement of claim by the plaintiff and for further pleadings. As noted earlier, the plaintiff delivered its statement of claim on 27^th November, 2020. The defendants sought particulars arising from the statement of claim on 23^rd December, 2020. The plaintiff furnished replies to particulars on 28^th January, 2021. With those replies, the plaintiff furnished another schedule of the invoices the subject of the claim together with a further copy of all of the invoices. The schedule and the copy invoices included the ten invoices relevant to the amendment application. It was pointed out in the replies that the invoices had previously been exhibited to the affidavit sworn by Mr. Moran on 17^th August, 2018 for the purpose of grounding the plaintiff’s application for leave to issue and serve notice of the proceedings outside the jurisdiction and to Mr. Moran’s affidavit of 5^th December, 2018. They were also exhibited to Mr. Moran’s affidavit of 1^st February, 2019, as noted above.

Plaintiff’s Amendment Application

31.              In the course of considering the defendants’ notice for particulars, the plaintiff ascertained that some of the invoices the subject of the plaintiff’s claim arose from purchase orders submitted by ACS prior to the commencement of the term of the First Microsoft Channel Partner Agreement on 1^st September, 2014.

32.              In a letter dated 28^th January, 2021 which enclosed the plaintiff’s replies to particulars, Matheson, the plaintiff’s solicitors, informed Hayes, the defendants’ solicitors, that in the course of considering the defendants’ notice of particulars, it had come to the plaintiff’s attention that certain of the invoices forming part of the claim referred to purchase orders submitted by ACS prior to the commencement of the term of the First Microsoft Channel Partner Agreement. The invoices in question were listed in a table which was appended to the letter. The table listed the ten invoices. Matheson’s letter stated that while those invoices were issued during the term of the First Microsoft Channel Partner Agreement, the purchase orders to which they referred predated that term and were submitted by ACS during the term of the preceding Channel Partner Agreement, namely, the 2013 Agreement. A copy of that agreement, which it was stated was in substantially the same form as the First Microsoft Channel Partner Agreement, was enclosed with the letter. It was noted that the 2013 Agreement contained identical applicable law and jurisdiction clauses, specifying Irish law and jurisdiction, to the First Microsoft Channel Partner Agreement and that each contract was signed by the same signatory on behalf of ACS, Syed Abdulaleem. The table attached to the letter listed the ten invoices (it did not include the dates of those invoices which were subsequently identified as being from between 31^st December, 2015 and 30^th September, 2016) and the relevant purchase orders for those invoices (which were from between 31^st December, 2013 and 28^th August, 2014). The letter referred to the plaintiff’s intention to amend the statement of claim in order specifically to refer to the 2013 Agreement, sought the defendants’ solicitors’ agreement to the delivery of an amended statement of claim and suggested variations to the directions timetable to make provision for further consequential steps.

33.              In an affidavit sworn by Mr. Moran on 20^th April, 2021 for the purpose of grounding the plaintiff’ amendment application, Mr. Moran confirmed the details which were set out in Matheson’s letter of 28^th January, 2021. He explained (at para. 19) that the 2013 Agreement was not identified as being directly relevant due to the “elapse of time between the purchase orders” and “the issuing of the subsequent corresponding invoices” due to “an oversight in preparing the proceedings”. He stated:-

“This was an error and I regret the inconvenience that has resulted from it”

(para. 19)

34.              A proposed amended statement of claim was furnished by the plaintiff’s solicitors to the defendants’ solicitors on 1^st February, 2021. The only amendments to the original statement of claim were:-

(1)               The plaintiff sought to include a new para. 4 to make express reference to the 2013 Agreement. The new paragraph was as follows:-

“By contract in writing dated 1 September 2013 (the ‘2013 Microsoft Channel Partner Agreement’), Microsoft entered into an agreement with ACS permitting it to sell Microsoft licensed offerings (the ‘licensed offerings’) in Saudi Arabia, as described in the Microsoft Channel Partner Agreement, from 1 September 2013 to 31 August 2014.”

(2)               At para. 9, it was sought to include the words “the 2013 Microsoft Channel Partner Agreement” as one of the agreements on which the plaintiff intended to rely.

No further amendments were proposed to the original statement of claim. No new invoices were sought to be added. No new reliefs were sought. The total sum claimed was unchanged.

35.              Having received the proposed amended statement of claim and Matheson’s letter of 28^th January, 2021, Hayes responded on 5^th February, 2021. Their initial response was that they required an extension of time to deliver their defence and counterclaim. They sought confirmation of the plaintiff’s agreement to an extension to 17^th February, 2021 “on the basis that we will consent to your late delivery of replies to particulars and amended statement of claim”.

36.              Matheson replied on the same date confirming the plaintiff’s agreement to the delivery of the defendants’ defence and counterclaim on 17^th February, 2021. However, the defendants did not deliver their defence and counterclaim on that date. Rather, on 26^th February, 2021, Hayes wrote to Matheson withdrawing the defendants’ consent to the amended statement of claim and making a number of points. First, they asserted that the plaintiff was not entitled to amend its statement of claim without seeking leave of the court under O. 28 RSC. Second, they asserted that, if the statement of claim was to be amended, the plaintiff might require leave of the court under O. 11 RSC to serve the amended proceedings on the defendants or be required to issue fresh proceedings. The defendants reserved their position in respect of both of those matters. Third, Hayes stated that they were considering the plaintiff’s “new claim” under the 2013 Agreement and referred to para. 8a of that agreement and to the “Program Guide” referred to in that paragraph of which they required a copy.

37.              Matheson replied on 2^nd March, 2021 querying the withdrawal of the consent to the amended statement of claim previously provided, taking issue with the defendants’ assertion that it was necessary for an application for leave to amend to be brought to the court, but stating that such an application would be brought if the defendants were insisting upon it. They rejected the contention that leave of the court was required to serve amended proceedings or fresh proceedings on the defendants (outside the jurisdiction). In a response dated 4^th March, 2021, Hayes maintained their position (a) that the plaintiff was not entitled to amend its statement of claim without seeking leave of the court and insisting that the appropriate motion be brought and (b) that if the statement of claim was to be amended, the plaintiff might require leave of the court to serve the amended proceedings (or fresh proceedings) on the defendants. Hayes made a further request for a copy of the “Program Guide” to which they had referred in previous correspondence. Hayes confirmed on 18^th March, 2021 that the defendants were not in a position to deliver their defence and counterclaim as required under the directions made by the court until the plaintiff’s amendment application had been determined by the court.

38.              On 9^th April, 2021, Matheson replied that the plaintiff had been unable to locate a “Program Guide” for 2013. They stated, however, that ACS had access to all relevant “Program Guides” at the relevant time through a particular website “explore.ms”. They further stated that, as the defendants were aware, “Program Guides” were “intended to be used as a reference for channel partners on routine matters such as how to place orders, how to pay invoices, etc.”. They provided a copy of the 2012 “Program Guide” which they said was “for the purposes of illustration”. However, they did not accept that the “Program Guide” terms were essential or even materially relevant to the defendants’ attitude to the proposed amendments to the statement of claim. They further rejected the suggestion that the plaintiff was seeking to advance a “new” claim in the amended statement of claim and explained why that was so. They observed that the 2013 Agreement had previously been exhibited in the proceedings by Mr. Moran in his affidavit of 1^st February, 2019.

39.              At para. 28 of the affidavit which he swore on 20^th April, 2021 for the purposes of grounding the plaintiff’s amendment application, Mr. Moran confirmed the contents of the plaintiff’s solicitors’ letter of 9^th April, 2021, confirmed that ACS had access to the 2013 “Program Guide” at the relevant time and that the 2012 version of the “Program Guide” was furnished to the defendants’ solicitors “for the purposes of illustration”.

40.              The plaintiff issued its amendment application on 20^th April, 2021. The application was grounded on Mr. Moran’s affidavit of the same date. Having set out the chronology which I have just summarised, Mr. Moran explained that the 2013 Agreement was undoubtedly relevant to the plaintiff’s claim in the proceedings “as it formed the original contractual basis upon which ACS submitted purchase orders to Microsoft which resulted in the invoices” listed at para. 15 of his affidavit (para. 29). He asserted that the proposed amendment to the statement of claim was necessary for the purpose of determining the questions in controversy between the parties. He stated:-

“The proposed amendment is designed to clarify the legal context in which certain purchase orders were submitted by ACS and in order to rectify an error in failing to specifically plead reliance upon the 2013 Microsoft Channel Partner Agreement.”

(para. 30)

41.              Mr. Moran asserted that in seeking to plead reliance upon the 2013 Agreement, the plaintiff was not introducing any new claim or cause of action but was referring to an agreement which was “relevant to those claims which are already before the court” (para. 31). He further asserted that the relevance of the 2013 Agreement “arises by implication from the existing proceedings and it does not enlarge the case made in any material sense” (para. 31).

42.              Mr. Moran asserted that no unfair prejudice would be caused to the defendants as a result of the proposed amendment and that the amended statement of claim would, if permitted, define the issues before the court, prevent surprise at the trial and permit the issues to be determined by the court. He noted that the amendment was being proposed at a relatively early stage in the proceedings and without any undue delay by the plaintiff. He further drew attention to the fact that the 2013 Agreement was previously exhibited to an earlier affidavit which he swore on 1^st February, 2019 (as I pointed out earlier).

43.              A replying affidavit was sworn on behalf of the defendants not by an officer or employee of either of the defendants but rather by Gillian Cotter, a solicitor in Hayes, the defendants’ solicitors. Ms. Cotter stated (at para. 2 of her affidavit) that there was “little to no factual dispute between the parties” and that the principal purpose of her affidavit was to explain the legal basis on which the defendants intended to oppose the amendment application. The two legal bases have been summarised earlier and will be addressed in greater detail below.

44.              The first was that, by permitting the plaintiff to amend its statement of claim, the court would (or potentially could) deprive the defendants of a limitation defence, assuming that the 2013 Agreement bound ACS, which Ms. Cotter said was something which was likely to be in issue in the proceedings (para. 3). She noted that the purchase orders referable to the ten invoices affected by the amendment application were raised between 31^st December, 2013 and 28^th August, 2014, more than six years ago. She asserted that the defendants’ position was that “any obligation on the part of ACS to make payment to Microsoft arose once the purchase orders issued, and that any cause of action on the part of Microsoft arose immediately (or within a reasonable period after the purchase orders issued)” (para. 4). She observed (at para. 5) that the question as to when any payment obligation on the part of ACS arose was “slightly complicated” by the fact that the plaintiff could not locate a copy of the “Program Guide” which formed part of the 2013 Agreement. She then noted (at para. 6) that it would be a matter for submission at the hearing as to whether the defendants were correct in their contention as to when any cause of action arose and whether permitting the amendment would deprive them of a legitimate defence under the Statute. The defendants were also reserving their position as to whether the plaintiff’s claim under the 2013 Agreement could succeed at all if the relevant “Program Guide” could not be located.

45.              The second objection articulated by Ms. Cotter was that the summary summons did not refer to the 2013 Agreement and no leave was granted by the court under O. 11 RSC in respect of the plaintiff’s claim under that agreement. Ms. Cotter stated that the defendants’ position was that the plaintiff should be required to apply for leave to serve the amended statement of claim on the defendants outside the jurisdiction.

46.              Mr. Moran swore a second affidavit in response to Ms. Cotter’s affidavit on 17^th May, 2021. In addressing what Ms. Cotter had said about the defendants’ first ground of objection based on the Statute and what she said as to when the defendants contend that the plaintiff’s cause of action first arose, Mr. Moran stated that the invoices at issue clearly specified a “payment due date” in each case (para. 3). He asserted that the payment obligation of ACS arose on the “payment due date(s)” specified on each of the invoices and that that was the date on which the cause of action accrued in respect of each invoice. He set out in a table at para. 4 of his affidavit the “payment due date” in respect of each of the ten invoices relevant to the amendment application which covered the period from 29^th February, 2016 to 29^th November, 2016. The table very helpfully identified in respect of each of the ten invoices the relevant purchase number, the purchase order date (as referenced on the invoice), the term of the relevant agreement (as referenced on the purchase order), the invoice number, the invoice document date (as referenced on the invoice), the payment due date (as referenced on the invoice) and the billing period (as referenced on the invoice).

47.              Mr. Moran disputed the assertion that the plaintiff’s claim for payment against ACS in respect of any of the invoices was statute barred. He disputed the contention that the payment obligation of ACS arose on the date of the purchase orders and observed that no factual basis had been advanced by Ms. Cotter for that contention. Indeed, Ms. Cotter could not provide any factual basis for such contention and none was provided by an officer or employee of ACS.

48.              Mr. Moran explained the invoice and payment cycle in respect of orders placed by ACS with the plaintiff (para. 7). He explained that each purchase order submitted by ACS sought the supply of products as specified in the purchase order over the course of a three-year cycle. As regards the invoicing cycle in respect of each purchase order, he explained that the “terms and conditions” section of each purchase order stated as follows:-

“Unless otherwise indicated on the channel price sheet and in a signed customer amendment, Microsoft will invoice reseller in three equal annual instalments. The first instalment will be invoiced upon acceptance of the Enrolment, and thereafter on the anniversary of the Enrolment.”

Mr. Moran explained that once ACS submitted the purchase orders, Microsoft then invoiced ACS annually, in three yearly tranches, throughout the three-year course of supply in respect of each purchase order. He explained that the invoices relevant to the amendment application all relate to the third (and final) invoice annuity in respect of each purchase order and that that explained why the purchase orders relevant to the amendment application ranged from 31^st December, 2013 to 28^th August, 2014, while the corresponding invoice dates ranged from 31^st December, 2015 to 30^th September, 2016. I would observe here that none of this was disputed by the defendants and no further affidavit was sworn by the defendants in response to Mr. Moran’s second affidavit.

49.              Mr. Moran asserted that nothing in the 2013 “Program Guide” altered the date of the defendants’ payment obligation (which was explained by Mr. Moran at para. 7 of his second affidavit) and he referred in that regard to the 2012 “Program Guide” which had been provided to the defendants.

50.              Mr. Moran also referred to what he described as a number of part payments made by ACS to the plaintiff in September, 2016 and December, 2016 in the total amount of US$14 million and to a payment of almost US$2 million received by the plaintiff in July, 2017 on foot of a letter of credit which had been put in place by ACS with Banque Saudi Fransi to indemnify debts due and owing by ACS (para. 9). Mr. Moran also noted that it had not been suggested by Ms. Cotter in her affidavit that any part of the plaintiff’s claim against NTG was statute barred and noted that the demand for payment under the Guarantee Agreement was made on behalf of the plaintiff on 10^th August, 2018.

51.              As regards the second objection raised by the defendants in Ms. Cotter’s affidavit, Mr. Moran disputed the contention that an application for leave to serve the amended statement of claim on the defendants outside the jurisdiction was required and referred to the fact that the plaintiff had demonstrated the necessary jurisdictional gateway to justify the making of an order for service of the original proceedings outside the jurisdiction under O. 11 RSC based on the First and Second Microsoft Channel Partner Agreements and on the Guarantee Agreement. He contended that the addition of the 2013 Agreement did not alter the position. He reiterated that the plaintiff was not seeking to introduce any new claim or cause of action in seeking to refer to the 2013 Agreement in its proposed amended statement of claim and that the 2013 Agreement contained the same choice of jurisdiction and choice of law clauses as were contained in the subsequent contracts between the plaintiff and ACS and that it was signed by the same person as signed the First Microsoft Channel Partner Agreement, Mr. Abdulaleem (para. 13).

52.              That is the evidence relevant to the plaintiff’s amendment application. There is and can be no real factual dispute between the parties in light of the fact that the defendants have chosen not to dispute the factual assertions made by Mr. Moran on behalf of the plaintiff.

Defendants’ Objections to Amendment Application

53.              In summary, therefore, the defendants have advanced two objections to the plaintiff’s amendment application.

54.              First, the defendants maintain that if the court were to permit the plaintiff to deliver an amended statement of claim, the defendants would or could potentially be deprived of a defence under the Statute which they would otherwise have in respect of any claim based on the 2013 Agreement. On that basis, the defendants assert that they would be unfairly prejudiced if the court were to allow the amendments.

55.              Second, and related to the first objection, the defendants maintain that the court should not allow the amendments sought in circumstances where the plaintiff has not put before the court the type of evidence which would usually be required on an application for leave to issue and serve proceedings outside the jurisdiction under O. 11 RSC. The main point relied upon by the defendants in respect of this ground is that, under O. 11, r. 5 RSC, an applicant for leave to issue and serve proceedings outside the jurisdiction must aver that it has a good cause of action. The defendants would have wished to argue, in the event that an application for such leave were brought, that the plaintiff had not established a good cause of action as the defendants say they have a good defence under the Statute to the plaintiff’s amended claim.

56.              In addressing the plaintiff’s application and the objections raised by the defendants, I will first consider the legal principles governing amendment applications, including those where it is said that a defendant would be deprived of a defence which it might otherwise have under the Statute. I will then consider the two grounds of objection raised by the defendants by reference to those legal principles and, in the case of the second objection, by reference also to some other relevant legal principles.

Legal Principles Applicable to Amendment Applications

57.              The starting point is O. 28, r. 1 RSC which provides as follows:-

“The Court may, at any stage of the proceedings, allow either party to alter or amend his indorsement or pleadings in such manner and on such terms as may be just, and all such amendments shall be made as may be necessary for the purpose of determining the real questions in controversy between the parties.”

58.              While the plaintiff also referred in its notice of motion to O. 28, r. 12 RSC, no submissions were directed by either the plaintiff or the defendants to the scope of that provision. Order 28, rule 12 RSC provides as follows:-

“The Court may at any time, and on such terms as to costs or otherwise as the Court may think just, amend any defect or error in any proceedings, and all necessary amendments shall be made for the purpose of determining the real question or issue raised by or depending on the proceedings.”

59.              That provision was discussed by Biehler, McGrath and Egan McGrath “Delany and McGrath on Civil Procedure” (4^th Ed.) (“Delany and McGrath”). At para. 6-64, the authors observe:-

The Defendants’ First Ground of Objection

87.              I am satisfied that the first ground of objection raised by the defendants to the amendment application must be rejected. I have reached that conclusion for the following reasons.

(a)   No New Cause of Action/Same or Substantially Same Facts

88.              First, I agree with the Plaintiff that the amendments sought to be made to the statement of claim by the plaintiff do not introduce any new cause of action. If the amendments are allowed, the plaintiff will still be seeking judgment in precisely the same amount as it sought in the original statement of claim on foot of the invoices referred to in the summary summons and in the statement of claim, including the ten invoices relevant to the amendment application. The plaintiff sought judgment in the amount set out in the summary summons and in the statement of claim in an amount which included the sums referred to in those ten invoices and based its claim in those pleadings, in part, on the fact that “licensed offerings” had been supplied to ACS on foot of orders placed which were the subject of those invoices.

89.              Even if it could be said that the plaintiff does seek to introduce a new cause of action in respect of those invoices, namely, a cause of action for breach of contract, being the 2013 Agreement, it would be an additional cause of action in respect of the same ten invoices already relied upon by the plaintiff in its original pleadings. Even on the assumption that the amendments sought by the plaintiffs do introduce a new or additional cause of action with respect to the ten invoices, the amendments clearly arise, in my view and exercising the appropriate judicial restraint, from “the same facts or substantially the same facts” as were pleaded in the summary summons and in the original statement of claim (to use the phrase adopted by Keane J. in Krops and by several of the other courts in the judgments discussed earlier, including Clarke J. in Mangan and Simons J. in Stafford as well as by the authors of Delany and McGrath); they also “fall within the ambit of the original grievance” (to use the phrase adopted by Birmingham J. in Rossmore and by Simons J. in Stafford); and the facts already pleaded in the statement of claim are, in my view, “sufficient to support the new cause of action” and “serve only to clarify the original claim” (to use the terms adopted by Finnegan J. in Smyth). The facts, such as they are, as are sought to be included in the amended statement of claim and the facts included in the statement of claim originally delivered are in no sense “discrete and different” (to use the phrase adopted by Clarke J. in Mangan).

90.              The invoices giving the total sum claimed of US$31,539,677.95 in the summary summons for which judgment was sought against both defendants included the ten invoices relevant to the amendment application. Those ten invoices were specifically listed in the particulars at schedule 1 to the summary summons. The ten invoices were specifically referred to and exhibited to several of the affidavits sworn by Mr. Moran on behalf of the plaintiff including (a) Mr. Moran’s affidavit sworn on 17^th August, 2018 grounding the plaintiff’s application for liberty to issue and serve notice of the proceedings on the defendants outside the jurisdiction; (b) Mr. Moran’s affidavit sworn on 5^th December, 2018 for the purpose of grounding the plaintiff’s application to enter the proceedings in the Commercial List and for summary judgment; and (c) Mr. Moran’s affidavit sworn on 1^st February, 2019 in response to the defendants’ application to set aside service of the proceedings.

91.              As well as that, the 2013 Agreement was among the agreements between the plaintiff and ACS referred to and exhibited by Mr. Moran to his affidavit sworn in connection with the defendants’ jurisdiction application which were referred to at para. 26 of my judgment on that application.

92.              In the event that the amendments sought by the plaintiff are permitted by the court, the plaintiff will be seeking judgment for precisely the same sum in the summary summons and original statement of claim on foot of precisely the same invoices (including the ten invoices relevant to the amendment application). No additional sum is sought to be claimed on foot of the amendments and no additional invoice is sought to be added to the particulars pleaded in schedule 1 to the summary summons and in schedule 1 to the statement of claim. Insofar as the plaintiff relies as one of its causes of action on an alleged breach of contract by the defendants, the plaintiff is not proposing to change or alter its claim in respect of the contracts pleaded but rather seeks to add reference to the 2013 Agreement which does not fundamentally change the case as pleaded by the plaintiff.

93.              In light of these significant factors, I am satisfied that, even if the claim involves a new cause of action by specifically relying on the 2013 Agreement, it is an additional cause of action based on the same invoices in respect of which the plaintiff has sought judgment from the very outset of the case. The amendments should nonetheless be permitted as they arise essentially out of the “same facts or substantially the same facts” and fall within the “ambit of the original grievance”.

(b)   Not Arguable that Statute Barred

94.              Second, I do not accept that the defendants have established an arguable case that the plaintiff’s claim in respect of the ten relevant invoices is statute barred on the basis that those invoices were issued within the term of the First Microsoft Channel Partner Agreement but on foot of purchase orders submitted by ACS during the currency of the 2013 Agreement. A review of the contractual material put before the court by the plaintiff which was not contested by the defendants has persuaded me that the defendants’ claim that it has a good or even arguable defence under the Statute of which it will be deprived if the amendments were permitted is incorrect and is not even arguable for the purposes of my consideration of the plaintiff’s amendment application.

95.              It is necessary to refer to some of the relevant contractual material here. At clause 6b of the 2013 Agreement, under the heading “Ordering”, the parties agreed as follows:-

“Company [i.e. ACS] will submit orders to Microsoft [i.e. the plaintiff] on a regular basis. Company should review the ‘Program Guide’ for complete information about the ordering process. The ‘Program Guide’ outlines how to order ‘licensed offerings’ from Microsoft. Microsoft can only provide ‘licensed offerings’ to customers within specific geographic regions. As a result, Company must sign an Agreement with the appropriate Microsoft entity for the Territory in which Company’s Customers are located.”

96.              Clause 8 of the 2013 Agreement dealt with “Reporting and payment”. It stated, “each ‘Program Guide’ specifies the reporting and payment requirements for the “licensed offerings”. The term “Program Guide”, which appears in clause 6b and clause 8, is itself defined in clause 2 as meaning:-

“the information about specific licensing programs that is available on the Channel Partner website. The ‘Program Guide’ may include several handbooks, including an operations academy handbook.”

97.              Clause 8b provided under the heading “Payment Due Date”, as follows:-

“Payments are due on the date and in the currency stated in the applicable ‘Program Guide’. If Company does not receive an invoice within ten (10) days after placing its order, it must promptly notify Microsoft, and Microsoft will promptly send a new invoice. Company must manage its own credit risk. Company’s payment to Microsoft is not dependent on receipt of payments from Customers even in the case of Customer insolvency.”

98.              I noted earlier that Mr. Moran explained that the 2013 Agreement was in substantially the same form as the First Microsoft Channel Partner Agreement. He also explained that the plaintiff was not in the position to locate a copy of the 2013 “Program Guide” but stated that ACS had access to it on a particular website at the time. A copy of the 2012 version of the “Program Guide” was provided to the defendants “for the purposes of illustration”. Since no witness on behalf of the defendants (apart from Ms. Cotter, the defendants’ solicitor) swore an affidavit in response to the amendment application, I am entitled to proceed on the basis that the 2012 “Program Guide” is illustrative of the relevant terms and conditions of the 2013 “Program Guide” and that there are no significant differences between the two documents.

99.              Clause 7 of the 2012 “Program Guide” (which I accept is illustrative of the position under the 2013 “Program Guide”) dealt with “Payment and Credit Terms”. Clause 7.1 dealt with “Payment Terms”. The relevant part provided as follows:-

“Payments are due with a value date on or before the due date of Microsoft’s invoice unless otherwise agreed in writing by Microsoft.

An overview of the standard payment terms by region/country is attached to this Guide as Schedule A. If Company does not receive an invoice within ten (10) days after placing its order, it must promptly notify Microsoft, and Microsoft will promptly send a new invoice. For confirmation of the Company’s payment terms, the Company will be notified in writing. Company must manage its own credit risk. Company’s payment is not dependent on receipt of payments from Customers even in the case of Customer insolvency…”

Schedule A (contained in an appendix to the 2012 “Program Guide”) provided that the standard payment terms for the relevant licensing programme “unless otherwise agreed upon in writing” was, in the case of the Middle East and Africa “Net 60 days calendar days”.

100.          As I observed earlier, Mr. Moran, at para. 7 of his second affidavit sworn for the purpose of this amendment application, explained in some detail the invoice and payment cycle relevant to the invoices at issue here. This evidence was not considered by any witness on behalf of the defendants. Each purchase order submitted by ACS sought the supply of products specified in the purchase order over the course of a three-year cycle. Copies of the relevant purchase orders and invoices were exhibited by Mr. Moran. Each relevant purchase order was placed by Mr. Moran behind each relevant invoice in the exhibit. Each purchase order specified the “term of agreement” as being three years and under the “summary” referred to a total deal value over three years and total annual payments for years 1, 2 and 3 of those years. Each purchase order then contained the following:-

“Unless otherwise indicated on the Channel Price Sheet and in a signed customer amendment, Microsoft will invoice Reseller in three equal annual instalments. The first instalment will be invoiced upon acceptance of the Enrolment and thereafter on the anniversary of the Enrolment.”

101.          Each of the ten invoices relevant to this application referred to the purchase order date, the date of the invoice and the “payment due date” calculated on the basis of the net 60 calendar day period referred to in Schedule A in the Appendix to the 2012 “Program Guide”. It will be recalled that clause 7.1 of the 2012 “Program Guide” (which I accept on the evidence is illustrative of the position applicable during the currency of the 2013 Agreement) provided that payments were due “on or before the due date of Microsoft’s invoice unless otherwise agreed in writing by Microsoft”. There is no evidence of any agreement to the contrary between the parties. Mr. Moran’s uncontested evidence (at para. 7 of his second affidavit) is that consistent with the detail contained in the purchase orders and in the invoices themselves, once ACS submitted the purchase order, the plaintiff invoiced ACS annually in three yearly tranches throughout the three-year course of supply in respect of each purchase order and that the invoices relevant to the amendment application all relate to the third (and final) invoicing period in respect of each of the purchase orders.

102.          Against that factual background, the defendants sought to argue that the obligation on the part of ACS to make payment to the plaintiff arose once the purchase order issued and that any cause of action in favour of the plaintiff arose “immediately (or within a reasonable period after the purchase orders issued)”. It relied in support of that argument on the terms of clause 8a of the 2013 Agreement and, in particular, on the reference to the fact that payments were due on the date and in the currency stated in the applicable “Program Guide” and that if ACS did not receive an invoice within ten days after placing its order, it had to promptly notify the plaintiff and Microsoft would promptly send a new invoice. It relied on similar wording in the 2012 “Program Guide” (subject to its complaint that the 2013 “Program Guide” was not provided). The defendants contended, therefore, that payment fell due as soon as, or very soon after, the product was ordered.

103.          I do not accept that the defendants have raised an arguable case for the purpose of this amendment application as to when the obligation to pay arose and as to when the cause of action accrued. The defendants’ argument ignores or significantly understates the provisions of clause 8a of the 2013 Agreement and clause 7.1 of the 2012 “Program Guide” (which I accept is illustrative of the position under the 2013 Agreement). Clause 8a incorporates the provisions of the relevant “Program Guide”. Clause 7.1 of the “Program Guide” makes clear that the payments are due on the due date on the invoice unless otherwise agreed in writing. The purchase orders all make clear the terms of the relevant agreement in respect of the “licensed offering” ordered by ACS, the total annual payments required to be made for each year of that three-year period and the fact that the plaintiff would invoice ACS in three equal annual instalments, the first being invoiced on the acceptance of the enrolment and, thereafter, on the anniversary of that date. The invoices themselves contain reference to the date of the purchase order and the date of the invoice itself as well as a “payment due date”. The “payment due date” in respect of each invoice relevant to the application is within six years of the date of the commencement of the proceedings.

104.          In light of those clear provisions of the contractual documentation, it seems to me that the defendants’ attempt to rely on parts of clause 8a of the 2013 Agreement and on clause 7.1 of the “Program Guide” concerning invoices is misplaced. In any event, on the defendants’ case, if ACS did not receive an invoice within ten days of placing its order, it had to “promptly notify” the plaintiff and the plaintiff would then “promptly send a new invoice”. There is no evidence from the defendants that ACS ever did so and, in light of the clear provisions to which I have referred, I do not see how the defendants could rely on any failure by the plaintiff to issue an invoice within ten days in light of the evidence set out by Mr. Moran and the clear terms of the 2013 Agreement, the 2012 “Program Guide”, the purchase orders and the invoices themselves.

105.          In those circumstances, I do not accept that the defendants have raised any arguable case on the Statute. That conclusion is copperfastened by the fact that all of the ten invoices relevant to the amendment application were included in the plaintiff’s claim from the date of the commencement of the proceedings in August 2018. Leaving aside altogether the fact that the position of the second defendant, NTG, was not addressed at all by the defendants in their submissions, I am, in any event, satisfied that the defendants would not be unfairly prejudiced if the amendments were to be permitted.

(c)   No Unfair Prejudice Due to Amendments

106.          Third, if I am wrong in my conclusion that the defendants’ contention that they would or could be deprived of a defence under the Statute is not arguable on the basis that the plaintiff’s claim in respect of the ten invoices relevant to the amendment application is not arguable, there is another reason why the defendants would not, in any event, be unfairly prejudiced if the court were to allow the amendments sought by the plaintiff. That reason is that if, contrary to the view I have reached, the defendants’ contention based on the Statute is arguable and if there is an arguable case that the plaintiff’s cause of action arose at or very shortly after the purchase orders were submitted by the defendants, that was an argument which was open to the defendants to make prior to the amendment as the ten invoices were referred to and were the subject of the plaintiff’s claim in the summary summons and in the original statement of claim. The defendants did not make the point before now.

107.          I agree with the plaintiff that somewhat by way of analogy with the approach taken by Simons J. in Stafford, the defendants cannot say that they are unfairly prejudiced as a result of the amendments when the amendments do not introduce any new purchase orders or invoices into the plaintiff’s claim. The purchase orders and invoices are precisely the same after the amendment as they were before the amendment. The total amount claimed is the same. The relevant provisions of the First Microsoft Channel Partner Agreement are also the same as those in the 2013 Agreement on which the defendants seek to rely in opposition to the amendment application. I do not agree, therefore, that any unfair prejudice arises for the defendants by virtue of the amendments sought by the plaintiff.

(d)   Qualification or Saver

108.          Finally, I have given consideration as to whether I should adopt one of the alternative courses of action suggested by the defendants. The alternatives proposed were that I could allow the amendments but direct that the amendments take effect as of the date of the order permitting them or, alternatively, I could allow the amendments and expressly leave over to the trial judge the question as to when the cause of action was deemed to commence.

109.          Without expressly deciding that I have jurisdiction to attach such terms to an order permitting an amendment, although I am tentatively of the view that I do having regard to the wide terms in which O. 28, r. 1 is expressed (“on such terms as may be just”), I do not believe that I should make any special direction in this case in light of the view I have expressed that the defendants’ contention based on the Statute is, for the purpose of this amendment application, at least, not arguable. I am not inclined, therefore, to introduce any qualification or saver into the order permitting the amendment.

The Defendants’ Second Ground of Objection

110.          The second ground of objection to the plaintiff’s amendment application advanced by the defendants is related to the first. It was put in various ways in Ms. Cotter’s replying affidavit and in the defendants’ written submissions. It was refined considerably in the concise and helpful submissions advanced on behalf of the defendants at the hearing.

111.          The point essentially made in Ms. Cotter’s affidavit and in the defendants’ written submissions was that the plaintiffs did not seek and obtain leave to serve out of the jurisdiction any claim advanced “under” the 2013 Agreement. Ms. Cotter asserted that the plaintiff should be required to apply for leave to serve the proposed amended statement of claim on the defendants outside the jurisdiction. In their written submissions, the defendants contended that, where a party wishes to add a new claim or to plead new facts which would, if pleaded when the proceedings were commenced, have required the leave of the court under O. 11 to permit service abroad, it would be improper to allow a party to circumvent the requirements of O. 11 by way of an application for an amendment brought after the proceedings were issued and after the initial application for leave was granted. Reliance was placed in the defendants’ written submissions on an English decision, Beck v. Value Capital Ltd [1975] 1 W.L.R. 6 (“Beck”) in support of that contention. The defendants also contended that the plaintiff had not sought any relief under O. 11 in respect of the proposed amended statement of claim and had not adduced the type of evidence which would usually be required on an application for leave to issue and serve proceedings outside the jurisdiction. In particular, it was submitted that the plaintiff’s evidence on the amendment application did not address the matters required to be addressed under O. 11, r. 2 (concerning the comparative cost and convenience of proceedings in Ireland when compared with the place of residence of the defendants) or under O. 11, r. 5 (concerning the requirement of the deponent of an affidavit sworn in connection with an application for leave to serve out of the jurisdiction to state his or her belief that the plaintiff has a good cause of action). The defendants submitted that, based on the evidence put forward by the plaintiffs in the amendment application, the court “would probably have refused [the plaintiff] leave to issue and serve proceedings outside the jurisdiction on the basis that the requirements of Order 11 have not been satisfied”. (para. 36 of the defendants’ written submissions)

112.          This objection was refined considerably in the course of the defendants’ submissions at the hearing. As refined the objection was that, based on the decision in Beck, the defendants would be prejudiced in that, if the plaintiff had applied for leave to serve the amended claim outside the jurisdiction, the plaintiff would have had to state that it had a good cause of action in respect of that claim and the defendants would have been entitled to object to that and to argue that the plaintiff did not have a good cause of action on the basis that the defendants would have a good defence under the Statute. Since the plaintiff did not apply for such leave, the defendants did not have the opportunity of making that case and that unfairly prejudices the defendants. It can be seen, therefore, that the second ground of objection is very closely related to the first and is predicated on the defendants having a good defence or at least an arguable defence under the Statute in respect of the matters sought to be raised in the proposed amended statement of claim.

113.          The plaintiff had a number of points to make in response to that objection. First, the plaintiff asserted that the court has already considered extensively the question of jurisdiction in the course of the jurisdiction judgment in which it was found that the plaintiff had demonstrated the necessary jurisdictional gateway for leave to issue and serve the proceedings out of the jurisdiction under O. 11, r. 1(e)(iii). When determining the defendants’ objection to jurisdiction, the court had before it not only the First and Second Microsoft Channel Partner Agreements but also the earlier agreements, including the 2013 Agreement which contained precisely the same terms as to choice of law and jurisdiction as in the two subsequent agreements.

114.          Second, the plaintiff pointed out that O. 11 provides for service out of the jurisdiction of an originating summons, in this case, the summary summons issued by the plaintiff and not subsequent pleadings such as the statement of claim or the amended statement of claim.

115.          Third, having regard to the fact that the court has already covered this territory in the jurisdiction judgment, and having regard to what Clarke J. said in IBRC v. Quinn [2016] 3 IR 197 (“IBRC”) as to the “low bar” which must be established by the plaintiff to obtain an order permitting service outside the jurisdiction, it would be a meaningless exercise to require a further application to be brought on the same basis on foot of the matters sought to be included in the proposed amended statement of claim.

Conclusions

126.          In conclusion, I have considered the two grounds of objection advanced by the defendants in response to the plaintiff’s amendment application. I have decided that neither ground of objection should be sustained. In doing so, I have concluded that, for the purposes of this amendment application, and bearing in mind the requirement to exercise judicial restraint, the defendants’ contention that a claim based on the matters sought to be inserted in the proposed amended statement of claim would, or might, be statute barred is just not arguable. I have concluded, therefore, that the defendants would not be unfairly prejudiced if I were to permit the plaintiff to amend the statement of claim in the manner proposed. I am satisfied that it is appropriate to do so without making any special provision or direction as to the time or circumstances in which such an amendment should come into effect. In my view, it is appropriate for the normal rule or practice that the amendment takes effect from the date of the commencement of the proceedings to apply. I believe that it is appropriate for me to adopt that course of action in light of the particular facts of this case and that there is no reason for me to depart from the normal approach. Having regard to my conclusions in relation to the first ground of objection raised by the defendants, the central plank of the second ground of objection falls away. However, for various additional reasons, I have concluded that the second ground of objection should also be rejected.

127.          I will, therefore, make an order giving the plaintiff liberty to deliver an amended statement of claim in the terms of the draft amended statement of claim exhibited at tab 7 of the booklet comprising exhibit “JDPM1” to the affidavit sworn by Mr. Moran on behalf of the plaintiff on 20^th April, 2021. I will also vary the directions made by the court on 13^th November, 2020 to make provision for the delivery of the amended statement of claim and for the delivery of further pleadings by the defendants. I will discuss with counsel the precise further directions to be made.