knowledge 7 May 2015 |

Discovery – A rare example of strike out

The Rules of the Superior Courts provide that if any party to litigation fails to comply with any order for discovery or inspection of documents, his claim or defence, as the case may be, may be dismissed or struck out. However, examples of the Irish courts exercising their discretion to strike out pleadings are unusual.

One recent case is such a rare example¹. Here, the defendant had carried out a residential development. The plaintiff and the defendant had agreed that the plaintiff would assist the defendant with the sale of units from the development in exchange for a commission. The plaintiff had brought proceedings to recover unpaid commission. The defendant had then brought a counterclaim alleging that the plaintiff had run a dual pricing scheme and had improperly retained sale proceeds from the units for its own benefit.

The plaintiff had agreed to make voluntary discovery. However, the defendant believed that certain documents relevant to its counterclaim had been intentionally omitted from the discovery to obscure the existence of the dual pricing scheme. These documents had come into the defendant’s possession from other sources. The defendant had applied both to dismiss the plaintiff’s claim and to strike out its defence to the counterclaim for failure to comply with the agreement to provide voluntary discovery.

The court struck out the defence to the counterclaim. The court said that the purpose of the court rules here was not to punish a defaulting party but to secure the interests of justice. It said that failing to make discovery was not the determining factor and the fact that a party had deliberately obscured documents would not be sufficient to justify a strike out. There should also be a substantial risk of injustice which could not be remedied by the making of an order for further and better discovery and/or in costs.

The court would consider the degree of contrition shown by a party in default, as well as whether that party had shown a willingness to remedy the omission. The court would examine whether the omission could be remedied in a way that protected both parties. Here the failure to make discovery had been deliberate and malicious with documents being intentionally concealed. The failure was on the extreme end of the spectrum of culpability. Having regard to the behaviour of the plaintiff, the court could not be assured that the defendant and indeed the court would not be prejudiced in the conduct of the trial and in particular the counterclaim. It could also not be safely assumed that all documentation in relation to the particular dual pricing scheme had now come to light or would be disclosed.

The court confirmed its general reluctance to strike out pleadings as it was important to allow litigation to be decided on oral evidence by a trial judge. In order to strike out a pleading, the court should be satisfied that it could draw some inference as to the merits of the case from the omitted documents. Here the interests of justice could not now be met by allowing the plaintiff to continue to defend the counterclaim. However, as the omitted documents did not directly relate to the plaintiff’s claim for commission, that main claim could proceed.

Warning

This case should be a salutary warning that while the courts have been traditionally reluctant to strike out pleadings for failure to comply with discovery, that this type of draconian order will be made in appropriate circumstances. The behaviour of the party in default and the nature of the documents concealed will be key considerations. Deliberate and malicious efforts to conceal crucial documents will not be tolerated by the courts. Parties need to be aware that they should adhere to their discovery obligations whether these arise by agreement with the other side or by order of the court.