THE SUPREME COURT
[Nos. 374/375 of 2006]
DOME TELECOM LTD.
JUDGMENT delivered the 5th day of December, 2007 by Mr Justice Fennelly.
1. I have had the opportunity of considering the judgments of Geoghegan J and Kearns J, before writing my own.
2. The first issue raised by the Appellant is that the form of order made by the High Court has the effect of directing a party to create documents for the purposes of the action. For all the reasons given by Geoghegan J, I would reject this ground of appeal.
3. It is, of course, axiomatic that a court will only order discovery of documents or records which exist. If no record has been made of a relevant conversation, meeting or event, a court will not, for the purpose of discovery, require a party to make one.
4. That is not what is required by the High Court order in this case. Undoubtedly, the order obliges the Appellant to take very elaborate, complex and costly steps in order to make information available in a form in which it has not previously existed. But the call data records (CDR’s) exist and are capable of being retrieved. The order is not equivalent to requiring a party to make a record, where one has never existed.
5. The rules of court have not been adapted so as to make their objectives conformable to modern technology. The courts have, nonetheless, been astute to ensure that genuine discovery can be ordered even when advances in technology have the effect that discovery takes a very different form from that of documents as traditionally understood. In former times, there would have been a written record of every commercial transaction. Old methods of record-keeping could not have coped with the sheer volume of traffic generated by the new means of communications. I accept that failure by the courts to move with the times by adapting the rules to new technology might encourage unscrupulous businesses to keep their records in a form which would defeat the ends of justice. I would, therefore, like Geoghegan J reject this ground of appeal.
6. The question which remains is whether the High Court order should be set aside as amounting to a disproportionate measure, having regard to the balance between the necessity, from the Respondent’s point of view, of discovery of the Category 9 documents, and the burden placed on the Appellant of complying with the order.
7. I gratefully accept the very comprehensive summary which Kearns J has given of the facts and the history of the two cases and the background facts. Since I agree with most if not all of the conclusions of Kearns J, I can be brief.
8. I will consider: a) the issue in the action to which the Category 9 discovery is said to be relevant; b) the reason advanced to justify the necessity for the order for its discovery; c) the burden placed on the Appellant of complying with the order.
9. I can commence with c). McKechnie J accepted that the order would place “perhaps a heavy burden” on the Appellant. The nature of that burden is described in the judgment of Kearns J and I do not propose to rehearse the evidence. The Appellant has described the technical measures necessitated, the length of time to be taken, the additional staff to be engaged, the need for additional computer equipment and programmes and the expense. Kearns J referred “to the undoubtedly burdensome nature of the form of discovery sought…” and to “the gargantuan task which an order under category 9 would impose on the defendant……”
10. I accept that it should be only in unusual cases that a court will decline to order discovery of relevant and necessary documents, but I think that the unusual scale and extent of the burden placed on the Appellant requires the Court to examine whether what is sought is likely to produce genuinely useful evidential material.
11. One then looks at the issues as pleaded and, in particular, any admissions made.
12. Firstly, it does not appear that the category 9 material is required to establish liability. The Respondent’s complaint is that the Appellant engaged for certain periods in unlawful and discriminatory pricing of its services. The Appellant is alleged to enjoy a dominant position in the market for public fixed telephony network and services markets in the State, the leased lines market in the State and the market for payphones in the State. It is claimed that it is obliged by law to adhere to the principle of non-discrimination with regard to interconnection and to ensure that charges for interconnection follow principles of transparency and cost orientation imposed by a European Community directive and that the Appellant’s license prohibits it from engaging in cross-subsidising or unfairly subsidising any service or in discrimination between persons regarding the provision of any licensed service or access to any telecommunications network.
13. The statement of claim alleges that from specified dates the Appellant imposed a telecommunications interconnection charge. Kearns J explains the MAC (mobile access charge) and the PAC (payphone access charge) imposed on all operators in the State between certain dates. The essence of the claim is that these charges were imposed on the Respondent and other operators in the State, but not on telecommunications operators outside the State. It is claimed that these actions constituted breaches of Articles 81 and 82 of the Treaty Establishing the European Community, sections 4 and 5 of the Competition Act, 1991 and of the licensing conditions pleaded as well as various regulations and a Council Directive.
14. It is not claimed that the category 9 documents will assist in establishing any of these complaints. Moreover, the Appellant does not dispute the facts constituting the basic complaint. It accepts that MAC and PAC were applied to national operators alone, in the period running, as regards MAC, from 15th October 2000 until 1st October 2001 and, as regards PAC, from 1st April 2000 until 1st December 2002. Furthermore, the Appellant accepts that this situation presented an arbitrage opportunity to certain operators, which would enable them better to compete with the Respondent. The Appellant does not, of course, accept that its MAC and PAC charges were unlawful. It claims that they were made necessary by regulatory and technical constraints. That is, however, irrelevant at this stage. For present purpose, it must be presumed that the Respondent’s claim is maintainable in law.
15. Kearns J has described the nature of the debate before the High Court in some detail, citing from a number of key documents. I agree with him that the category 9 documents are essentially sought only in order to assist the Respondent in the assessment of the damages it seeks. That is, of course, perfectly legitimate. It is thus necessary to refer to the reason given for the request for Category 9 discovery.
16. What is sought is information relating to “the volume of minutes trafficked per month in respect of each 1800 number issued by reference to access method…” Thus, as is stated in the letter written by the Appellant’s solicitors to the learned High Court judge, which is quoted more fully by Kearns J, “the essential difference between the parties remains whether or not it is necessary for the proper disposal of the within proceedings for the plaintiff to have information on the volume of freephone minutes trafficked per month in respect of each 1800 number in addition to information on the total volume of such traffic.” That was indeed the ambit of the debate at the hearing of the appeal.
17. The reason advanced to justify the need for the breakdown into individual 1800 numbers was:
18. The second sentence only refers to “minutes trafficked per number,” which I take to relate to individual number. But that sentence refers only to the “manner” in which the charge was imposed, which does not appear to be an issue in the case at all. In any event, the category 9 information would cast no light on the manner in which the charge was imposed. The other sentences refer more generally to loss of customers to operators who were not required to pay the charges. Leaving aside the language actually used by the Respondent’s solicitors one must examine, in concrete terms, the need to break the information down into individual numbers. The Respondent refers, and is entitled to refer, in general terms to loss of market share, an entirely legitimate approach to establishing loss. It also accepts that it will be able to call witnesses in order to establish the effects of the alleged discriminatory pricing on other operators in the State. The Respondent’s solicitors’ letter to the learned judge contained the following sentence:
“The plaintiff alleges that it has suffered loss as a result of the discriminatory imposition of the MNO origination charge/ MTC by the defendant. Access to call details regarding the quantity of 1800 numbers issued by the defendant , the number of minutes trafficked per number (by reference to access method) and the names of the parties to whom the numbers were allocated would enable the plaintiff to access the manner in which the MNO origination charge/MTC was imposed. In terms of assessing the quantum of its alleged loss, such information would demonstrate how in a market highly sensitive to increases in price, the discriminatory imposition of the MNO origination charge/MTC caused the plaintiff to lose customers to operators who were/are not charged the MNO originators charge/MTC by the defendant.
In short, this category would enable the plaintiff to show a link between its market share and the obligation to pay the MNO origination charge/MTC to the defendant. The plaintiff believes that expert analysis of these figures will establish a direct and conclusive correlation between the discriminatory behaviour of the defendant the loss suffered by the plaintiff.”
19. That is precisely the sort of case I would expect the Respondent to wish to establish: contemporaneously with the Appellant’s allegedly discriminatory pricing policy, its sales dropped and those of its more favourably treated competitors rose sharply. A court would, quite obviously, be concerned at the possibility that it was not sufficiently facilitating a litigant’s access to information which was essential to establishing the level of damage it has suffered. However, I fail to see, in the present context, that the Respondent, as plaintiff in the High Court action must undertake the burden of proving the level of telephone traffic on individual 1800 numbers. Mr Paul Anthony McDermott, on behalf of the Respondent explained at the hearing that, since his client’s case was based on damage to its call-card business, the breakdown into individual 1800 numbers was necessary in order to establish the extent to which each 1800 number was used in connection with call-cards. In view of the statement, already cited, that the category 8 discovery enabled it to establish that the international operators had benefited from “a huge growth in minutes when the discrimination by the defendant occurred…” and that this fell off when the alleged discrimination ceased, I cannot see that more is needed. Mr McDermott expressed concern that, even if the plaintiff produces strong statistical evidence of differential movements in traffic, explanations might be put forward based on single, unusual or idiosyncratic events. All of this seems to me rather far-fetched. It would be for the defendant to produce evidence of such events and to discover any documents in its possession in relation to them. It seems to me that, if such an issue were to arise during the trial, the trial judge would be able to deal with it as it arose and make an ad hoc order for discovery. However, even if there is a technical issue here which I have not fully grasped (and it is a highly technical case), it becomes relevant to consider the concessions offered by the Appellant.
“The discovery made to date by the defendant supports this reasoning, and bears out the plaintiff’s belief that its competitors received a huge growth in minutes when the discrimination by the defendant occurred, which grew to a high point and then dropped away (almost completely in some cases) when the defendant took steps to address the discrimination as a result of the plaintiff instituting the two actions that are before the Court.”
20. The Appellant has offered to concede that during the period during which it is agreed that the Appellant imposed what are claimed to be discriminatory charges, the entire of any growth in 1800 traffic to mobiles and half of that growth in the case of payphones to international operators related to the use of phone cards. Mr McDermott accepted that this concession solved the problem, insofar as the agreed periods was concerned. He claimed that the concession was insufficient in two respects. Firstly, there was evidence (an internal e-mail was examined in detail at the hearing) from the Appellant’s discovery that the policy of imposing charges was not immediately and effectively implemented by imposition of charges on all international operators. The extent of this “slippage” was not quantified, but I refer to the suggestion of the Respondent quoted above that this growth dropped away (almost completely in some cases) when the defendant took steps to address the discrimination. I am not satisfied that this limitation in the concession takes away significantly from its value. Secondly, the Appellant limits its concession in the payphones case. It accepts that fifty percent of any increase is related to call cards. The situation in that case is less clear cut. In the circumstances of the case generally, I agree with the proposal of Kearns J regarding that case. I prefer to reserve my final position regarding the order in that case until the eventuality mentioned by Kearns J.
I return to consider the proportionality issue. It is worth repeating the language used by Murray J, as he then was, when, following a review of the authorities, in his judgment in Framus Limited and others v CRH plc and others  2 I.R. 20 at 38:
McGuinness J and Geoghegan J agreed with that judgment. One of the authorities cited was Ryanair plc v Aer Lingus c.p.t.  4 I.R. 264. In my own judgment in that case, at page 287, I said:
“I think it follows that there must be some proportionality between the extent or volume of the documents to be discovered and the degree to which the documents are likely to advance the case of the applicant or damage the case of his or her opponent in addition to ensuring that no party is taken by surprise by the production of documents at a trial.”
21. I have come to the conclusion that the very unusual burden and heavy cost of the discovery in this case requires the Court to have a clear view of the litigious benefit to the plaintiff from obtaining the extremely detailed breakdown of information which is the only remaining issue. The Respondent has already had the benefit of discovery on a huge scale. It accepts that this enables it to establish that the alleged discriminatory pricing had a very significant market effect. I do not believe that it is established, at this stage of the litigation, that the likely benefit, if any, to the Respondent of obtaining the category 9 discovery is sufficient to justify the highly unusual and burdensome form of discovery sought.
“The court, in exercising the broad discretion conferred upon it by O. 31, r. 12(2) and (3), must have regard to the issues in the action as they appear from the pleadings and the reasons furnished by the applicant to show that the specified categories of documents are required. It should also consider the necessity for discovery having regard to all the relevant circumstances, including the burden, scale and cost of the discovery sought. The court should be willing to confine categories of documents sought to what is genuinely necessary for the fairness of the litigation. It may have regard, of course, to alternative means of proof, which are open to the applicant. These may, no doubt, include the possible service of notices to admit facts or documents. But there are two sides to litigation. The behaviour of the opposing party is relevant. That party may, for example, have made or may offer to make admissions of facts, and thus persuade a court that discovery on some issues is not necessary.”
22. For these reasons, I would allow the appeal. I agree, however, with Kearns J that the Respondent should be at liberty to make a fresh application for discovery of the material covered by category 9, following determination of the issue of liability. I agree with the form of order proposed by Kearns J in the penultimate paragraph of his judgment.