Defender Ltd v HSBC Institutional Trust Services (Ireland) Ltd & ors

Factual and Procedural Background

This is a preliminary application in a case involving a claim by Plaintiff against Defendant for approximately $333 million, alleging negligence and breach of contract related to Defendant's role as custodian of funds lost due to the fraud of its alleged sub-custodian, Company B, whose principal was involved in a large Ponzi scheme in the United States. The trial is scheduled to last 20 weeks.

The present application seeks the Court's permission for Plaintiff to deliver three additional expert reports beyond those already submitted, aiming to rebut 11 expert reports previously delivered by Defendant. The timetable for expert reports was agreed and approved by the Court, with Plaintiff's initial three expert reports served on Defendant in February 2018, and Defendant's 11 expert reports served in June 2018. Plaintiff now requests leave to serve three further expert reports from new experts.

Legal Issues Presented

1. Whether Plaintiff should be granted liberty to serve additional expert reports beyond the number initially agreed and served, in light of the trial timetable and procedural rules.
2. The applicability and interpretation of Order 39, Rule 58 of the Rules of the Superior Courts regarding the limitation on the number of expert witnesses and whether it prevents serving additional expert reports at this stage.
3. Whether permitting additional expert reports is necessary to do justice between the parties given the complexity of the case and the nature of the expert evidence already exchanged.

Arguments of the Parties

Plaintiff's Arguments

• Order 39, Rule 58 applies to the admission of evidence at trial, not to the delivery of expert reports during case management, and thus does not prevent the serving of additional expert reports now.
• At the directions stage, the Court may not be sufficiently informed to determine whether additional experts are necessary or overlapping; given the complexity and length of the trial, additional expert reports are justified.
• Additional expert reports are essential to rebut Defendant's 11 expert reports and ensure justice between the parties.
• Plaintiff has complied with case management procedures and has not engaged in significant non-compliance.

Defendant's Arguments

• Relies on Order 39, Rule 58 to argue that only one expert per party per field on a particular issue should be permitted unless the Court finds special reasons to allow otherwise.
• Opposes the serving of additional expert reports as unnecessary and potentially prejudicial, aiming to limit Plaintiff's ability to undermine Defendant’s expert evidence.

Table of Precedents Cited

Court's Reasoning and Analysis

The Court began by referencing the agreed timetable for expert reports, which was approved by the Court, setting deadlines for Plaintiff's and Defendant's expert reports. Plaintiff complied with the initial deadline, and Defendant served multiple expert reports in response.

The Court examined Order 63A, Rule 22, which requires parties to serve written expert statements by set deadlines unless otherwise ordered. The Court acknowledged the existing order setting the timetable but considered the application for additional reports as a request for a variation of that order.

Defendant relied on Order 39, Rule 58, which limits each party to one expert per field per issue unless the Court permits otherwise for special reasons. Defendant argued this rule barred additional expert reports. Plaintiff contended that this rule pertains to evidence admitted at trial, not the delivery of expert reports during case management, and that the Court at this stage may not be equipped to decide on the necessity of additional experts.

The Court found Plaintiff's reasoning persuasive, concluding that Order 39, Rule 58 does not prevent the delivery of additional expert reports at this stage. The paramount consideration is the interests of justice.

Applying the principles from cited precedents, the Court considered whether allowing additional expert reports would prejudice Defendant. Finding no substantive prejudice beyond tactical disadvantage, the Court exercised its discretion to permit Plaintiff to serve three additional expert reports.

The Court analyzed each proposed expert report individually:

• Expert Report by Mr. Denci: Allowed because Mr. Denci’s experience working within the relevant institution (DTC) enables him to provide expert opinion combining factual and expert evidence, thereby rebutting Defendant’s expert who relied on similar experience.
• Expert Report by Mr. Shore: Allowed as Mr. Shore is a US law expert needed to rebut Defendant’s US bankruptcy law expert report, filling a gap in Plaintiff’s original experts.
• Expert Report by Mr. Lundelius: Allowed to address broker dealer issues under US law raised by Defendant’s expert, complementing Plaintiff’s custody expert report and ensuring balanced expert evidence on this issue.

The Court noted Plaintiff’s compliance with case management and the complexity and length of the trial as factors supporting the grant of liberty to serve additional expert reports.

Holding and Implications

The Court GRANTED Plaintiff liberty to serve three additional expert reports from the proposed experts to rebut Defendant’s expert evidence.

This decision directly affects the parties by permitting Plaintiff to expand its expert evidence, thereby enabling a more comprehensive presentation of the issues at trial. No new legal precedent was established; the ruling reflects the Court’s discretion to manage expert evidence in complex litigation to ensure justice.