Dogo Media Ltd v. Tempest Tech Ltd

Order 37 rules 7 and 10 of the Rules of the Superior Courts interpreted on leave to counterclaim: ‘I also reject any suggestion that when adjourning the matter for plenary hearing as if commenced by plenary summons, it is proper to infer a requirement to obtain the specific leave of the court to advance a counterclaim. In the ordinary course, the Defendant is entitled to deliver a counterclaim with his defence to proceedings commenced by way of plenary summons.’ [50]

1. 1.1

   National Asset Loan Management Ltd v. Kelleher [2016] IECA 118 distinguished: In that case ‘it was specifically ordered … the Defendant be precluded from raising his intended counterclaim at the plenary hearing.’ [48]

Counterclaim not precluded: ‘I do not construe the Order adjourning the proceedings to plenary hearing as conditioning the defence of the proceedings in a manner which precluded the maintenance of a counterclaim.’ [47]

1. 2.1

   Later consent directions inconsistent: ‘subsequent directions concerning the delivery of the Defence to Counterclaim are inconsistent with an understanding that the Counterclaim was precluded.’ [51]

Strike-out exercised sparingly: ‘The authorities repeatedly emphasise that the strike-out jurisdiction is to be exercised sparingly. This is not a case in which I have been persuaded that the counterclaim discloses no reasonable cause of action, constitutes an abuse of process, is bound to fail or has no reasonable chance of succeeding or is frivolous or vexatious.’ [61]

Order 19 rules 2 and 27 of the Rules of the Superior Courts applied: Overlap ‘demonstrates that the Counterclaim can conveniently be disposed of in the pending action and that its maintenance will not introduce a separate factual controversy likely unreasonably to prejudice or delay the trial.’ [60]

1. 4.1

   Counterclaim like a sword: ‘The Defence uses those allegations as a shield against the Plaintiff’s claim, but the Counterclaim uses them as a sword to obtain affirmative relief against the Plaintiff.’ [52]

Particulars as broad outline: ‘particulars are intended to ensure that the opposing party knows, in broad outline, the case it must meet at trial.’ [73]

Order 19, rule 3 of the Rules of the Superior Courts applied: ‘It is legitimate to refuse particulars where they seek evidence or are addressed to argument, inference, or legal submissions rather than facts. Particulars are concerned with facts, not legal argument. A party is generally not required to provide explanations of the legal consequences drawn from pleaded facts or an argumentative justification for a pleaded contention.’ [74]

Most requests evidence or argument: ‘Most of the requests for particulars pressed at hearing before me did not relate to clarification of a pleaded allegation but were directed to the evidence relied upon or matters of argument or submission.’ [121]

1. 7.1

   Payments from Microsoft: ‘impermissible attempt to interrogate the legitimacy of the Defendant’s position in light of the fact that it may have received payments from Microsoft … or the rationale underpinning the partial payment of an invoice.’ [96]

2. 7.2

   Particulars motion unfocussed: ‘it has not assisted me that there was no correspondence on behalf of the Plaintiff indicating the basis upon which it was dissatisfied with any reply given or confirming that it was satisfied with others. … the position in this regard was only clarified over the course of the day of hearing and was not known either to the Defendant or the Court in advance.’ [71] Hearing ‘would have been helpful and a better use of court time had there been proper interrogation of the replies received in advance of proceeding to Court. … the motion took longer than necessary and lacked proper focus.’ [72]

3. 7.3

   Argumentative requests: ‘particulars requested are … directed to an argument which the Plaintiff wishes to pursue. I am not persuaded that this is a proper use of a request for particulars’ [101].

4. 7.4

   Traffic for evidence: ‘whether there has in fact been traffic of a [certain] type … is, in my view, a matter for evidence.’ [83]

Non-compliant traffic to be particularised: ‘requiring the Defendant to identify the allegation it proposes to prove as opposed to requiring it to prove its allegation. The Plaintiff is not entitled by particulars to the technical data, reports or Microsoft communications by which the Defendant proposes to establish non-compliance. It is, however, entitled to know what conduct or traffic characteristic is alleged to have constituted non-compliance.’ [90] Fraud recast as ‘traffic which was non-compliant with the Guidelines referred to in the Agreement and not otherwise fraudulent’ [91].

Article 40.3.1° of the Constitution applied: ‘The jurisdiction to strike out a pleading for disclosing no cause of action is an exceptional one and is exercised sparingly because of the constitutional right of access to the courts.’ [137]

1. 9.1

   Relevance sufficient: ‘Paragraph 24 proposes a different explanation namely that, as the Defendant was withdrawing from Microsoft syndicated search partnerships generally, it adopted a policy of retaining revenue shares otherwise payable to its partners.’ [129] ‘It is not a standalone cause of action but is comprised of a factual allegation relevant to the pleaded contractual duties concerning discretion/good faith/proper purpose.’ [138]

2. 9.2

   Costs appropriate remedy: ‘any unnecessary or unreasonable maintenance of an expanded claim can be remediated, at least to some extent, through orders the court may make as to costs.’ [140]

Insufficiently particularised: ‘I agree that paragraph 24 is insufficiently particularised but I have concluded that it is not wholly speculative and some necessary information may only emerge from discovery, therefore further particulars should follow discovery.’ [134]

1. 10.1

   Some factual basis necessary: ‘There is a distinction, however, between a properly pleaded allegation resting on some identified factual foundation and a speculative allegation used to justify a broad investigation of the Defendant’s dealings with third parties.’ [131] ‘[E]mail … referenced by the Plaintiff supplies at least some factual foundation for the plea, even if its meaning is disputed.’ [133]

Test for discovery affirmed:

1. ‘whether the documents sought are relevant to an issue arising on the pleadings,’
2. ‘whether discovery of them is necessary for the fair disposal of that issue or for saving costs’
3. ‘whether the category is proportionate having regard to the burden involved.’ [144]

Relevance insufficient: ‘relevance does not, without more, establish necessity, and an otherwise relevant category may require narrowing to satisfy the requirements of proportionality.’ [144]

Catch-all “relating to” narrowed: ‘revised category removes the catch-all request for documents “relating to” every communication, introduces a defined time period and confines discovery to communications relevant to pleaded issues in the Defence and Counterclaim’ [204].

No duplication: ‘genesis, timing and evidential basis of the Defendant’s conclusions will likely also be discernible from discovered documents in respect of the methodology, subsequent decisions or communications arising from those conclusions’ [212].

Anonymised comparator sample ordered: ‘Plaintiff also pleads arbitrariness, bad faith, unreasonable exercise of contractual discretion and unequal treatment. To test those allegations, some comparator evidence concerning how invalid traffic was treated within the programme may have forensic relevance.’ [174] ‘Comparator material will be limited to anonymised PTQS scores and associated decisions concerning withholding of payment during the final quarter of 2023, if any.’ [177]

Reasons relevant to retaliation only: ‘I do not accept that the Defendant’s subjective reasons for invoking the clause are relevant merely because the Plaintiff contends that the clause constitutes a penalty. … The position is different, however, in relation to the Plaintiff’s separate pleaded allegation that invocation of the clause was retaliatory, in bad faith and for an improper purpose. Contemporaneous non-privileged documents capable of showing why the Defendant invoked the clause are relevant to that issue.’ [195]

Documents for own plea discoverable: ‘The fact that the alleged policy concerns conduct of the Defendant does not mean that relevant documents must necessarily be confined to the Defendant’s possession.’ [242] ‘This is not discovery designed merely to ascertain whether the Plaintiff has evidence for its case.’ [244]

Third-party comparisons collateral: Category 6 sought ‘documents recording the Plaintiff’s traffic-quality scores or issues arising from its supply of similar traffic to third parties during the period September 2023 to January 2024.’ [247] ‘The test for discovery, however, is not satisfied merely because a document might provide material for an argument.’ [248] ‘Discovery which introduces such collateral inquiries requires a clear justification.’ [252]

Overlap relevant to necessity: ‘In considering necessity, regard must be had to discovery otherwise agreed or ordered and to whether the same issue can fairly be determined without a separate or overlapping category.’ [215]

1. 19.1

   Duplication unnecessary: ‘Ordering this category in addition to Category 1 would create significant duplication and would extend discovery from documents evidencing what occurred to documents concerning the Plaintiff’s general internal processes.’ [229]

“From time to time” too general: ‘general search for documents recording receipt and implementation of Guidelines “from time to time” would risk requiring discovery in order to ascertain whether a factual issue exists, rather than obtaining documents relevant to an issue already arising on the pleadings.’ [234]

No strike-out of Counterclaim: Plaintiff’s application refused [61].

Particulars ordered partially: Further reply to Plaintiff’s request 4, as recast only [121]. Defendant’s request 10 within ten weeks of discovery by Defendant [135].

No strike-out of part of Statement of Claim: Defendant’s application may be renewed after particulars or at hearing [140].

Discovery ordered in part: Against Defendant, Category 1 reformulated [159]. Category 2 reformulated [163]. Category 3 refused [167]. Category 4 narrowed [177]. Category 5 reformulated [178]. Category 7 reformulated [189]. Category 8 narrowed [196]. Category 9 reformulated [205]. Category 10 refused [212]. Against Plaintiff, Category 1 reformulated [224]. Category 2 refused [230]. Category 4 refused [237]. Category 5 granted [246]. Category 6 refused [254].