Loan Sales: No Entitlement to Redact Loan Documentation Without Court Approval

The Commercial Court has criticised the common practice of extensive redaction of loan sale documents by loan portfolio purchasers seeking to enforce before the Irish courts and has emphasised the limited basis on which redactions may be applied to documentation in court proceedings.


In Courtney v OCM1, the plaintiff’s debt and related security had been included in a loan sale and assigned by NALM to OCM (a private equity fund company). Prior to completion of the loan sale between NALM and OCM, the plaintiff had tried to purchase her loans from NALM to prevent them from being sold to a third party. The plaintiff was unsuccessful and subsequently brought proceedings against OCM challenging the validity of the assignment. In the course of those proceedings, OCM’s director swore an affidavit exhibiting the relevant loan sale deed and deed of transfer. However, those documents were heavily redacted. The court found that this was done without its leave, on OCM’s own initiative and likely without obtaining prior legal advice.

Plaintiff’s application

The plaintiff then brought an application for inspection of unredacted copies of those documents under Order 31 rule 15 RSC. In particular, she wished to see those redacted parts of the documents relating to the price allocated to the plaintiff’s connection and the price paid generally. OCM opposed the application seeking to justify the redaction on the basis of commercial sensitivity, confidentiality and lack of relevance. It also argued that these documents were documents of title which are excluded from inspection under Order 31 rule 15.

Applicable principles

Haughton J said that the principles laid down in Wallace Smyth Trust Company v Deloitte2 would inform the approach the court should take here. In summary these are:

  • The burden lies on the party seeking inspection to show that it is necessary for the fair disposal of the action;
  • If no element of confidentiality arises, routinely documents will be produced for inspection without any need for a hearing on the issue of necessity. Production will be based on relevance;
  • If confidentiality is asserted or any other objection arises, relevance is assumed and it is necessary to decide if inspection is necessary for the fair disposal of the action;
  • Disclosure will be necessary if (a) it will give “litigious advantage” to the party seeking inspection; (b) the information sought is not otherwise available to that party; and (c) the disclosure order would not be oppressive e.g. by reference to the volume of documents;
  • If a prima facie case is made out for disclosure, the court will first inspect the documents to ensure that inspection is necessary, and assuming it is, to see if the loss of confidentiality involved could be mitigated by redacting parts of the documents or limiting the disclosure to legal advisers only.

Haughton J said that the “real test for redaction, however, appears to be whether the information is relevant, rather than confidential.” He went on to say that once a party seeking inspection had made out a prima facie case for disclosure, the burden then switched to the party seeking redaction to justify that on grounds of irrelevance, confidentiality, commercial sensitivity or otherwise. Often, in practice, this would be achieved by the court’s inspection of the document.

Decision of the court

Haughton J was critical of the practice of heavy redaction of loan sale agreements. He noted that almost invariably the redactions had not been reviewed by lawyers but appeared to be client led saying that “[t]his is not as it should be.” He commented that such redactions frequently caused suspicion and resentment and their justification absorbed considerable court time.

Rejecting OCM’s argument, he held that the exclusion from inspection for documents of title did not extend to loan sale documents as they related not only to an assignee’s title but also affected the title and legal obligations of the debtor concerned.

Haughton J also referred to Article 34.1 of the Constitution which provides for the administration of justice in public save in special and limited circumstances prescribed by law. He was satisfied that openness in the use and production of documents relied on by a litigant was part of that right. In commercial cases and possibly all cases, the starting position was that the parties should be “forthright in the production of documents”.

In the case before him, he concluded that an understanding of the loan sale documentation as a whole was not a fishing expedition to establish a cause of action but was relevant to the plaintiff’s already pleaded claims which were being unfairly impeded by the redactions. The disclosure would give the plaintiff “litigious advantage”, the material was not otherwise available to her and the disclosure was not oppressive.

On the issue of confidentiality, Haughton J pointed out that details of the confidentiality agreement relied on by OCM had not been provided. In any event, the court said that a lesser form of protection was given to confidentiality than to privilege or commercial sensitivity and he was satisfied that confidentiality could be protected by appropriate undertakings on any further use of the information disclosed. On the issue of commercial sensitivity, he pointed out that the plaintiff was not OCM’s competitor and that OCM’s commercial interests could be adequately protected by limiting the persons to whom disclosure might be made and the purpose of that disclosure. Any wider disclosure would require the leave of the court. The court was also satisfied that commercial sensitivity was not in itself a valid reason here for permitting the redaction of price sensitive provisions (other than those relating to uninvolved third parties). He ordered full disclosure of the loan sale deed and deed of transfer subject to limited specified redactions and set out the undertakings that the plaintiff should provide to the court following that disclosure to protect the confidentiality and commercial sensitivity of the information.


This decision should be considered carefully by loan sale purchasers and sellers alike.  In particular, it is worth noting that if a party is obliged to produce relevant documents in the course of proceedings, there is no right to redact relevant aspects of those documents unless there is valid claim of legal privilege.  Claims of confidentiality or commercial sensitivity will not suffice, however, these issues can often be effectively managed either by agreement between the parties or by court orders so as to offer a certain level of protection to the disclosing party.

While the decision in this case did result in the disclosure of pricing information, arguably this is primarily due to the specific facts of the dispute and the particular relevance of that information in the context of the proceedings. A similar outcome might not arise in a more standard enforcement scenario action (where the underlying debtor had not also sought to purchase the debt from the vendor).

  1. Courtney v OCM EMRU DEBTCO DAC [2019] IEHC 160.
  2. [1997] 1 WLR 257.

This document has been prepared by McCann FitzGerald LLP for general guidance only and should not be regarded as a substitute for professional advice. Such advice should always be taken before acting on any of the matters discussed.