Irish Court of Appeal

THE COURT OF APPEAL

CIVIL

Neutral Citation number: [2025] IECA 69

Appeal Number: 2024/242

 

Whelan J.

Allen J.

Meenan J.

 

 

BETWEEN/

ORLA MCNULTY

PLAINTIFF/RESPONDENT

- AND –

 

THE GOVERNOR AND COMPANY OF THE BANK OF IRELAND

TRADING AS BANK OF IRELAND GROUP

DEFENDANT/APPELLANT

 

JUDGMENT of Mr. Justice Allen delivered on the 21^st day of March, 2025

 

Introduction

1.                  This is an appeal by the Bank of Ireland against the judgment of the High Court delivered on 5^th April, 2024 ([2024] IEHC 228) and consequent order made on 3^rd May, 2024 by which the Bank was ordered to produce for inspection by the court the communications and records of communication between the Bank and its solicitors since the commencement of the proceedings, in respect of which the Bank claims legal professional privilege.

Background

2.                  For some years prior to 22^nd July, 2008 Bank of Ireland had a branch at Dublin Airport where it also carried on the business of a bureau de change.  It had a lease or licence from Aer Rianta cpt - which in 2004 changed its name to Dublin Airport Authority ("DAA").  By all accounts the rent or licence fee payable by the Bank was based on, or took account of, the turnover of the branch.

3.                  Ms. Orla McNulty worked for the Bank from 1979 until 22^nd July, 2008.  From 1984 she worked in the Dublin Airport branch.

4.                  On 22^nd July, 2008, the Bank of Ireland branch was closed and on the following day the office reopened as a bureau de change operated by First Rate, a Bank of Ireland subsidiary.  Ms. McNulty was asked to transfer to another Bank of Ireland branch but declined.  The Bank's case is that it was entitled to ask Ms. McNulty to transfer.  Ms. McNulty's case is that it was not.  It is common case that Ms. McNulty did not return to work.

The action

5.                  By personal injuries summons issued on 23^rd June, 2010 Ms. McNulty issued proceedings claiming damages - including aggravated, exemplary and punitive damages - for personal injuries, breach of contract, bullying, intimidation, ageism, breach of contractual relations/ attempted breach of contractual relations and loss of legitimate expectation.  The gravamen of her case was that in April, 2008 - suddenly and without warning and despite repeated assurances that her employment at Dublin Airport would continue until December, 2010 - she had been told that the Bank would be closing the bureau.

6.                  On 25^th August, 2010, an appearance was entered on behalf of the Bank by Bank of Ireland Group Legal Services.  For some time thereafter Ms. Teresa Kelly, solicitor, had responsibility for the file.  On 12^th July, 2019, the Bank appointed an outside firm of solicitors to replace Bank of Ireland Group Legal Services.

7.                  In replies to particulars delivered on 6^th August, 2013, Ms. McNulty introduced a new element to her case, which was that she believed that she had been blamed and scapegoated by the Bank for disclosing to the newly appointed manager that a duplicate accounting system had been in operation at the branch for some time, the object of which was to under record the turnover with a view to evading some or all of the Bank's liability to the DAA for turnover rent.  In an amended personal injuries summons delivered on 28^th January, 2015 Ms. McNulty further made the case that she had been forced to operate a duplicate accounting system designed by the Bank and its servants and agents to understate reported turnover figures to the DAA.

8.                  Part of the case originally pleaded was that on 23^rd July, 2008 First Rate, a wholly owned subsidiary of the Bank, commenced business at the same premises and with the same telephone and fax numbers.  Part of the case made in the replies to particulars was that the foreign exchange bureau continued to operate as before but with an entirely new staff and operating systems and discontinued the secondary accounting system.

9.                  In an amended defence delivered on 18^th May, 2015 Ms. McNulty's pleas in relation to the alleged duplicate accounting system were traversed.

The order for discovery by the Bank

10.              On 6^th March, 2017, the High Court (Noonan J.) made a consent order for discovery by the Bank of:-

1.             The most recent lease/licence in respect of the Bank's Dublin Airport premises in the period prior to 2010.

2.             (i)      Turnover figures in respect of the Dublin Airport premises submitted to the DAA for the month of July, 2007;

(ii)         Documents recording the actual turnover achieved at the Dublin Airport Branch and submitted to a general manager for the month of July, 2007;

(iii)       Trading Accounts Foreign Notes Sales in respect of Shifts A, B and C for July, 2007;

(iv)       Foreign Note Sales Reserve Account for July, 2007; and

(v)         Daily tally rolls generated from the Forde Electronics Calculators for July, 2007.

3.       Recruitment campaign advertising documents in respect of the Bank's Dublin Airport recruit campaign 2008.

4.       Ms. McNulty's contract of employment and personnel file, and her desk diary for 2007 and until August, 2008.

5.       (i)      Memos and notes of a meeting attended by Ms. McNulty at the bureau with members of Santry Garda Station in 2007 or in the first half of 2008;

          (ii)     Notes and/or memos of a meeting attended by Ms. McNulty with a manager in the period 2007 or in the first half of 2008.

6.       Medical records maintained by a doctor.

7.       Any documents recording the reason for the payment of €7,500 to Ms. McNulty in 2008.

8.       Employee handbook(s) in operation by the Bank from 2005 to 2010.

11.              There had previously been a protracted exchange between Ms. McNulty's solicitors and the Bank's solicitors as to the extent of the discovery which had been sought by Ms. McNulty.  By the time Ms. McNulty's motion came before the High Court on 6^th March, 2017, nearly nine years had elapsed since the closure of the Dublin Airport branch and - on Ms. McNulty's case - the discontinuance of the alleged dual accounting system. 

12.              On 25^th October, 2017, an affidavit of discovery was sworn on behalf of the Bank by Mr. Colin Kingston. 

13.              From the commencement of the proceedings until 10^th December, 2018 Ms. McNulty was represented by solicitors and counsel.  Since then, she has been self-representing.

14.              Ms. McNulty identified a number of shortcomings in the affidavit of discovery filed on behalf of the Bank and on 26^th February, 2019 issued a motion seeking an order to compel compliance with the order for discovery, or in the alternative, striking out the Bank's defence.  In response to that motion a further affidavit of discovery was sworn on behalf of the Bank on 9^th May, 2019 by Mr. David Coleman, Head of Industrial Relations.

15.              On 31^st May, 2019 Ms. McNulty issued a motion for an order compelling the Chief Executive Officer of the Bank to swear an affidavit of discovery on behalf of the Bank, alternatively for an order striking out the Bank's defence.  In response to that motion, Mr. Coleman swore a second supplemental affidavit of discovery on 1^st October, 2019.

16.              Without getting bogged down in the detail, the underlying problem was that by the time the order for discovery was made on 6^th March, 2017 a good deal of the material captured by the order had been destroyed.  That underlying problem was compounded by a lack of clarity in the affidavits filed on behalf of the Bank as to the time at which and the circumstances in which the material had been destroyed.

17.              Ms. McNulty's two motions were heard together by the High Court (Gearty J.) in February, 2020.  Gearty J. refused the motions but in view of the fact that they had prompted two further affidavits of discovery from the Bank, ordered the Bank to pay her costs.  An appeal by Ms. McNulty to this Court was dismissed for the reasons fully set out in the judgment of Collins J. (Whelan and Binchy JJ. concurring) delivered on 29^th June, 2021. ([2021] IECA 182)

18.              On 21^st May, 2021, shortly before the hearing of the earlier appeal, a composite affidavit of discovery was sworn on behalf of the Bank by Mr. Coleman.  Collins J. found that the composite affidavit of discovery adequately addressed the circumstances in which the documents were destroyed and the times at which they were destroyed, as well as the steps taken by the Bank to comply with the order for discovery.  It did not, however, provide any information on the steps (if any) taken by the Bank to preserve potentially relevant documents from destruction following the commencement of the proceedings or explain whether any steps, short of a formal "litigation hold", were taken to alert potential custodians of the prospect that discovery would in due course have to be made in these proceedings.  For that reason, the Court ordered that the Bank should file a further affidavit addressing those matters.  That affidavit was to be sworn by someone in the legal department of the Bank: by Ms. Kelly, if she was available, otherwise by another solicitor in the legal department.  Such an affidavit was sworn by Ms. Irene Gleeson on 10^th August, 2021.

19.              Although Ms. McNulty's appeals failed, the Bank was ordered to pay her the costs on the grounds that it had been in default of its discovery obligations until the composite affidavit of discovery was filed on 21^st May, 2021 and had been ordered to file the further affidavit.

20.              The precise detail of all that happened in the following eighteen months or so in not clear but what is clear is that there was a protracted dispute in relation to the discovery sought by the Bank from Ms. McNulty, which was ongoing at the time of the issue of the motion that has given rise to this appeal.

The motion for inspection

21.              By notice of motion issued on 8^th February, 2023 Ms. McNulty applied to the High Court for an order pursuant to O. 31, r. 20(2) of the Rules of the Superior Courts for the inspection by the court of the documents discovered by the Bank for which privilege had been claimed for the purpose of deciding the validity of the claim for privilege.

22.              That motion was grounded on quite a long affidavit of Ms. McNulty - said to have been sworn in compliance with a direction of the High Court of 9^th December, 2022 - in  which she rehearsed the merits of her case and the Bank's pleadings and the efforts she had made to comply with the Bank's request that she should make discovery.  She dealt at very considerable length with the merits of a discovery motion which appears to have been brought on behalf of the Bank on 9^th September, 2021 and with the contents of an affidavit of the Bank's solicitor filed on 2^nd November, 2022.

23.              As to Ms. McNulty's motion for the inspection of the documents in respect of which privilege was claimed, Ms. McNulty asserted that she believed that it was imperative that she should challenge the Bank's claim for privilege of the documents listed in the composite affidavit of discovery.  She suggested that the Bank had failed to articulate a narrative for each of the 193 documents listed in the First Schedule, Second Part, or to provide any description of the nature of the privilege asserted.  She was, she said, therefore unable to assess whether privilege had been properly and correctly asserted for each of the documents.

24.              At para. 27 Ms. McNulty deposed that:-

"27.  The court must establish if legal advice was sought with the intention of defeating my legal rights and entitlements.  The court must establish if Ms. Kelly participated in the cover up of fraud, dishonesty and wrongdoing.  The crime fraud exception mut be applied.  I say that a public policy imperative exists which demands close scrutiny.  Aer Rianta/Dublin Airport Authority policy imperative exists which demands close scrutiny.  Aer Rianta/Dublin Airport Authority is a semi-state body.  Bank of Ireland by way of concealment understated and underpaid the rent contractually due to its landlord.  I therefore request the court to inspect the entirety of the documents listed by the [Bank] for which privilege is claimed. ..."

25.              At para. 28 she deposed that:-

"28.  I say the administration of justice requires full disclosure.  The dominant purpose of the [Bank's] legal representation has been to frustrate and delay me.  I say that under European Law inhouse legal representation are not entitled to claim privilege as they lack the requisite independence.  Full and frank disclosure is warranted in this case."

26.              I pause here to say that the High Court found that legal professional privilege did apply to communications between the Bank and its legal department and that there is no appeal against that finding.

27.              In her affidavit filed on 8^th February, 2023, Ms. McNulty referred to an affidavit which she had sworn on 14^th October, 2022.  That affidavit - which ran to 48 pages - was described as a consolidated affidavit which was sworn in response to the consolidated affidavit of discovery of Mr. Coleman, the affidavit of Ms. Gleeson, and two affidavits of the Bank's solicitor which appear to have been filed on the Bank's motion for discovery by Ms. McNulty.  Ms. McNulty's affidavit of 14^th October, 2022 was directed, in the main, to the adequacy of the Bank's discovery and the explanations offered for the destruction of the material which had been destroyed.  All of these issues had been dealt with in the judgment of Collins J., from which Ms. McNulty quoted extensively.  Ms. McNulty had a good deal to say about the closure of the Dublin Airport branch, the circumstances of her departure, and her subsequent engagement with the human resources department and a doctor to whom she was referred by the Bank, which are not germane to the motion for inspection.  At paras. 53 and 54, under the heading "First Schedule - Second Part", Ms. McNulty made more or less the same points as to the adequacy of the Bank's claim for privilege as she later did in the affidavit she swore to ground the motion for inspection; namely, that Mr. Coleman had failed "to explain the nature, genesis and purpose of the documents in issue", with the result that she was - sha said - unable to assess whether privilege had properly been claimed.

28.              The First Schedule, Second Part to the composite affidavit of discovery sworn on 21^st May, 2021 was a list of 193 or so documents - mostly e-mails with ten or a dozen attendance notes - which were described, all together, as:-

"Professional communications of a confidential nature between the defendant and its solicitors in these proceedings and between its solicitors and counsel advising on the defence of these proceedings which came into existence after these proceedings were commenced with a view to defending such proceedings either for the purpose of giving or obtaining advice in relation to the proceedings and/or obtaining and collecting evidence to be used, or of obtaining information which might lead to the obtaining of such evidence and for the purpose of defending these proceedings, in respect of which a claim or privilege is claimed ..."

29.              Mr. Coleman's list gave a date for each of the documents but identified them only as e-mails or attendances.  Inferentially, perhaps, it could be confidently inferred that the documents described as attendances were file notes made by the solicitors but the list of e-mails and letters did not identify any of the senders or recipients.

30.              On 6^th June, 2023, an affidavit of Mr. Cómhnall Tuohy, solicitor, was filed on behalf of the Bank in response to Ms. McNulty's motion for inspection.  Mr. Tuohy protested that in her affidavit grounding the motion, Ms. McNulty had repeated serious but entirely baseless - and in the case of the composite affidavit of discovery, misdirected - allegations against the solicitors involved in preparing the affidavits of discovery and he rejected these.  He also pointed to the finding of this Court on Ms. McNulty's earlier appeal - in which substantially the same allegations had been made - that there was no evidence from which the Court could conclude that the shortcomings in the Bank's discovery were the result of wilful default, or a malicious determination to evade the obligation to make discovery.  Mr. Tuohy's core argument was that there was simply no basis for Ms. McNulty's suggestion that the crime/fraud exception was engaged.

31.              Mr. Tuohy then moved to what he described as Ms. McNulty's "passing reference to a suggested lack of completeness in the description of the documents over which privilege is claimed in the composite affidavit."  I have to say that I think that understated the criticism of the description of the documents.  Mr. Tuohy suggested that it was relevant to note that in the earlier appeal no issue had been raised in relation to the description of the documents.  That is strictly speaking true but the focus of the earlier appeal was on the documents listed - and not listed - in the Second Schedule.  In order - he said - to avoid any conceivable ground of complaint on the part of Mr. McNulty, Mr. Tuohy prepared "a further and more detailed schedule of every document in respect of which legal professional privilege is claimed in these proceedings", and he exhibited that schedule, marked "CT3".

32.              Mr. Tuohy's schedule, in tabulated form, identified the nature of the document, the sender and recipient, and the immediate purpose of the document - pleadings, instructions, court, advice - as the case may be. 

33.              As I will come to, the High Court judge found that the requirement of the Rules of the Superior Courts that the documents in respect of which privilege is claimed  should be identified and sufficiently described was not met until the affidavit of Mr. Tuohy was filed.  There was no appeal by the Bank against the judge's finding that the documents had not been sufficiently identified and described in the First Schedule, Second Part, to the composite affidavit of discovery.  Nor was there a cross-appeal by Ms. McNulty against the judge's finding that the required standard was achieved by the filing of the affidavit of Mr. Tuohy. However, I need to say something about it.

34.              In the first place, it appears to me that the intention in preparing the further and more detailed schedule was that it would replace the earlier schedule.  That was not appropriate.  The responsibility for discovery rests squarely on the party, not his or her or its solicitor.  Of course, the parties will take advice and it is entirely unobjectionable that the solicitor should draft the schedule but the discovery must be made by the party.  Along the way, the necessity recognised in May, 2021 that there should be a composite affidavit of discovery appears to have been lost sight of.

35.              Secondly, even on a cursory perusal, the documents listed in two schedules are not the same.   In the First Schedule, Second Part to the composite  affidavit of Mr. Coleman, the earliest document is an e-mail dated 8^th February, 2011 and the latest an e-mail dated 30^th April, 2021.  Mr. Tuohy's schedule suggests that there are two books, Book 1 and Book 11, which should presumably refer to Book I and Book II.  The first three documents in Mr. Tuohy's schedule are a Group Legal Service internal memorandum of 18^th August, 2010 and two attendance notes of 10^th December, 2010 - which are not in Mr. Coleman's schedule at all.  At a glance, Mr. Tuohy's schedule includes a number of undated memoranda, which are not in Mr. Coleman's affidavit. 

36.              The apparent divergence between the two schedules was not the subject of any debate at the hearing of the appeal but, subject to anything that the Bank may have to say, it seems clear that the First Schedule, Second Part to the Bank's affidavit of discovery needs to be revisited.

The High Court judgment

37.              For the reasons given in her judgment, the High Court judge concluded:-

(a)          That the Bank had proved that the documents listed in Mr. Tuohy's schedule were documents to which legal professional privilege applied;

(b)          That the present case came within the category of cases to which the crime/fraud exception applied;

(c)          That Ms. McNulty had adduced prima facie evidence that the proceedings involved "moral turpitude" such that it would be injurious to the interests of justice and to those in the administration of justice not to invoke the exception;

(d)          That the fact that the documents listed in the schedule of privileged documents all post-dated the proceedings did not preclude the application of the crime/fraud exception.

38.              I will return to the detail of the judge's analysis and reasoning when I come to consider the arguments made on the appeal.  Before doing that, it is useful to examine the authorities.

Legal professional privilege

39.              In Miley v. Flood [2001] 2 IR 50, Kelly J. (as he then was) said:-

"Legal professional privilege is more than a mere rule of evidence. It is a fundamental condition on which the administration of justice as a whole rests.  That is the conclusion which I reached in Duncan v. Governor of Portlaoise Prison [1997] 1 IR 558.  In that case I quoted with approval a passage from the speech of Lord Taylor of Gosforth in R. v. Derby Magistrates Court; Ex parte B. [1996] 1 AC 487 where, having set forth the history of legal professional privilege in English law he concluded at p. 507 as follows:-

 'The principle which runs through all these cases, and the many other cases which were cited, is that a man must be able to consult his lawyer in confidence, since otherwise he might hold back half the truth.  The client must be sure that what he tells his lawyer in confidence will never be revealed without his consent.  Legal professional privilege is thus much more that an ordinary rule of evidence, limited in its application to the facts of a particular case. It is the fundamental condition on which the administration of justice as a whole rests.'"

40.              Kelly J. went on to note that although the right to legal confidentiality originated in a rule of evidence, it developed into a substantive right.  At pp. 66 and 67 Kelly J. quoted with approval from the judgment of Lamar J. in the Supreme Court of Canada in Descoteaux v. Mierzwinski [1982] 1 S.C.R. 860, noting that:-

"At p. 872 [Lamar J.] said:-

'The following statement of Wigmore ... of the rule of evidence is a good summary, in my view, of the substantive conditions precedent to the existence of the right of the lawyers client, to confidentiality: "Where legal advice of any kind if sought from a professional legal adviser in his capacity as such, the communications relating to that purpose, made in confidence by the client, are at his instance permanently protected from disclosure by himself or by the legal adviser, except the protection be waived." ...

There are exceptions.  It is not sufficient to speak to a lawyer or one of his associates for everything to become confidential from that point on.  The communication must be made to the lawyer or his assistants in a professional capacity; the relationship must be a professional one at the exact moment of the communication.  Communications made in order to facilitate the commission of a crime or fraud will not be confidential either, regardless of whether the lawyer is acting in good faith."

41.              Within those passages and in the earlier and later cases there is an interesting question to be seen as to whether the exceptions are truly exceptions to a rule or whether the so-called exceptions define the parameters of the rule.  Thus, legal professional privilege applies to communications with a lawyer in his professional capacity, which will not include communications made to facilitate the commission of a crime or fraud.  So, although identified as an exception to the rule, in truth if the purpose of the communication is to facilitate a crime or fraud, it will not have been covered by the privilege in the first place.

42.              In Murphy v. Kirwan [1993] 3 I.R. 501, Finlay C.J. identified the first source of the exemption as the judgment of the Court for Crown Cases Reserved in R. v. Cox and Railton (1884) 14 Q.B.D. 153 in which Stephen J. (for an eleven member Court) said that:-

"The reason on which the rule is said to rest cannot include the case of communications, criminal in themselves or intended to further any criminal purpose, for the protection of such communications, cannot possibly be otherwise than injurious to the interests of justice and to those of the administration of justice."

43.              Finlay C.J. immediately went on to say that in Williams v. Quebrada Railway, Land and Copper Company Ltd. [1895] 2 Ch 751 the same principle had been extended beyond the narrow confine of the furtherance of a criminal purpose to fraud, which Goff J. in Crescent Farm Sports v. Sterling Offices [1972] Ch. 553 said was "... not limited to the tort of deceit but included all forms of fraud and dishonesty, such as fraudulent breach of trust, fraudulent conspiracy, trickery and sham contrivances."  Murphy v. Kirwan was a claim for damages for malicious prosecution.  The majority of the Supreme Court upheld an order of Costello J. (as he then was) for the production for inspection of the defendant's legal advice in connection with a claim which had previously been dismissed. 

44.              In a nutshell, any challenge to a claim of legal professional privilege must be directed to the purpose, not the subject matter, of the communication.

45.              In their written submissions and oral presentation counsel for the Bank undertook a careful and comprehensive analysis of all of the Irish authorities and commentaries and many of the English authorities and commentaries - most recently the important decision of the Court of Appeal in England in Al Sadeq v. Dechert LLP [2024] 3 WLR 403 - as to the nature and scope of legal professional privilege and the circumstances in which it may be displaced - or shown not to have been applicable - but the Bank's fundamental argument was that on the evidence, the crime/fraud exception was simply not engaged.

Analysis

46.              The case pleaded by Ms. McNulty is that for some time prior to 22^nd July, 2008 Bank of Ireland operated a dual accounting system at its Dublin Airport branch, the object of which was to underreport the turnover to the DAA.  If it is not clear precisely when and by whom this system was devised, Ms. McNulty's case is that it ceased when the branch was closed on 22^nd July, 2008.  The allegation - which is hotly contested by the Bank - is that the object of the dual accounting system was to defraud the DAA, or, perhaps, short of that, amounted to trickery or contrivance.  What is strikingly absent from the case is the slightest hint or suggestion, still less a clear allegation based on cogent evidence, that the solicitors had any hand, act or part in the establishment or operation of the alleged accounting system.  The solicitors first became involved upwards of two years after the branch closed and the first reference to the alleged irregularities came three years after that.

47.              As a matter of first principles, the Bank, faced with Ms. McNulty's claims, was entitled to take legal advice.  If the Bank's purpose in seeking the advice of its solicitors was to meet Ms. McNulty's action, it had a right to expect that the advice would be permanently protected from disclosure.  There was no suggestion by Ms. McNulty that the Bank's purpose in consulting and communicating with its solicitors was other than what Mr. Coleman deposed that it was.

48.              At para. 38 of her judgment, the High Court judge considered the factual basis for the application.   She found that Ms. McNulty's reliance on the manner in which the Bank dealt with the discovery made by her was not pertinent to the application.  She found that it was not necessary nor appropriate that she should revisit the issue of the destruction of documents, which had been dealt with in the judgment of Collins J.  Similarly, the judge rejected Ms. McNulty's reliance on the shortcomings in the Bank's compliance with the order for discovery, which, she said, had been dealt with by this Court in the earlier appeal.  At para. 38.3(d) the judge rejected Ms. McNulty's argument that a negative inference ought to be drawn from the fact that the first affidavit of discovery had been sworn by Mr. Kingston and the later affidavits by Mr. Coleman.  There is no challenge to any of these conclusions.

49.              At paras. 38.3(g), 39 and 40 the judge examined what Ms. McNulty had said in her affidavit of 14^th October, 2022 in relation to "Stor System Inspection and Double Accounting System".  The judge considered those averments to be of particular significance. 

50.              It will be recalled that the order for discovery made on 6^th March, 2017 called for discovery by the Bank of various documents recording the turnover achieved at the Dublin Airport branch and the turnover figures submitted to the DAA, including the Foreign Notes Sales Trading Account and the Foreign Notes Sales Reserve Account.  These documents would have shown whether there was or was not a disparity between the actual turnover and the reported turnover and so were directly relevant to the issue as to whether the Bank had been operating a double accounting system. 

51.              It appears from the composite affidavit of discovery of Mr. Coleman of 21^st May, 2021, that the terms of the consent order for discovery were agreed on the morning on which Ms. McNulty's discovery motion was listed for hearing and that although the terms of the order were agreed, Ms. McNulty's lawyers were made aware of "the likelihood of a potential difficulty on the part of the Bank in obtaining documents dating back to 2007."  It transpired that the specified documents had in fact been destroyed but the Bank eventually found some data on a backup information technology system called the "Stor System."  This data was part of the data which had been used to create the - by then unavailable - Trading Accounts Foreign Notes Sales and Foreign Notes Sales Reserve Accounts.  Emphasising that the Stor System was not an analogue for the accounts and suggesting that it was not responsive to the order for discovery, Mr. Coleman added the data recorded on it to the First Schedule, First Part.

52.              The judgment of Collins J. of 29^th June, 2021 shows that Ms. McNulty was then dismissive of the value of the data recorded on the Stor System but by the time she swore her affidavit of 14^th October, 2022 she had inspected it and - she said - it provided irrefutable proof of the existence of the duplicate accounting system.   The judge did not go that far but she did find (at para. 40) that the documents stored on the Stor System "did tend to support the averments of [Ms. McNulty] at paragraphs 21 to 23 of her affidavit of the 14^th October, 2023."  The substance of what Ms. McNulty had deposed to at para. 21 to 23 of her affidavit of 14^th October, 2022 was that the Stor System data was proof of the existence of the alleged dual accounting system and that "even at this late stage, an internal audit and forensic examination of the Stor System should uncover the irregularity and duplicity to defraud their landlord, Dublin Airport Authority."

53.              For the avoidance of doubt, I want to make it absolutely clear that I express no view as to whether the Stor System data does tend to support Ms. McNulty's case, still less whether it is irrefutable proof which Ms. McNulty may believe that it is, but it is - for present purposes - completely irrelevant.  The Stor System data comprises records made and kept by the Bank in the course of its bureau de change business carried on in July, 2007.  The solicitors had absolutely nothing to do with that business or the way in which it was carried on by the Bank.  Whatever the data may show, it does not go to the purpose of the engagement between the Bank and its solicitors.  There was no suggestion that the advice was sought or given in furtherance of the practice allegedly carried on at the Dublin Airport branch of the Bank upwards of two years before the solicitors were consulted and five years before it was brought into the case.

54.              Ms. McNulty's motion was misconceived.  It did not assert - much less seek to establish - that the Bank's claim of legal professional privilege was bad.  Rather the premise of the application and the order sought was that the privilege claimed might not apply and that the judge should examine the documents to see whether it did or not.  To invoke the power conferred by O. 31, r. 20(2) to inspect a document for the purpose of deciding as to the validity of a claim for privilege, the party seeking such inspection must first establish - at the very minimum - that there is reason to believe that the privilege which would ordinarily apply to communications between the solicitor and his client has been abused. 

55.              Counsel for the Bank made detailed submissions as to what a party impugning the solicitor and client relationship was required to show to justify an order for the inspection of apparently privileged documents but, on the evidence, the crime/fraud exception was simply not engaged.

56.              At para. 43(b) the High Court judge found that the present case came within the category of cases in which the crime/fraud exception was engaged.  That conclusion, however, was based on her finding that the proceedings involved circumstances of moral turpitude or of dishonest conduct even though it may not be fraud.  In my view the judge erred in conflating the nature of the claim with the purpose of the engagement between the Bank and its solicitors.  The basis on which privilege was claimed was that the scheduled documents had come into existence for the purpose of seeking and giving legal advice in relation to Ms. McNulty's claims.  That was not contested.

57.              In coming to the conclusion which she did, the judge placed particular reliance on the judgments of the Court of Appeal in England in Gamlen Chemical Company Ltd. v. Rochem Ltd. [1983] R.P.C. 1 and of the Supreme Court in Murphy v. Kirwan.  That reliance, in my view, was misplaced.

58.              In Gamlen Chemical Company a large number of the plaintiff's senior executives had left their employment together between September, 1973 and June, 1974 and later established themselves in business in competition with the plaintiff in a corporate structure established in the Spring and Summer of 1973, which included three companies acquired by the executives' solicitor in February, 1973.  The plaintiff claimed that the executives had, during their employment, worked for their own purposes against the interests of the plaintiff, induced other employees to break their contracts of employment, and used its confidential information for their own purposes.  The Court of Appeal upheld a High Court order for the production for inspection by the plaintiff of all documents relating to the incorporation of the three companies and the issue, allotment or transfer or beneficial ownership of the shares in the companies.  The foundation for the order was that the plaintiff had adduced prima facie evidence that the purpose of the engagement between the executives and their solicitor was to further a conspiracy to damage its business.  There was some debate as to the extent of the solicitor's knowledge of what was going on but Templeman L.J., in a judgment concurring with Goff L.J., emphasised that the intent to be looked at was the intent of the clients, rather than the solicitor.

59.              In Murphy v. Kirwan the plaintiff's action for specific performance - which the defendant had previously unsuccessfully sought to have dismissed as frivolous and vexatious - had been non-suited.  The defendant subsequently sought inspection of the plaintiff's legal advice in connection with his claim, for the purposes of his counterclaim for damages for malicious prosecution.  The Supreme Court, by a majority, upheld a High Court order that the plaintiff produce the documents for inspection.  As Finlay C.J. put it, the alleged wrongdoing was that the plaintiff had abused the court's procedures and deliberately maintained a baseless claim which amounted to "... a claim of dishonest conduct which precludes the protection otherwise afforded by the rule relating to professional privilege."  The focus was not on the merits of the underlying action but on the plaintiff's motive, and so the purpose of his engagement with his solicitor.

60.              Murphy v. Kirwan is clear authority for the judge's finding that the fact that the documents post-dated the proceedings does not preclude the application of the crime/fraud exception, but not for her finding that this is a case that comes within the category of cases in which the exception is engaged.

Conclusions

61.              I am persuaded that the judge erred in focussing on the nature of the dispute between the parties rather than on the purpose of the engagement between the Bank and its solicitors. 

62.              I would allow the appeal and set aside the order of the High Court.

63.              Provisionally, the discrepancy between the First Schedule, Second Part of the  composite affidavit of discovery and Mr. Tuohy's schedule appears to me to require a further affidavit of Mr. Coleman but as this was not identified in the course of the hearing, I would hear any submission which the Bank would make before making such an order.

64.              The appeal will be listed on 31^st March, 2025 at 2:00 p.m. for submissions as to the final form of order and to deal with the costs of the appeal and the application to the High Court.

65.              As this judgment is being delivered electronically, Whelan and Meenan JJ. have authorised me to say that they agree with it and with the orders proposed.

Result:     Appeal Allowed