Judge refuses to halt Menolly case

A High Court judge has refused to halt a long-running action to establish the cause of defects in hundreds of homes in north Dublin on grounds of “negligent” and “blameworthy” failure by both sides to discover documents in the case.

Because of the discovery failures, 400 affected home owners awaiting the outcome of the action by developer Menolly Homes against Irish Asphalt Limited (IAL) and several companies in the Lagan group will now have a longer wait before they can proceed with their own actions, all of which arise from swelling and cracking in hundreds of homes allegedly as a result of defective pyrite infill.

Mr Justice Paul Giligan said today he was conscious of the position of the some 400 home owners from the Drynam, Myrtle and Beaupark estates in north Co Dublin who have initiated actions against the Menolly plaintiffs. Menolly has joined the Lagan defendants to the homeowners cases.

After the judge’s ruling today, Paul Gardiner SC, for the home owners, said his clients have been very prejudiced by the discovery failures and he asked to be heard by the court when the case is mentioned again next Thursday. The home owners had expected the case to conclude last July, counsel added. The case opened last February and has run for some 90 days, including 50 days of evidence.

Mr Justice Gilligan said counsel could address the court on Thursday. The judge added the court had never believed the case would conclude last July. The court was told at one point it was “hoped” the case would conclude in July, he said.

The Menolly action opened a year ago but discovery failures led to both sides bringing motions against each other late last year.

The defendants sought to have the Menolly claim struck out over admitted failures in Menolly’s discovery of June 2008 and the plaintiffs delay in making discovery of some 50,000 documents until some months into the trial while the Menolly side also sought to strike out the defence over a series of defence discovery failures.

In a 400 page decision on those motions, Mr Justice Gilligan strongly criticised both sides over discovery failures but ruled these had not caused such irreparable prejudice to either side requiring the trial be halted.

A series of directions from the court, if adhered to, and other measures including the recall of expert witnesses to address issues raised in later discovery should address the problems, he found. He also noted, while the court had heard some 50 days of evidence, this related mainly to the geological rather than construction aspect of the case.

Both the plaintiffs and defence had had possession of updated discovery documents for some time now and had ample time to digest its content and signficance, he added.

In his decision, the judge said the characterisation of Menolly’s discovery of June 2008 as “a mess” was appropriate and he found negligence by the plaintiffs, their servants or agents, in failing to comply with discovery. Their actions could be described as “blameworthy to a significant extent”.

Various explanations for the discovery failures included anxiety to get on with the trial, he noted. Whatever the reasons, the discovery failed to achieved the standard required by the court. However, there was no wilful attempt to suppress documents and he did not consider the failures were deliberate or dishonest.

He rejected the defence argument the Menolly side will not make discovery and noted the plaintiffs had since retained a panel of junior counsel and Price Waterhouse Coopers chartered accountants to asisst with e-discovery and had given assusrace to abide by court directions on discovery

The judge also found the defendants were negligent and blameworthy in aspects of their discovery. The defendants had embarked on “a plan of subterfuge” to convince their own solicitors and the Menolly side some documents related to the Bay Lane quarry were not relevant “when clearly they were”.

There was also failure to discover the unique Celtest suite of tests relevant to the Bay Lane quarry that specifically referred to “Investigaiton into Pyrites and related testing” and failure to provide details of all complaints received between 2006 and 2009 in relation to the Bay Lane product.

He was also seriously concerned at serious deficiency in discovering minues of management meetings both of IAL and Lagan and said he was entitled to conclude he had “a reasonable suspsicion” whether or not all relevant minutes were discovered.

The judge directed that further searches for minues be undertaken. While the minutes were those of IAL, some were copied to Kevin, Terry and Michael Lagan, who were directors of the Lagan defendants, he noted.

The judge also said IAl and another defendant company, Linstock Ltd knew, or should have known, a statement by IAl that certain individuals had no other diaries or material which should be discovered was untrue. The actions of the defendants in relation to discovery issues were blameworthy to a significant extent and their discovery failed to achieve the standard required by the court, he found.